Oklahoma City's Retail Rebound
Retail is thriving in the Oklahoma City region, with developers such as Burk Collins taking advantage of an underserved market.
Greg Moe, AIA

Shopping had gotten pretty dull in Oklahoma City, with few new projects and little excitement. Developers and center owners were frustrated by the lack of opportunity in the market.

“Oklahoma City was dead for years,” says Burk Collins, CEO of Hurst, Texas-based developer Burk Collins & Co. “There were a few new buildings in the 1970s, but you couldn't give them away.”

Today all that is changing. New centers are springing up around the region, providing new shopping for a long-deprived market. Collins intends to be in on the action, creating new retail centers to meet the pent-up demand.

“The national retailers are starting to realize this is a good market,” Collins says. “It's a great time to be Oklahoma City.”

Oklahoma City's Emergence From Economic Slumps

Oklahoma and the capital region in particular were dealt blows in the last decades that took time to get over. The first was the oil slump in the 1980s that crippled the region's economy. Then came the bombing of the Alfred P. Murrah Federal Building in 1995, which left a pall over the entire community.

Ten years later, Oklahoma City has put the pain of the past behind it. Today, the community is experiencing increased population growth, bringing new energy — and spending power — into the region. The region has grown at a rate of nearly 14 percent in the last decade, according to U.S. Census data. Residents are attracted by low housing rates, low traffic congestion and new employment opportunities with major employers such as Dell Computer, which plans to bring 1,000 jobs to the area this year.

“Oklahoma City is growing,” says Carl Edwards, managing partner of Price Edwards & Company, a local commercial real estate firm. “Things are going very well here. Unemployment is low and job growth is good. The city government is very pro-development. There are a lot of positives in Oklahoma City.”

However, the previous years have left their mark on the retail market. For years, new projects were almost unheard of. National retailers in the Oklahoma City market made due with older facilities, often located in stand-alone structures. Demand was limited by the available quality retail space.

Now that's changing.

“The retail development market is as strong as it's been in 15 years,” Edwards says.

In a 2004 year-end survey of the retail market, Edwards wrote that the big news in the region was “the large amount of new or redeveloping centers under construction.” At that point, he identified “nine different centers in excess of 25,000 square feet that are under construction, expansion or redevelopment. Many of these developments are pre-leased with national tenants that are expanding in this market, or, in a few cases, with tenants new to the market. We also have reports of at least four major centers that are planned but have not broken ground.”

These new properties will start to meet built-up demand. “There continues to be an abundance of demand, but not much product on the market,” the report states.

The quality of the new projects is significantly higher than those previously available. The report states: “Since most, if not all, are being developed by experienced retail developers, it is felt that quality properties will be the result.”

“Retailers want to enter in the type of facility that's in accordance with their present prototypes. The older centers that are not on the leading edge don't suit them,” says Edwards.

Edwards points to other trends behind the retail growth in the area, including a favorable investment environment. “Low interest rates, abundant financing, strong investor dollars and strong buyer dollars are hastening growth as well,” he says.

Seizing Oklahoma Opportunity

One developer excited about the retail opportunities in Oklahoma City is Burk Collins. Collins was born in Bromide, Oklahoma, a small town southeast of Oklahoma City. “We were so poor, thieves used to break into our house and leave us things,” Collins says. Today, while his primary residence is in the Dallas/Fort Worth area, Collins owns a ranch near Ada, Oklahoma.

A career of shrewd investments and careful development strategy in Oklahoma and North Texas has given Collins insight into how to spot a market ready to grow. After purchasing an industrial campus in Oklahoma City, Mid America Business Park, Collins started to watch the patterns of growth around the region.

“I must have visited a thousand sites,” he says. “I studied the traffic, the demographics. I've developed a method over 40 years in this business. I've learned to stick with it.”

Collins was quickly impressed with the disposable income of the region's growing residential neighborhoods. “I watch income levels like a hawk,” he says. “If I don't see that disposable income, I'm not interested. If they can't afford it, people won't shop. They'll buy groceries and pay the rent but that's all. You can have the strongest contract in the world with your retail tenants, but if no one's shopping there, the tenants will find a way to get out.”

He liked the residential growth in the market. “You hadn't seen that growth before.”

Soon, Collins was hunting down locations that met his criteria for shopping center development. One area he found particularly interesting was in southwest Oklahoma City off the Southwest Expressway (I-240) between the intersection with I-35 and the Oklahoma City Airport. Collins identified a location at the intersection of I-240 and Pennsylvania Avenue housing a vacant Wal-Mart and a Mardel's. Nearby were national retailers such as Michaels and PetsMart in older, stand-alone buildings.

“I decided to go after it,” Collins says. “I had to pay through the nose, but you know, it's like putting a cup of sour milk in a gallon of fresh. You'd never know it was there.”

If the site succeeded as he anticipated, the price didn't matter. Sure enough, soon “tenants fell out of the sky,” Collins says. Current plans include tenants such as Pier 1 Imports, Old Navy, Marshalls and Circuit City.

Local developer Burk Collins is creating 240 Penn Park, a more than 225,000-square-foot retail center that will also include about 16,000 square feet of restaurant space when it opens in May 2006.

Another hot retail area in Oklahoma City spotted by Collins is the North Submarket, which was identified by Price Edwards as one of the strongest retail submarkets in the region, anchored by two strong shopping malls, Penn Square and Quail Ridge. Collins purchased property on the northwest corner of the intersection of North May Avenue and Interstate 44; it is being developed as The Shops at Penn Square. With almost 205,000 square feet of retail space and two 6,000-square-foot restaurant sites, the center has attracted retailers including Circuit City and PetsMart.

“The tenants around here were located in freestanding buildings, so it was no problem to fill it up,” Collins says.

Burk Collins is also developing The Shops at Moore located along I-35 at South 19th Street in Moore, Oklahoma. The nearly 50-acre site includes 430,000 square feet of building space, two large retail lots and eight restaurant pad sites. Tenants include Best Buy, Ross, Michaels, T.J. Maxx and Office Depot.

Collins is embarking on other projects even farther afield in towns such as Ardmore, located along I-35 south of Oklahoma near the Texas border, and Tahlequah, located in eastern Oklahoma between Tulsa and the Arkansas border. He's interested in expanding into small towns as well as large cities, predicting that national retailers will start to look to those markets as urban centers become oversaturated. “They've got to look at smaller cities because it's the only place to get growth,” he says.

Looking Ahead

The Bricktown area of Oklahoma City is becoming an entertainment and shopping hub with projects such as Bass Pro Shops and Toby Keith's I Love This Bar and Grill.

Local developer Tom Blanton of Blanton Properties is excited about growth in the northern market near Quail Springs Mall along Memorial Road, where 3 million square feet of retail in a mile-and-a-half strip generate sales of roughly $800 million.

Oklahoma City's Bricktown area is becoming a lively place for entertainment and retail.

Meanwhile, suburbs such as Edmond in the north and Norman in the south continue to see expanding residential growth, with retail projects following.

National retailers are either moving into the area for the first time or expanding their presence. For example, Ross Stores has three stores in Oklahoma City today, with two more to open in the city itself and another in Enid.

“We look for communities that have healthy growth demographics,” says Katie Loughnot, vice president of investor and media relations for Ross. “Oklahoma is an existing state for us, and where there is an opportunity to serve that growth, we like to take advantage of it.”

PetsMart also believes Oklahoma City is a good location, with four stores currently in the region and a fifth set to open. Bruce Richardson, spokesperson for PetsMart, says, “We add stores as we see demand. We're looking for a solid pet population.”

The growth trend in the area should continue for several years, Edwards says. “The Oklahoma City market is going to continue to do well. Lots of subdivisions are moving outward in the suburbs. We've got nice housing going on downtown as well. We've got a pretty few good years ahead of us,” he says.

Meanwhile, Collins continues to look around Oklahoma City and the state as a whole for retail opportunities. In his 40-year career, Collins has seen good markets and bad. He says he knows how to recognize a good market when he sees it. “I've been through all of the ups and downs, and there have been many of them,” he says. “Right now, Oklahoma City is definitely on the upswing.”

Greg Moe is director of retail for GSBS architects.


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