New owner, new hopes

Florida investment firm buys troubled 50 Penn Place

The Journal Record- Oklahoma City, OK
By Brianna Bailey

Mahin’s Full Service Salon owner Mahin Dehaghani was thinking about leaving the space her business has occupied in the lower level of 50 Penn Place. That was before a group of Florida investors purchased the property and announced plans to renovate the center.

Now she hopes to lure some of her business back now that the new owners have plans to convert the second floor of the shopping center into office space and fill empty storefronts in the center.

“The building has gone down over the years, so it can only go back up from here,” Dehaghani said. “I’m hopeful things will change.”
The salon owner says she’s lost clientele and employees after several key retailers shut their doors at the shopping center over the past several years. Most of the second floor of the shopping center sits empty today.

“It’s like a morgue in here,” she said.

A few merchants like Full Circle Bookstore are still doing well, thanks to a strong local following, said bookseller Juliana Westerheid, who has worked at Full Circle for six years.

“We’re very excited,” Westerheid said. “I don’t think the previous owners understood retail people very well.”

Lake Worth, Fla.-based In-Rel Properties Inc. recently acquired the com-bination 16-story office tower and retail center for $15.2 million. That’s a steep discount from the $23 million that the seller, an affiliate of Dallas-based Ranier Capital Management, paid for the center in 2004, according to county property records.

Calls to In-Rel Executive Vice President Ron Riley were not immedi¬ately returned on Wednesday.

In-Rel is partnering with Oklahoma City architectural firm GSB Inc. to give the place a face-lift.

The new ownership has purchased that building on the strength of its office tenancy,” said Ryan Eshelman, an architect for GSB. “It’s an incredible address arid there are retail merchants which are doing well despite of overall decline.”

Renovation plans are still in the pre-liminary stages, but will include reduc¬ing the amount of retail space at the center, Eshelman said.

“They want to develop it as a multi¬use facility with a much smaller compo¬nent of retail, as well as attract a new mix of tenants into what they call the ‘R’ levels,” he said.

The lower two “R,” or retail levels of the combination office tower/retail center, were once a hot local shopping destination, but several stores have moved out in recent years.

The high-end clothing store Balliet’s closed its 12,200-square-foot store at 50 Penn Place in summer 2010, reopening in August at the Classen Curve between Classen Boulevard and Western Avenue. Clothier Pendleton Woolen Mills recently relocated to Spring Creek Plaza in Edmond. Other upscale cloth¬ing retailers like Talbots and Harold’s have also left 50 Penn Place over the past few years.

Office occupancy at 50 Penn Place remains strong, at about 90 percent, said Amy Dunn, a broker with CB Richard Ellis/Oklahoma, who handled the sale. The computer-assisted legal research company Lexis Nexis just renewed its lease for the top two floors of the office tower, about 24,600 square feet. The tower is also home to U.S. Sen. James Inhofe’s district office.

The retail and office structures have a combined occupancy rate of about 70 percent, but the vacancies are primarily empty storefronts in the lower levels of the building, Dunn said.

In-Rel plans to convert the second retail level of the building, which is mostly vacant today, into more office space, Dunn said.
The real estate investment compa¬ny’s portfolio consists primarily of office and retail holdings scattered across Alabama, Florida, Georgia and Tennessee. 50 Penn Place is In-Refs first acquisition in Oklahoma.

“It’s a perfect fit for them, it fits into their portfolio really well,” Dunn said. “They like well-located buildings, where they can go in and do magic.”