OG&E Tower

[BDP]

Vernacular architecture has a universal appeal.

Not really. There are actually places in the world that don't like standard Wal-Marts or the boxy office parks that dominate the OKC landscape.

[OKVision4U]

Building big with spec space would make this building compete with what another developer will construct on the west side, and therefore lower it's potential sales price. What he loses by "building short" will be made up by the other site, and increase the number of potential buyers.

Tom, in todays local economy & demand back in the CBD, both should be (driving demand ) by having an "we are here statement", not "Well we're a nice average piece of real-estate, but the new one across the street can help you". In an UP market for large scale real estate the products delivered to the market should be greater than the existing demand. This keeps the next project going bigger and not slowing the market. ...this is the HOW to build a snow ball effect in real estate.

[Pete]

Rainey Willaims is not building spec space to lease... He's effectively building exactly what OG&E needs and no more; apart from some extra parking.

[mkjeeves]

Rainey Willaims is not building spec space to lease... He's effectively building exactly what OG&E needs and no more; apart from some extra parking.

Those jobs for the most part are already downtown too aren't they?

[OkieNate]

Rainey Willaims is not building spec space to lease... He's effectively building exactly what OG&E needs and no more; apart from some extra parking.

So are they moving ALL of their employees to this new building (and how many do they have?) or just consolidating their employees who are not in their current building?

[OKVision4U]

Tom, in todays local economy & demand back in the CBD, both should be (driving demand ) by having an "we are here statement", not "Well we're a nice average piece of real-estate, but the new one across the street can help you". In an UP market for large scale real estate the products delivered to the market should be greater than the existing demand. This keeps the next project going bigger and not slowing the market. ...this is the HOW to build a snow ball effect in real estate.

...this is also how you build DEMAND for your product too. And, the lending groups feel more relaxed when all the surrounding new projects are increasing in scale & design. Thus, escalation in values.

[zookeeper]

I can almost hear the jingle in the pockets.

No further comment.

To be clear --- I mean certain members of the DDRC. This was a sham.

So who will post the members and their votes? I also think at least one of those two "no votes" was a sham, just to make it look good. I saw this coming a mile away.

[Jchaser405]

Is there another city with it's PUBLIC UTILITY company occupying a "world class" tower on prime real estate in the CBD? I am curious is this a normal practice?

[Bellaboo]

So are they moving ALL of their employees to this new building (and how many do they have?) or just consolidating their employees who are not in their current building?

The past rumor has been around 1000 employees from 2 or 3 different buildings.

[SoonerDave]

...this is also how you build DEMAND for your product too. And, the lending groups feel more relaxed when all the surrounding new projects are increasing in scale & design. Thus, escalation in values.

Not sure how you get escalating values by purposely overbuilding. If I'm not mistaken, it was that philosophy that led to a huge surplus of office space and plunging rents about a decade (?) ago.

I mean, its easy to say "We should have a Taj Mahal office building here!" and conversely be dismissive about someone else's reluctance to do it when you're spending someone else's money. The folks with the ready cash and/or resources to invest in large-scale complexes also know they've got to get some kind of return on those dollars - heck, that's why they have the $$ in the first place. If you have the choice between spending a huge sum on a huge building, or a smaller sum on a smaller building, knowing the returns on either won't be markedly different, or that your occupancy rate will be better on the latter because you have reason to suspect that "high end" space won't be fully occupied - perhaps for a long time - it becomes a great deal simpler to go with the smaller, simpler project.

[Of Sound Mind]

i mean, its easy to say "we should have a taj mahal office building here!" and conversely be dismissive about someone else's reluctance to do it when you're spending someone else's money. The folks with the ready cash and/or resources to invest in large-scale complexes also know they've got to get some kind of return on those dollars - heck, that's why they have the $$ in the first place.

bingo!

[zookeeper]

For better or worse, to be honest I don't see "for profit" public energy (OG&E, ONG, etc.) to survive the next 10-15 years. By necessity.
Their goals clash with worldwide sustainability .....go ahead and bookmark this post.

[Richard at Remax]

not standing up for OGE but A) they aren't putting up the money for this. they are going to lease and B) regardless if they are a public utilities company or not, who are you to say they can't move to new offices?

[OKVision4U]

Not sure how you get escalating values by purposely overbuilding. If I'm not mistaken, it was that philosophy that led to a huge surplus of office space and plunging rents about a decade (?) ago.

I mean, its easy to say "We should have a Taj Mahal office building here!" and conversely be dismissive about someone else's reluctance to do it when you're spending someone else's money. The folks with the ready cash and/or resources to invest in large-scale complexes also know they've got to get some kind of return on those dollars - heck, that's why they have the $$ in the first place. If you have the choice between spending a huge sum on a huge building, or a smaller sum on a smaller building, knowing the returns on either won't be markedly different, or that your occupancy rate will be better on the latter because you have reason to suspect that "high end" space won't be fully occupied - perhaps for a long time - it becomes a great deal simpler to go with the smaller, simpler project.

You are confusing financing & investing....w/ Real Estate. If Rainey builds short, he will be leaving money on the table ( real estate ). His neighbor, DEVON, is worth over $1B in value. Rainey's hands are being tied by the OG&E relationship, not the market. The only reason Rainey is building short, is due to his relationship w/ OG&E, and he needs their ( signature on a lease ) to finance the project. If he was able to float the note on his own, he would build a 40+ World Class A building. That is what the real estate ( $1B Neighborhood ) calling for.

Then, if he built his 40 +, then the next developer can justify another one across the street w/ 45 stories. In real estate, you don't want your neighbors lower value bringing yours down.

Also, when DEVON added 1M + sf of Class A, they increased the demand for the CBD, for more. Not less.

[Pete]

So are they moving ALL of their employees to this new building (and how many do they have?) or just consolidating their employees who are not in their current building?

This has never been clear, and even people at OG&E don't know for sure.

It's possible they will keep their current downtown building and just move employees from the buildings they don't own.

[s.hoff]

So how long before we get concrete details and see actual renderings?

[SoonerDave]

You are confusing financing & investing....w/ Real Estate. If Rainey builds short, he will be leaving money on the table ( real estate ). His neighbor, DEVON, is worth over $1B in value. Rainey's hands are being tied by the OG&E relationship, not the market. The only reason Rainey is building short, is due to his relationship w/ OG&E, and he needs their ( signature on a lease ) to finance the project. If he was able to float the note on his own, he would build a 40+ World Class A building. That is what the real estate ( $1B Neighborhood ) calling for.

Then, if he built his 40 +, then the next developer can justify another one across the street w/ 45 stories. In real estate, you don't want your neighbors lower value bringing yours down.

Also, when DEVON added 1M + sf of Class A, they increased the demand for the CBD, for more. Not less.

If that were true, developers from around the world would be lining up right now to build all this space for which there is infinite demand and infinite money to be made, and no one would hesitate to underwrite Rainey whatever amount of money he wanted because he would be guaranteed to fill it, and thus no risk in the underwriting.

[shawnw]

Does OG&E own or lease their current building(s)?

[Pete]

So how long before we get concrete details and see actual renderings?

Steve tweeted today that Rainey Williams told the DDRC:
* 12 to 18 months (!) for final design work and determining OG&E's exact needs
* Start in mid-2015; 12-18 months construction

No way construction is less than 18 months; more like 24+. That means approximately a mid-2017 open date.

[Pete]

This is how the committee voted (3-2 AYE for demolition approval):

GiGi Faulkner, Vice-Chair AYE - broke tie
Ike Akinwande NAY
Connie Scothorn NAY
Richard Tanenbaum AYE
Charles Ainsworth AYE

Betsy Brunsteter, Chair Recused -- works for ADG who did the conceptual plan

[BDP]

not standing up for OGE but... B) regardless if they are a public utilities company or not, who are you to say they can't move to new offices?

It would certainly match the tea party platform. I think we have a few members of that group around Oklahoma.

Personally, I don't mind who is going to be the tenant. It's not OG&E's fault if we trade an icon for a mediocre development (note: at press time we still have little idea what kind of development this will be) while a large chunk of the core remains vacant or undeveloped. That'll just the result of community apathy mixing with indifferent wealth.

[AP]

Steve tweeted today that Rainey Williams told the DDRC:
* 12 to 18 months (!) for final design work and determining OG&E's exact needs
* Start in mid-2015; 12-18 months construction

No way construction is less than 18 months; more like 24+. That means approximately a mid-2017 open date.

Why so long on the final design work?

[OKVision4U]

If that were true, developers from around the world would be lining up right now to build all this space for which there is infinite demand and infinite money to be made, and no one would hesitate to underwrite Rainey whatever amount of money he wanted because he would be guaranteed to fill it, and thus no risk in the underwriting.

I will give you an example of Risk.... If you have a plane and you want to fly from NY to London, how much fuel would you want to make it safely to the destnation? The Lending community says you can make it on a 1/2 tank, the Architects tell you you can make it w/ cost +8 , ...what is the risk? ...The risk has to be shared, but you cant have less than 100%. If I'm lending Rainey, I want to ask him, what makes your building different from the others? ( that is the real risk equalizer )

Now, OKC is briddled w/ average & small thinking ( top to bottom ), that is what truly holds things back.

What does DEVON / SandRidge / Continental want in their new neighbors that have yet to build? ...something small or something extraordinary? ...that is what continues to drive a real estate market.

[CuatrodeMayo]

Why so long on the final design work?

12-18 months is not a unreasonable timetable to go from schematic design to the completion of construction documents, especially considering the scale of the project. Especially if the firm doing the design work does not specialize in high-rise construction.

EDIT: That is one reason obtaining the demolition permit now instead of just before construction makes sense. There is a significant outlay of money in design work ($5M-$10M) just to get the point of moving dirt. It would be unwise to spend that kind of money only to be denied when you a ready to start construction.

[BDP]

This is how the committee voted (3-2 AYE for demolition approval):

GiGi Faulkner, Vice-Chair AYE - broke tie
Ike Akinwande NAY
Connie Scothorn NAY
Richard Tanenbaum AYE
Charles Ainsworth AYE

Betsy Brunsteter, Chair Recused -- works for ADG who did the conceptual plan

Interesting that those guys have benefited from their own restoration projects (don't know the others). Obviously, they don't want to set a bad precedent if they go into a restoration project that ends up unfeasible and want to demolish. Despite their good works, they certainly are of the fox watching the hen house type breed that always seems to find their way onto these kinds of boards (not just in OKC).

Oh well... another one bites the dust. At least I am pretty sure that we don't have enough "splendor" left to be shamed by a fourth volume of pictures of destroyed structures.