Shrinking energy sector helps keep retail reined in
It could be better, it could be worse: "Stable but unremarkable" is Price Edwards & Co.' s outlook for retail this year.
Last year saw a modicum of improvement in average store vacancy, which dropped to 8.7% from 9.8% at the end of 2018, the commercial real estate firm said in its year-end retail market summary.
Empty big boxes were filled.
Discount chains like Ollie's and At Home came to town or opened new locations.
Fitness centers, including Vasa and Open Air, absorbed space.
Vacancy also took a hit from marijuana dispensaries, according to the report, which was compiled by Jim Parrack, senior vice president and retail specialist.
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But.
"Economic concerns, particularly related to energy ," he said, and reduced disposable income ," are the main concern for 2020 and the reason that our
outlook is for a stable but unremarkable retail performance in the upcoming year."
More than the energy sector' s shrinking economic footprint is tripping up some potential national chains that might otherwise consider coming here, according to the report, available at www.priceedwards.com.
"The fact that Oklahoma City lacks the density of many other markets changes the nature of our market for retailers (although we all know we'll drive further than the average shopper)," Parrack wrote in the report. "And, no breaking news here, Oklahoma' s incomes are lower than much of the rest of the country. Therefore, we see even more emphasis on valueoriented retailers.
"It is harder to convince high-end retailers to locate here. It is more difficult to get big projects off the ground. Oak, the next phase of Chisholm Creek, the cotton mill site — all are working on preleasing and these local factors add a degree of difficulty."
Here are highlights from the report by submarket:
North
"Improvement (vacancy 6.7%, compared to 8% a year ago) with some big box vacancy being filled, notably the former Toys R Us and Hobby Lobby with At Home. Costco opened its inaugural location at Western and Memorial. And, Chisholm Creek continues to add to South Pointe with additional restaurants and micro-retail. REI and 5 Below backfilled the former Belle Isle Babies R Us space. ...
"Washington Prime has added restaurant and small-shop space between Nichols Hill s Plaza and Whole Foods. Ryan McNeal continues
to work on the ambitious Oak mixed- use project on the southwest corner of Northwest Highway (Express way) and Pennsylvania. Flix will open shortly at Half, the American Fidelity development on Broadway Extension."
Northwest
"Improved its performance, moving to 12.4 vacancy at year-end. While the area has seen little new development, some long-vacant space has been leased such as the new Ollie's at Council Crossing. It is one of the more mature s ubmarkets in the city. For many retailers, this market is their second or third choice. This is reflective of the area demographics and the distressed condition of some of these properties."
South
"South Oklahoma City vacancy declined to 13% from 14.1% at midyear. Chatenay Square backfilled the former Homeland space and several of the newer small-shop centers saw space filled, such at the Sprouts at (SW) 119th and Western and Charlie Plaza on south Western. Vasa fi tness opened at (SW) 44th and Western as well."
Edmond
"Vacancy improved modest ly during the year, ending the year at 8.4%. The former Homeland at Edmond Crossing was backfilled with Home Goods and Surge Trampoline Park. Edmond has also seen some growth in boutique projects, like the Railyard in downtown. Larger
projects like the Bridges at Springcreek and the Covell & I-35 Showbiz-anchored development remain in the pre-leasing stages."
West Central
"Occupancy continues to be strong at 94.3%. Westgate Marketplace, Yukon Village, The Market at Czech Hall, West End Point ea nd the OK C Shoppes comprise nearly half the total product in the sub market and all maintain high occupancy. Czech Hall recently added a ground-up construction Burlington as Burlington continues to downsize and relocate stores. ... The former cotton mill parcel is one of the possible locations for the MAPS 4 soccer stadium, which could jumpstart a larger mixed-use development there."
Moore-Norman
"Ended the year 7.1% vacant, an uptick from the previous year. Fritts Farm added a new building with Burlington and Ulta as well as a couple of small multitenant outparcels. Parkway Plaza finally saw a gain in occupancy with the addition of
CostPlus World Market, Party City, and a remodeled Bed, Bath & Beyond. Sooner Mall has seen a rise in vacancy with Sears vacating. A second metro Costco is expected in this submarket, but timing is unknown."
Eastern Oklahoma County
"Im proved sign ificantly over the second half of the year, ending the year at 12%, down from 14 at mid- year. Ollie's back-filled a portion of the long-vacant former Hobby Lobby s pace at Green way Plaza and both Warren Theatre and Andy's opened at Sooner Rose. ... The former Sears building at Reno and Air Depot was bought by the city of Midwest City for nonretail use."