OKC Retail Boom Creates Sharp Divide Between Centers

Contrary to popular belief, the internet did not kill retail and Oklahoma City is seeing an influx of new construction.

But a new retail survey shows a growing divide emerging between the success of newer shopping destinations and fading fortunes of those built in the age of disco balls and leisure suits.

Jim Parrack, who leads the retail division at Price Edwards, said the Oklahoma City metro at first glance is doing well compared to the national market in which rental rates are going up and new development is slowing amidst higher construction costs and rising economic uncertainty.

Large new retail properties in Oklahoma City include OAK, the mixed-use upscale development at Northwest Expressway and Pennsylvania Avenue, Grove Marketplace at NW 178 and Portland Avenue, and Rose Creek Plaza at NW 164 and May Avenue.

And a next-generation prototype Walmart Supercenter, meanwhile, is being built as part of Deercrest Marketplace at the corner of John Kilpatrick Turnpike and Rockwell Avenue. More announced retailers are moving forward in northwest Oklahoma City, including a Scheels store and a Crest Foods.

Legacy at Covell in Edmond is set to include some of the biggest names in retail and dining, including Whole Foods and a Ruth's Chris Steakhouse. And multiple new developments continue in Norman, including construction of a large development anchored by a Target store.

"Retail in general is doing better than people tend to think. There is a lot of negative news nationally. But even nationally, retail is doing better than people often give credit for mainly because people are still spending money."

Older Locations Seeing Rent Stagnating

Parrack identified Oklahoma City's two power retail corridors where much of the growth is happening as those at Northwest Expressway and Pennsylvania Avenue, and along the Memorial Road corridor between Portland and Western avenues.

"The other locations are those that are older, maybe aren't configured right and have more mom-and-pop tenants," Parrack said. "The surprising part to me is the gap between the two has widened significantly. We're seeing certain centers, like Classen Curve, get $50 to $60 a foot in rent. There are some small strip shopping centers in that same range. And we haven't seen those kinds of rents here ever."

Older centers, meanwhile, are seeing rents stagnating between $12 and $14 a foot.

"The discrepancy is very noticeable," Parrack said. "A lot of the older centers in the '70s are in that older tier. Sometimes the markets have grown away from them. But sometimes the centers just get old; the ceilings are low and maybe their spaces are too deep. Something is wrong with them."

"At some point, a number of these older centers just need to be repurposed, whether that means torn down for a new center, or re-imagined," Parrack said.

Parrack does not expect the city to see another dying mall like Crossroads or Heritage Park anytime soon, but notes that Penn Square remains the metro's strongest performer while smaller malls like Sooner Fashion Mall in Norman continue to struggle with vacancies.

Newer mixed-use developments like OAK, Chisholm Creek and The Half are being well received by the market, with OAK drawing comparisons to Tulsa's Utica Square as a premier shopping destination the market hadn't previously experienced.

"The last holiday sales period saw 75% of sales being at brick-and-mortar stores. That percentage for holiday sales has held steady."

Source: The Oklahoman · Steve Lackmeyer