Traffic counts are envied along the five-mile stretch of Oklahoma City’s Memorial Road corridor, known for its abundance of retail, restaurants, hotels, banks and office sites on both sides of Kilpatrick Turnpike.

While some businesses ride out the recession and remain cautious, a few have become casualties. Meanwhile, others that didn’t overexpand and were financed before the slowdown are starting to grow. It’s a mixed bag, experts say.

The old switcheroo
Although there have been a handful of restaurant fatalities in recent years, those buildings don’t stay vacant for very long, as other restaurant groups readily stepped in.

Brokers Mark Inman and Stuart Graham with CB Richard Ellis/Oklahoma say they believe the road is a “super-regional corridor” with Quail Springs Mall and its 24-screen AMC theater being a draw. The reason some eateries failed on Memorial, they say, was too many restaurant seats placed there in 2006, making for too much competition.

“That retail corridor relies upon people traveling from Yukon, Guthrie, Northwest Oklahoma City and Edmond to shop and eat there,” Inman says. “I think it just ended up being too many seats.”

He also says the recent economic crisis has created a slowdown in the casual-dining theme restaurant segment.

“People are going more toward fast food that tends to serve cheaper meals,” Inman says, adding that “the Chili’s and the Applebee’s of the world” are not expanding, as they’ve been hit hard by the recession. “People are looking at cheaper ticket prices, and if you look at the real estate world, the restaurants that are expanding are the fast-food and the fast-casual: the Yum! brands – Taco Bell, KFC – and all the burger concepts, the Panda Express, the Smashburgers. They’re not only expanding, but they’re doing well.”

In fact, fast-food chains Arby’s and Carl’s Jr. will soon open locations near the newly opened Procure Proton Therapy Center, 5901 W Memorial Road, and Integris Cancer Institute of Oklahoma, 5911 W Memorial Road.
 
Room service?
The hospitality industry along the corridor is also faring well. Currently, several hotels are at various stages of construction on both sides of the turnpike. A 119-room Four Points by Sheraton Oklahoma City Quail Springs is being built by Key Construction, with an estimated opening date of March 2010; a five-story, 109-room, 86,000-square-foot Holiday Inn Express is being built by TMC Construction; and Hawthorn Suites is also scheduled to enter the area at the southeast corner of Memorial Road and MacArthur Boulevard. Two other hotels on the south side of the turnpike, near Portland Avenue, are going up, as well.

Inman says many of the hotels currently under construction were planned and financed prior to the financial crisis that hit Oklahoma and the rest of the nation in late 2008.

“What was driving that was a booming economy at the time, along with easy financing,” he says. “But now you’re seeing some hotel groups that own land, but aren’t building, so the economy has caught up with them. There’s even more hotels planned out there, but some of the occupancies are down, and there are more rooms on the market now and the financing is harder to get.”

New to the game
In September, Farmers Insurance Exchange purchased 18.08 acres of land at the southwest corner of Memorial Road and Rockwell Avenue for its 175,500-square-foot office building and data center. The insurance company anticipates bringing 3,200 to 3,500 employees to the area. Farmers will vacate Shepherd Mall on NW 23 Street when its new facility opens in late 2010.

A new, three-story, 147,000-square-foot AAA Operations Center at 3100 Quail Springs Parkway has been completed, where 825 employees will call the northwest quadrant their workplace.

“The hiring has begun, and we’re starting to train the personnel that will be working here,” says Chuck Mai, spokesperson for AAA, adding that most of the employees are local hires. “We’ve had several job fairs, but we don’t expect to be up to full strength until probably the third quarter of next year.”

Entering Quailbrook Center, 4401 W Memorial Road, Ste. 111, is Saturn Grill restaurant, which will occupy 3,100 square feet of retail space. Owner Joseph Royer says he’s been eyeing the Memorial Corridor for several years, wanting to open a second location for patrons living farther north.

“When we opened our first location, we had to work with a tighter budget and size of space we have at Nichols Hills Plaza,” he says. “Our second location will be larger and have more of a sophisticated and modern design to it. We’ll have the same menu, but we plan to offer additional types of wine and beer.”

Initially, the restaurant will seat 85, but Royer plans to have patio seating by spring. Saturn Grill is scheduled to open in January 2010. Price Edwards & Company handled negotiations on the deal.

Inman and Graham also are working to lease out Circuit City’s 33,800 square feet of space at the Memorial Square shopping center on the northeast corner of Pennsylvania Avenue and Memorial Road. The duo says they have two national prospects that could take the entire space.

Picking up
Phillip Mazaheri, who specializes in real estate investment sales for Price Edwards & Company, agrees that retail on Memorial Road remains strong. He says demand for retail is picking up, and his firm continues to renew leases and bring new tenants to the area.

For example, Leslie’s Swimming Pool Supplies opened earlier this year at the Quail Springs Shoppes, located on the east side of Memorial next to Men’s Wearhouse, and Sprint United Cellular has leased space in the complex and expects to open soon. Mercy Sleep Center leased space and opened its doors at Quail Brook Village, a new development on the west side of Memorial Road by Mercy Health Center.

Mazaheri, along with brokers Paul Ravencraft and Everest Ernst at Price Edwards & Company, is charged with preleasing for Memorial Plaza, a new, $25 million, mixed-use project comprised of retail and office space to be located at the southwest corner of May Avenue and Memorial Road.

According to Mazaheri, his group and architect Rick Brown of RBA currently are working through site plan changes to maximize the property, and hope to break ground on the development by January 2010. He says traffic counts have been a significant factor in bringing interest to the future site.

Traffic counts consist of 50,000 cars per day at the southwest corner of May Avenue and Memorial Road. In addition, Kilpatrick Turnpike brings another 45,000 cars per day to the area. These numbers aren’t going unnoticed by national tenants, he says.

“The first phase will consist of 15,000 square feet of retail,” Mazaheri says, adding that 8,000 to 10,000 square feet already have been locked in and ready to go. “We believe by the time the development is completed, the center will be fully leased to national tenants.”

Rental rates vary from $22 to $25 per square foot. The project is expected to be complete by December 2010.