October 7-13, 2019
By Jeff Yates
Commercial Real Estate around Central Arkansas
The deadline for this column is about a week before you see it in print. So, while this is a first-hand knowledge, bona-fide “scoop” as I write it, it may be old news by the time you read about it. You may recall that in 2016 the former Sears building and the medical office buildings surrounding it on 30 acres sold. In the time that has passed, finally, the Sears buildings and the Plaza building have been demolished. That property, it is approximately half of the 30 acres, is being redeveloped for restaurants, retail shops and a hotel. The north half of the property includes the landmark Doctors Building and a recently built building named Midtown Medical Park. Yes, I know that’s old news. Here’s the scoop part. UAMS has leased all of the available space in Midtown Medical Park for a women’s clinic to open in 2020 and both that building, and Doctors Building have been sold! Doctors Building will get a make-over and is getting some new tenants, with more on the way. That’s news that became final this afternoon as I write this.
Both Doctors Building and Midtown Medical were sold at the same time, yet there are two different buyers. Welltower (NYSE: WELL), a real estate investment trust purchased Midtown Medical Park. The building is 100 percent leased and will be 100 percent occupied when the interior finish work is completed for the new women’s clinic. A group of investors via Cushman Wakefield | Sage Partners have purchased Doctors Building in the name of Midtown Doctors Building, LLC with a plan for exterior and interior renovations to the landmark building. Ownership of Doctors Building was unchanged for nearly 40 years from the late ‘70s to 2016. Those owners, and the property manager, made consistent investments in the property all that time. The result is a property that is in great shape and is still a Class A building despite its age. The fact that the building has been there over 50 years is a plus. It is a genuine Little Rock landmark. When the Wilbur D. Mills Freeway fully opened in 1985 Doctors Building was sitting there with tremendous visibility and terrific access from the University Avenue interchange. With the coming renovations to Doctors Building and the exciting redevelopment next door (and maybe across the street?), Doctors Building is shaping up to again be the Midtown destination for medical clinics and related services. This area is the next big thing in Midtown!
I make no secret of my fondness for Midtown. I respect the downtown boosters and cheerleaders. I’m rooting for downtown too. However, Little Rock did not grow concentrically like so many other cities. So downtown is not the center of Little Rock. Little Rock grew west and southwest from the original city. This puts downtown at the far east side of town, still central to the metropolitan area and very integral to the economy of Little Rock and the metro. However, the population, the people, us; we live in the southwest and west areas. That makes Midtown, all the way down to UA Little Rock, physically more convenient than driving all the way downtown. My office is in Plaza West, next door to Catholic High and Park Plaza Mall. I will attest to the convenience of a Midtown location.
There are still not announcements on the locations of Costco or Top Golf. There was an announcement, and lots of other press, that the new Interstate 40 interchange serving Maumelle via White Oak Crossing (the Counts Massie Road extension) will be opening by the first part of November. I had the opportunity to sit in on a meeting with some of the folks involved in the interchange and the development of the properties around the new interchange. The anticipation of this opening is palpable. There are projections of what the traffic volume will be. Humans are funny animals though and predicting human behavior is an inexact science. There are questions about how quickly drivers will adopt the new route. There are questions about what will happen with the land, formerly a rest stop, controlled by ArDOT that wasn’t used for the interchange. There are questions about how quickly the infrastructure will come together to provide for additional development. And of course, there are questions about businesses and residents choosing to build, work, live and play in the area. I include play because an extension of the River Trail is proposed along White Oak Bayou. All these questions and more will be answered in time. Stay tuned. I’ll keep an eye on this and report back after the first of the year.
A trio of convenience stores sold last month in related transactions. CST Arkansas Stations f/k/a Valero Ark. Retail bought all of them from The Crackerbox or Gardner Oil in 2012 (seems like last month …). The one out on Hwy 165 in North Little Rock (on the way to Scott) sold for $624,268. The one on Brockington in Sherwood sold for $532,639. And the one on Mabelvale Pike in southwest Little Rock sold for $801,635. I don’t know about you, when I look at those values, they look like an accountant came up with them somehow. The total for the 3 is $1,958,542. Which further makes me think someone with a discounted cash flow model assigned values down to the decimal points.
The Knowledge Tree building at 825 N. University sold for $580,000. Pulaski County Assessor says the building is 7,644 square feet. At that floor area, the selling price is just under $76 per square foot. I haven’t been in the building in ages, if ever. I drive by it nearly every day though and it looks like it is in great condition. The apparent condition and the location would have had me expecting a higher value on that transaction. I don’t know any details and I’m just reporting what I know.
Most pizza aficionados will be familiar with this next property sale as the location of Pizza Café West. A Pizza Hut pick-up & delivery location sits across the parking lot too. Or maybe some readers have been to Thirst & Howl or Fuller & Son. The Property is Pinnacle Valley Plaza shopping center on Hwy. 10 on the west side of Little Rock. It was built in 1986 and has seen that part of town grow up around it. Doug Brandon Properties sold the center to Steve Key Will Greene, LLC for $2,380,000. With a recorded floor area between the two buildings of 28,344 square feet, the math on a per square foot basis is $84.
The last transaction I’ll include this month, got long winded above again, is the Crockett Law Firm building at 11521 W. Markham Street in Little Rock. The 3,153 square foot office building sold for $435,000, right at $138 per square foot.
Shoot me an email anytime. I appreciate the feedback. Tips and suggestions, well most of them anyway, are appreciated. Hope you found something interesting in the column this month. Check back again next month for the things that didn’t get included here this time and that pop up between now and then.