LESS AGGRESSIVE EXPANSIONS IN THE RETAIL MARKET
The retail market has been strong during the last 6 months, but there are some indicators that the next 6 months could see fewer expansions.
The common opinion at the annual International Council of Shopping Centers Convention held in Las Vegas was that the current slow down would be short lived and optimism was the general feeling. Several developers indicated they would push their plans back by six months to a year, but were steady on course for expansion.
Faced with record high fuel prices, rising food costs and a softening job market, consumers are pulling back on discretionary spending, resulting in weakened retail sales across the board. While Oklahoma’s housing market has avoided the low sales price and high inventory prevalent on the coasts, Oklahoma City is not immune to its effects. Out of state investors are dealing with losses in other markets instead of investing in new projects locally.
However, Forbes Magazine recently ranked Oklahoma City as the most recession proof city in the nation, thanks to our soaring energy, manufacturing, agricultural and housing. We hope that this news will help lure buyers to sell properties in less reliable markets and invest their capital in Oklahoma City.
Our two largest hurdles are retail reluctance to expand, increasing lease rates due to higher construction costs and land prices.
However, we will overcome these by...
Strong financial forecast for the City of Oklahoma City
A five year economic forecast prepared for the City of Oklahoma City indicated that the per capita income for Oklahoma City is 107% of the national average and the cost of living is only 93% of the national average. These factors along with pro-business city leaders make Oklahoma a business friendly city.
More high income residents
The demand for retail will be driven by consumers that want the latest fashions seen in places like Dallas and Chicago. The arrival of our new NBA franchise will bring even more high income residents to the city which will help drive the demand for the more expensive retail currently lacking in Oklahoma City.
Construction of new retail hubs
The Warren Theatre in Moore was built in the middle of a vacant quarter section and retail now surrounds the site. A new Warren Theatre has been announced for the corner of Memorial Road and Rockwell in Oklahoma City. This area is already becoming a hot medical center and retail area and additional retail will follow the expansion.
Oklahoma City’s First
Oklahoma City welcomes its first outlet mall consisting of 340,000 SF retail has been announced for Council and I-40. This will offer Oklahoma patrons retail opportunities within the state they have not had in several years.
To view the full report visit:
http://www.naisullivangroup.com/marketreports/RetailMarketReport-MidYear2008.pdf?MarketID=22