Correction: This story contained outdated information on the tenants of the Block 44 building. The size of the Valley National Bank branch was also incorrect. The story has been corrected.
Ross Group’s new office development under construction will be a transformative addition for the Central Business District, a real estate expert said this week.
“I think that’s a huge win for development downtown,” Matt Reese of CBRE said. “It’s the second speculative office development in 35 years downtown. That’s a huge success, and it sets a bar for the market that we haven’t seen.”
Reese was one of the brokers who spoke Wednesday at Tulsa Trends 2018 at Southern Hills Country Club. The conference was presented by the Oklahoma chapter of NAIOP, the Commercial Real Estate Development Association.
NAIOP is the leading organization for developers, owners and related professionals in office, industrial, retail and mixed-use real estate with over 15,000 members in North America.
Construction on Ross Group’s development, also called Block 44, began months ago and is scheduled to be completed in 2019. Located at 110 N. Elgin Ave., just west of ONEOK Field in the Greenwood District, it is a six-story building that will house Valley National Bank’s executive offices.
Along with those offices, a new bank branch will occupy close to 2,500 square feet of the 100,000-square-foot building. In the Raw will operate a rooftop restaurant, and each floor will have a terrace with a ballpark view. Other tenants will include BKD CPAs & Advisors and Casillas Petrolueum.
“This guy right here, to me this kind of sets a benchmark,” said Reese, referring to the building. “What this tells me is compelling office product in our market … will lease.”
Reese also said that he expects Santa Fe Square to be out of the ground soon.
A mixed-used development proposed by Nelson-Stowe in the Blue Dome District, it was announced as a 600,000-square-feet project that would include retail and office space, a parking garage, 291 apartments and a hotel. The hotel, the $20 million Hotel Indigo by SJS Hospitality, opened this month.
“They kind of went through a rework of this project, brought the floor plates down,” Reese said of Santa Fe. “Ideally, a 60,000-square-foot tenant gets this thing out of the ground. They may decide to pull the trigger on this, regardless.”
Casey Stowe of Nelson-Stowe declined an email request to elaborate on the project Thursday.
At Wednesday’s NAIOP event, Steve Ganzkow of American Residential Group updated the multifamily market, and Steve Walman of Walman Commercial spoke about the retail segment.
While e-commerce is making its mark, traditional storefronts still account for more than 90 percent of all retail sales, he said.
“There’s a long way before we are a dying breed,” he said. “As most of you know, there is a hybridization going on of internet and brick-and-mortar operators. … The creation of retail that is experiential, that brings people in and meets those food and services demands are still there.”
Nowadays, Walman said 60 to 70 percent of his inquiries center on spaces for marijuana and CBD (cannabidiol) sales. Voters OK’d the state’s medical marijuana program in July.
“Being able to fill a space, even if its above-market rent, the impact of your tenant mix, your lender, the long-term effects of how that impacts your center are still too nebulous for me to really advise anybody to go for it,” he said. “Again, we’ll see how that goes.”
Shawna Hale of Wiggins Properties examined the industrial market. She said companies considering expanding or relocating to Oklahoma remained concerned about the state’s public school system.
“I don’t think it’s any surprise to anybody that our public school systems are in what a lot of people believe is a crisis situation,” she said.
“Hopefully, with the change in governors and everybody pressing hard for teacher raises, that will change because it is a driver.”