Just remembered that someone (who I trust) told me that CHK has cut way back on their charitable contributions; perhaps even not honoring some previous commitments. So, that alone tells you something dramatic has changed.


I posted in the Local Business forum an article from Reuters describing the interest in CHK's 3Q numbers to be reported tomorrow. This is the first full quarter under the new board and everyone is anxious to see their impact.

Does any one know if the recent closing with Chesapeake's newest shell corporation (EAST CLASSEN PROPERTY DEVELOPMENT LLC) and the Maupin family is new business or just old business that is just now closing? The EAST CLASSEN PROPERTY DEVELOPMENT LLC/Berlin deal north of 63rd was an old contract

Does any one know if the recent closing with Chesapeake's newest shell corporation (EAST CLASSEN PROPERTY DEVELOPMENT LLC) and the Maupin family is new business or just old business that is just now closing? The EAST CLASSEN PROPERTY DEVELOPMENT LLC/Berlin deal north of 63rd was an old contract

Don't know but it would make sense given the big cutbacks at Chesapeake.

They have really reigned in their spending so acquiring all these properties for millions didn't make any sense. They seem to have put the brakes on elsewhere, except for the projects already under construction.

Thanks Pete.

Does any one know if the recent closing with Chesapeake's newest shell corporation (EAST CLASSEN PROPERTY DEVELOPMENT LLC) and the Maupin family is new business or just old business that is just now closing? The EAST CLASSEN PROPERTY DEVELOPMENT LLC/Berlin deal north of 63rd was an old contract

Gary Berlin?

Johnny and Connie Berlein.....Gary Berlin's cousins.

Pete -
Do you know if Chesapeake or one of their LLCs owns the property just north of the correctional facility near Robinson and Grand? They did a lot of dirt work at this location and put in a retention basin in the middle.

Are you referring to the massive circular concrete basin on 58th Street immediately east of Lee? It's very large, very odd, and looks like something a Bond villain would create. I got out of there before security grabbed me and threw me into a concrete mixer.

Are you referring to the massive circular concrete basin on 58th Street immediately east of Lee? It's very large, very odd, and looks like something a Bond villain would create. I got out of there before security grabbed me and threw me into a concrete mixer.

That will be a retention pond for all the green space CHK has. A new building to house HR is supposed to be built just to the north of that.

Are you referring to the massive circular concrete basin on 58th Street immediately east of Lee? It's very large, very odd, and looks like something a Bond villain would create. I got out of there before security grabbed me and threw me into a concrete mixer.

The correctional facility is on the east side of the RR tracks; all of CHK's property is to the west.

And yes, that circular area will be a huge pond and in addition to the office building, they just had adjacent land rezoned for a boat house of some sort.

Does any one know if the recent closing with Chesapeake's newest shell corporation (EAST CLASSEN PROPERTY DEVELOPMENT LLC) and the Maupin family is new business or just old business that is just now closing? The EAST CLASSEN PROPERTY DEVELOPMENT LLC/Berlin deal north of 63rd was an old contract

I can say that chk had been ignoring Maupin for years, but I guess that they are still serious about expansion. Good for him.

I suppose that the credit/blame goes to Chesapeake, but traffic controls are being installed on 63rd at Shartel, and what may be a center, left turn lane between Shartel & Olie. I believe that now makes four stop lights on 63rd between Western & Broadway (Classen, Shartel, Harvey & Robinson). Expect congestion to increase on 63rd, and more traffic to be pushed onto Wilshire and I-44.

I suppose that the credit/blame goes to Chesapeake, but traffic controls are being installed on 63rd at Shartel, and what may be a center, left turn lane between Shartel & Olie. I believe that now makes four stop lights on 63rd between Western & Broadway (Classen, Shartel, Harvey & Robinson). Expect congestion to increase on 63rd, and more traffic to be pushed onto Wilshire and I-44.

I wish they would time the lights along 63rd better. I have to drive it every day and its very difficult to not get stopped at every single light between Hefner Pkwy and Broadway.

As has been noted elsewhere, since the changes on the Chesapeake board, it seems no new construction has started at all.

They still have a bunch of stuff underway but there were several things in the pipeline that seem to have stalled and may have been completely stopped: the project at NW 50th & Western, the expansion of Classen Curve, the Nichols Hills Market and anything further on their corporate campus. Also, the McClendon-owned Pops in Bricktown has gone nowhere since the announcement several months ago.

They have five large buildings nearing completion on their campus and it will be very interesting to see if they start consolidating employees from the Caliber Center, Atrium Towers, etc.

That's what happens when the new board says, "Hey naughty Aubrey. Why dont you stop doing all this other CRAP with the company and do some actual company work for a change".

Was McClendon using Chesapeake's money (and only Chesapeake's) to do all of this as extensions of Chesapeake's natural gas business or was his personal wealth tied up in all of this too? I've read the articles and such, but I don't understand how a billionaire can't get the POPS in Bricktown built...?

Steve Lackmeyer said in another thread that Pops in Bricktown is going forward, just slowly.


I'm sure the issue from the board perspective is focus and time, not just money spent.

But also, Chesapeake employs several people to administer to McClendon's personal dealings. That may be something that has changed.

Steve Lackmeyer said in another thread that Pops in Bricktown is going forward, just slowly.


I'm sure the issue from the board perspective is focus and time, not just money spent.

But also, Chesapeake employs several people to administer to McClendon's personal dealings. That may be something that has changed.

Thanks for the response Pete. I just don't know that I have any sort of grasp on how intertwined Aubrey's personal dealings were with those of Chesapeake and why the board would be so interested in stopping his extracurriculars, other than to refocus his time to just the company.

The new garage furthest to the north (3?) is getting some sort of modern sheeting on the north side of the garage.

It looks like Building 14 is getting ready to roll into it's 27th months of construction. Does anybody know when this thing is supposed to open? I have never seen any kind of construction as slow as this building has taken.

All the Chesapeake buildings have taken 2 to 2.5 years to build; that's about how long it took for the entire Devon complex to be open for business.

Building 14 looks like it's getting close. I bet it's open in the next couple of months.

The rest (Building 1, Building 15, RTC Lab, Data Center and Garages 3 & 5) should all be complete by the end of 2013 and I think that will be the end of campus construction for a while.

All the Chesapeake buildings have taken 2 to 2.5 years to build; that's about how long it took for the entire Devon complex to be open for business.

Building 14 looks like it's getting close. I bet it's open in the next couple of months.

The rest (Building 1, Building 15, RTC Lab, Data Center and Garages 3 & 5) should all be complete by the end of 2013 and I think that will be the end of campus construction for a while.

Building 14 should be moved in by January and building 15by June.

As I predicted when I saw this building in October, looks like Glenbrook Centre West will soon be demolished.

Last July, I went into this building and there were still a bunch of tenants. In October, I noticed a virtually empty parking lot and when I went inside it looked like everyone had moved out. I was surprised the building was unlocked at that time.

Chesapeake paid $7.8 million for this property in 2005, and at that time it was a appraised for $1.9 million. It sits on 3.7 acres. Some may remember the old Brigadoon Restaurant was on the ground floor during the 70's and 80's.

Given that the new CHK board seems to have put the brakes on spending, I imagine this will sit as yet another grassy lot, just like the former Glenbrook Centre East, the Kensington Apartments, Kings Court Condos and several other parcels owned by Chesapeake in the area.

http://www.okctalk.com/images/pete/glenbrookwest.jpg

Here is a recent aerial compared to about ten years ago:



http://www.okctalk.com/images/pete/chk2a.jpg


http://www.okctalk.com/images/pete/chk2aold.jpg

Not sure if it's an improvement or not

Isn't there a First Fidelity drive-through right on the corner? Does Chesapeake own that, or the bank?

It this where they were thinking of putting the boutique hotel?

As I predicted when I saw this building in October, looks like Glenbrook Centre West will soon be demolished.

Last July, I went into this building and there were still a bunch of tenants. In October, I noticed a virtually empty parking lot and when I went inside it looked like everyone had moved out. I was surprised the building was unlocked at that time.

Chesapeake paid $7.8 million for this property in 2005, and at that time it was a appraised for $1.9 million. It sits on 3.7 acres. Some may remember the old Brigadoon Restaurant was on the ground floor during the 70's and 80's.

Given that the new CHK board seems to have put the brakes on spending, I imagine this will sit as yet another grassy lot, just like the former Glenbrook Centre East, the Kensington Apartments, Kings Court Condos and several other parcels owned by Chesapeake in the area.

http://www.okctalk.com/images/pete/glenbrookwest.jpg Hopefully, this parcel of land gets developed sooner than later! The building that is being demolished is very 1970's prefabbed, concrete. Not very visually appealing. This area of town needs to have more modern visually appealing buildings.

So what I'm worrying about is Chesapeake ever going to make a comeback? It seems like they were doing great things for this city and everything went downhill in a matter of months. I know they had problems with a scandal with Aubrey and a hedge fund or something. But are they ever going to continue new ambitious construction or did the board pretty much kill that?

Chesapeake is in the middle of liquidating billions in assets just to fund their cash flow.

The new board of directors has clearly turned off the spending tap, although there are still a bunch of campus projects under construction.

Since the change in the board, there has been no new construction started of any type, and I doubt that will change in the near future.

So what caused all of this? Was it due to all of the construction spending? I just can't imagine all their construction costing so much that it would cause a major downturn to the company. Sorry if it was stated elsewhere.

Most of it was due to spending billions to acquire speculative mineral rights while at the same time natural gas prices have remained at historic lows. But generally speaking, they've been very undisciplined spenders and real estate is just part of that.

Just read today that they have shifted their gas/oil ratio from 83% to 70% in the last few years, and that diversification should help them.

Yeah I couldn't believe how much they were paying for some properties.

With all of the attention Chesapeake pays towards campus beautification (landscaping, Christmas lights, etc.), they have made huge mistakes in the location and positioning of their buildings. Those are mistakes that can't be rectified by moving a grove of trees or relocating a running track from here to there. A case in point is the main entrance to their campus. Where is it? Is it the stop light near 62nd & Western, or where Classen enters at 63rd, or Classen crossing Western, or is it somewhere along Classen on the back side now that employee parking and new construction is to the east? IMHO they should have made a large entrance at the corner of 63rd & Western that visually draws one's eye into the center of their main campus, surrounded by classic buildings containing core departments. Instead of a beautiful entrance and driveway at that intersection, they stuck another building there with three flagpoles. In fact, what you see along much of the main campus' periphery are mechanical systems, driveways and stairwells leading into buildings.

It this where they were thinking of putting the boutique hotel?

No, that is where the old Tapwerks used to be: the south triangle.

So what caused all of this? Was it due to all of the construction spending? I just can't imagine all their construction costing so much that it would cause a major downturn to the company. Sorry if it was stated elsewhere.

Well the thinking is beginning to emerge that Aubrey may need to personally finance some of this stuff

With all of the attention Chesapeake pays towards campus beautification (landscaping, Christmas lights, etc.), they have made huge mistakes in the location and positioning of their buildings. Those are mistakes that can't be rectified by moving a grove of trees or relocating a running track from here to there. A case in point is the main entrance to their campus. Where is it? Is it the stop light near 62nd & Western, or where Classen enters at 63rd, or Classen crossing Western, or is it somewhere along Classen on the back side now that employee parking and new construction is to the east? IMHO they should have made a large entrance at the corner of 63rd & Western that visually draws one's eye into the center of their main campus, surrounded by classic buildings containing core departments. Instead of a beautiful entrance and driveway at that intersection, they stuck another building there with three flagpoles. In fact, what you see along much of the main campus' periphery are mechanical systems, driveways and stairwells leading into buildings.

Good observation. With all the money spent on this campus, it is a dismal failure from a planning perspective. Same goes for the nearby Chesapeake-related developments (Classen Curve). It's bizarre.

The problem from a planning perspective is that all the components that made this massive vision came last. When Chesapeake was finally on the rocks.

I predicted that Chesapeake would start selling some of the satellite office buildings they recently acquired, 1) because they are selling off assets and shrinking and 2) because they have a bunch of buildings on their campus being completed this year.

The sale has not yet been posted on the County Assessor site and it will be very interesting to see what they sold it for. In addition to paying $38.2 million, they also put in at least another $3 million in building permits.



IBC Bank-Oklahoma buys office building for Oklahoma City headquarters (http://newsok.com/ibc-bank-oklahoma-buys-office-building-for-oklahoma-city-headquarters/article/3741415)
By Richard Mize | Published: December 29, 2012 0

The 10-story, Class A building at 3817 Northwest Expressway — known as Hertz Financial Center for more than a decade, even after Hertz Corp. moved in 2002 — will continue to house IBC Bank's Oklahoma headquarters.

Hertz sold the building, constructed in 1976, to Caliber Development, led by Jade Noles, in 2007 for $20 million. Caliber spent $5 million to upgrade the building.
Chesapeake Energy bought it just more than a year ago, paying $38.2 million. The Oklahoma County assessor estimated its market value at $30.2 million last March.

I predicted that Chesapeake would start selling some of the satellite office buildings they recently acquired, 1) because they are selling off assets and shrinking and 2) because they have a bunch of buildings on their campus being completed this year.

The sale has not yet been posted on the County Assessor site and it will be very interesting to see what they sold it for. In addition to paying $38.2 million, they also put in at least another $3 million in building permits.

IBC Bank-Oklahoma buys office building for Oklahoma City headquarters (http://newsok.com/ibc-bank-oklahoma-buys-office-building-for-oklahoma-city-headquarters/article/3741415)
By Richard Mize | Published: December 29, 2012 0

The 10-story, Class A building at 3817 Northwest Expressway — known as Hertz Financial Center for more than a decade, even after Hertz Corp. moved in 2002 — will continue to house IBC Bank's Oklahoma headquarters.

Hertz sold the building, constructed in 1976, to Caliber Development, led by Jade Noles, in 2007 for $20 million. Caliber spent $5 million to upgrade the building.
Chesapeake Energy bought it just more than a year ago, paying $38.2 million. The Oklahoma County assessor estimated its market value at $30.2 million last March.

A few years back when CHK was spending like crazy and could seemingly do no wrong, I had a wise friend tell me, "Regardless of how smart those guys think they are, at some point fundamentals apply." I think we are seeing all of that ridiculous overpaying coming back to bite Aubrey & Co.

Very true about the fundamentals. I was at a Christmas party talking with an acquaintance high up the CHK chain, enough so I believe they meet with Aubrey on a regular basis (weekly if not daily). I got the strong impression Aubrey is conducting business as he always has but obviously with a much shorter rope from the board, and everyone around him was just hanging on for dear life biting their nails about the future. It sounded to me like the many years of fun and growth in the wild wild west has turned into a high stress situation. Another acquaintance that is in the job placement business told me about they're starting to see a several CHK people contemplating or actually looking to jump ship. I sure hate to hear things like that and hope, as we all do for the good of OKC, that CHK can stabilize the negativity and downward appearing momentum and remain a strong local company.

The CHK campus reminds me of the Cisco campus in Milpitas. I can't figure out why people keep building them.

The CHK campus reminds me of the Cisco campus in Milpitas. I can't figure out why people keep building them.

Cisco is way way worse

Cisco is way way worse

It is now, but there was a time when all their building were full. Now it is a vast area of nothing, with buildings that all look the same and no one wants to buy or use. They could easily film zombie movies there.

I predicted that Chesapeake would start selling some of the satellite office buildings they recently acquired, 1) because they are selling off assets and shrinking and 2) because they have a bunch of buildings on their campus being completed this year.

The sale has not yet been posted on the County Assessor site and it will be very interesting to see what they sold it for. In addition to paying $38.2 million, they also put in at least another $3 million in building permits.



IBC Bank-Oklahoma buys office building for Oklahoma City headquarters (http://newsok.com/ibc-bank-oklahoma-buys-office-building-for-oklahoma-city-headquarters/article/3741415)
By Richard Mize | Published: December 29, 2012 0

The 10-story, Class A building at 3817 Northwest Expressway — known as Hertz Financial Center for more than a decade, even after Hertz Corp. moved in 2002 — will continue to house IBC Bank's Oklahoma headquarters.

Hertz sold the building, constructed in 1976, to Caliber Development, led by Jade Noles, in 2007 for $20 million. Caliber spent $5 million to upgrade the building.
Chesapeake Energy bought it just more than a year ago, paying $38.2 million. The Oklahoma County assessor estimated its market value at $30.2 million last March.

Bank pays $32M for Chesapeake property | The Journal Record (http://journalrecord.com/2013/01/04/bank-pays-32m-for-chesapeake-property-energy/)
OKLAHOMA CITY – Chesapeake Land Development Co. has sold one of its northwest Oklahoma City properties to IBC Bank for $32 million, public records show.

Along with the $3 million in renovations, it looks like Chesapeake lost about $9 million on this property alone. I wonder what the future holds.

There was an Arcadia Farms LLC sale reported over the weekend near 192nd & May. I'm told that Arcadia Farms is also selling agricultural properties in NE Oklahoma County back to the heirs of the original owners (at a loss, of course). Arcadia Farms isn't Chesapeake Land, but they're related, and this seems to indicate the start of a clear trend of across-the-board property sales.

Noticed that Arcadia Farms sale as well. What a sweet deal for the heirs, sell it at a huge premium and then be able to buy it back at a discount. Heckuva deal.

There was an Arcadia Farms LLC sale reported over the weekend near 192nd & May. I'm told that Arcadia Farms is also selling agricultural properties in NE Oklahoma County back to the heirs of the original owners (at a loss, of course). Arcadia Farms isn't Chesapeake Land, but they're related, and this seems to indicate the start of a clear trend of across-the-board property sales.

We've all been concerned about what would happen to the real estate market if Aubrey and CHK had to shift from buyers to sellers.

Fortunately, the market is strong enough to absorb a lot but it all depends on how much they dump and the timing; i.e. the spacing of when everything hits.

192nd & May was sold to Shaz Investments LLC. So who is Jalal Farzeneh?

192nd & May was sold to Shaz Investments LLC. So who is Jalal Farzeneh?

Who knows. But I have a feeling you wouldnt be asking who it was if the name was Bob Smith.

I think that is the home builder Home Creations. Same address.

Who knows. But I have a feeling you wouldnt be asking who it was if the name was Bob Smith.

Oh, I'd be asking, but it would be "WHICH Bob Smith just bought..." I figured that someone with a unique name like that would be quickly known here at OKC Talk, and that would indicate what his plans would be for the property.

I think that is the home builder Home Creations. Same address.

You are correct.

CHK unloaded another office building recently, located at 301 NW 63rd. Paid $10mil for it a year ago, sold it for $6.4 mil. Good investment huh?

Chesapeake subsidiary sells office building | The Journal Record (http://journalrecord.com/2013/01/11/chesapeake-subsidiary-sells-office-building-real-estate/)

That's the Harvey Parkway, bought 1/13/12 for $10 million and sold 12/26/12 for $6.4 million.

They also put in a bunch of improvements in between, so they basically lost 50% on that building in less than a year.

http://www.oklahomacounty.org/assessor/Searches/sketches/picfile/2614/R132968000001rA.jpg


Will be really interesting to see how many more of these properties are dumped. I'd also bet that they owe more than they are able to recover in sales on most these buildings.

Don't forget that CHK frequently paid 2x (or more) of the fair market value when acquiring properties years ago, so when someone pays 50% or less today, that simply re-establishes the original FMV. Sellers got rich when CHK was buying - I don't think today's buyers should expect to get a bargain.

Going one step further, I suspect that the transactions will involve large buildings and cash buyers. Banks will have a hard time participating due to the difficulty in determining a solid FMV during a CHK dump, and not knowing how the value of real estate will be affected if CHK has trouble with their turnaround.

192nd & May was sold to Shaz Investments LLC. So who is Jalal Farzeneh?

One of the brothers that own Home Creations builders

Oops: Sorry missed the reply that this had been answered

Gosh, I wonder who the broker was who allowed CHK to pay such an inflated price for these buildings?
Would they not negotiate anonymously?

CHK set up a bunch of LLC's but everyone knew when they were the ones looking to make a purchase.

But long before they drove the prices up in the area, they paid way, way over the mark as a policy.

And even after prices went up, they still paid way over market.

There were two buyers in those days: Chesapeake, and sleazy people trying to buy your property so they could flip it to Chesapeake.

Well I guess if you were one of those stubborn people that did not sell to CHK, for the purposes of holding out for more money then I think you missed your opportunity to get way above market value