OKC Retail Market Summary: Part 1

02.20.2017

By most traditional measures – occupancy, rents, lease volume, new construction – the retail market held up pretty well in 2016, probably the best performance of any asset type. Market vacancy ended the year at 10.6 percent compared to 10.4 percent at mid-year. Some underlying factors, however, are creating uncertainty and could impact 2017 performance. Chief among these are continued low energy prices, low income growth (the lowest in the country in the third quarter) and the resultant decline in sales taxes. For these reasons, we anticipate uneven performance in 2017 with a slight rise in vacancy and relatively flat rents. Discounters like TJ Maxx, Ross and the various dollar stores have done well the past few years and we expect that to continue. Restaurant expansion, which has been booming in Oklahoma City and nationally (40 percent of retail growth last year), will likely slow. The higher end boutique market may see the most headwind. One unknown that could help our economy and possibly change the market dynamics is President Trump. It is anticipated that the new administration’s policies will be good for business in general and the oil industry in particular by ushering in reduced regulations and lower taxes.

Whether or not these policies come to pass or give Oklahoma a positive bump in 2017 is unknown.

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