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Nick Preftakes hopes he has found the cure for his big-box blues in south Oklahoma City.
“The issue is the big box,” Preftakes (pictured, right) says.
Other shopping centers in the metro area have lost big-box tenants, and owners often are left scratching their heads as to what to do with these large spaces. Several have been leased seasonally as Christmas or Halloween stores, while others have found tenants, such as Gold’s Gym moving into the old Circuit City location at 3625 Northwest Expressway. Still, large, single users for those have been few and far between.
Preftakes says when he looked at the vacancy at Brookwood, he knew no big boxes were likely to be looking for space. He decided to make a bold move and chop 20,000 square feet out of the former Hobby Lobby site, dice up the remainder for multiple tenants, and add a landscaped courtyard. What is left: a 21,217-squarefoot space and a 13,660-square-foot space.
In the remaining 10,900 square feet, which will sit back from the courtyard, he is willing to divide to fit specific tenants’ needs.
With asking rates of $10-$15 per square foot, Preftakes knew it was a gamble taking 20,000 square feet out of play, but realized that without renovations, he might be lucky to get anything. Rather than wait for tenants to come calling, he decided to invest in making the space desirable, and then see who was interested.
“From a leasing standpoint, it’s very much a wait-and-see market,” he says. “People don’t want to spend capital until they have a lease, and tenants don’t want to commit until they know you’re going to do it.”
Exterior renovations alone will run about $1 million, and the entire project budget is $2.5 million. But rather than just freshen up things, Preftakes is converting the space into what he hopes will be a shopping destination.
“I’m trying to increase the value and not just maintain a status quo,” he says.
His existing tenants range from local to national, with nail and hair salons, medical services, Jiffy Lube, Freddy’s Frozen Custard, Boomerang and Arby’s.
South Oklahoma City has seen vacancies in big boxes, but had a few more bright spots than some areas of the metro. South OKC Chamber President Elaine Lyons says there have been some shifting of locations by the likes of Walmart and Burlington Coat Factory, but only few large, persistent vacancies. The area along Interstate 240 is lined with big boxes such as Walmart, Lowe’s and Home Depot.
“Our big boxes are doing well,” Lyons says.
A Circuit City store that closed at I-240 and S. Pennsylvania Avenue is set to be occupied by Best Buy. An Ultimate Electronics, 515 W. I-140 Service Road, however, still sits empty. Other than
a few blips, the market is healthy, according to a midyear 2011 retail market report by CB Richard Ellis | Oklahoma. The report shows that the south OKC sub-market increased retail occupancy by 3% in the first half of the year.
The report cites new deals along I-240, along with several older centers in the sub-market that have leased blocks of space this year, many to local users. Of 31 retail buildings tracked for south OKC, the CB report shows for the first half of the year, occupancy was at 86.29%, slightly less than the 89.19% occupancy rate recorded for the entire metro area retail market.
Preftakes is banking on that momentum to bring tenants to the renovated space at Brookwood. Preleasing efforts have begun through his company, Precor Ruffin, and the project is set for completion by year’s end. Rather than telling potential tenants what might be, Preftakes is hard at work to show those who might be interested that construction is under way, and while it might not be pretty right now, he is indeed committed to the project.
can see past construction,” he says. “They can’t see past no activity.
We can demonstrate to that tenant population that we’re serious.”
Photos by Mark Hancock