Oklahoma City's big-box retail space surplus has slipped away the past few years as the local economy hums and national and regional chains keep grabbing space.
That's according to a midyear report by brokers Mark Inman and Stuart Graham of CB Richard Ellis-Oklahoma, who tracked deals “across the full spectrum of property types.” They follow transactions involving retail spaces of at least 18,000 square feet, which they consider the smallest space usable by a “junior anchor” in a shopping center.
“After so much worry several years ago about an oversupply of empty box space, we are now struggling with a lack of inventory. There are tenants circling the market that simply can't find space,” said Inman, senior vice president of the firm.
And so developers are developing.
“For the most part, the construction is occurring as expansion of existing projects, but there are new boxes under construction or being contemplated in most every submarket,” Inman said.
He pointed to the new 138,445-square-foot Sam's Club under construction on the west side of Interstate 35, north of 15th Street, in Edmond, set to open Oct. 3, and others, including LA Fitness locations in Edmond, Moore and west Oklahoma City; Crest, Home Goods, DSW, Michael's and Walmart Neighborhood Market in Norman; and Petco in north Oklahoma City.
Inman and Graham found 629,366 square feet of big-box retail space vacant at midyear, a 2.8 percent drop from the end of 2012.
The tightening supply is presenting challenges for site selector and brokers, Graham said.
“While there are exceptions, most big-box users will be looking in our market for no more than five or six units. When you look at the most desired trade areas — Quail Springs Mall area, Moore-Norman, west Oklahoma City or Midwest City — there are simply no options. Retailers are forced to consider new construction or simply pass on the market,” said Graham, a CB Richard Ellis-Oklahoma vice president.
Notable deals the first half of the year include Nordstrom Rack, “a very attractive tenant,” which leased 34,000 square feet at Belle Isle Shopping Center at Interstate 44 and Classen Boulevard; The Tile Shop, with 19,100 square feet at French Market Mall at NW 63 and May Avenue; and Sean's Wine and Spirits, with 18,000 square feet at Market Plaza Shopping Center at Northwest Expressway and Rockwell Avenue.
In addition, a 32,000-square-foot former Piggly Wiggly grocery store has converted to office use at Eagle Crest Shopping Center southeast of Memorial Road and Bryant Avenue.
Those four transactions, totaling 103,100 square feet, were largely offset by three store closings totaling 85,171 square feet, for a net absorption of 17,829 square feet, Inman and Graham reported.
Going dark were a Homeland store at NW 39 and Pennsylvania Avenue, a Locke Supply Co. location at W Main Street and 24th Ave. NW in Norman, and ATI Career Training Center northeast of Interstate 35 and I-240.
“We believe the vacancies at 39th and Penn and in Norman will not last long. There is current activity on the former Homeland space, and open box space in Norman is simply in short supply. In both cases, we anticipate quick absorption of these units,” Graham and Inman reported.