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Retail Demand in Oklahoma City is on the Rebound

admin  /   March 2022

North Oklahoma City Leads the Market

A combination of stable leasing activity and limited construction has kept Oklahoma City’s retail market stable over the past year.

With the majority of pandemic-related move-outs in the rear view mirror, the market reported net absorption, the difference between move-ins versus move-outs, of almost 888,000 square feet last year, registering the best performance since 2017. As a result, vacancy rates have fallen to 5.1%, down from a peak of 5.4% at the end of 2020. With vacancy rates falling, rent growth is trending higher, close to 4% through the first quarter of 2022.

Leasing activity registered 1.4 million square feet over the past 12 months. That is par with levels in 2020, but below pre-pandemic levels, a trend that is persisting through early 2022.

North Oklahoma City is leading the market in new, direct leasing activity with tenants signing on for 136,640 square feet in the past year, accounting for 25% of all direct leasing. The area is a longstanding shopping destination in the market and is home to several of Oklahoma City’s major malls, including Penn Square Mall and Quail Springs Mall.

The submarket benefits from relatively higher household incomes and strong buying power. In the past two years, several national retailers have descended on the area, including Costco, Hobby Lobby and REI.

Overall leasing volume was driven by a mix of sporting goods, fitness, home goods and discount retailers. Among the largest lease deals, Dick’s Sporting Goods signed on for 49,638 square feet at Centennial Plaza in North Oklahoma City, under its outlet concept called Warehouse Sale Store. Other tenants committing to larger blocks of space include MetroMerch, Aaron’s and OKC Gymnastics.

Net absorption is expected to steadily improve, allowing vacancy rates to remain close to 5%. The trend follows Oklahoma City’s economic recovery. Overall employment is 6,400 jobs away from reaching pre-pandemic levels and is expected to regain all jobs lost through the first half of the year.