Oklahoma City has been soaking up the empty big-box retail space, and more than half the vacancy available in 2010 is back in use.
That's according to brokers Mark Inman and Stuart Graham with CB Richard Ellis-Oklahoma, who started tracking big empty stores — those 18,000 square feet and larger — three years ago, when a glut was hitting landlords hard. Then, Inman and Graham counted 30 vacant spaces totaling 1,248,800 square feet.
“Landlords were reeling as a result of closures by Circuit City, Linens N' Things, Sportsmen's Wearhouse, Ultimate Electronics and others,” they said in a year-end report. “Times have changed. After a remarkable run of nine new deals signed over the past six months, the number of vacant boxes and the total square footage has been cut nearly in half.”
Now, the brokers said, only 17 large vacancies remain with a combined 647,295 square feet. They said 340,728 square feet of space — about one-third — has been filled since last summer.
In the past six month, Gold's Gym filled two spaces; Planet Fitness absorbed one; Heritage College filled the former Best Buy at Crossroads Mall; Goodwill leased a large portion of the former Albertson's at May Avenue and Britton Road, Stuart and Inman said. Developer Jim Tapp's demolition of the former Westpark Mall at NW 63 and MacArthur, reportedly to develop a new grocery store, also impacted the big-box numbers, they said.
“Oklahoma City has been a target for a number of retailers looking to expand,” Inman said. “With limited new development, the options for box users have been restricted to the existing inventory. Without competition from new projects, these spaces are being absorbed.”
He said a wide range of property types are being leased.
“When properties age and are reclassified (downward in class), the number of potential users grows,” he said. “In many cases, deals are being made at prices 30 percent below what might have been paid before, and nontraditional users are now in the prospect pool.”
Inman said Class A big-box retail space is in strong demand across the country and that Class B space is seeing moderate absorption. Class C spaces are mostly being converted to nonretail uses or remaining empty, he said.
Looking ahead, Inman and Graham said big boxes in Oklahoma City should continue to be in demand.
“We anticipate additional box space being leased in the next six months and the trend of higher occupancy to continue. The pace may not be as brisk, but the trend line should continue its course. There are several large retailers operating in the market with questionable long-term strategies and balance sheets, but today there are no imminent store closures,” the brokers reported.