Oklahoma City real estate market braces for Chesapeake property sales

BY STEVE LACKMEYER AND BRIANNA BAILEY Published: March 18, 2013

Anewalt believes more sales will follow, specifically the former IBC Bank Building at 3601 NW 63, the Central Park office buildings at 515 Central Park Drive, and the Atrium Towers at 3501 NW 63rd.

Company streamlines operations

The company has said in recent months that it plans to streamline its operations, and its workforce in Oklahoma City has contracted somewhat over the past year.

While Chesapeake had about 4,950 employees in Oklahoma City at the end of January 2012, the company reported that 211 employees recently accepted a buyout offer the company extended to some of its staff late last year, according to a regulatory filing.

Chesapeake also listed its 20-story Fort Worth office tower — the headquarters of its Barnett Shale operations — for sale in 2012. The company purchased the tower in 2008 for $104 million.

Kurt Foreman, executive vice president of economic development at the Greater Oklahoma City Chamber, believes Chesapeake's surplus office properties won't be empty for long.

“I don't think it will create a glut on the market,” Foreman said. “We heard the same concerns when Devon announced its tower. There are few pockets of space downtown now based on what we're seeing. We have a high number of companies from out of state wanting to come into Oklahoma City and we have a challenge finding large amounts of existing space for them.”

Anewalt agreed, noting that the office properties already sold by Chesapeake were never officially listed as being for sale. The buildings, she said, had buyers waiting and eager to do deals.

“We think the Chesapeake space will be absorbed pretty quickly,” Anewalt said. “The assets outside their campus will be easiest to sell. The assets in their campus will be trickier.”

With the Chesapeake campus designed specifically for that company's needs, especially with garages located along the perimeter, Anewalt said any contemplated sale of some or all of the headquarters will be a challenge.

“The right buyer could make it work,” Anewalt said. “But it could be difficult.”

While the website for the company's real estate arm, Chesapeake Land Development Co., lists numerous real estate properties in Texas and Virginia for sale, only for-lease office space is listed in Oklahoma City.

The company declined to speak with The Oklahoman about plans for its real estate assets in Oklahoma City.

Some buildings empty

Some of Chesapeake's off-campus office buildings remain vacant.

After Chesapeake purchased the twin Atrium Tower office buildings at Lake Hefner Parkway and NW 63 in 2011 for $17.3 million, the company bought out the leases of all of the tenants in the building before launching a major renovation, said attorney Paul Quigley, a tenant in one of the buildings at the time of the transaction.

“They were very orderly about it and they gave all of the tenants different offers to entice them to leave,” Quigley said.

Today, Chesapeake offices occupy only one of the twin, six-story Atrium Tower buildings, although renovations are ongoing.

A large sign facing the roadway in front of the buildings advertises that office space in the towers is available for lease.

Staplegun, an advertising and marketing firm, was forced to relocate from its home at 6529 N Classen to CityPlace Tower downtown last year. Chesapeake bought the North Classen building for $2.35 million in September 2006. After leasing 80 percent of the building for several years, Staplegun Chief Executive Officer Phillip Baker said he was first presented with an “enormous” rent increase — and then an outright request to vacate.

“They were fantastic landlords,” Baker said. “They addressed problems with the heating and air, the landscaping was immaculate, and windows were kept cleaned. We never had issues.”

When Baker inquired as to whether any new leasing arrangements could be made, he said Chesapeake officials told him they needed the space and Staplegun needed to leave quickly.

“They were flexible with us when we couldn't move out in 60 days,” Baker said. “They were friendly, but there was constant pressure.”

A year later, a sign remains in the entrance advising visitors of Staplegun's move. The building remains empty, and the landscaping, Baker said, remains “immaculate.”

CONTRIBUTING: Paul Monies, Business Writer


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