Oklahoma City 2012 Year–End Retail Market Summary TABLE of CONTENTS

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Oklahoma City 2012 Year–End Retail Market Summary TABLE of CONTENTS Oklahoma City 2012 Year–End Retail Market Summary TABLE OF CONTENTS Retail Market Summary 1-2 Sales Summary 3 North Submarket 4-5 Northwest Submarket 6-7 South Submarket 8-9 Edmond Submarket 10-11 West-Central Submarket 12-13 Moore / Norman Submarket 14-15 Eastern OK County Submarket 16-17 Chamber Retail Development & Recruitment Back Cover Penn Square Mall The information contained herein has been obtained from reasonably reliable sources. Price Edwards & Company makes no guarantee, either express or implied, as to the accuracy of such information. All data contained herein is subject to errors, omissions and changes. Reproduction in whole or in part, without prior written consent is prohibited. Oklahoma City 2012 Year–End Retail Market Summary THE Retail MARKet 2012 was a good year for Oklahoma City retail, submarket, older centers experienced a few OKC TOTAL RETAIL MARKET INVENTORY particularly for national tenants. Oklahoma City sizable tenant move-outs that contributed to probably saw the most national tenant leasing in the rise in vacancy. This divergence between 50 GLA SF Freestanding SF the last ten years. Much of our report this year vacancy in old and new product is taking place 40 end will focus on tenants new to our market, throughout the country. A number of older new concepts and expanding tenants. Newer centers will need to be re-positioned in the 30 well located space is generally well occupied. upcoming years to compete; a few may need If you take only centers opened from 2000 till to be torn down. The vibrancy in the top half 20 now, vacancy is 5.2%. There isn’t much space of our market is winning the day though which (millions of square feet) (millions of square 10 available for tenants in the best locations which bodes well for the upcoming year. is a hindrance for attracting more national and 0 2008 2009 2010 2011 2012 big-name tenants. Consequently, a number of IssUes of InteRest new projects are in some stage of development; OKC TOTAL RETAIL MARKET VACANCY expect announcements of new construction Big Boxes. in 2013. Much of the improvement in our market has 15% come from big boxes being filled. Both former 12% The overall market is healthy but not without Ultimate Electronics, on I-240 and Quail Springs concerns. We’ve talked before about the Marketplace, have been leased, by US Foods 9% importance of consumer confidence in Chef’s Store and Golfsmith, respectively. The an economy that is 70 percent driven by former Belle Isle Linen’s space is expected to be 6% consumption. ‘Consumer Confidence Rises leased in the first quarter. Gold’s Gym took the 3% to 4-year High’, Chain Store Age; ‘The Mighty NW Highway and Portland former Circuit City Consumer is on the Ropes’, Wall Street off the market as well as the former Sportmen’s 0% 2008 2009 2010 2011 2012 Journal; ‘Consumer Confidence Points to building at Quail Springs. Several boxes have Growing Optimism’, National Retail Federation; been converted to non-retail use, including both OKC TOTAL RETAIL MARKET ABSORPTION ‘Consumer Confidence is on the Wane’, Wall former Borders, the Norman location will be a 0.7 Street Journal. These four headlines were library and the NW Highway location a medical 0.6 all from the last few months and highlight the clinic. The former Crossroad’s Best Buy will 0.5 0.4 retail market’s continued issues with slow be expansion space for Heritage College. As 0.3 0.2 national growth and related uncertainties in our a result, we’ve seen a nearly 1 percent drop in 0.1 0.0 economic and political environment. Locally, vacancy for the free-standing retail buildings -0.1 we have some issues that contribute to this we track, to 4.7 percent. -0.2 -0.3 uncertainty as well: low natural gas prices, feet) (millions of square -0.4 -0.5 shareholder/management issues at Chesapeake New Retailers; New Concepts. -0.6 -0.7 and Sandridge, health care changes – to name The health of our market can be seen in the -0.8 2008 2009 2010 2011 2012 a few. activity by retailers new to our market and new concepts by existing retailers. The biggest entry Our year-end survey results reflect this back and to our market was probably made by Dick’s forth between the positive and this uncertainty. Sporting Goods who opened four stores this is rumored to be searching for sites. Aldi is The market as a whole was relatively flat for the fall that have been well received. Title Boxing actively looking for more sites. Local operators year, vacancy ended the year at 10.2 percent, up recently signed a lease in Edmond. Lululemon Buy for Less, Crest, and Williams all have moderately from year-end 2011 at 9.8 percent. opened a temporary location on Automobile expansion plans of some degree or another on The South submarket reflected improved Alley. As noted, Golfsmith is on its way as is the table. A new Mercado opened at City Center occupancy as some long-vacant spaces were HomeGoods. LA Fitness is still expected to in Moore. Vitamin Cottage opened in Norman. filled. The remaining markets saw vacancy tick open 4 to 5 stores although they are moving A number of Herbalife stores are now open. up slightly, but overall absorpsion was positive slowly. Trader Joe’s is expected to open at least Torrid is now in our market. New dental chains at just over 178,000 square feet. With the one store in 2013 as could Fresh Market, in are expanding aggressively, including Monarch, exception of the West-Central submarket, the a continuation of the new wave of specialty Aspen, Heartland, Dental Depot and others. increase was generally spread throughout the grocers discovering Oklahoma. The grocery centers in each submarket. In the West-Central market remains active. Tulsa based Reasors A number of our existing retailers are either 1 expanding or rolling out new concepts. The future of Crossroads Mall remains a hot corridor in 2013. And, a Dallas developer has Hemisphere’s announced a planned Fritts Farm topic of conversation since local businessman been working to acquire property for a retail store. Forever 21, a favorite of the teen set, has Mike Dillard bought the distressed property development along west I-40. Another Midwest opened a big store at Penn Square. Mathis just over a year ago. Dillard’s group has been City project is a possibility as well. Brothers has opened two Sleep Centers, has developing plans for the Mall; expect a first plans for others, and is working on locations for quarter announcement. From what we know, OUtlooK foR 2013 a smaller mattress store concept. The number the direction will be exciting for south Oklahoma We remain positive in our outlook for the of new and expanding restaurants in our market City and, we think, has a chance to be very Oklahoma City retail market barring any are too numerous to list, but include Oliveto’s, successful. disruption by one of our major employers. There Costa Vida, Five Guys, Smashburger, Top That is far more positive in the market than negative Pizza, Chuy’s, Freebirds, and Zoie’s Kitchen. Walmart. with low unemployment, good population and Walmart is such a part of the Oklahoma City income growth, and all the positives we as a Retailers kicking the tires and searching for retail fabric. It dominates retail both nationally community are getting from MAPS, Project 180, locations include Charming Charlies, Nordstrom and locally, and dominates the local grocery and the Thunder. As a result, Oklahoma City’s Rack, Costco, Von Maur, Versona, a couple market with between 65 & 70 percent market national image among retailers is the best its of upscale movie theaters, a large golf range, share, depending upon your source. Despite ever been. Expect this to translate into more Einstein Bagel, Petland, Cabella’s and Ruth’s our current wave of grocery expansion, Walmart stores, more new development, and a better Chris. isn’t ready to give up market share. It has quality and diversity of retailers in our market. planned, or has underway, eight new stores Costco, Von Maur. for the Oklahoma metro area. These include Survey Footnote: While Costco is one of the more exciting retailers two new Sam’s Clubs, at Fox Lake in Edmond Our survey tracks 27.7 million square feet in 233 on the above list, it appears that they may be and on 149th street in Moore. Four new Walmart buildings of over 25,000 square feet and 12.3 passing on Oklahoma City for now. They’ve Neighborhood Markets are planned and two million square feet of stand-alone buildings for secured a site on south Memorial in Tulsa for new Walmart Supercenters, one of which is a total market of 40.0 million square feet. their first Oklahoma store and may see how under construction in Choctaw. It won’t affect that store does first. Von Maur has talked to a us locally, but it is rumored that Walmart will There continues to be a significant number of number of developers over the past few years buy the Tesco Fresh & Easy stores after Tesco smaller strip centers in the market (under 25,000 about Oklahoma City. If you are not familiar with announced its leaving the US market, converting s.f. in size). We would estimate there are easily them, you’ll like them. People like to compare them into Walmart Express’s. At this point, 3 million square feet of these properties in the their stores to Nordstrom; they aren’t quite to Oklahoma does not have any Walmart Express market.
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