First National Center

[Pete]

Tomorrow (Thursday, July 17th) is the deadline the owners have set for all bids on this property.

I have heard from good sources there may be as many as five separate bids. Remember, however, the owners have not set a price and it's not clear if they will accept any of the offers. There is legitimate concern that the owners are not realistic about the true value of the complex.

Any potential buyer is having to do their own due diligence as the the owners have not been providing much assistance. At this point, it seems there is great concern about including a hotel use due to the expense and the looming and likely development of a huge Convention Center hotel. Those factors along with a ton more rooms in the pipeline (another large hotel is likely to be part of the expanded Stage Center development) means that redevelopment is more likely to focus on residential, office and some retail on the ground level. It is likely all proposals will include razing part of the non-historic eastern sections to make room for essential structured parking, as even with this complex 75% empty, downtown parking garages are operating at more than 100% capacity.

One name that has emerged as a very strong potential buyer and re-developer is Alterra out of Philadelphia. Most of their work has been in Pennsylvania but they are very experienced taking historic Class B office buildings and converting to Class A apartments.

They have deep pockets and this seems to be right up their alley. And remember, the current owners had previously only focused on California and a few other markets before they bought this project. FNC obviously has strong appeal to out-of-state suitors, and that point was reinforced by the listing broker just a few weeks ago.

Here is some of Alterra's work:

Alterra Properties » Properties

The Arch is very similar to FNC; here are some photos:

[FighttheGoodFight]

Wow. Would love to see FNC looking like that

[bchris02]

So is it technically impossible for this to be converted to class-A office space?

[Pete]

So is it technically impossible for this to be converted to class-A office space?

For the tower, the floor plates are small and chopped up and don't lend themselves to modern office layouts.

The sections that were added layer to the east are more workable for office.


For these reasons, it's always been assumed the tower would be redeveloped for residential or hotel use.

[adaniel]

Unless they can rework the floor space to be more open style like you see in newer buildings, it would be very hard to lease this out as Class A office space. That is the style most common and it would be very difficult to do so in a building this age (EDIT: Pete beat me to it).

Residential with a small office/retail component would probably be best. Especially considering very little housing has been added to the CBD outside the Carnegie Center.

Its unfortunate that this building has deteriorated to the point where the needed ROI eliminates a lot of viable options. I am still worried the current owner can still screw this up. Isn't that guy in jail BTW?

[john60]

Crazy scenario: Any chance someone buys the center strictly for the purpose of demolishing the newer sections, building a parking garage there, and essentially deciding not even to mess with the old tower? That would seem to be the easiest/quickest way to generate revenue, but I don't know if the numbers could work.

[Pete]

^

Sales price is likely to be tens of millions, plus whatever the cost for renovation / re-development.

So no way a parking garage would generate enough revenue to cover the investment.

The value in that complex is in the tower but it's going to need a lot of work.

It's certainly doable, though. Converting historic office space to residential / hotel has already been done at the Colcord. Ambassador, Park Harvey, Montgomery, etc.

[Plutonic Panda]

Wow. Would love to see FNC looking like that

That would be awesome!

How long will it take to convert this?

[ljbab728]

Steve's update.

Purchase Offers Are in For First National Center | News OK

[John]

I would think Magnolia Hotels might be one of the hotel bids, as this is their type of property...

[bchris02]

Steve's update.

Purchase Offers Are in For First National Center | News OK

This is going to be a real jewel. I can't wait to see what is in store.

[bombermwc]

^

Sales price is likely to be tens of millions, plus whatever the cost for renovation / re-development.

So no way a parking garage would generate enough revenue to cover the investment.

The value in that complex is in the tower but it's going to need a lot of work.

It's certainly doable, though. Converting historic office space to residential / hotel has already been done at the Colcord. Ambassador, Park Harvey, Montgomery, etc.

Do you think we might be approaching saturation in the boutique hotel market? And would adding that many more rooms be detrimental to a convention center hotel? We're already seeing SOME pressure put down by the other developments around. The less boutique and more lower chain-like ones going in are the ones that actually pull away from a CC hotel. Honestly, i bet we see a Marriott as the CC....think about how many places pair those two together. It's sort of their Niche. But there's a point at which places like Hampton/Holiday Inn/Fairfield/Aloft/etc. start pulling those customers away because their regular rate is lower than the Marriott CC rate and doesn't involve that much walking...not to mention would have rail/shuttle access anyway. I'm glad to see more options for different ranges of visitors these days, i'm just concerned that we might be jumping too quickly for the market. Anyone know if the levels of the area hotels have been affected or are they staying up while the downtown ones are opening? Meridian still seems to be building new ones...and they aren't just 3 floor suburban versions.

I would be partially concerned for FNC as a hotel because it would lack the ability to offer any real meeting space. Even if you aren't a CC, you still need meeting spaces for smaller groups. The tower just can't do that with the way it's plates are laid out. And if you toss the other awful additions, A - unfortunately you're tossing the part that is actually making money, and B - you're tossing the part that actually has a better floor plate. <-they're just ugly as crap. Either residential or hotel though, you're going to need the parking. People aren't going to live (or want to stay) there if they dont have somewhere to put their car, and we dont have anything to offer for them to not need a car.....yet.

I'm still going to hope it goes residential and gets gutted. But i sort of have the same fears on saturating the market. it's a good size space and would affect whatever market it touches. And with large projects like Park Harvey opening soon, i guess that's when we'll see how the market plays out.

[Pete]

In Steve's article he mentions a hotel use as likely and although I heard differently, I hope he's right.

I think it's getting harder to get hotel projects financed because there has been so many of them built everywhere, not only in OKC.

But, urban areas are different in that critical mass is very important and in that sense, all these rooms feed off each other; brings more people in, allows for bigger events, etc.

If it becomes an overbuilt situation, then the low-end, poorly located hotels will suffer most; projects like the Bricktown Homewood Suites and Straybridge Suites.


Really excited to see the proposals. I really prefer at least part of the tower be used for a hotel because that would mean the Great Banking Hall would be at least semi-public space.

[catch22]

Hotel oversupply will hurt the Memorial road and far suburban hotels first. I predict low occupancy in those will be the signal that the market has hit saturation, I think downtown hotels will continue to fill.

[bchris02]

Doesn't OKC currently have fewer full-service hotels than most cities its size? Most of the hotels that have been built are of the low-end ilk such as Staybridge and Homewood Suites.

[catch22]

Low-end ilk? Seriously?

A lot of people just need a bed to sleep on, and a clean room to come "home" to.

When I travel (if I'm not using AirBNB) I stay in a cheap low-end ilk room (your words) because I am there to visit that city, not spend all my time in a hotel.

[bchris02]

Low-end ilk? Seriously?

A lot of people just need a bed to sleep on, and a clean room to come "home" to.

When I travel (if I'm not using AirBNB) I stay in a cheap low-end ilk room (your words) because I am there to visit that city, not spend all my time in a hotel.

Catch22, no need to take what I was saying out of context or as some sort of attack. I was simply alluding to the fact that the limited service hotels in Bricktown shouldn't affect the success of a boutique hotel in First National. As for the demand for a convention center hotel like a full-service Marriott being cannibalized, that could be debated.

[catch22]

Yes, but low-end ilk?

ilk?

ilk?

ILK?

I L K?

They may not be full service, but they are hardly roach motels or pay by the hour joints, which I would say are ilk.

[Pete]

Doesn't OKC currently have fewer full-service hotels than most cities its size? Most of the hotels that have been built are of the low-end ilk such as Staybridge and Homewood Suites.

Almost all the downtown hotels are full-service.

Of the 18 built, under construction or proposed, 12 of them are full-service which represents 78% of the rooms.

Only SpringHill, Staybridge, Hampton, OK Kids Korral, Holiday Inn Express and Hyatt Place are the exceptions and are generally much smaller than their full-service counterparts. BTW, Hyatt Place may also turn out to be full service, meaning it may contain a restaurant/bar, offer room service, etc.

[bchris02]

Yes, but low-end ilk?

ilk?

ilk?

ILK?

I L K?

They may not be full service, but they are hardly roach motels or pay by the hour joints, which I would say are ilk.

ilk - simply means "type." Saying "low-end ilk" means the same thing as low-end type or kind.

Ilk | Define Ilk at Dictionary.com

[catch22]

ilk - simply means "type."

Ilk | Define Ilk at Dictionary.com

It's a negative term.

[bchris02]

It's a negative term.

My apologies. I have used the word my entire life, but never in a derogatory way.

[catch22]

Everytime I have heard or used the word ilk, while not an offensive word, has been used to put things down.

The homeless and their ilk.

The rich and greedy and their ilk.

etc.

Look at all of those wonderful monuments and their ilk. I have never heard.

[bchris02]

Everytime I have heard or used the word ilk, while not an offensive word, has been used to put things down.

The homeless and their ilk.

The rich and greedy and their ilk.

etc.

Look at all of those wonderful monuments and their ilk. I have never heard.

The last one would still be appropriate. It's an archaic word though and I will refrain from using it since obviously it means something negative to some people. Sorry man.

[lindsey]

I hope the property is bought by someone who appreciates it's art deco charm. Seeing the Great Banking hall converted into a lobby (while a great idea) would make me sad as the space is now used for private events. I just had my wedding reception there and it was fabulous.