Rather than Midfirst building new (assuming they are planning on building new), perhaps someone could talk them into buying FNC and renovating it. Is it big enough to meet their needs?

Rather than Midfirst building new (assuming they are planning on building new), perhaps someone could talk them into buying FNC and renovating it. Is it big enough to meet their needs?

First things first - FNC will NEVER be an office building again.

I think the only way it could be office is more of a small company office in a mixed-use configuration. The majority of it would need to be hotel/residential.

Agreed. And it's going to have to be torn down to the studs to do it.

BTW, the last loan extension is due to expire this week, but I've more or less stopped getting my hopes up that something is actually going to happen here any time soon.

I just don't understand HOW they keep getting BS loophole extensions!

Nick, they've been paying for them.

Steve Lackmeyer reported approximately $1 million has been paid to the lender to keep dragging this out.

Nick, they've been paying for them.

Steve Lackmeyer reported approximately $1 million has been paid to the lender to keep dragging this out.

You really have to wonder where he is getting the money for these extensions. If he has paid $1 million over the last few months why couldn't he just make the monthly loan payment in the first place.

Because he's in default of the current loan and you can't just make payments without bringing the account current.

I meant BEFORE he went into default. How does he have access to millions now that he didn't have access to before? Seems that the bankruptcy judge should ask him.

Typical capitalization rates for investment properties like this would be 10% on his investment..
I seriously doubt he is making 10% return on his investment.

With little to no plans to sink a lot of money into the building, I just don't understand why they are doing this.
I honestly don't know how they are making enough revenue to keep the lights on.

They have to KNOW they are upside down in their loan!

He's done this with countless properties and ultimately ends up surrendering them, but only after bankruptcy, foreclosure attempts, multiple lawsuits, etc., etc.

He held on like grim death to The Roosevelt Lofts, a restoration and conversion of a beautiful old building in downtown L.A. He was sued for not returning deposits after the building went belly-up and ultimately it was bought out of foreclosure and turned into rentals. But, most the restoration was complete by the time they pried his hands off the property.

I'm not sure what he has left in his portfolio and may see this as his last chance in terms of development. It's pretty clear he loves to plan/dream big, with little regard to reality.

I am uncertain how anyone, given projections of 80+ mil to rehab the space, can ever make money on it

I am uncertain how anyone, given projections of 80+ mil to rehab the space, can ever make money on it

I feel like a good place to start is to first to decide what you're doing. No one ever seems to be able to say "i'm going to make this building ______". If you want to convert to residential, start with a floor that's currently unoccupied, and get cracking. You can make a "model" floor and then get moving on the others are you get leases. All the while, the current office space tenants can stay there. There's no reason you have to empty the entire structure at one time to do this. Demo on one of those floors can be totally completed in a week. So you even minimize the amount of time someone is taking up an elevator.

Really the same concept works for commercial as well. No one would want the place the way it is now. So even if you want to stay commercial, you'll have to do some gutting. No one wants office space that smells like old wet dust.

I feel like a good place to start is to first to decide what you're doing. No one ever seems to be able to say "i'm going to make this building ______". If you want to convert to residential, start with a floor that's currently unoccupied, and get cracking. You can make a "model" floor and then get moving on the others are you get leases. All the while, the current office space tenants can stay there. There's no reason you have to empty the entire structure at one time to do this. Demo on one of those floors can be totally completed in a week. So you even minimize the amount of time someone is taking up an elevator.

Really the same concept works for commercial as well. No one would want the place the way it is now. So even if you want to stay commercial, you'll have to do some gutting. No one wants office space that smells like old wet dust.

I think you completely underestimate the task of renovating a building like this. The entire mechanical infrastructure needs replacing, I understand. And that is hard to do a bit at a time when you are talking about plumbing, hvac, wiring, etc. Plus, the whole reconstruction process is dirty and people generally don't want to live or work in a building being completely renovated. Doing it a floor at a time prolongs the agony for years. Plus a bit at a time is pretty inefficient and costly. Cosmetics is one thing, structure and infrastructure is another.

First things first - FNC will NEVER be an office building again.

Probably, but why not?

Devon just spent $750 million to build a 1,800,000 square foot office tower. That's about $400/ft. FNC has 990,000 square feet of office space. $400/ft spent on the FNC would be about $400 million, or over 4 times what we're guessing it would take to do a renovation. Could someone looking to build an office tower drop $200 million on it, or about half the cost per foot of what Devon did, and get it to modern spec for less than building a new tower?

Now, Devon built a world class facility and I am sure you can build a modern facility of the same size for less. So, I guess the question is, what is the minimum it would cost to build a 1MM square foot modern tower and how does that compare with a renovation of FNC? No doubt there are buildings in the world that are of FNCs style and pedigree and are fully functioning office towers. What is it specifically about FNC that prevents it from being one, too?

NOTE: These numbers are sourced from WikiPedia and the math is mine, both of which welcome, and probably deserve, further scrutiny.

I think you completely underestimate the task of renovating a building like this. The entire mechanical infrastructure needs replacing, I understand. And that is hard to do a bit at a time when you are talking about plumbing, hvac, wiring, etc. Plus, the whole reconstruction process is dirty and people generally don't want to live or work in a building being completely renovated. Doing it a floor at a time prolongs the agony for years. Plus a bit at a time is pretty inefficient and costly. Cosmetics is one thing, structure and infrastructure is another.
So...you're advocating demolition then?

Probably, but why not?

The floor plates in the tower are way too small. At best it would make nice space for a bunch of small companies but the supply of companies just isn't there, and if it was most couldn't afford the rent it would require. If the Devon office tower was a spec building Devon wouldn't be able to afford the rent (well, they could but they wouldn't want to).

Jane Jacobs has a real good chapter on why old buildings are important in her book The Death and Life of Great American Cities. The non-tower portion might could make a go of it as office space but it will probably be a parking garage soon.

www.newsok.com/federal-authorities-are-investigating-asbestos-payments-to-owner-of-first-national-center-in-oklahoma-city/article/3717097

Wowee.

Perhaps this latest issue with the law will be enough for Capmark to finally stop dealing with this guy.

I came in early this morning and noticed the top of the building was all lit up like it used to be. Maybe it has been that way for a while, but I just noticed.

I dont think i'm underestimating it at all. But we have to face facts. This buildingg it NEVER going to be purchased to gut the entire thing all at once. It's going to be so cost prohibitive to do that, and the ROI is so extremely long term, that no investor is going to stick with it that long.

Yes, construction is dirty. And doing it a floor at a time can make it take longer. But that's sort of the point. Do it a little a a time and you minimize your upfront cost and can spread the capitalization across several year's worth of books. There are accounting reasons that help with that as well. But if you look at the building in a post Devon world, you already see large swaths of space that are unoccupied.

So what i'm saying is, take those now vacant areas and re-tool them. It's incredibly easy to have an entire floor empty in the tower since the floors are so small (for commercial). Yes it would be ideal for them to get commercial back in, but it's class C space and small business don't typically take up space at the high dollars it goes for being downtown. If they did, the place would be full so that's a wasted argument.

You see this done in suburban office space every day. Suites are torn out and rebuilt for the new tenant. It's not really that big of a deal. Commercial construction moves really fast, and the walls between suites get soundproofing so you don't really hear that much. And being residential, it's going to have even more soundproofing between the spaces. And if you hear it between floors, it will be minimal.

I dont think i'm underestimating it at all. But we have to face facts. This buildingg it NEVER going to be purchased to gut the entire thing all at once. It's going to be so cost prohibitive to do that, and the ROI is so extremely long term, that no investor is going to stick with it that long.

Yes, construction is dirty. And doing it a floor at a time can make it take longer. But that's sort of the point. Do it a little a a time and you minimize your upfront cost and can spread the capitalization across several year's worth of books. There are accounting reasons that help with that as well. But if you look at the building in a post Devon world, you already see large swaths of space that are unoccupied.

So what i'm saying is, take those now vacant areas and re-tool them. It's incredibly easy to have an entire floor empty in the tower since the floors are so small (for commercial). Yes it would be ideal for them to get commercial back in, but it's class C space and small business don't typically take up space at the high dollars it goes for being downtown. If they did, the place would be full so that's a wasted argument.

You see this done in suburban office space every day. Suites are torn out and rebuilt for the new tenant. It's not really that big of a deal. Commercial construction moves really fast, and the walls between suites get soundproofing so you don't really hear that much. And being residential, it's going to have even more soundproofing between the spaces. And if you hear it between floors, it will be minimal.

I don't think it's so much a construction annoyance issue as it is an issue of not being able to do the large scale utilities upgrades(HVAC, Plumbing, Electric, etc) that would allow it to properly support whatever the floors were being renovated/converted to. It's tough to completely overhaul all the interior workings of a building with people still in it. I'm sure it could be done, but it would be difficult.

And if you hear it between floors, it will be minimal.

Just like that.

You would hear it between floors. Been there.

I don't think people understand the amount of work that needs to be done. How are you going to put in new plumbing or electrical systems while they are being used? This isn't just tearing down some interior walls and moving them around. Go look at the Braniff building and see if that kind of remodel could be done one floor at a time while people are using the rest of the building.

The floor plates in the tower are way too small. At best it would make nice space for a bunch of small companies but the supply of companies just isn't there, and if it was most couldn't afford the rent it would require. If the Devon office tower was a spec building Devon wouldn't be able to afford the rent (well, they could but they wouldn't want to).

Jane Jacobs has a real good chapter on why old buildings are important in her book The Death and Life of Great American Cities. The non-tower portion might could make a go of it as office space but it will probably be a parking garage soon.

Gotcha.

So, essentially our market just isn't good enough to justify it and old buildings like these only survive and function in areas where premium land for office space is scarce and there are a lot of small and mid-sized companies creating demand for space.

Makes sense. Basically, not going to happen unless some big shot has too much cash and sees it as a legacy.

So...you're advocating demolition then?

Absolutely not. Just being realistic that the re-use has to be of enough economic value to encourage proper investment. We don't need a cycle of failures who botch the job and continue to make it harder and more expensive to rectify.

Is the $80M number that's been thrown around representative of a complete overhaul in the building for a more appropriate use?

Gotcha.

So, essentially our market just isn't good enough to justify it and old buildings like these only survive and function in areas where premium land for office space is scarce and there are a lot of small and mid-sized companies creating demand for space.

Makes sense. Basically, not going to happen unless some big shot has too much cash and sees it as a legacy.

That is basically it. If FNC was the only Class C property downtown it would probably be full, but downtown has a glut of Class C office space which makes it unprofitable for all the players.

There is much less Class C than there used to be, as lots of it has been taken off the market (Dowell Center), demolished (old Kerr McGee buildings) or converted (Park Harvey).

In fact, I'm not sure of another Class C building downtown, unless you count Dowell which will probably be Class B if/when he ever gets around to re-opening.


Even with Devon as their largest tenant (set to stop paying rent this summer) FNC is 50% vacant.

Is there a listing of what various locations in OKC qualify as Class "A", "B", and "C" office space? Who makes that distinction, if not the market? (and I guess my real question is:) Why does this absolute gem of a building not manage to make the cut as Class "A" office space? If the new owner were to throw some money at it, would it be a different class?

Is there a listing of what various locations in OKC qualify as Class "A", "B", and "C" office space? Who makes that distinction, if not the market? (and I guess my real question is:) Why does this absolute gem of a building not manage to make the cut as Class "A" office space? If the new owner were to throw some money at it, would it be a different class?

From wikipedia.

The Building Owners and Managers Association (BOMA) classifies office space into three categories: Class A, Class B, and Class C.[4] According to BOMA, Class A office buildings have the "most prestigious buildings competing for premier office users with rents above average for the area." BOMA states that Class A facilities have "high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence." BOMA describes Class B office buildings as those that compete "for a wide range of users with rents in the average range for the area." BOMA states that Class B buildings have "adequate systems" and finishes that "are fair to good for the area," but that the buildings do not compete with Class A buildings for the same prices. According to BOMA Class C buildings are aimed towards "tenants requiring functional space at rents below the average for the area."[5]
Office - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Office)

In the annual survey done by Price Edwards, they categorize buildings as Class C if they have rents at or below $13 / square foot.


You see here that the only other decent amount of space in this class is the Robinson Renaissance, which I would put a full notch above FNC, as it was fully renovated in the late 80's:



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

From wikipedia.

Office - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Office)

Catch22, thanks for the response. I read that, but it seems to be very qualitative, not quantitative. Who says we have x sf of Class "A", y sf of Class "B" and z sf of Class "C"?

Yeah, read that, but it seems to be very qualitative, not quantitative. Who says we have x sf of Class "A", y sf of Class "B" and z sf of Class "C"?

The commercial real estate companies that compile annual surveys, as shown above.

Even between them there is some disagreement, but not much.

Thanks, Pete. Your post #819, if you were too modest to reference yourself.

If you take Pete's chart and you don't include FNC, there is 253,000 sq feet of Class C rented. If there was no other Class C property downtown and this space was leased in FNC it would be 75% full. That includes not just the main tower but the entire complex. However, if FNC was taken off the office market and the current tenants wanted to stay downtown in equivalent space the 4 remaining Class C buildings would be 100% full with a waiting list. Of course, that analysis ignores Devon’s situation.

As usual, when a plan is presented, i see a lot of people saying "no you can't do that" rather than coming up with a plan to do something.

You say you can't do it while it's in use, that is not accurate. Not in the slightest. We know that the services are going to have to be totally revamped from every angle. That includes the infrastructure as well as the easy cosmetics. Things like electrical/plumbing/hvac have to be tossed and redone. HVAC is extremely easy for this, which goes hand in hand with electrical and plumbing since it needs both to function. The building currently operates on a steam system that would go. Since you're tossing it, you don't need to tie into it for anything. That means that portion of the mechanical floor can be ignored. In fact, what once was the mechanical floor can be replaced by a new mechanical floor on a diffrent level. At that time, they weren't constructed any differently from a normal office space floor...meaning it takes very little effort to convert one to a new mech. floor.

That opens the possibilty for re-working to new systems ALL around. Is it a pain in the rear? For sure it is. But after you get the first big change done, you can add services to the newly renovated floors much more easily. The only issue you run into is when you get to the last group of floors that still use the old hardware and have to either decide whether to move those businesses or keep two systems running. Moving makes more sense, but the leasing company has to be willing to pay the moving /construction cost for the company...even though in the end, both parties benefit.

Look, we're not going to get this thing back by thinking in normal terms or in small dollars. If it were, it would be done....and would have been done 20 years ago. We have to think outside the box. What i'm suggesting isn't a new idea, it's just not as common. But it's done every day around the world on re-hab projects. Hell, we've done some of the same things in our own buildings, which are from the 50's. Just because something is in use doesn't mean that it's untouchable for work. There's always a way to make it work, but you have to be willing to put in the extra effort to do it.

As usual, when a plan is presented, i see a lot of people saying "no you can't do that" rather than coming up with a plan to do something.

You say you can't do it while it's in use, that is not accurate. Not in the slightest. We know that the services are going to have to be totally revamped from every angle. That includes the infrastructure as well as the easy cosmetics. Things like electrical/plumbing/hvac have to be tossed and redone. HVAC is extremely easy for this,... .

Uh, NO! HVAC renovations in a building like this are expensive and can be complicated. This isn't like changing your AC at home. Most people tend to trivialize what they don't know, but replacing whole systems in a building like this is very involved. Throw in the fire suppression systems, new communications/data infrastructure, energy management systems, plumbing, etc., and it is a massive task. The full extent cannot be determined until use is determined as not all uses require the same systems. What to do with this building and what the economics are is not just an easy bulletin board task.

It is easy to talk "big ideas" at 20,000 ft., but down on earth where the detail is important it is a different reality. This building needs serious capital that will have to be paid back one way or another. It will take deep pockets and patience. I think it is worth it, but the pool of investors willing to do this is not large.

To get an idea of what this would cost, just look at SandRidge tower. They renovated every floor of the tower. Three floors end up being around $3,000,000 ($1,000,000 per floor). The conference floor is definitely more expensive and so is the Lobby. So 30 floors of SandRidge probably was around $40,000,000 and the original building was built in 1971. Also, it already had a lot of systems in place.

To get an idea of what this would cost, just look at SandRidge tower. They renovated every floor of the tower. Three floors end up being around $3,000,000 ($1,000,000 per floor). The conference floor is definitely more expensive and so is the Lobby. So 30 floors of SandRidge probably was around $40,000,000 and the original building was built in 1971. Also, it already had a lot of systems in place.

i absolutely think the $80 million number thrown out (by i believe steve) is very close to accurate for a full renovation

To get an idea of what this would cost, just look at SandRidge tower. They renovated every floor of the tower. Three floors end up being around $3,000,000 ($1,000,000 per floor). The conference floor is definitely more expensive and so is the Lobby. So 30 floors of SandRidge probably was around $40,000,000 and the original building was built in 1971. Also, it already had a lot of systems in place.

Yep. Plus there is a huge price difference between replacing the pipe that goes from the wall to the bathroom sink, and replacing the pipe that is behind the wall.

To get an idea of what this would cost, just look at SandRidge tower. They renovated every floor of the tower. Three floors end up being around $3,000,000 ($1,000,000 per floor). The conference floor is definitely more expensive and so is the Lobby. So 30 floors of SandRidge probably was around $40,000,000 and the original building was built in 1971. Also, it already had a lot of systems in place.

Actually, the building permits for each floor were a little less than $500,000.

So, that would put the total renovation of the SandRidge Tower around $15 million, plus $5.1 million for the lobby and the exterior work. $20 million total is probably the best number, excluding furniture, fixtures and equipment.

bombermwc, your comments about the technicalities of the renovation made me think of some comments a few years back by Donald Trump. He appeared before a congressional panel that was investigating the costs (and cost overruns) of renovating the United Nations building.

Transcript: https://dl.dropbox.com/s/tbtah1cf98sg6cu/trump_testimony.html
Audio: https://dl.dropbox.com/s/hm05mj2hf51jaov/TheDonaldUNTestimony.mp3?dl=1

Keep in mind, I'm NOT trying to bring politics into this thread (in fact, I try very hard to avoid that altogether). It's just that this guy has had considerable experience with both new construction and renovation, and I thought his comments from that testimony were interesting regarding the renovation of large old buildings.
(and yes, I realize that Donald Trump is not coming to town to save the FNC!)

bombermwc, your comments about the technicalities of the renovation made me think of some comments a few years back by Donald Trump. He appeared before a congressional panel that was investigating the costs (and cost overruns) of renovating the United Nations building.

Transcript: https://dl.dropbox.com/s/tbtah1cf98sg6cu/trump_testimony.html
Audio: https://dl.dropbox.com/s/hm05mj2hf51jaov/TheDonaldUNTestimony.mp3?dl=1

Keep in mind, I'm NOT trying to bring politics into this thread (in fact, I try very hard to avoid that altogether). It's just that this guy has had considerable experience with both new construction and renovation, and I thought his comments from that testimony were interesting regarding the renovation of large old buildings.
(and yes, I realize that Donald Trump is not coming to town to save the FNC!)

I'm not sure I would make the Donald my idol and authority...he has a mixed past on these things having received a huge amount of favorabletax credits, preferential opportunities, controversial projects etc. he has made billions yet has taken several of his entities through bankruptcy and big time lawsuits. I know some of his project payments were less than timely. He did several reconstructions cheaply but many others over budget and late.

Oh, and surprise, surprise there is graft in construction in NYC that runs up costs.

Each of these projects are unique and so the costs vary widely. Once future use is determined then a more accurate budget on this building can be made. However, $80 MM seems in the right range.

With regard to Trump's comment, it took him a long time to say that renovations should cost 1/2 of building the structure new with a slight upcharge for coverting office to residential. So how much would a residential building constructed with the same building materials as FNC cost today?

The 35 story 909 Walnut building in Kansas City was converted from office to residential for $36 million.

http://www.kcphotos.com/gallery/albums/new/downtown//normal_downtown_8308.jpg

With regard to Trump's comment, it took him a long time to say that renovations should cost 1/2 of building the structure new with a slight upcharge for coverting office to residential. So how much would a residential building constructed with the same building materials as FNC cost today?

The 35 story 909 Walnut building in Kansas City was converted from office to residential for $36 million.

http://www.kcphotos.com/gallery/albums/new/downtown//normal_downtown_8308.jpg

This and the adjacent building were bought for $2 million and renovated for $64 million about 6-7 yrs ago, I believe. I think the sq ft cost of renovation would be in the range of what we are talking about with FNC. BTW, this KC property sells the condos now for about $300 per ft.

Rover, i think you missed oh about half of my post there. I realize what's involved. It's basically building a building within a building. My point, which you continue to miss, is that you ABSOLUTELY DO NOT have to shut the entire building down to do it. No way, no how. Is it easier if you do so, hell yeah. And cheaper in the end. But it also means that you have to secure the ENTIRE revenue stream for the project up front. That, my friend, is NEVER going to happen for FNC. If it were, we would have had the building brought up to spec 20 years ago.

As far as HVAC goes, it's far less complicated than you're making it though. The typical blower/chiller goes in the ceiling or in a mechanical room for the floor. The only major updates you have after that are the lines from the blower to the condensor and it's drains. As I've said, if you're going to make a new mechanical floor for those items, then you're going to be running a whole new set of lines for those things. And I absoultely gurantee that the holes between floors have space for it. If not, guess what, a drill works great for that. I say these things because i've personally been present for the same thing being done. I've seen it up-close, first hand, on a building here in OKC...that's about 50 years newer. This is why it's not nearly the big deal you make it out to be. People do these things all the time in normal maintenance. FNC just would take it to a more complex higher level becuase it involves more. But the basic plan is still the same.

You can continue to throw the "why nots" at me all you want, but i'm going to remain optomistic on the building. How about trying some "how to's" next time instead?

As far as HVAC goes, it's far less complicated than you're making it though. The typical blower/chiller goes in the ceiling or in a mechanical room for the floor. The only major updates you have after that are the lines from the blower to the condensor and it's drains. As I've said, if you're going to make a new mechanical floor for those items, then you're going to be running a whole new set of lines for those things. And I absoultely gurantee that the holes between floors have space for it. If not, guess what, a drill works great for that. I say these things because i've personally been present for the same thing being done. I've seen it up-close, first hand, on a building here in OKC...that's about 50 years newer. This is why it's not nearly the big deal you make it out to be. People do these things all the time in normal maintenance. FNC just would take it to a more complex higher level becuase it involves more. But the basic plan is still the same.

You can continue to throw the "why nots" at me all you want, but i'm going to remain optomistic on the building. How about trying some "how to's" next time instead?

Obviously you are not a HVAC expert. I wonder if you even know what a chiller is. (First hint - chillers do not go in ceilings). Large commercial HVAC has been my area for over 20 years and I have done some of the largest systems in the world. So, don't try to bluff. I don't know what you think you "saw" but it could have been any number of system types. Were they central systems or not? Splits? Water or refrigerant? District? Sizes of spaces? Load requirements? Reconfigurable? Lift requirements? How was the ventillation handled to meet code - separate system or integrated? Was the same system used in the commercial spaces? Was the building occupied 24 hours? How was the humidity and changing load handled? What was the building type and orientation? Was the objective installation costs, operating costs, life costs, comfort control?

Until we know use of the project we don't really know the optimum system or what might be required. I guess we could just put new window units or mini-splits in and call it a day. I've seen that done too - in places like Jakarta and Sao Paulo. It is cheap and quick and you can do that a room at a time. But I don't think that is the standard for this type building and this location...at least I hope not.

As far as the why nots...it is easy to dream. But full feasibility analysis is pretty comprehensive. Especially if you are investing up to $80 Million. Conjecture, extrapolation and lunch time chatter doesn't cut it. If this building can be bought cheaply then developers will engage in a full feasibility study and offer alternatives. Once they know what it can be bought for they will assess how much they can spend to update and convert based on expected revenue from their use objectives. This will help determine the infrastructure retrofit options they have. Like JTF's example in Kansas City, the fact that the property was bought for $2 million allowed them to use their investment for improvements knowing they could turn around and sell the condo's for $300 a foot. If FNC can be bought cheaply and condo'd out at $300 a foot, then we will see multiple options for quality retro-ing.

Obviously you are not a HVAC expert. I wonder if you even know what a chiller is. (First hint - chillers do not go in ceilings). Large commercial HVAC has been my area for over 20 years and I have done some of the largest systems in the world. So, don't try to bluff. I don't know what you think you "saw" but it could have been any number of system types. Were they central systems or not? Splits? Water or refrigerant? District? Sizes of spaces? Load requirements? Reconfigurable? Lift requirements? How was the ventillation handled to meet code - separate system or integrated? Was the same system used in the commercial spaces? Was the building occupied 24 hours? How was the humidity and changing load handled? What was the building type and orientation? Was the objective installation costs, operating costs, life costs, comfort control?

Until we know use of the project we don't really know the optimum system or what might be required. I guess we could just put new window units or mini-splits in and call it a day. I've seen that done too - in places like Jakarta and Sao Paulo. It is cheap and quick and you can do that a room at a time. But I don't think that is the standard for this type building and this location...at least I hope not.

As far as the why nots...it is easy to dream. But full feasibility analysis is pretty comprehensive. Especially if you are investing up to $80 Million. Conjecture, extrapolation and lunch time chatter doesn't cut it. If this building can be bought cheaply then developers will engage in a full feasibility study and offer alternatives. Once they know what it can be bought for they will assess how much they can spend to update and convert based on expected revenue from their use objectives. This will help determine the infrastructure retrofit options they have. Like JTF's example in Kansas City, the fact that the property was bought for $2 million allowed them to use their investment for improvements knowing they could turn around and sell the condo's for $300 a foot. If FNC can be bought cheaply and condo'd out at $300 a foot, then we will see multiple options for quality retro-ing.

Rover wins.

Rover wins.

Rover is very pragmatic and usually pretty spot on as far as his analysis goes. I don't always agree with him on some things, but I do appreciate his input. Definitely makes one think.

Arent modular chillers designed for variable scenarios? Often cost effective for multistorey retro installs? I think you can zone off sections of floors and have multiple floors for mechanical or stack them. If the building is not geared to one or the other (commercial or residential) modular systems allow for adaptation with minimal floor plan changes.

But, i'm sure this has already been considered.

The Answer to the Question “What the Heck is Going on with First National?” | OKC Central (http://blog.newsok.com/okccentral/2012/10/13/the-answer-to-the-question-what-the-heck-is-going-on-with-first-national/)

I am uncertain how anyone, given projections of 80+ mil to rehab the space, can ever make money on it

No, it's not very conducive to the almighty quick buck.

The Answer to the Question “What the Heck is Going on with First National?” | OKC Central (http://blog.newsok.com/okccentral/2012/10/13/the-answer-to-the-question-what-the-heck-is-going-on-with-first-national/)

"...the money wire they were awaiting had gotten “lost” and that they need more time to find it. "

This is beyond a joke.
:(

No, it's not very conducive to the almighty quick buck.
It's going to require an "investor" instead of a profiteer.

It's going to require an "investor" instead of a profiteer.

true, but even an investor expects a return. It's simply hard to envision a return, even long haul, sufficient to justify an 80 million rehab. hope remains.

There are plenty of examples across the country of expensive rehabs to a building like FNC. The return can be there, it just requires a patient investor who understands what they are getting into and understands what is required.

It's going to require an "investor" instead of a profiteer.

You don't mean investor, you mean benefactor. An $80 million benefactor would be huge. Lol. Why do you think anyone will, or should, begin this or any project without expecting a reasonable or good rate of return?

So...you're advocating demolition then?

You don't mean investor, you mean benefactor. An $80 million benefactor would be huge. Lol. Why do you think anyone will, or should, begin this or any project without expecting a reasonable or good rate of return?
An investor someone who is willing to see the return a little further out in the future, not someone who expects to be paid off in 3-5 years which seems to be all the patience that most developers/profit takers seem to have anymore of course someone not willing to wait longer than 5 years may qualify as a benefactor in your mind, if that is the case we disagree on meaning of the terms. I am pretty sure that Dr. McKean had a much longer time frame on when he expected a return on JDM Place than the expectation of return on his other properties since he was willing to spend more on it in our budget meetings with him and his staff. Every time that he had budget concerns we gave him cheaper options and he turned them down every time because he didn't want to compromise on that building.

Most developers that I have worked with are profit takers and not investors, their pro forma is designed on a 3-5 return for leases and most have the desire to sell out before then so the buildings are "spec'd" for that time frame which goes against a sustainability mindset that we try to do. We always tried to use better windows,more insulation, and quality materials to make it a better building. Unless the developers were going for "green marketing" they usually chose the lowest common denominator when it came to products used because they intended to flip the building. Now I had some projects (funded by ING in the Houston area) where the financier required a better quality of product because their intention was to hold onto the property and the developer was only responsible for the construction and leasing of the project.

That said, no I don't really expect any one to commit to an $80 million renovation without an expectation of return. I expect any renovation to be piecemeal unless someone with the financial clout like a Devon decides to take on the project. I do feel that a successful mixed-use project in that building could be valued well in excess of an $80-85 million investment based on similar projects that I have seen elsewhere where the building sold after completion.