2023 was a good year for retail, better than expected. Sales were up and national vacancy is at all-time lows driven by both consumer disposable income and limited new construction as well as a stronger than anticipated economy. Locally the same dynamics were in play, vacancy ended the year at 8.9 percent, up from 8.5 percent at the end of last year. Most of the uptick in vacancy was either space coming onto the market from bankruptcies – Tuesday Morning, Party City, David’s Bridal – or some small tenant closures in older centers. It should be noted that most of the closures from national bankruptcies have either already been back-filled or deals are in process; Party City and David’s Bridal also kept a number of their stores open. There is a growing gap between the haves and the have-nots in Oklahoma City retail both in terms of vacancy and rent. If you dig into the numbers, newer, well-located centers are almost all 95 percent occupied or above. Rents on new construction, particularly restaurants, can reach $40 per square foot or more. Conversely, older centers who are not as well located have seen some slippage in occupancy and little improvement in rent over the past few years. While the local economy has held up well on an aggregate basis, there is significant uncertainty which tends to hurt smaller, local tenants more than national tenants.
