Cummins Building

[Pete]

I think this project has really cooled off.

They were fishing for tenants but that is a very chicken-and-egg proposition.

Very few companies will commit to a building of this size with this type of developer / owner before it's well underway.

Especially when there are plenty of other options readily available around town.

[Urbanized]

^^^^^^^
And especially considering the beatdown energy has taken since the building was announced.

[Rover]

Slow, but not dead.

[Urbanized]

^^^^^^^^
I've heard same. The team is capable, and they DO want to do it. They just need local economy to rebound a little bit I think.

[Pete]

If in fact they cannot get financing without major tenant commitments, that is always going to be tough to pull off, no matter the economy.

[HangryHippo]

Do they have enough resources to get it built with a tenant taking up some of the space while searching out other deals? Or do they need to wait for tenants for a much higher percentage of space before they can get the money to build it?

[Rover]

Most financial institutions lending for a speculative building want to see at least half the building pre-leased with bankable tenants.

[catch22]

Hopefully they can drum up some interest in this. It's a very good looking building.

[HangryHippo]

Pete, had they had any success with prospective tenants?

[Pete]

Most financial institutions lending for a speculative building want to see at least half the building pre-leased with bankable tenants.

Yet there are a bunch of projects get done in OKC by self-funding, finding investors, etc.

My point is that if this project is completely dependent on commercial financing which indeed does require significant pre-leasing, they are going to have a big challenge even in a good economy because few companies will commit to a lease when there is no assurance of a building actually being constructed, especially with a newish developer. And then wait 2 years for it to be complete.

Usually developers start with smaller projects and often times leverage those to get bigger projects off the ground. Or, take in equity partners and thus need far less commercial financing.

[sbs]

Any recent update on this Pete?

[Pete]

I don't think anything is going to happen here until they find a sizable office tenant.

[hoya]

It seems like this building would be perfectly suited to being built as condos or apartments. Are they wedded to the idea of it being office space?