Bored with the same old, same old places to eat, drink and shop? Just wait a bit. More stores are in store for OKC, as neither rising interest rates nor inflation have tamped down demand for yet more, more, more stuff to buy.
Surging retail development hasn't sated anybody's appetite, according to OKC's NAI Sullivan Group, which just issued reports for retail, office, industrial and apartment property for the first quarter of the year.
The reports are loaded with details. Here are highlights from each.
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Retail is rocking right along in Oklahoma City
From Samuel Dunham, retail specialist:
- "Retail development continues to plug along even with interest rates being at their highest since 2006."
- "The construction for the new Crest Foods grocery store is well along its way at the northwest corner of Sooner and Covell in northeast Edmond."
- "Mayfair Village continues to announce more retailers to their development at NW 50 and May. Panda Express will be starting construction soon, and Taco Casa has been announced, and a new OnCue has broken ground just north of here."
- "Development continues to ramp up in northwest Oklahoma City towards Deer Creek. Plans are taking shape at NW 178 and Portland; 7-Eleven has purchased the southeast corner, and Braum’s will be building a new location next door. Chick-fil-A will be on the northeast corner as well as HomeGoods and Ross.
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Office construction, development and rents stable in Oklahoma City
From Matthew Pierce, office specialist:
- "Construction levels have remained relatively stable, with about 778,753 square feet currently under construction."
- "The two properties with the largest building area under construction are the 400,000-square-foot ... Innovation Hall, which is set to be delivered in June 2023, and the 80,000-square-foot building at 424 NW 10, which is scheduled to be delivered in May 2024 ... with Phillips Murrah, one of Oklahoma City’s largest law firms, set to occupy the top three floors. Restaurants and retail are envisioned for the first two floors."
- "Oklahoma City continues to show growth and improvement, with office market rents positive over the trailing 12-month period and the vacancy rate settling in near 9.7%."
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Industrial property market in Oklahoma City is still on the grow
From Zac McQueen industrial specialist:
- "The Oklahoma City industrial market continues to grow at a very quick rate with 3.2 million square feet being delivered in the last year increasing the total inventory to 132,786,282 square feet."
- "The increase in inventory is largely due to the amount of Class A warehouse space being delivered to the market, much of it being speculative development, meaning developers are building without a user already in place. Even still, as of April 2023, there is over 6 million square feet under construction expected to be delivered this year."
- "This trend of speculative development has impacted our vacancy numbers which now sit at a steady 4.2%. Class A vacancy from Q1 2019 to Q2 2022 stayed below 2.5%, rarely going above 2%. Now, Class A vacancy has been at or above 4% for the last three quarters."
- "Another trigger for the higher vacancy rates is the turmoil being seen in the state’s medical cannabis market. There is a general consensus that there is an over saturation of companies in the market, leading to an oversupply of the product without a matching demand."
- "To add to this the voters voted down State Question 820 in March 2023, which would have legalized recreational marijuana, which was the last straw for many cannabis companies, leading to broken leases, properties on the market, and vacancies."
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Apartment rents in Oklahoma City are up, and down, depending on size
From Sam Walter and Dirk Erdoes, investment specialists:
- "Class-A studio has hit what seems to be an all-time high in asking rents at over $2,000/month."
- "We believe this is an outlier to what the rest of the market is experiencing and that is confirmed with the overall asking rent for studios dropping $115/month from last quarter (to $823/month)."
- "Across all asset classes, we saw one-bed asking rents drop while two- and three-bed asking rents raised somewhat considerably. One-bed rents saw an $86/month drop (to $823/month), while two- and three-beds saw a $63/month and $191/month increase, (to $989/month and $1,145/month), respectively."
Senior Business Writer Richard Mize has covered housing, construction, commercial real estate and related topics for the newspaper and Oklahoman.com since 1999. Contact him at rmize@oklahoman.com.Sign up for his weekly newsletter, Real Estate with Richard Mize.
