Retail

Download the full copy of the 2021 Midyear Retail Market Report here (email required)

The Retail Market

The effect of the pandemic on our market is reflected in our first half numbers; overall market vacancy increased to 11.6 percent from 9.7 percent last year. The increase is centered in vacancies created by a handful of larger tenant closures, including JCP, Warren Theater and Steinmart among others. These vacancies tend to be concentrated in a handful of our subdistricts. The numbers also reflect a more evenly, but smaller, increase in vacancy among small tenants, particularly locals. And while the vacancy increase is meaningful, don’t take it to mean that there isn’t activity. In fact, the first half of 2021 has set the stage for a very good finish to the year. By any metric, there has been more activity so far this year. As expected, there’s a significant amount of pent up demand. But deals don’t happen overnight, particularly from a near-standing start. As a result, much of this activity will show up in the numbers later in the year. As we discussed in our year-end market summary, last year saw a number of retailers do very well – grocery stores, discounters, general merchandisers, fast food – you know the list. These categories of retailers strong sales have continued into 2021. The good news is that many of the retailers that were hurt last year – boutiques, entertainment, small local tenants – are beginning to do better. This is really the start of the recovery for them.

We talk a lot about retail being driven by rooftops and incomes. Well, Oklahoma City (and the country) is in the middle of a single-family housing boom and a rise in disposable income. Needless to say, retail in the aggregate is doing well, retail sales are up, City sales tax revenue is up, and many tenants are expanding. Several forces are driving this growth: the pent-up demand we’ve already mentioned, the infusion of money into the economy (both the individual stimulus and company stimulus), the general economy opening back up and a much higher consumer optimism.

These positives in the market are undeniable but must be tempered with the understanding that this is a very unique set of circumstances. After shutting down parts of our economy for the better part of a year, there’s no playbook on what the longterm results will be either for the general economy or retail in particular. People spending so much time in their homes no doubt has played a role in the housing boom. No one is sure just how long this will last. The same can be said about pent-up demand; is it a short-term phenomenon or will it last a few years? What effect will the additional federal government spending have on incomes and the economy? What will the economic effect of the millions that the City and County just received result in locally? The general political and social climate is in a place it has never been before. How these issues play out will determine the long-term nature of retail here and in the country.

Here is where we see the market headed. While expectations are high, retail performance will continue to be uneven both in terms of which retailers excel and overall growth. The pandemic shut down most larger projects. Expect announcements this year with possible ground-breaking in 2022. We anticipate pent up demand in combination with the amount of stimulus in the economy to lead a strong second half in 2021 through 2022. Beyond that, the uncertainties of the moment make it virtually impossible to predict further out

Retail Property For Sale

Retail Space For Lease

Download the full copy of the latest market report here (email required)