Originally built for Dayton Tire Co. in 1969, the 300-acre property was shuttered in Dec. 2006 and put on the market under the supervision of Eric Dienstbach, a senior vice president in the Denver office of Philadelphia-based Binswanger. According to Dienstbach, about a half dozen prospects showed interest in the property, but only three pursued it and only two made serious bids: Big Industrial and Wichita, KS-based Ablah Enterprises Inc.
The former won not only because it offer the most money but also because it seemed more capable of closing. "We were interested in eliminating as many contingencies as possible during the due diligence to be sure we had a deal that would go through," Dienstbach says. "Big Industrial was very cooperative in that regard."
Ben Schmidt, a broker with Big Industrial who leads the property's leasing effort, says the buyer plans to redevelop the property into a multi-tenant facility for a mix of warehouse, distribution and manufacturing tenants. It will demolish some parts of the existing complex and renovate others. A 300,000-sf center section will be torn down and replaced by a truck court, with loading docks inserted into the surrounding structures. The resulting product will total about 2.1 million sf. Schmidt says Big Industrial has already begun power washing the plant and will begin rehabbing it "in earnest" in January. It has been renamed Will Rogers Business Park.
The Q3 report from Grubb & Ellis shows Oklahoma City ranking last among major North American markets with a vacancy rate of 19.4%. Annual rents are also near the bottom at $3.25 per sf. But Schmidt says large spaces are in short supply because few modern distribution centers have been built in the market. "We think the building will address that need," he tells IPJ. "We have been in conversation with several prospective tenants already."
The Big Industrial broker reports asking rents at the property range from $1.99 per sf to $3.50 per sf, depending on use and level of finish. In addition, about 150 undeveloped acres at the site may be developed on a build-to-suit basis or sold to buyer-users.
Dienstbach acknowledges there are many obstacles, but still thinks converting the property to multitenant use is the correct decision. "We see that all across the country with these older manufacturing facilities," he says. "They need to be repositioned for the next generation of users. The heavy manufacturing they were built for initially is not going to be the future."
The property's major attractions, after renovation, include 24-foot ceiling heights, truck bays and loading docks, on-site rail access to Burlington Northern Santa Fe Railway and proximity to Interstate 35, Interstate 40 and Will Rogers World Airport. In addition, the property has an on-site c-generation, natural gas-fired power plant, and tenants may qualify for subsidized heating, cooling or process energy. Schmidt says the site also has about 150 undeveloped acres available for build-to-suit projects.
"We expect this renovation will bring significant jobs, expansion and economic development to Oklahoma City," says Big Industrial principal Daniel E. Smith. "We expect to attract businesses from not only Oklahoma but across the country, with more than two million sf of industrial space that can be finished for individual company requirements."
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