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After sitting idle for years, the Sherman Iron Works building in Bricktown finally found a buyer. It wasn’t that the building is an ugly duckling, but it is a bit off the beaten path for a retailer, and its size, layout and condition made it hard to find a user who could make the numbers work.
Many Bricktown buildings are multilevel and large enough to house a variety of users — despite many with vacant upper floors — and can be reconfigured as needed.
At 2,600 square feet, the 1928 building at 14 E. Main sat by as its neighbors were renovated for restaurants, night clubs, office space and museums. The building was part of a $10.9 million package purchase in 2006 of an entire block of buildings in Bricktown. The other buildings had tenants, or have gained tenants as the properties have sold.
Sherman’s buyer came from its own neighborhood, with office technology company Standley Systems LLC. It purchased the building for $897,500 and plans to renovate and occupy the space. The sale was handled by Andy Burnett and Zach Martin with Sperry Van Ness/William T. Strange and Associates, and Vicki Knotts with Grubb & Ellis|Levy Beffort.
Burnett and Martin got their feet wet in Bricktown with the sale of the Kingman Building in 2010, followed by the sale of Oklahoma Hardware Building in 2011 for $6.5 million. With those sales, the pair has learned the ins-and-outs of making a deal work in the district. SVN also handles leasing for those and other properties in Bricktown.
“We’ve had success selling property in Bricktown because we’ve tried to understand the properties from a financial point of view and what the numbers look like when a product is finished,” Burnett says.
Finding a buyer who understands the numbers and managing a seller’s pricing expectations are the keys to making a deal work, Martin says.
“When a building is in shell condition, meaning you basically have just the structure and it requires new plumbing, electrical, elevators, HVAC, et cetera, before it is move-in ready, someone will have to spend around $100 per square foot on improvements to make the building habitable,” he says. “You must account for this cost when pricing a building for sale. Many property owners will put the property up for sale at $200plus per square foot, but the building needs another $100 per square foot in improvements before it can be used. It is hard for any business to make those numbers work.”
The Kingman and Hardware buildings were owned by French Hickman and sold to local buyers. Black Oak Investments purchased the Kingman, and the University of Central Oklahoma purchased Oklahoma Hardware to house its Academy of Contemporary Music.
But misplaced expectations by an owner can contribute to vast empty spaces seen elsewhere in Bricktown.
“The same happens when an owner puts a shell building for lease ‘as is,’ hoping some tenant is going to come along and overhaul their entire building at their expense,” Martin says. “This is where you see property sitting on the market year after year. Yes, Bricktown property is great, but you have to be reasonable about what the market will bear.”
Photos by Mark Hancock