I got bored after spending an entire day combing through the Claritas market segmentation reports and decided to look up various spots in OKC. One thing we talk about is how OKC is incredibly mixed and varied, at least in terms of demographics, with no real concentration of any single demographic trend in one area. This is simply why upscale retailers are more prone to pulling the trigger on Tulsa, usually locating in Midtown, rather than take a chance on OKC. I think this idea originated from Pete, who has significant commercial real estate experience. Richard Florida recently corroborated this in Segregated City (http://www.citylab.com/housing/2014/03/us-cities-where-poor-are-most-segregated/8655/), concluding that OKC is one of the 10 least income-segregated large metros. Just to be clear, this is obviously a huge positive and put differently makes OKC one of the nation's most equitable metros, along with the likes of Portland, San Jose, and Seattle. However, for real estate and economic development, this is a huge demographic hurdle that OKC has to overcome when making a pitch.

So I was curious and looked up downtown OKC's ZIP codes, 73102 and 73104. 73102 has around 2,500 residents and 73104 has 1,800, and both have average household incomes of $25,000. If you didn't know those areas, you would have reservations about investing in an area like that. 73170 (Westmoore area) has 40,000 residents and household incomes in excess of $80,000. Most large metros will have a concentration of several ZIPs that exceed 100K in household income. Not even Edmond, due to some apartments and UCO students.

PRIZM > Market Segmentation Research, Tools, Market Segment Research, - Market Segments, Consumer Markets, Customer Segmentation Profiling (http://www.claritas.com/MyBestSegments/Default.jsp?ID=20&pageName=ZIP%2BCode%2BLookup&menuOption=ziplookup#)

Downtown was especially intriguing, and makes me wonder if their data is outdated. I know for a fact that OKC's downtown population is almost double the 4,300 residents that the market segmentation data is showing, and I would imagine that the incomes are very high. This is one example of a larger disconnect between commercial and housing circles within the development/planning world. A housing needs assessment or supply analysis would add up all of the housing units that Pete has. Or perhaps people are buying or leasing second homes, and file their census elsewhere? Something has to explain this disconnect.

Downtown Housing Summary - OKCTalk (http://www.okctalk.com/showwiki.php?title=Downtown+Housing+Summary)

5,023 total downtown dwelling units. We know the occupancy and rental rates are very good, too. You would think downtown should be an emerging retail market.

Good stuff, and agree that it's perplexing we don't have more national retailers taking a shot in the downtown area.

Right, retailers look at demographics in a 1-, 3- and 5-mile radius. They usually care most about the first two numbers.

And because OKC is spread out and because the cost of living (and therefore average salary) is low, these numbers look pretty weak just about from any location. And when it comes to downtown, they usually look horrible.

Imagine what they look like even at 63rd & Western; there is virtually no housing on the east side of Western and a 3-mile radius will pull in lots of people with low salaries.

For national retailers, they have real estate reps who go out and search sites. 99% of the time they look at Tulsa and OKC at the same time, and often choose Tulsa first just because their demographics usually look better.

These reps are not risk takers and have nothing to gain and everything to lose if a location does not end up performing well. So while when people finally do open in OKC and inevitably blow out their numbers, all that matters in the exploratory phase is what the radius number say and that often kills deals at the outset, if not the point when it gets passed up-stream for approval.

Exactly what happened to CVS at the Century Center, Panera Bread downtown, etc. Those at least had initial approval but couldn't clear the people who crunch numbers and don't often even see the cities/sites.

the retail folks at the Chamber probably beat their heads against the wall trying to deal with the spreadsheeters, because as you said Pete, the proof is in the results data here, not the speculative data.

Do retailers consider recent data and units under construction or do they pretty much stick to the official 2010 numbers? I would think the new downtown living units plus the high-income homes in Heritage Hills/Mesta Park would be enough to spark the interest of a grocer. It's unfortunate that people who live downtown usually have to drive to 63rd for a grocery store.

You can use the radius approach with GIS, but the data is often not as accurate as just drawing a primary market area based on boundaries, and combining census tracts or zip codes. You can do acceptable development analysis any of those ways, but the point is that it's a science and not an art for most of the real estate world.

I was curious and took a look at the ZIP codes around Nichols Hills Plaza, where Chesapeake got the ball rolling with upscale retail, and now Glimcher is working with others toward a huge mixed-use redevelopment of the 63rd and Western area. 73116 extends from 63rd to Wilshire, for all of N. OKC - only 10,000 residents and avg HH income is 57K. 73118 is from Penn to 235, from 63rd down to 36th (I'd probably live in this ZIP myself if I were back in OKC). Sort of the southern end of Shadid's council ward. 14,000 residents and avg HH income of 38K. For OKC's "best area," these numbers are an underwriter's nightmare.

That's why Whole Foods needed some undisclosed deal in order to underwrite just merely operating a location in Nichols Hills. That really puts into perspective the role that CHK played in catalyzing retail development in OKC, because they felt that's what was needed to attract a quality workforce to work for them in OKC. That story has been swept under the rug since Aubrey's departure and Larry Nichols' urban renewal spree.

Do retailers consider recent data and units under construction or do they pretty much stick to the official 2010 numbers? I would think the new downtown living units plus the high-income homes in Heritage Hills/Mesta Park would be enough to spark the interest of a grocer. It's unfortunate that people who live downtown usually have to drive to 63rd for a grocery store.

There's a reason we all know that downtown residents drive to 63rd and Western, rather than Homeland or 2 closer Walmarts. Just to bring it back full circle, the market segmentation still shows a significant proportion of the population is upscale and without kids. That same market segment exists in large quantities in other ZIPs with some downtown bleed-over (like 73107), and in the inner north side (73118), up to the Nichols Hills area (73116). Because virtually all of OKC's new urban development has been pretty high-end, there is this "arc" of gentrification that brings a fairly strong mix of demographics in that area between 235 and Penn which was fairly low-income right up until NW 63rd when I was a little tyke.

There's a reason we all know that downtown residents drive to 63rd and Western, rather than Homeland or 2 closer Walmarts. Just to bring it back full circle, the market segmentation still shows a significant proportion of the population is upscale and without kids. That same market segment exists in large quantities in other ZIPs with some downtown bleed-over (like 73107), and in the inner north side (73118), up to the Nichols Hills area (73116). Because virtually all of OKC's new urban development has been pretty high-end, there is this "arc" of gentrification that brings a fairly strong mix of demographics in that area between 235 and Penn which was fairly low-income right up until NW 63rd when I was a little tyke.

With all the economists, analysts, and urban theorists out there, why has no one ever developed better methodology for comparative urban analysis? A zip to zip comparison is as flawed as a city limits to city limits comparison. I have often wondered if there is such a thing as an urbanized area analysis based on population density without regard to the name of the municipality in which the residents live.

Actually we shop at Native Roots and the Homeland at 17th and Classen. I go to Whole Foods when I'm feeding a big group like at Thanksgiving and Christmas. I see a lot of people from Heritage Hills at that Homeland. As my husband says, if you're buying staples, they're no different than at any other Homeland. Of course if we had a nicer option nearby, we'd drop that store like a hot potato. I try to do as much shopping as possible within my and adjacent zip codes.

With all the economists, analysts, and urban theorists out there, why has no one ever developed better methodology for comparative urban analysis? A zip to zip comparison is as flawed as a city limits to city limits comparison. I have often wondered if there is such a thing as an urbanized area analysis based on population density without regard to the name of the municipality in which the residents live.

I have a friend who works in Dallas for a retailer (that is not in Oklahoma as of now) who used to do these "marketing reports." They are usually done by 20-something new hires who could care less about getting a specific store to a region; they are just trying to do their jobs the easiest way possible. My friend actually admitted to me in using Wikipedia as a source! Zip code breakdowns are the easiest way; most data companies group nearly all information by zip code because that's how tax returns are organized. Not so much by anything else, although some large retailers do use a radius type study.

You may be able to get more market segmentation by census block, however. In Spartan's example 73116 may have only 57K in median HH income, but the census tract that covers Nichols Hills specifically has an income of well over 100K. Same with Heritage Hills.

This is all pretty fascinating to me. I've always thought it was odd that OKC doesn't really have a "moneyed corridor." Meaning, I can hop on Preston Rd in Dallas from its inception in Uptown to the far north border of the city some 16 miles away and I won't leave a zip code with a median HH income of 75K or less. This despite the fact that Dallas city proper statistically has a lower HH income than OKC. Its not a bad thing. IMO having OKC so integrated at least economically is a strength of this community, but the bizarre side effect is we will always struggle with stuff like this.

I'm not sure what can be done in the interim to lure retailers, outside of super aggressive recruitment by the Chamber. The money is here. Recently, incomes by tax returns were released by each county in America and I was surprised to see Oklahoma County not only higher than the state average but national average as well (about 65K/household if I remember). This coupled with our low cost of living means there is a lot of disposable income here.

Actually we shop at Native Roots and the Homeland at 17th and Classen. I go to Whole Foods when I'm feeding a big group like at Thanksgiving and Christmas. I see a lot of people from Heritage Hills at that Homeland. As my husband says, if you're buying staples, they're no different than at any other Homeland. Of course if we had a nicer option nearby, we'd drop that store like a hot potato. I try to do as much shopping as possible within my and adjacent zip codes.

I guess if you live in that area and don't want to have to drive 15 minutes, that Homeland has to do. It's still an unacceptable excuse for a grocery store. In another thread it was mentioned that it will soon be remodeled. Hopefully its due for a real remodel and NOT a conversion to Cash Savers. If the store gets upgraded that will be a huge plus for the urban core of OKC. Hopefully in five years this conversation will be just a memory.

I'm not sure what can be done in the interim to lure retailers, outside of super aggressive recruitment by the Chamber. The money is here. Recently, incomes by tax returns were released by each county in America and I was surprised to see Oklahoma County not only higher than the state average but national average as well (about 65K/household if I remember). This coupled with our low cost of living means there is a lot of disposable income here.

Excuses can be made as to why OKC doesn't have this or that but in the grand scheme of things not having certain amenities negatively affects quality of life here regardless of the reason. I think there needs to be more aggressive recruitment by the Chamber or possibly even small incentives for retailers who may be interested in OKC but look at a spreadsheet and are on the fence. CVS to the Century Center comes to mind. Also, it's one thing for national chains to overlook OKC, but I don't see any local grocers (Crest, Homeland, Uptown) rushing to get a downtown location open. They should know the market and be able to take into account the income distribution irregularities yet they don't. Why do you think that is?

I wish I knew how the Brooklyn neighborhood in Jax was able to get a Fresh Market because no one even lives there right now, although hundreds of units are under construction. Downtown OKC could learn from that.

I wish I knew how the Brooklyn neighborhood in Jax was able to get a Fresh Market because no one even lives there right now, although hundreds of units are under construction. Downtown OKC could learn from that.

I am sure liquor laws do play a role. Harris Teeter in downtown Charlotte has a larger beer/wine selection than a typical Harris Teeter and is slightly smaller on the grocery side. It's easily observable that the store gets a very large portion of its businesses from alcohol sales. Charlotte also has a Target and a Trader Joe's downtown however so there is competition.

I wish I knew how the Brooklyn neighborhood in Jax was able to get a Fresh Market because no one even lives there right now, although hundreds of units are under construction. Downtown OKC could learn from that.

Probably New Markets. OKC seriously needs a non-profit developer that knows how to get the federal funding.

Right, retailers look at demographics in a 1-, 3- and 5-mile radius. They usually care most about the first two numbers.

And because OKC is spread out and because the cost of living (and therefore average salary) is low, these numbers look pretty weak just about from any location. And when it comes to downtown, they usually look horrible.

Imagine what they look like even at 63rd & Western; there is virtually no housing on the east side of Western and a 3-mile radius will pull in lots of people with low salaries.

For national retailers, they have real estate reps who go out and search sites. 99% of the time they look at Tulsa and OKC at the same time, and often choose Tulsa first just because their demographics usually look better.

These reps are not risk takers and have nothing to gain and everything to lose if a location does not end up performing well. So while when people finally do open in OKC and inevitably blow out their numbers, all that matters in the exploratory phase is what the radius number say and that often kills deals at the outset, if not the point when it gets passed up-stream for approval.

Exactly what happened to CVS at the Century Center, Panera Bread downtown, etc. Those at least had initial approval but couldn't clear the people who crunch numbers and don't often even see the cities/sites.
The nationals also don't realize that many people in OKC don't think twice about driving longer distances to shopping than many people in other metros. I knew people in Austin who thought they had to plan a trip to go anywhere more than 3 miles and crossing the river (Town Lake) might require an overnight stay, it was just ridiculous. I knew much more in a few years about the areas outside of Austin than people who had lived there their whole lives. They just couldn't comprehend getting on a motorcycle and riding 100+ miles for lunch.


I wish I knew how the Brooklyn neighborhood in Jax was able to get a Fresh Market because no one even lives there right now, although hundreds of units are under construction. Downtown OKC could learn from that.
Probably some development inducements or guarantees. A few of the stores had those when The Domain in Austin first started up. We had a market across the street from our office, it didn't survive after a couple of years because only part of the residential component had been built out and the other phases were in a holding pattern at the time.

I may not be understanding this correctly but couldn't inner city Okc benefit from simply re-zoning of few the zip code areas?
For example Heritage Hills and Mesta Park are not fully under one zip code, there is a small portion of very high income households that is in with 73106. It appears that the new residential project of Lift will also be in the 73106 zip but right up the street is the Edge and it is 73103. It is only one block out of being in the same zip.

The 73102,73103,73104 could all be restructured as to give Okc it's best shot at higher household incomes. Could also take a look at the 73118 zip code boundary to give it a boost. I'm sure that other cities have done this before to help spur economic opportunities.

Retailers look at info within radius distances from targeted location. They don't necessarily use zip code data. Changing zip codes doesn't change the dispersion of incomes.

We talk about wanting socioeconomic diversity but it is one thing that hurts OKC in attracting certain retailers. For instance, within a mile of 63rd and Penn are multimillion dollar mansions and run down 800 sq ft. frame houses.

If segregation by income is the answer to more national retail then I would just as soon not have more national retail. We have allowed ourselves to be segregated enough.

The success of Glimcher and Chisholm Creek will prove me right or wrong on this, but I believe that with the exception of grocers, its OKC's lack of quality shopping centers that keeps it from getting higher-end national retailers moreso than income segregation. A lot of today's most trendy retailers want to be in lifestyle centers, not strip malls, Wal-Mart anchored power centers, or even enclosed malls. Grocers rely extensively on the 1-3-5 mile radius formula because they are designed to serve the neighborhood and are usually not a destination.

Spot on bchris02. Jax was the exact same way. Once a Town Center was built (and Walmart wasn't the main anchor) upscale retailers flocked to Jax.

Chicken and Egg.

You can't reasonably expect any developer to invest in a lifestyle center without lining up good, high end, national retailers.

Chicken and Egg.

You can't reasonably expect any developer to invest in a lifestyle center without lining up good, high end, national retailers.

Most lifestyle center developments I've followed in other cities are mostly spec developments. They usually get a few committed anchors to begin with, much like Chisholm Creek has with TopGolf and Cabela's. After that the development breaks ground. Most deals are done while the center is under construction or even after it opens.

Retailers look at info within radius distances from targeted location. They don't necessarily use zip code data. Changing zip codes doesn't change the dispersion of incomes.

We talk about wanting socioeconomic diversity but it is one thing that hurts OKC in attracting certain retailers. For instance, within a mile of 63rd and Penn are multimillion dollar mansions and run down 800 sq ft. frame houses.
Or even worse, industry and/or open fields.