First National Center

[bombermwc]

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.

[PhiAlpha]

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.

[ethansisson]

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

Just like that.

You would hear it between floors. Been there.

[Just the facts]

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.

[BDP]

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.

[Rover]

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.

[Teo9969]

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

[Just the facts]

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.

[Pete]

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.

[Dubya61]

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?

[catch22]

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

[Pete]

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:

[Dubya61]

From wikipedia.

Office - Wikipedia, the free encyclopedia

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"?

[Pete]

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.

[Dubya61]

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

[Just the facts]

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.

[bombermwc]

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.

[Rover]

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.

[TechArch]

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.

[jedicurt]

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

[Just the facts]

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.

[Pete]

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.

[Praedura]

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/tbtah1cf98s...testimony.html
Audio: https://dl.dropbox.com/s/hm05mj2hf51...imony.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!)

[Rover]

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/tbtah1cf98s...testimony.html
Audio: https://dl.dropbox.com/s/hm05mj2hf51...imony.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.

[Just the facts]

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.