Retail wreckage; retail rising
Pandemic winners and losers in OKC region
Karen Johnston’s heart broke when Stein Mart filed for bankruptcy late last year and closed its stores, citing the beating its business took during the early throes of the coronavirus and its effects.
She shopped the one in Mayfair Village, for herself and her husband, David, until he died, for some 25 years. She said the women who had worked there for years knew her, and she knew them.
“When they closed down, there was this heartsick feeling that hit the bottom of my stomach,” said Johnston, a Realtor associate with KirkAngel Inc. Real Estate Professionals. “I wasn’t even aware they were shutting down.
“I knew the women — for years — who worked there. They were distant friends. We like to shop the places that make us feel welcome and comfortable.”
The coronavirus pandemic is leaving retail wreckage in its wake, although there are also some winners.
The damage hit Oklahoma City shopping centers, where most of the stores are found. The injury has been greater this year than last, with the loss of big names and the end of their need for big spaces, such as J.C. Penney and Warren Theatre, in addition to Stein Mart.
However, it’s been painful for many smaller, locally owned stores, as well.
Those that were among the fortunate include grocery stores, discounters, home improvement and furnishing stores. Many saw their business soar last year during the lockdowns with so
many people staying home and working remotely.
Vacancy overall crawled up throughout the COVID-19 crisis, from 8.7% at the first of 2020, to 9.2% at midyear, to 9.7% at the start of 2021, to 11.6% at midyear 2021, according to commercial real estate brokerage Price Edwards & Co.
“The vacancy increase is meaningful, (but) don’t take it to mean that there isn’t activity,” Price Edwards said in its midyear retail market summary by Jim Parrack, senior vice president and retail specialist. “In fact, the first half of 2021 has set the stage for a very good finish to the year.
“By any metric, there has been more activity so far this year. As expected, there’s a significant amount of pent up demand,” Parrack said. “But deals don’t happen overnight, particularly from a near-standing start. As a result, much of this activity will show up in the numbers later in the year.”
Johnston said that with Stein Mart gone, she does her shopping at Penn Square Mall and at a locally owned shop — both malls and small, local retailers need the business, judging from the Price Edwards report.
About two-thirds of the stores in the metro area are in retail centers and malls, and the pandemic has left some as winners and some as losers. Price Edwards did not label the centers that way — it just compiled the statistics and analysis.
Price Edwards defines and tracks seven submarkets in the Oklahoma City area. By analyzing submarkets, researchers can identify localized trends that might not be as recognizable in the metro area as a whole.
But here are the pandemic winners and losers at midyear, with comments from Parrack.
North Submarket
• Winner: Chisholm Creek, N Western Avenue and Kilpatrick Turnpike, 99% occupied.
“While phase two hasn’t started, Chisholm Creek has been able to backfill Republic and other tenants that have vacated, and its restaurant-centric tenant mix has held up well during the pandemic.”
• Loser(s): The malls: Quail Springs, 92% occupied, and Penn Square, 95% occupied.
“Not only were they shut down longer than any other retail due to the pandemic, they lost some tenants. Vacancy, while still good, is higher than any time in recent memory. They will be back!”
Northwest Submarket
• Winner: Council Crossing Shopping Center, Council Road and Northwest Expressway, 82.7% occupied.
“This forever-beleaguered center saw some new life with tenants like discounter Ollie’s that thrived during the pandemic.”
• Loser: Rockwell Plaza, 7104 Northwest Expressway, Rockwell Avenue and Northwest Expressway, 76.7% occupied.
“A combination of harder-hit clothing tenants and not-so-optimal spaces were not an ideal combination for a lockdown.”
South Submarket
• Winner: 240 Penn Park, 1409-1609 W Interstate 240; phase one 82.7% occupied, phase two 96.5% occupied.
“Nothing says pandemic success like a lineup of national discounters: Ross, Conn’s, Best Buy. Throw in PetSmart and you’ve got a list of retailers that are doing great.”
• Loser: Southern Hills Shopping Center, 1602 W I-240, 57.3% occupied.
“They had significant vacancy before the pandemic but the lockdown scared retailers and kept them from being able to backfill space.”
West-Central Submarket
• Winner: The Furniture District, anchored by Bob Mathis Furniture, 3434 W Reno Ave., a mix of leased and owneroccupied space.
“This nearly 3 million square feet was 94% occupied at midyear, fueled by the housing and remodeling boom.”
• Loser: OKC Outlet, Interstate 40 and Council Road, 83% occupied.
“Outlet malls rely on travel, travel from a distance, and people getting out and about — not a good combination for a pandemic — although it has rebounded with the reopening of the economy and people focusing on local travel.”
Edmond Submarket
• Winner: Edmond Crossing, 33rd Street and Broadway Avenue, 94.7% occupied.
“It added HomeGoods and Dollar Tree just before the pandemic and, along with TJ Maxx, all were able to thrive during the pandemic. Even the new Surge Trampoline Park was able to open successfully during the pandemic.”
• Loser(s): New development.
“Several ongoing projects — Bridges at Spring Creek, phase two of Spring Creek Plaza, the expansion of Legacy at Covell were all delayed.”
Moore-Norman Submarket
• Winner: Fritts Farm, 780 SW 19, Moore, 90% occupied.
“Costco. Enough said.”
• Loser: Shops at Moore, 2650 S I-35 Service Road, Moore, 83.4% occupied.
“The J.C. Penney closure here put a crimp in plans to market and sell the center and no doubt created co-tenancy clause issues in some leases.”
Eastern Oklahoma County Submarket
• Winner(s): The the rank-and-file shopping centers.
“This submarket has a lot of the tenants that have done well during the pandemic: discounters, grocers, fast food.
• Loser(s): Moviegoers.
“The Mid-Del area was a theater desert prior to the Warren Theatre at Sooner Rose opening, then the pandemic hit, it closed and went through foreclosure. The good news is that the theater was recently purchased by Regal and is reopening.”