An Ohio-based real estate investment trust is poised to buy Classen Curve, Nichols Hills Plaza, and Triangle @ Classen Curve shopping centers from Chesapeake Energy for $51.8 million, and also has plans for future development in Oklahoma City.
The Columbus-based Glimcher Realty Trust said in a regulatory filing that it will likely complete the purchase of the three open-air shopping centers that include Oklahoma City’s only Whole Foods and Anthropologie stores during the first quarter of the year. Glimcher also has 12 adjacent acres of vacant land owned by Chesapeake under contract and wants to pursue development in the area that could include a hotel or housing, among other possibilities.
In a quarterly conference call with analysts, Glimcher Chairman and CEO Michael Glimcher said the pending Oklahoma City purchases would give the company the potential to create a new shopping and entertainment district that would draw shoppers from across the city.
“With the markets of only Whole Foods, Anthropologie and Lululemon already in place, we see an opportunity to create a fully integrated shopping and entertainment district that would not only serve the immediate trade area but all of Oklahoma City,” Glimcher said during the call. “With respect to the development land, we will have the opportunity to add additional retail space along with possible mixed uses including residential, office and hospitality.”
Glimcher plans to finance the purchase primarily with cash. As a whole, the shopping centers are about 75 percent leased. With its strong relationships with retailers, Glimcher expects to be able to lure more national retailers into the mix than Chesapeake was able to, Glimcher said in the conference call.
“We’re in the business of leasing retail space and leasing shopping centers and you have an energy company that was doing something that was ancillary to their business,” Glimcher said. “So it was not their primary focus and it was probably more of a distraction than anything else. It’s a really unique opportunity. What’s been built — it’s been built with the utmost of quality. The quality of the dirt underneath there — the location is A-plus dirt. I think it’s the best dirt in the marketplace.”
Chesapeake purchased Nichols Hills Plaza in 2006 for $27.5 million and spent an undisclosed sum acquiring the real estate for and developing Classen Curve and the Triangle @ Classen Curve.
Numerous tenants have vacated the southern portion of Nichols Hills Plaza in recent years, including Nichols Hills Drug and Crescent Market, siphoning off critical sales tax revenue from the City of Nichols Hills. Much of the southern part of the Plaza lies vacant after Chesapeake abandoned plans to develop a company-owned grocery store there.
Nichols Hills city officials have not been told details of the pending sale, but are eager to see new life breathed into the Plaza shopping center, Nichols Hills Mayor Steven Goetzinger said when told of the pending sale.
“Based upon what you’ve told me, I am delighted that this group is the buyer,” Goetzinger said.
“Judging from what you’ve told me the website says, it appears that they will be a perfect candidate to carry on the vision created by G.A. Nichols in 1929 — that vision contemplated a shopping center that served not only Nichols Hills but Oklahoma City at large,” said Goetzinger.
Gordon Pennoyer, a spokesman for Chesapeake, declined to comment on the pending sale.
Under new leadership, the company has been selling off much of the ancillary real estate that it owns around its campus in northwest Oklahoma City, frequently at a loss.
In January, Chesapeake also sold the Chase Bank building just north of the Classen Curve at 1200 NW 63rd for $3.95 million to the shell company 63 Grand LLC. Chesapeake purchased the five-story bank building in 2008 for $5.1 million.
Chesapeake has sold off about $93 million in office buildings and other Oklahoma City real estate since January 2013, according to a tally of property records.
The pending Glimcher sales would bring that tally to more than $144 million.
With the markets of only Whole Foods, Anthropologie and Lululemon already in place, we see an opportunity to create a fully integrated shopping and entertainment district that would not only serve the immediate trade area but all of Oklahoma City.”
Glimcher Chairman and CEO