Retail vacancy rate dips in metro Tulsa
BY ROBERT EVATT World Staff Writer
Tuesday, January 22, 2013
1/22/13 at 6:54 AM
Retail property vacancy fell slightly in metro Tulsa last year, largely because few new spaces were built.
According to a study by CB Richard Ellis/Oklahoma, 13.3 percent of multitenant retail space is now vacant, down from 13.8 percent at the end of June and 13.6 percent a year ago.
Ben Ganzkow, author of the report, said the new number suggests stability, as it falls between the peaks and valleys recorded during the recession and its aftermath.
But the decrease isn't necessarily due to large numbers of new stores and restaurants opening up, he said.
"With a very limited supply of new construction, we've seen positive absorption picking up," Ganzkow said.
Construction began on only two major retail projects last year - Tuscana on Yale, a 32,000-square-foot center near 91st Street and Yale Avenue, and Shoppes On Peoria, a 23,000-square-foot neighborhood center near Pine Street and Peoria Avenue.
Ganzkow said that while the economy is improving - evidenced by a holiday shopping season that saw sales rise about 9.2 percent from a year ago nationally - few developers are making moves.
"It's a wait and see situation right now," he said. "We're in a low interest rate environment and demand is picking up, but developers still have to work through pre-leasing a project to get financing since underwriting has gotten so difficult."
However, Tuscana on Yale is finding success even though it's still under construction, said Bryan Hendershot, owner of the development along with Clint Brumble.
"We've been getting so many requests for letters of intent, we've been able to pick and choose which tenants go in there," Hendershot said. Signed tenants include Keo Asian Cuisine and Russo's Coal-Fired Italian Kitchen.
Ganzkow said that despite the slow pace of growth, positive signs prevail. The average lease rate for retail space rose to $10.60 per square foot, indicating more competition for space, and more centers have been purchased by investors, most notably the sale of Union Plaza near 71st Street and U.S. 169 for $27.7 million.
Some new retailers coming to Tulsa, include Conn's, a furniture store that will take Sports Authority's former space at 71st Street and U.S. 169, and Sprouts, a specialty grocery chain that's building a 30,000-square-foot store at 101st Street and Memorial Drive.
However, the closure of 13 former Drug Warehouse, May's and Med-X Drug stores by new parent Walgreen Co. will empty some spaces.
Ganzkow said he's cautiously optimistic for retail, though improvement could take some time.
"It's a slow turnaround," he said.
Original Print Headline: Area retail vacancies dip
Robert Evatt 918-581-8447
A construction crew works on Russo's Coal-Fired Italian Kitchen on Monday just northeast of 91st Street and Yale Avenue. The concept is a version of Houston-based Russo's New York Pizzeria restaurant. It is being built as a stand-alone structure at the Tuscana on Yale shopping center. JOHN STANCAVAGE / Tulsa World