With commercial occupancy rates in Tulsa at near record lows, the development of additional office space might not seem a profitable practice. But, Bob David feels he has found a loophole in the stagnant market for commercial office space.
“We have found our niche in the build-to-suit office building,” said David, owner of Iron Horse Development, 4745 E. 91st St.
Building in Brookside
And quite a niche it is proving to be, as Iron Horse will soon break ground on Rockford Village, a 4.9-acre project on Rockford Avenue, just south of 41st Street and Tulsa’s trendy Brookside District.
“We are excited about the project,” David said. “We thought we would build most of the buildings and then have to market and sell them.”
“But as it turns out,” he said, “we are going to have contracts on most of them before we turn any dirt.”
Rockford Village, one of the company’s three current commercial projects, will break ground in August and will contain 65,000 SF in as many as 10 buildings ranging in size from 4,000-14,000 SF. The complex could house as many as 20 tenants, ranging from oil and gas companies to law firms.
It will have a decidedly Midtown look, David said.
“There are places all over town where developers used to mix a brownstone apartment building into a single-family development,” he said. “That’s the look we are going for.”
That Residential Feel
Iron Horse, which realized $37 million in 2006 revenue, is also developing Silver Ridge, a new office park at 75th Street and Yale Avenue, and Southern Woods Phase III, which sits at the 4600 block of 91st Street.
Silver Ridge, an $11.9-million infill project, will be ready for occupancy in early 2008. Southern Woods, a 4.5-acre, $10 million addition to an existing 6.5-acre office park, will wrap up in late 2007.
When completed, the developments will add 182,500 SF to the Tulsa commercial real estate landscape and will sell for $180-210 per SF, depending on amenities. Silver Ridge will contain 65,000 SF and Southern Woods III, 52,500 SF.
David, a 20-year veteran of residential real estate development, feels that his home-building history laid the groundwork for his current projects.
“On the residential side, we are primarily lot developers,” he said. “So when we began doing office parks, we approached it much the same way.”
Iron Horse, operating as Leadership Properties, is developing five residential projects in Tulsa, including the Wind River, Cimarron, White Oak, Tall Grass, Cross Timber and Iron Horse Ranch subdivisions. Additionally, the company has ongoing projects in Edmond and Centerton, Ark.
“The first part of both (residential and commercial) equations is location, of course, and we have found that most people don’t want to go hire an engineer and an architect and spend that time and money,” David said.
“Our commercial development has created a one-stop shop where we develop the lots, the business owner picks floor coverings and paint colors, then buys the building. Then when it’s all said and done, we have a closing, we hand over a key, and the business has a space that is built to suit.”
Look Ahead, Tulsa
David believes the demand for the owner-occupied office park is driven by a solid local economy.
“Most business owners in Tulsa have done well in the past 10-15 years, and there is an accumulation of wealth that needs to be put to work,” he said. “A lot of people are looking at these projects as a wise business decision.”
He said that the future of residential development will need to include an increased number of infill projects. Neighboring communities will continue to reap the benefits of Tulsa’s land-poor status.
“Tulsa, because of the lack of land, will continue to see infill development,” he said. “Unfortunately, there is just not that much land left. I think the City realizes that if they want to see increased sales taxes, they need to see it through an increase in retail development, and that development will have to be infill.”
“You will see some redevelopment in Tulsa, but for the most part, the suburbs will thrive. I could see an Owasso with 70,000 people and a Broken Arrow with 100,000.”
David foresees speed bumps in Tulsa’s residential and commercial real estate markets, yet remains optimistic.
“We aren’t finished with our current projects,” he said. “We are still looking for land, and we want to continue doing business in this market.”
“We are very bullish on the market and excited to be here. There is a lot of development yet to be done.” ?