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Recent $70 Million Shopping Center Sale in Tulsa Exhibits Trend of Out-of-State Investors Finding Value in Oklahoma Retail

CoStar Market Insights: Overall Sales Volume Has Averaged Around $260 Million Annually Over the Past Five Years
October 10, 2018
In the past several years, out-of-state investor interest in Oklahoma retail property has notably increased. The most recent example of this trend is the $70 million sale of the Tulsa Hills shopping center, which was acquired by two Dallas-area investors, Direct Development and Rockstreet Partners.

The pair teamed up to buy the southwest Tulsa retail center from real estate investment trust InvenTrust Properties, which originally acquired the property in 2010 for $54.05 million, according to CoStar data. The $70 million sale was first reported by Tulsa newspaper, Tulsa World.

In both Tulsa and Oklahoma City, the amount of retail property acquired by local buyers and out-of-state buyers has shifted closer to a balance after being dominated by local players. From 2010 to 2016, about 70 percent of retail property transactions were locally-based. Since then, out-of-state investors are now involved in about half of all retail property transactions as the healthy performance of the local retail market has attracted a wider audience.

Sales volume of all commercial property types has averaged about $260 million in Tulsa annually over the past five years, well above the previous average sales volume between $50 million and $100 million from 2007 to 2012.

With the elevated investment levels into Tulsa, prices have reached new heights as well. At the start of the fourth quarter of 2018, more than $220 million in properties has traded hands in Tulsa?, well beyond this historical norm for the market.

Another out-of-state investor buying into the Tulsa retail market is Crow Holdings Capital, which paid $11.1 million for a freestanding Trader Joe’s off of South Peoria Avenue this past January.

Oklahoma City has a similar story. Even as some large retailer vacancies have dented the overall fundamentals, out-of-state investors have also found opportunities within the market. So far in 2018, out-of-state investors accounted for 40 percent of Oklahoma City retail property sales, up from the historical average of just over 20 percent for previous years.

A recent example of out-of-state investments in Oklahoma City include Dallas-based TriGate Capital acquiring the 277,566-square-foot Bryant Square Center in Edmond, just north of Oklahoma City’s central business district. At $38 million, this sale stands as the second-largest transaction of the year in the market so far.

CoStar Market Insights provides a snapshot of recent real estate trends. The CoStar Market Analytics team monitors commercial and multifamily real estate across 390 metro areas, with a granular understanding of the projects, players and economic trends that move these markets.

Learn how CoStar Market Analytics can add to your market knowledge, helping to minimize risk and maximize returns.
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