First National Center

[Rover]

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.

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.

[bombermwc]

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?

[Rover]

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.

[ethansisson]

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.

[CaptDave]

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.

[BigD Misey]

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.

[Steve]

The Answer to the Question “What the Heck is Going on with First National?” | OKC Central

[Spartan]

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.

[Praedura]

The Answer to the Question “What the Heck is Going on with First National?” | OKC Central

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

This is beyond a joke.

[bluedogok]

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

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

[kevinpate]

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.

[bluedogok]

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.

[Rover]

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?

[Urbanized]

So...you're advocating demolition then?

[bluedogok]

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.

[Rover]

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.

All investors require an adequate return on capital invested. You are talking about short or long term, not the fact they are investors. Long term investors understand the net present value of money and do not forego the expectation that what they lose in the short term they will make up in the long term. The also understand risk and that the higher the risk the higher the expectation of returns. That doesn't change the analysis on the FNB. It must be acquired cheaply and the building must be able to appreciate. Nobody will come in and invest $80 million and just forget about it. The real value of the building must be raised to cover their total investment, including the opportunity costs of the money. To get any commercial lending group to finance the investment means they will have to have their own evaluation. Unless a private investor puts up $80 Million of their own money, is willing to accept the risk, and has extreme patience, this will be a difficult retrofit. Not saying there isn't someone out there to do it, but I bet it requires an extremely low acquisition cost and perhaps some public assistance.

[Praedura]

According to Steve:

"JUDGE BILL GRAVES, sources tell me, has the discretion to call an end to this chapter of the First National story on Monday and have a receiver appointed"

So assuming the magical (my dog ate it) "lost money wire" does not show up by Monday, will the judge end this farce?

Fingers crossed.

[bluedogok]

Unless a private investor puts up $80 Million of their own money, is willing to accept the risk, and has extreme patience, this will be a difficult retrofit. Not saying there isn't someone out there to do it, but I bet it requires an extremely low acquisition cost and perhaps some public assistance.

I think once it is removed from current ownership it is going to have to go for next to nothing, I don't think Milbank is going to be able to get much for it as they hope and will have to take pennies on the dollar for it. I also think that some public financing/assistance is more than likely to get the project going. I just don't want it to sit for 20 years wasting away like the Skirvin did, just seems like something should be able to be done to this building. Like I stated before, there are many examples across the country of buildings just like FNC that have been renovated into viable, profitable jewel.

[Snowman]

Is it unreasonable to think that Devon may want to buy it for pennies on the dollar and fix it up and put the additional Houston employees in there? They certainly would have more of a long-term outlook.

I think I heard somewhere, not sure how reliable the source was, they looked at buying and renovating First National before building the current tower but decided against it because for what they were looking for they got more out of building new, probably would have had to been early in the process since it seems hard to see they could have gotten everyone in the current tower in FNC.

[bombermwc]

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.

Well you can tell me i'm wrong all you want. I've been there for it. I've seen it with my own eyes. You could have installed it for 50 years. But if you haven't been present for it, then i can't really speak to that. Systems are made exactlly for this purpose. As i've said, they are more expensive becase of what's involved in getting them where they need to go given the extra constraints....but they do exist. I've said all along that it won't be easy. Let's go through some of these, and remember we're starting from scratch rather than even touching the old steam based system. But here's what it was.....

Were they central systems or not? Yes, it was a large central system.
Splits? No.
Water or refrigerant? Water. The main unit had not been converted in 2000. That's when my cousing actually worked for the company...in the building...that leased space out there. So i've got first hand knowledge of the place. Being interested, i of course asked a milion questions, and saw some things most wouldn't be able to.
District? Yes it was.
Sizes of spaces? Of course that varies.
Load requirements? Varies if you're using any space as a data center, but since the floor plates in the tower section are so similar, you get a basic same load. What varies are the other portions of the district.
Reconfigurable? Not easily. It would be very difficult compared to what you see today. Remember heating includes radiators as well.
Lift requirements?
How was the ventillation handled to meet code - separate system or integrated? The guts of the thing is from the 20's. Remember code is only applied when major renovations are done. Most floors dont even have smoke detectors either. So code requirements aren't something they had to worry about in the past.
Was the same system used in the commercial spaces?
Was the building occupied 24 hours? No
How was the humidity and changing load handled? You can tell that it wasn't handled all that well. The place can become VERY humid inside in the summer and because VERY dry in the winter.
Was the objective installation costs, operating costs, life costs, comfort control? The goal when it was built, is not what the goal today would be. Individualized comfort control wasn't a question. Much like any large system, the basics of the thing was...it's on or it's off. You get AC or you get Heat. Anyone remember their old dorm days?

------

Now if you want to look at these same questions, but from the new re-hab side, you alter some things. No one would want to see window units on the thing. But what you are going to find, especially if it converts to residential, would be the comfort control ability. No one wants to live in a building with the large central contols like it has today. That question starts the whole discussion of what the new system would look like. It DRASTICALLY changes, as i'm sure you know, what you would do. Knowing that you'll have smaller units like that also means that the amount of infrastructure becomes smaller, but more frequent. Remember, you don't have a dropped ceiling to shove a blower in either...ceilings are too low. So they're going in a close like they would for a home unit. The difference, is going to be on the other end.

Whatever....

[Rover]

Doubling down is a dangerous thing to do. Lol.

[Bellaboo]

Well you can tell me i'm wrong all you want. I've been there for it. I've seen it with my own eyes. You could have installed it for 50 years. But if you haven't been present for it, then i can't really speak to that. Systems are made exactlly for this purpose. As i've said, they are more expensive becase of what's involved in getting them where they need to go given the extra constraints....but they do exist. I've said all along that it won't be easy. Let's go through some of these, and remember we're starting from scratch rather than even touching the old steam based system. But here's what it was.....

Were they central systems or not? Yes, it was a large central system.
Splits? No.
Water or refrigerant? Water. The main unit had not been converted in 2000. That's when my cousing actually worked for the company...in the building...that leased space out there. So i've got first hand knowledge of the place. Being interested, i of course asked a milion questions, and saw some things most wouldn't be able to.
District? Yes it was.
Sizes of spaces? Of course that varies.
Load requirements? Varies if you're using any space as a data center, but since the floor plates in the tower section are so similar, you get a basic same load. What varies are the other portions of the district.
Reconfigurable? Not easily. It would be very difficult compared to what you see today. Remember heating includes radiators as well.
Lift requirements?
How was the ventillation handled to meet code - separate system or integrated? The guts of the thing is from the 20's. Remember code is only applied when major renovations are done. Most floors dont even have smoke detectors either. So code requirements aren't something they had to worry about in the past.
Was the same system used in the commercial spaces?
Was the building occupied 24 hours? No
How was the humidity and changing load handled? You can tell that it wasn't handled all that well. The place can become VERY humid inside in the summer and because VERY dry in the winter.
Was the objective installation costs, operating costs, life costs, comfort control? The goal when it was built, is not what the goal today would be. Individualized comfort control wasn't a question. Much like any large system, the basics of the thing was...it's on or it's off. You get AC or you get Heat. Anyone remember their old dorm days?

------

Now if you want to look at these same questions, but from the new re-hab side, you alter some things. No one would want to see window units on the thing. But what you are going to find, especially if it converts to residential, would be the comfort control ability. No one wants to live in a building with the large central contols like it has today. That question starts the whole discussion of what the new system would look like. It DRASTICALLY changes, as i'm sure you know, what you would do. Knowing that you'll have smaller units like that also means that the amount of infrastructure becomes smaller, but more frequent. Remember, you don't have a dropped ceiling to shove a blower in either...ceilings are too low. So they're going in a close like they would for a home unit. The difference, is going to be on the other end.

Whatever....

Bomber,

HVAC is Rovers business.................he knows this industry.

[LakeEffect]

Is it unreasonable to think that Devon may want to buy it for pennies on the dollar and fix it up and put the additional Houston employees in there? They certainly would have more of a long-term outlook.

This.

[Spartan]

According to Steve:

"JUDGE BILL GRAVES, sources tell me, has the discretion to call an end to this chapter of the First National story on Monday and have a receiver appointed"

So assuming the magical (my dog ate it) "lost money wire" does not show up by Monday, will the judge end this farce?

Fingers crossed.

Unlikely..and I'm willing to bet a lot of money (just so I can finally be wrong and see an end to this madness)

[HangryHippo]

Is it unreasonable to think that Devon may want to buy it for pennies on the dollar and fix it up and put the additional Houston employees in there? They certainly would have more of a long-term outlook.

This would be a fantastic result. However, yes, I think it's unreasonable. Or at the least, unrealistic.