Tuesday, August 21, 2012
Grocery stores' appetite for Oklahoma City keeps nibbling away retail space one big-box store at a time.
Three big spaces totaling 94,252 square feet came off the market the first half of the year, according to brokers Mark Inman and Stuart Graham of CB Richard Ellis-Oklahoma. Grocery-related users are committed to two of the spaces and being recruited for the other one.
Just one store went dark, a 10,000-square-foot Famous Footwear at French Market Mall, NW 63 and May Avenue.
Combined with 9,100 square feet vacant next door — a former Ooo La La store — it meant a reduction of 75,152 square feet in big-box retail space, as defined by Inman and Graham. They consider any retail space larger than 18,000 square feet to be a big box.
The changes left 24 vacant locations totaling 961,023 square feet of space in the metro area, a reduction of 7.3 percent from the 1,036,175 square feet available for lease at the first of the year, the brokers found.
The spaces that came off the market were:
City records show that Rosemont, Ill.-based US Foods, which has a large, regional warehouse distribution center at 37 NW 122, plans an operation at the I-240 location.
Inman and Graham said the building was absorbed as a result of "brisk activity in . . . the grocery sector," but declined to elaborate, citing confidentiality agreements. US Foods had no comment.
Sunflower Market, which recently was acquired by Sprouts, will open its third store in the metro area. The first was northeast of NW 63 and May, which was followed by a store at Second Street and Littler Avenue in Edmond.
Graham and Inman said the Sunflower/Sprouts deal "eliminates all vacant big-box space in the Moore/Norman submarket."
Developer Jim Tapp bought the dilapidated shopping center to redevelop it with retail anchored by a neighborhood grocery store.
More to come
Inman and Graham said they expect more big boxes filled with groceries.
"We've watched over the last few years as grocers watched for opportunity. In fact, the site selectors are still out there. They're still looking for deals and we believe the market's vacancy rates will continue to decrease," Inman said.
Graham called the store openings "encouraging," but noted that the supply of retail space is still strong.
"There are good opportunities for those still looking at our market," he said.
Among spaces likely to come off the market in the second half of the year is a 33,500-square-foot former Linens 'n Things at Belle Isle Station Shopping Center at Interstate 44 and Classen. Nordstrom Rack is an off-price division of Nordstrom Inc. An architecture firm that designs Nordstrom stores Thursday took out a permit to remodel the space, city records show.
In a separate report, CB Richard Ellis-Oklahoma estimated a midyear vacancy rate of 9.75 percent among shopping centers 25,000 square feet or larger, almost flat compared with a rate of 9.9 percent at the first of the year.
"The small movement doesn't necessarily represent a lack of activity or stagnation. There is simply not much more room for growth without new construction," brokers wrote in the report.
They noted that of the seven submarkets tracked, three saw lower vacancies, three saw higher vacancies and one was unchanged. Overall, they said, Oklahoma City's retail property market remained "uniquely healthy," with success building on success.
"The market continues to gain attention for the overall strength of the local economy and the positive reports from retailers that are expanding here. These upbeat reports help create demand by others searching for high-qualityspace," CB Richard Ellis reported. "At the same time, the nation's flat economy and the resultant restricted capital for new investment constrains the opportunities for new development, especially the construction of any speculative retail space.
"The lack of new product forces those looking to expand to consider existing alternatives. The result is a tightening market with occupancy factors at record highs."