Being the only game in town is no guarantee that one will never need to up one’s game, even relatively early on. A case in point is Oklahoma’s sole outlet center, which has been operating for only about six years and yet is undergoing a rebirth now, under new ownership. Last May the Chicago-based Outlet Resource Group purchased the 34-acre development from Horizon Group Properties and CBL Properties for $130 million. The center, which opened in 2011 as the Outlet Shoppes at Oklahoma City and has been renamed OKC Outlets, measures nearly 394,700 square feet and houses roughly 90 shops.
The center’s trade area also encompasses the neighboring states of Kansas, Missouri and Texas
Outlet Resource Group jumped to buy the property, located west of downtown Oklahoma City at the intersection of Council Road and Reno Avenue, soon after it was put up for sale last year. “The outlet sector is a small niche, so we knew the asset well,” said David Hinkle, an Outlet Resource Group principal. “We knew the original developer, we knew how the tenants felt about their stores there, and it is truly unique.” The property’s Oklahoma City location was a draw in itself, says Hinkle. Indeed, the center’s rebranding as OKC Outlets is intended to highlight its locality. “The city has a great leadership, and there just are a lot of great things going on in that community that I think people in gateway cities like San Francisco and New York would never grasp,” he said. The center’s trade area also encompasses the neighboring states of Kansas, Missouri and Texas.
During the due diligence process, Outlet Resource Group identified several improvements that could be made. “An outlet center is always a collection of some of the best brands in the world, and we felt like the aesthetics of the center could be improved, and some of the amenities could be improved as well,” said Hinkle. The first phase of work involved fairly simple changes, such as introducing Wi-Fi, improving signage and using a paint scheme that better matched the native architectural style. “One thing that we found of great interest is, there is a real commitment to architecture and art in Oklahoma City,” said Hinkle. “And we felt like the paint color schemes, for example, were so far out of kilter from what [they] should be with expectations for architectural design in that city.”
Hinkle points out that last November’s Black Friday weekend saw several of the center’s retailers record their best sales-volume days since 2011. “At the end of the day,” he said, “our job is to bring more traffic to our retailers.” Occupancy has remained at a steady 90 percent, but Outlet Resource Group has no intentions of being complacent. “The center performs well,” said Hinkle. “And now our objective is to continue to improve that shopping experience as the Millennials become a more important consumer in the outlets sector, and [accordingly to] add to the selection of retailers and manufacturers that tenant the center.”
“Quite frankly, the outlet sector has been a laggard in providing those types of amenities to the consumer”
Certainly, the tenant mix continues to evolve. “As sales continue to rise here, that will allow us to bring in better brands to complement the core brands that we have in place now.” This includes entertainment-oriented retailers that will help generate longer consumer dwell times. The dynamic nature of shopping centers has changed significantly since the center’s earliest days, including a heavier focus today on entertainment and food tenants.
“Quite frankly, the outlet sector has been a laggard in providing those types of amenities to the consumer,” said Hinkle. “Now the opportunity for us — and not just in Oklahoma City, but also in the other centers we operate — is to bring those other amenities in and make it a better shopping experience.”
Local real estate experts say this outlet center has been a retail game changer. “OKC Outlets is arguably the most successful addition to the Oklahoma City retail market in the last 10 years, filling a niche we really didn’t have,” said Jim Parrack, a senior vice president at local real estate firm Price Edwards & Co. “When [Outlet Resource Group] purchased the center, no one here really knew what to expect. In a short time though, they’ve not only improved the appearance of the mall, but are [also] in the process of making some needed changes, most notably an improved food selection and a renewed focus on tenant mix.”
Plans for the center will continue to evolve over the next five years, according to Hinkle, indicating that this will be a long-term hold for the company. “We have really worked hard to get involved with the city,” he said. “We felt like it was important for us to work with the city and be part of the community and not be this out-of-town investor that comes in and does our thing and goes on our merry way later on when we sell it.”
By Ben Johnson
Contributor, Commerce + Communities Today
