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09-23-2006, 03:33 PM
Global firm to market Kerr-McGee property

By Richard Mize
The Oklahoman

Anadarko Petroleum will have Cushman & Wakefield, a real estate firm with offices all over the world -- but not here -- market the former Kerr-McGee headquarters tower and other property in Oklahoma City.
The move was disappointing to Oklahoma City commercial brokers, who see the Kerr-McGee property as a big deal -- one with a healthy downtown riding on it.

Cushman & Wakefield has an office in Houston. Anadarko Petroleum is based in the Houston suburb of The Woodlands.
"Anadarko has retained Cushman & Wakefield to help us with our global real estate needs; however, we have not actively marketed the building in Oklahoma City," spokesman John Christiansen said Monday.

Anadarko has several properties to dispose of here and in other locations, said Mark Beffort of Grubb & Ellis-Levy-Beffort in Oklahoma City.
Anadarko's $18 billion purchase of Kerr-McGee Corp. on June 23 was part of a larger acquisition, including the purchase of Western Gas Resources in Denver for $5 billion.

The day of the multibillion-dollar transaction, spokesmen for Anadarko seemed hardly to realize that real estate in Oklahoma City and Denver came with the purchases.

In Oklahoma City, where Kerr-McGee had been a downtown presence for generations, the prospect of about 1 million square feet of space coming open at once hit hard -- in the gut as well as the bottom line.
The idea that the 30-story Kerr-McGee tower, with almost 500,000 square feet, would be vacated caught property brokers and others by surprise just when it seemed the downtown office market was finally shaking off the 1980s oil bust.

Bringing in Cushman & Wakefield probably made sense to Anadarko Petroleum from a strict business standpoint, Beffort said, but the energy company looked over the cadre of local brokers who not only know the Kerr-McGee property in and out, but also know the most likely potential buyers.
Beffort said someone from Oklahoma City should be "on the team" that will market the property. He said he probably knows the 20 most likely buyers.

The prominence of the Class B headquarters building at 123 Robert S. Kerr Ave., especially, made something of a splash when Anadarko purchased it with plans to dissolve Kerr-McGee.

The 489,408-square-foot building, in Kerr-McGee's hands since the company built it in 1973, didn't take long to attract potential buyers, said Ford Price, co-founder and co-managing broker of Price Edwards & Co.

"I think there are a number of people circling. It has piqued a lot of people's interest and imagination," Price said.

A corporate buyer intending to use the entire building for its own operations would not be limited by the rest of the downtown market, its vacancies and rent rates. An investor would face a different scenario, he said.

"If some were to buy that building as an investment with the intention of positioning it in the downtown marketplace, they're going to have to spend some money and take some time." Price said.

The future of Tronox Inc.'s corporate headquarters is in the air. Tronox, which leases 100,000 square feet of the building, is working to secure a building for its permanent home. The company in August said it would keep its headquarters in Oklahoma City.

Tronox and Anadarko Petroleum are in discussions, said Shaun Frankfurt, managing director of Trammell Crow Co.'s operations in Oklahoma.

Trammell Crow is managing the property under a shared-services agreement in place to smooth the change of ownership.

Frankfurt said the former Kerr-McGee headquarters should be attractive to both investors and potential user-owners.
"It's in good space; it's in the CBD (central business district); it has parking associated with it, and its on the Conncourse," he said.