Kelley Commercial plays key role in deals to bring Amazon, Costco and Trader Joe’s to Little Rock
July 13-19, 2020
The is the second in a two-part series on Kelley Commercial Partners by the Daily Record Staff
Even as Arkansas has seen the rise in jobless claims amid the COVID-19 pandemic, Mayor Frank Scott Jr. and local city and chamber officials have been able to close the loop on key economic development deals that will bring thousands of jobs to central Arkansas.
On Tuesday, Amazon.com Inc. announced plans to open its first fulfillment center in Arkansas at the city’s largest industrial park by 2021. The new 825,000 square-foot fulfillment facility at the Port of Little Rock is expected to create over 1,000 new full-time jobs with starting pay at an average of $15 per hour with full benefits, company officials said.
On the following day, the Little Rock City board approved the zoning requirements for the development of the planning Costco development in West Little Rock. The national’s second largest wholesale retailer intends to begin construction on a 165,000 square foot store in February 2021 with a grand opening scheduled a year from now. That location would employ nearly 250 workers, along with other allied retailers such as a gas station operator, an optometrist, and a possible liquor store.
Earlier in late April, Mayor Scott announced that Costco filed an application with the city to build its first location in Arkansas. That application before the city’s planning board included plans by the Kirkland, Wash.-based warehouse membership club to build a new store on ay 32-acre site at the junction of Chenal Parkway and Kirk Road.
But Little Rock’s deal-making started almost exactly year ago when the city first revealed that California-based Trader Joe’s had applied through a local architectural firm for a building alteration permit at 11500 Financial Centre Parkway, the former location of the now bankrupt Toys R’ Us store.
The one thing in common all those deals included is that the newly branded Kelley Commercial Partners real estate firm was the impetus for finding a Little Rock location for the three national retailers. In a recent interview with The Daily Record, Kelley CEO Henry “Hank” Kelley and his new partners recalled how Amazon, Costco and Trader Joe’s all ended up in the firm’s deal pipeline.
“The best companies in America turn to us to find real estate for them,” citing the recently closed Costco and Amazon deals. Kelley said the several of the firm’s newly minted partners were involved in bringing those retail giants to Little Rock under the company’s former Flake & Kelley brand.
On May 7, longtime Little Rock commercial real estate developer John Flake announced he was ending the partnership with the firm he co-founded 41 years ago to join his daughter Jessica Flake Dearnley in a new real estate venture called Flake & Company. The redemption agreement with Flake included mothballing the familiar Flake & Kelley moniker, thus the rebranding of Kelley Commercial Partners.
The firm’s nine new partners now include Kelley as CEO and executive broker, and Company President Daryl Peppers, CFO Maggie Hogan and Executive V.P. Nicolas Kelley, serving as the firm’s executive team that handles day-to-day operations. The remaining partners include Cheryl White, Cynthia Lu. Eric Varner, Kevin Pledger, Brooke Miller, and Bill Pendergist.
Kelley said Lu and Miller have been working for several years on helping to bring Trader Joe’s to Little Rock. Pledger, who is director of Kelley Commercial’s facilities operations, also work behind the scenes to help Lu and Miller “figure out how to take a 30,000 square foot Toys R’ Us building and turn it into 15,000 square foot Trader Joe’s,” said Kelley.
“And that does not happen by snapping your fingers,” said the firm’s namesake chief executive. “Our client in New Jersey said, ‘folk’s there is a lot of work to do to get this done,’ and Mayor Scott wants to make sure it gets done. So, we get that done and Mayor Scott tells me: “Hank – next on my list is Costco.”
The Daily Record reached out to Scott for comment for this story, but he was not available at publication deadline. Still, Kelley credited the Little Rock’s mayor with closing the Costco deal, “but I have been working on this for five years,” the longtime real estate developer said jokingly.
Concerning the recently closed Amazon deal, Kelley Commercial was retained a few years ago by the Little Rock Port Authority to obtain land for future industrial development. He said the firm’s partners have since been working overtime to find sites for economic development prospects and building relationships with landowners, including those who may not want to sell their property.
The blockbuster Amazon deal involved acquiring several parcels of land around the main property to ensure future growth of the site if needed and possible recruitment of other users that wanted to follow Amazon. Along with his son, Nicholas, and agent Gary Smith, the local commercial real estate executive worked with Little Rock Chamber CEO Jay Chesshir and associate Ben France to acquire those parcels under the direction of Port Authority Executive Director Bryan Day.
“This all had to be done in a confidential manner to comply with the terms of the sale,” said Kelley. “We are proud to have helped facilitate the requirements of a complicated land sale involving a great new addition to our Port and the City of Little Rock.”
“I can honestly say that without Hank and his team, this very complex real estate transaction would not have happened in the seamless manner that it did,” added Day. “The owner’s representative was very complimentary of the whole process.”
Following the City of Little Rock’s approval of the planned Costco location on Wednesday, Kelley said the state’s premier real estate firm with a portfolio of 7.4 million square feet of managed property will have completed a trio of major deals in the middle of a pandemic, bringing thousands of jobs to Little Rock.
“These [deals] are a significant additional to the Little Rock landscape during a COVID environment,” he said. “And Little Rock ought to take a minute and breath, and say ‘wow’ [we] have demonstrated that our community is credible – during a time when most retailers have their hands in their pockets saying, ‘we are not doing anything.’”
“So, we are really proud we could play some role in helping make that happen,” added Kelley.
To that end, Trader’s Joe, Amazon and Costco in January were rated among the top four U.S. grocery retailers in the third annual dunnhumby Retailer Preference Index (RPI), a nationwide study that examines the $700 billion U.S. grocery market. For the first time, Texas-based regional grocer HEB was rated as the nation’s top grocery store, bumping Trader Joe’s from the No. 1 spot it held for two years.
HEB, which was ranked fourth in 2019, also leap-frogged Amazon and Costco, which fell to the third and fourth spot, respectively. Bentonville-based Sam’s Club and Walmart Stores USA, the key subsidiaries of Walmart Inc., ranked 8th and 9th in the annual study. The RPI study surveyed 7,000 U.S. households to determine which of the top 60 largest grocery retailers have the strongest combination of financial performance and consumer emotional sentiment.
“One of the most important findings is that leading traditional regional grocers are experiencing a resurgence in customer preference, by winning with relevance and convenience,” said Jose Gomes, President of North America for dunnhumby. “If they can compete on price and quality – the value core for grocers – they are especially well-positioned to fend off the growing threat of non-traditional players. This also leaves them better insulated against an economic downturn. In the end, there is no ‘one size fits all’ approach to winning in this market, and retailers with Customer First strategies are most likely to fare best.”
The overall RPI ranking evaluated retailer performance on seven pillars, including price, quality, digital, operations, convenience, discounts/rewards and speed.
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