Published in Oklahoman : Wed, August 15, 2018 9:55 AM
Rick Dowell, 1985, at his alma mater, the University of Chicago, for a meeting with the editor on a forthcoming article in the Journal of Political Economy.
Dowell Properties is celebrating its 30th anniversary this month, having carved out a unique niche in the Oklahoma market. Dowell Properties Inc., operating originally under the moniker, “Clarendon Properties,” began in August 1988 in Norman. Rick Dowell, president of Dowell Properties, said, “I began the business while still an Economics Professor at the University of Oklahoma. I arrived at OU in 1987. I had spent the previous ten years in Australia: first on the Economics Faculty of the Australian Graduate School of Management in Sydney; and later the Economics Department at Monash University in Melbourne. I knew nothing about real estate but felt the need to invest my retirement funds from Australia into something in America that could provide secure retirement.” After an initial investment in Norman multifamily properties, Dowell began investing in office buildings. Starting with the acquisition of the Midtown Plaza, Norman’s largest private sector office building. He went on to develop the Clarendon Park Shopping Center and Lindsey Square Office Park, both in Norman.
Dowell felt by 1995 that further investment in Norman
was limited. “I was intrigued by the MAPS initiative in Oklahoma City. Both my childhood and work life had involved living in a multitude of cities and states including Chicago, Kansas City, California, Florida, Georgia, Montana, Omaha, Cheyenne, D.C., Maine, Virginia, etc., not to mention a considerable time overseas. This experience along with my background in Economics gave me a unique insight, missed by most locals, on Downtown OKC’s potential,” he said. His first purchase was the former “Midland Center” renamed the ‘Dowell Center” and the complimentary “Federal Center Parking Garage” rechristened “Dowell Center Parking.” This was followed by acquisition of about ten acres and ten buildings on the west side of the Central Business District operating under the moniker “Midtown Plaza OKC.”
Dowell Properties began liquidating multifamily assets in 2015. This transition was initiated with the purchase in 2015 of an eleven-acre business park next to Mesta Park called 2000 Classen Center. By 2017 the focus of the company was completely on office space. Kimberly Steed, Dowell’s sister and the chief financial officer, said that increased cash flow in 2017 had allowed the company to reduce total debt by 50 percent. With excellent assets, a lean balance sheet, a clear mission, and an excellent management team, Dowell said his company is well prepared to meet the challenges of the 21st Century.
Starting with smaller buildings in Norman turned out to be a significant learning experience in plotting the company’s future according to Fred Dowell, Rick Dowell’s brother and current manager of the Norman portfolio. The Dowells researched the make-up of office tenants in the OKC Metro. Using the Xceligent company’s data base, they calculated that over 50 percent of all office space in the OKC Metro is leased by tenants renting less than ten thousand square feet. When adding in the plethora of smaller buildings that escaped the Xceligent survey, that percentage could be closer to 70 percent.
After an extensive survey, company management was able to gain insights as to what these smaller tenants required. Rick Dowell said the survey revealed the following profile: Short leases (one to three years) are preferred; cost is a serious consideration; the expense and inconvenience of parking was the major factor in keeping them out of Downtown OKC; and finally, they valued a high-quality space.
The challenge was to find the solution to this puzzle within the confines of the Central Business District (CBD). Dowell determined that buildings and acreage in the Center of the CBD or in Bricktown was either unavailable or very expensive. He found that the West side of the CBD had acres of buildings and land that was available at discount prices. At the turn of the century this part of downtown was considered hopeless.
After the bombing in 1995, only prostitutes, drug dealers, addicts, and the homeless roamed these blocks full of vacant and deteriorating buildings, Dowell said. From late 1999 to 2005, Dowell bought most of the area from Northwest 6th to Couch Drive and from North Hudson to North Dewey from the Ford Motor Company, OG&E, the Bob Moore Company, and several other sellers.
He now controlled ten buildings, 14 corner lots, and roughly ten acres of Downtown. All of the properties were within one to three blocks of the Federal Courthouse and the underground tunnel system.
Midtown Plaza OKC
These west-side purchases were to become the “Midtown Plaza OKC.” Dowell’s first priority was to provide what is known in the development literature as a “sense of place.”
Dowell said this was accomplished by first building a 75-foot tall clock tower on the corner of Northwest 4th and Walker, a new building on the opposite corner with a tower of similar height designed into the building’s architecture and a remake of the building façade on the third corner making it both 15 feet taller and matching the architecture of the remaining adjacent historic buildings.
When the project was complete, the Midtown Plaza project was able to meet the four requirements from the tenant survey discussed earlier: item cost was delivered by the low purchase price of the ten buildings; the parking requirement of item was met with the ample adjacent parking to the ten buildings; items – short leases and high quality space were met by designing the ten buildings to have collectively over twenty floor plans, varying in size from eight hundred to ten thousand square feet.
Paul Pendley, the Midtown Plaza manager, said “by telling the prospective small business ‘what you see is what you get’ along with a varied selection of design, sizes and room count, costly tenant build-outs are avoided allowing for a quick turnaround between tenants, a quality space, short-term leases, and a low price.”
Dowell said, the re-development plan for the twenty-story Dowell Center is similar to the development of the Midtown Plaza. In plans submitted to the city, the building will feature move-in-ready spaces with varied designs and sizes to meet the demands of small business. The parking problem has been solved by the expansion in 2015 of the Dowell Center Parking Garage, which now can hold close to seven hundred cars, giving the two- hundred-thousand–square-foot Dowell Center an enviable parking ratio of over 3.4 spaces per thousand square feet of leasable space.
Dowell Properties moved into the market for large tenants with the acquisition of the 2000 North Classen project in 2015. Ed Duclos, the project manager, said “since 2015 we have leased one hundred and 75,000 square feet with leases pending on another 50,000 square feet.” Duclos, who successfully managed the turn-around of the former defunct Shepherd Mall into a profitable office building sees no problem in getting the former American Fidelity Headquarters into a vibrant multi-tenant building. Duclos added “the project has a location in the booming twenty-third street market adjacent to Mesta Park and Heritage Hills, large open floor plans, ample parking, with a design and amenities that meet the demands of larger tenants. Its location between the capital and the CBD hits the sweet spot of the market.”
Dowell has plans to build fences and landscaping to screen the ten acres of parking lots from the street. To further beautify the area, Dowell purchased the filling station at 1700 N. Classen Blvd., adjacent to Homeland, and is currently in the process of demolishing the structure.
He is getting ready to submit plans to the city for an eight thousand square foot office building as well as a 75-foot tall brick tower of similar design to the bell tower in Venice, Italy. This improvement along with another developer’s proposed shopping center and apartment building across the street should give the area a major visual uplift.
Dowell plans to construct up to one million square feet of office space and garage structures on the six acres of parking lots in the Midtown Plaza beginning in the next business cycle. He plans to integrate the design and mass of the new structures so as to compliment the ten existing buildings. Dowell said that this should make the North Walker corridor the most small- business friendly area in the metro. He is still looking for additional buildings that complement the company’s existing portfolio of projects.
Dowell said his organization is unique in that it has management, ownership, leasing, construction and acquisition under the same roof. The typical office project is operated by a management company which has a short-term contract with an out-of-state partnership owner. Leasing is usually carried out by short-term contract with yet another local real estate firm. The owner generally has a planning horizon of five years or less and acquires the project using yet another real estate brokerage.
The typical owner has no long-term plans and is generally looking for a short-term flip. Dowell acquires projects to be permanent with long-term potential. This allows a continuity of service and direct relations with tenants that his typical competitor cannot provide, he said.