Retail realty rebounding in Oklahoma City, real estate firm says

Rising store sales and stronger retail rents should put landlords in the best position they've been in for several years, according to Price Edwards & Co., the biggest local commercial real estate firm.

The lurching national economy kept stumbling into locally owned retailers in 2011, but this year should bring growth broad enough to give some relief from the lingering effects of the Great Recession.

That's according to the year-end retail market summary from Price Edwards & Co. The firm forecast sales to rise at an increasing rate and retail rents to rise, putting landlords “in the best position they've been in the past four years to negotiate deals.”

Local stores, Price Edwards said, have benefited little from the improving economy since they haven't been able to cut costs, spend more on advertising or take other steps that regional and national chain stores have.

The tide is starting to turn, the firm said. Not that some stores won't close and that some won't still see sluggish sales.

“This is the nature of retail,” Price Edwards said in the report, compiled largely by Jim Parrack, senior vice president and retail specialist. “As with the past two years, improvement won't always seem readily evident as we are in the middle of it, but it will be real.”

National trends will still affect the local retail property market in Oklahoma City but with better results than last year.

Occupancy rates are forecast to slowly rise in the country as a whole, and not be wiped out by sudden large vacancies from big-name bankruptcies as in 2011, said Garrick H. Brown of Atlanta-based ChainLinks Retail Advisors, who wrote a national outlook for the Price Edwards report.

“There will certainly be plenty of retail failures in 2012, but we don't expect anything on the scale of Blockbuster or Borders — between them these two retailers alone returned over 14 million square feet of space to the market over the past year,” wrote Brown, national director of research for ChainLinks.

Stores aimed at middle-income shoppers will face the biggest challenges this year, he said.

“Retailers on either extreme are doing well. Luxury shoppers are back, but middle-class shoppers have downsized to discount retail. This goes across all retail types, from midpriced apparel chains, to midpriced grocers ... to casual dining chains,” Brown wrote.

In Oklahoma City, the retail vacancy rate fell below 10 percent for the first time in several years, ending 2011 at 9.8 percent, down from 10.5 percent at midyear and 11 percent at year-end 2010, Price Edwards reported.

The year ended with 2,668,006 square feet of space vacant, out of a metro inventory of 27,362,806 square feet of retail space, the firm said.

Price Edwards said retail occupancy increased on four factors:

Several vacant big-box stores were filled; national tenants, after a two-year lull, became more active; limited construction of retail space other than the successful lease-up of the new Outlet Shoppes of Oklahoma City, which opened 100 percent occupied; and national retail sales up 20 percent from the 2009 trough and 5.5 percent above the pre-recession peak, not accounting for inflation.

For access to the entire Price Edwards report, go to www.priceedwards.com.

Source:http://newsok.com/retail-realty-rebounding-in-oklahoma-city-real-estate-firm-says/article/3638126