Devon Energy seeks buyer for Colcord Hotel in downtown OKC
Devon Energy is selling the Colcord nine years after buying the historic property as the company built its adjoining 50-story headquarters.
Devon Spokeswoman Lisa Adams confirmed Friday the 108-room full-service hotel is listed for sale with CBRE, but did not disclose further details including the asking price.
The sale coincides with a historic plunge in the energy industry triggered by the COVID-19 pandemic. When the company’s headquarters at 333 W Sheridan Ave. opened in 2012, its workforce topped 2,000. As of Sept. 29, the headquarters workforce was down to 850.
The hotel market, meanwhile, has taken an equally devastating hit from the pandemic with reports of occupancy rates running at 30% to 50%.
The Colcord was built in 1910 and was originally an office building (the developer, Charles Colcord, rebuffed efforts by partners to make it a hotel). More than a century later, the building still features the original marble and fixtures in the lobby and distinctive cursive neon rooftop sign.
Tulsa boutique hotelier Paul Coury purchased the building and spent $20 million renovating it into a hotel in 2006.
Devon Energy purchased the building in 2011 for $19.5 million as construction of its headquarters resulted in noise interrupting the hotel’s operations. The company proceeded with further renovations and addition of a wing with conference rooms that attached the Colcord to Devon Energy Center.
The purchase price was almost $8 million more than the county's estimated value and $16.5 million more than hotel developers paid for the 1910 office building in 2005.
Calls to CBRE were not returned on Friday.
Devon Energy's plan early on was to eventually sell the hotel. Then CEO Larry Nichols told The Oklahoman it was "very likely" the hotel likely would be sold within four years because the company wasn't the hotel business.
"I have never been in the hotel business and don't want to be in the hotel business," he said. "We are in the oil and gas business, and we try to focus on what we think we know something about."
Coury continued to manage the hotel for a brief time before former Skirvin Hilton manager John Williams was hired to take over. In 2014 Devon hired Coury to return and manage the hotel.
Like many energy producers, Devon was hit hard by the collapse in energy prices earlier this year. For the second quarter of 2020, it posted a net loss of $670 million, or $1.78 per share, on total revenues of $394 million.
It also holds a massive amount of debt — $4.4 billion. However, only $558 million of that will mature during the next decade. Devon officials stated earlier this year it held $4.7 billion in liquidity, with $1.7 billion of that in cash.
Since then, Devon has closed on its deal to sell its assets in the Barnett Shale field for about a half-billion dollars, and announced corporate boards for both it and Tulsa-based WPX Energy plan to merge. If shareholders agree, officials expect that would happen during the first quarter next year.