Tulsa Club Building - Ross Group to begin renovations

[TulsaGoldenHurriCAN]

Putting in some rough math:

I believe the Tulsa Club will have 92 hotel rooms.  Total space in the building is reputedly 92,000 ft over 11 floors.  I believe they said two floors will be common areas so average room size should be around 800 or so feet.  At an average rate of $125/night assuming rack rate will be $150 or higher as a boutique hotel.  IIRC, expected occupancy is an average of 90% at least when I interviewed for the marketing director position at Adam's Mark in 1994.  That works out to roughly $3.8 million/year with no food & beverage revenue added in.

Maybe occupancy used to be around 90%, but I highly doubt hotels are getting close to that. Hotels are lucrative and they can still be very profitable at 40% occupancy rate (which is the case for some hotels: on average weekends and 1 other day is booked per room per week), but if they made their proposals with 90% occupancy, the numbers will likely be very far off. The $3.8 million sounds great on paper but when that ends up being closer to $2 million and you consider all of the extra maintenance, construction costs and employees, it is often in the range of 10-20% more profitable than apartments. Still well worth it many times and revenue is far higher so you have a chance to make even more. If they can keep 90% occupancy at good rates (like Embassy Suites does through their brand), then it is more like double the profit of apartments. And of course events/bar/restaurant can add much  more profit if done well. I understand why more are being built, but similar to oil prices: they can keep drilling like crazy and eventually everyone is going to lose.

I did pull up rates from Expedia during Chili Bowl week 2017 to get an idea during peak events what rooms go for and I'm really surprised downtown Tulsa doesn't command quite the rates of other places my wife and I travel to in their city center.  That does make one wonder if that means there already is a bigger supply than demand or people simply have not gotten the idea there are more rooms in downtown so they take something a few miles out.  Of course Expedia may be screwy as the Expo Inn at the fairgrounds actually does show some available rooms during the Chili Bowl which I find hard to believe since it's a few hundred feet from the Expo Building.

That is basically the gist of what I was saying. Rates are already low, even for newer properties. Adding more competition will probably reduce them more (unless downtown really takes off, oil booms again and other things bring a lot more events downtown long-term). Many other downtowns cost $100+ any time and $200+ on weekends/events. For the price of some of the "premier" hotels in Tulsa (that are very nice), you would get a La Quinta or some other nasty hotel in Dallas.

[cannon_fodder]

Tulsa World reports they are still working on City approval of the tax abatement, with a presentation yesterday:
http://www.tulsaworld.com/homepagelatest/tulsa-club-building-renovation-seeking-tax-abatement-from-city-before/article_c740ebf1-86bb-58e4-b232-f9f141c1a028.html

The vote is coming up at some future meeting.

[TulsaGoldenHurriCAN]

I think there are a couple more hotels not on your list (the one NW of McNellies by RR - is that the 105-room Holiday Inn Express? Or maybe it was cancelled) and the Residence Inn by the YMCA lofts (110 rooms). Also a 134-room Hilton Garden Inn and a 103-room hotel in the Boston Building. That's 242-347 more rooms right there.

All the hotel announcements reminds me a bit of all the outlet mall announcements, when only 1 actually gets built. Although most will get built, maybe some of it is to strong-arm the other guys into not building in an increasingly crowded market. The Patels already cancelled 1 hotel project for a 100 room hotel in the Parker Drilling Building. Tax-incentives were required for Mayo and iloft (180 rooms) to be worth it and are required to make the Tulsa Club remodel worth it. Without those, would any investor have done those remodels? For the hoteliers building new buildings with no tax incentives, you'd have to step back and reevaluate and maybe wait to see how the market adjusts.

Another recent hotel is the Best Western Plus (79-room) and the Ambassador remodel.

I am all for new development downtown and new hotels. I hope things continue to pick up and make investments in downtown pay off so more comes later on. And honestly, if they are ok with $70-$90/night rooms, that's great for the consumer. It sucks paying $250 for a mediocre place in other cities when you can get a great place for $80 here. I need to move somewhere else so I can take advantage of our cheap hotel rates!

[Conan71]

Maybe occupancy used to be around 90%, but I highly doubt hotels are getting close to that. Hotels are lucrative and they can still be very profitable at 40% occupancy rate (which is the case for some hotels: on average weekends and 1 other day is booked per room per week), but if they made their proposals with 90% occupancy, the numbers will likely be very far off. The $3.8 million sounds great on paper but when that ends up being closer to $2 million and you consider all of the extra maintenance, construction costs and employees, it is often in the range of 10-20% more profitable than apartments. Still well worth it many times and revenue is far higher so you have a chance to make even more. If they can keep 90% occupancy at good rates (like Embassy Suites does through their brand), then it is more like double the profit of apartments. And of course events/bar/restaurant can add much  more profit if done well. I understand why more are being built, but similar to oil prices: they can keep drilling like crazy and eventually everyone is going to lose.

That is basically the gist of what I was saying. Rates are already low, even for newer properties. Adding more competition will probably reduce them more (unless downtown really takes off, oil booms again and other things bring a lot more events downtown long-term). Many other downtowns cost $100+ any time and $200+ on weekends/events. For the price of some of the "premier" hotels in Tulsa (that are very nice), you would get a La Quinta or some other nasty hotel in Dallas.

Great analysis and thank you for bringing me up to speed more on what the expectations are for occupancy on larger properties.

We are opening a B & B in Cimarron, New Mexico and for all of my forecasting and business planning, I used 50% which is standard for that industry.  I started to use that for the numbers I ran on my previous post but remembered 90% was what the stated goal was 22 years ago when I was interviewing for that job. 

Our B & B will peak in spring, summer, and fall and will likely fall off during winter as the closest skiing is Angel Fire at 34 mies away.  Still, there are people who prefer not to be in the midst of the ski area their entire trip.  We are used to the idea of committing to ski as we have skied Wolf Creek many times and you have to commute 30-45 minutes from the nearest towns to ski there, which is not a big deal.  Hunting season does run through January so there's that business still and there are other longer term rental opportunities when there are major infrastructure projects going in the area or down at Philmont Scout Ranch as there are not a lot of rooms available, nor is there a wide selection of restaurants to choose from where our place is so a B & B is quite an attractive option in the area for many reasons. 

[rebound]

Great analysis and thank you for bringing me up to speed more on what the expectations are for occupancy on larger properties.

We are opening a B & B in Cimarron, New Mexico and for all of my forecasting and business planning, I used 50% which is standard for that industry.  I started to use that for the numbers I ran on my previous post but remembered 90% was what the stated goal was 22 years ago when I was interviewing for that job. 

Our B & B will peak in spring, summer, and fall and will likely fall off during winter as the closest skiing is Angel Fire at 34 mies away.  Still, there are people who prefer not to be in the midst of the ski area their entire trip.  We are used to the idea of committing to ski as we have skied Wolf Creek many times and you have to commute 30-45 minutes from the nearest towns to ski there, which is not a big deal.  Hunting season does run through January so there's that business still and there are other longer term rental opportunities when there are major infrastructure projects going in the area or down at Philmont Scout Ranch as there are not a lot of rooms available, nor is there a wide selection of restaurants to choose from where our place is so a B & B is quite an attractive option in the area for many reasons. 

Slight Drift...
Don't forget fly fishing as a target market for your B&B.  The Cimarron is an excellent fly fishing stream.   The local guides often have relationships where they recommend places to stay.  You should reach out to all of them and see if you can set up some kind of referral arrangement.

[cannon_fodder]

I think there are a couple more hotels not on your list (the one NW of McNellies by RR - is that the 105-room Holiday Inn Express? Or maybe it was cancelled) and the Residence Inn by the YMCA lofts (110 rooms). Also a 134-room Hilton Garden Inn and a 103-room hotel in the Boston Building. That's 242-347 more rooms right there.

You listed the Holiday Inn
The Residence in is the one right across from the Courthouse
The Hilton Garden Inn is directly behind the Wright Building

My descriptions were lacking, I admit it!  But I did cover those.

I'm not up to date on the Boston building.

[Bamboo World]

Putting in some rough math:

I believe the Tulsa Club will have 92 hotel rooms.  Total space in the building is reputedly 92,000 ft over 11 floors.  I believe they said two floors will be common areas so average room size should be around 800 or so feet.  At an average rate of $125/night assuming rack rate will be $150 or higher as a boutique hotel...

The plans show 98 rooms on six levels of the building.


Rooms #1 - #6 on Level 03 each about 14' x 19' = approximately 266 sq ft each

Rooms #7 - #10 on Level 03 each about 12'-6" x 20' = approximately 250 sq ft each

Room #11 at southeast corner of Level 03 = about 12'-7" x 27' = approximately 340 sq ft

Rooms #12 - #18 on Level 03 each about 12' x 19' = approximately 230 sq ft each

Room #19 at southwest corner of Level 03 = approximately 260 sq ft


Rooms #20 - #25 on Level 04 each about 14' x 27' = approximately 380 sq ft each

Rooms #26 - #29 on Level 04 each about 13' x 20' = approximately 260 sq ft each

Room #30 at southeast corner of Level 04 = approximately 300 sq ft

Rooms #31 - #36 on Level 04 each about 12' x 27' = approximately 325 sq ft each

Room #37 at southwest corner of Level 04 = approximately 500 sq ft


Rooms #38 - #43 on Level 05 each about 14' x 27' = approximately 380 sq ft each

Rooms #44 - #47 on Level 05 each about 13' x 20' = approximately 260 sq ft each

Room #48 at southeast corner of Level 05 = approximately 300 sq ft

Rooms #49 - #54 on Level 05 each about 12' x 27' = approximately 325 sq ft each

Room #55 at southwest corner of Level 05 = approximately 500 sq ft


Rooms #56 - #61 on Level 06 each about 14' x 27' = approximately 380 sq ft each

Rooms #62 - #65 on Level 06 each about 13' x 20' = approximately 260 sq ft each

Room #66 at southeast corner of Level 06 = approximately 300 sq ft

Rooms #67 - #72 on Level 06 each about 12' x 27' = approximately 325 sq ft each

Room #73 at southwest corner of Level 06 = approximately 500 sq ft


Rooms #74 - #79 on Level 07 each about 14' x 27' = approximately 380 sq ft each

Rooms #80 - #83 on Level 07 each about 13' x 20' = approximately 260 sq ft each

Room #84 at southeast corner of Level 07 = approximately 300 sq ft

Rooms #85 - #90 on Level 07 each about 12' x 27' = approximately 325 sq ft each

Room #91 at southwest corner of Level 07 = approximately 500 sq ft


Suite #92 on Level 08 about 24'-6" x 36'-4" = approximately 890 sq ft

Suite #93 on Level 08 = approximately 744 sq ft

Suite #94 on east side of Level 08 = approximately 1,600 sq ft

Rooms #95 - #97 on Level 08 each about 18' x 24'-6" = approximately 440 sq ft each

Suite #98 at southwest corner of Level 08 = approximately 675 sq ft

----

Summary: 

7 @ 230 sq ft
4 @ 250 sq ft
17 @ 260 sq ft
6 @ 266 sq ft
4 @ 300 sq ft
24 @ 325 sq ft
1@ 340 sq ft
24 @ 380 sq ft
3 @ 440 sq ft
4 @ 500 sq ft
1@ 675 sq ft
1@ 744 sq ft
1 @ 890 sq ft
1 @ 1,600 sq ft

The online plans are not worked out in terms of walls/existing windows.  There are columns near the middle of some of the rooms.  But those types of issues can be resolved as the design is developed.  Emergency egress near the northeast corner of the building appears to be relying on an exterior fire escape.

The view out the window shown is perplexing.  It appears to be a mirrored image of Tulsa's skyline -- from a vantage point somewhere south of the downtown area -- no where near the Tulsa Club Building.  The view from many of the north rooms will be looking at the side of parking garage a few feet away, which might not matter to many people staying there. 

[Conan71]

The plans show 98 rooms on six levels of the building.


Rooms #1 - #6 on Level 03 each about 14' x 19' = approximately 266 sq ft each

Rooms #7 - #10 on Level 03 each about 12'-6" x 20' = approximately 250 sq ft each

Room #11 at southeast corner of Level 03 = about 12'-7" x 27' = approximately 340 sq ft

Rooms #12 - #18 on Level 03 each about 12' x 19' = approximately 230 sq ft each

Room #19 at southwest corner of Level 03 = approximately 260 sq ft


Rooms #20 - #25 on Level 04 each about 14' x 27' = approximately 380 sq ft each

Rooms #26 - #29 on Level 04 each about 13' x 20' = approximately 260 sq ft each

Room #30 at southeast corner of Level 04 = approximately 300 sq ft

Rooms #31 - #36 on Level 04 each about 12' x 27' = approximately 325 sq ft each

Room #37 at southwest corner of Level 04 = approximately 500 sq ft


Rooms #38 - #43 on Level 05 each about 14' x 27' = approximately 380 sq ft each

Rooms #44 - #47 on Level 05 each about 13' x 20' = approximately 260 sq ft each

Room #48 at southeast corner of Level 05 = approximately 300 sq ft

Rooms #49 - #54 on Level 05 each about 12' x 27' = approximately 325 sq ft each

Room #55 at southwest corner of Level 05 = approximately 500 sq ft


Rooms #56 - #61 on Level 06 each about 14' x 27' = approximately 380 sq ft each

Rooms #62 - #65 on Level 06 each about 13' x 20' = approximately 260 sq ft each

Room #66 at southeast corner of Level 06 = approximately 300 sq ft

Rooms #67 - #72 on Level 06 each about 12' x 27' = approximately 325 sq ft each

Room #73 at southwest corner of Level 06 = approximately 500 sq ft


Rooms #74 - #79 on Level 07 each about 14' x 27' = approximately 380 sq ft each

Rooms #80 - #83 on Level 07 each about 13' x 20' = approximately 260 sq ft each

Room #84 at southeast corner of Level 07 = approximately 300 sq ft

Rooms #85 - #90 on Level 07 each about 12' x 27' = approximately 325 sq ft each

Room #91 at southwest corner of Level 07 = approximately 500 sq ft


Suite #92 on Level 08 about 24'-6" x 36'-4" = approximately 890 sq ft

Suite #93 on Level 08 = approximately 744 sq ft

Suite #94 on east side of Level 08 = approximately 1,600 sq ft

Rooms #95 - #97 on Level 08 each about 18' x 24'-6" = approximately 440 sq ft each

Suite #98 at southwest corner of Level 08 = approximately 675 sq ft

----

Summary: 

7 @ 230 sq ft
4 @ 250 sq ft
17 @ 260 sq ft
6 @ 266 sq ft
4 @ 300 sq ft
24 @ 325 sq ft
1@ 340 sq ft
24 @ 380 sq ft
3 @ 440 sq ft
4 @ 500 sq ft
1@ 675 sq ft
1@ 744 sq ft
1 @ 890 sq ft
1 @ 1,600 sq ft

The online plans are not worked out in terms of walls/existing windows.  There are columns near the middle of some of the rooms.  But those types of issues can be resolved as the design is developed.  Emergency egress near the northeast corner of the building appears to be relying on an exterior fire escape.

The view out the window shown is perplexing.  It appears to be a mirrored image of Tulsa's skyline -- from a vantage point somewhere south of the downtown area -- no where near the Tulsa Club Building.  The view from many of the north rooms will be looking at the side of parking garage a few feet away, which might not matter to many people staying there. 

That's a far better rental rate per square foot than I thought and means there are a few extra floors for office or conference space?  Any ideas there?

I believe this is the most exciting re-development news since work finally commenced on the Mayo for the final time.

[SXSW]

I recently stayed at the new Museum 21c hotel in OKC.  It's in an old warehouse/factory building on the west side of downtown.  Cool place and something similar would be neat to see in the Tulsa Club.

[Bamboo World]

I recently stayed at the new Museum 21c hotel in OKC.  It's in an old warehouse/factory building on the west side of downtown.  Cool place and something similar would be neat to see in the Tulsa Club.

Thanks for mentioning the OKC 21c Museum Hotel, SXSW.  I looked at their website, and was happy to see the various room/suite sizes and floor plans, along with photos.  The huge windows there probably made some of the partitions much more difficult to lay out and to build, compared to the relatively smaller windows at the Tulsa Club Building.

That's a far better rental rate per square foot than I thought and means there are a few extra floors for office or conference space?  Any ideas there?

See the links in cannon_fodder's initial post for conceptual floor plans, proposed restaurant area, hotel support spaces, pro forma, etc.

[AdamsHall]

I noticed they were installing a construction debris chute yesterday on the south face of the building.

[heironymouspasparagus]

Great analysis and thank you for bringing me up to speed more on what the expectations are for occupancy on larger properties.

We are opening a B & B in Cimarron, New Mexico and for all of my forecasting and business planning, I used 50% which is standard for that industry.  I started to use that for the numbers I ran on my previous post but remembered 90% was what the stated goal was 22 years ago when I was interviewing for that job. 

Our B & B will peak in spring, summer, and fall and will likely fall off during winter as the closest skiing is Angel Fire at 34 mies away.  Still, there are people who prefer not to be in the midst of the ski area their entire trip.  We are used to the idea of committing to ski as we have skied Wolf Creek many times and you have to commute 30-45 minutes from the nearest towns to ski there, which is not a big deal.  Hunting season does run through January so there's that business still and there are other longer term rental opportunities when there are major infrastructure projects going in the area or down at Philmont Scout Ranch as there are not a lot of rooms available, nor is there a wide selection of restaurants to choose from where our place is so a B & B is quite an attractive option in the area for many reasons. 

Beautiful area!   Wish you very well !!   When are you gonna open it up?   Or is it already??

We stayed at a B&B in east TN a few months ago that had several long term guys there doing months of construction in the area - the owner had just bought the place about 30 days earlier and was thrilled about having those long terms...can work very well.

[Conan71]

Beautiful area!   Wish you very well !!   When are you gonna open it up?   Or is it already??

We stayed at a B&B in east TN a few months ago that had several long term guys there doing months of construction in the area - the owner had just bought the place about 30 days earlier and was thrilled about having those long terms...can work very well.

We will be there full time by April 1 and will start taking bookings in early June. 

[BKDotCom]

Update
Not much to see yet...

http://www.tulsaworld.com/photovideo/slideshows/photo-gallery-tour-of-tulsa-club-building/collection_dbac4447-059e-59f8-a332-23a3a4126745.html

[TulsaGoldenHurriCAN]

Update
Not much to see yet...

http://www.tulsaworld.com/photovideo/slideshows/photo-gallery-tour-of-tulsa-club-building/collection_dbac4447-059e-59f8-a332-23a3a4126745.html

At least it is cleaned up so you can see the shape of the rooms and remnants of old tile which is interesting.