AHTD: Keeping Us Moving
The Arkansas State Highway Commission was appointed in 1913. The five-member State Highway Commission was created in 1952 and entrusted with administering Arkansas’ State Highway System. Act 192 of 1977 created the Arkansas State Highway and Transportation Department (AHTD). This action added responsibilities for coordinating public and private transportation activities and implementing a safe and efficient intermodal transportation system. As you read that you may be wondering “Why do I care?” and “What does that have to do with CRE?” Simply put, AHTD makes decisions and investments of public funds that materially affect most of the traffic in the state, including how much traffic your property might see and how accessible it might be. On top of that, most municipalities rely heavily on AHTD to implement or cooperatively construct public infrastructure.
AHTD has been, and continues to be, in the midst of the process of soliciting, reviewing and accepting bids for hundreds of millions of dollars in the highway improvements and construction. This is in large part thanks to Congress’s action to provide some stability to the Federal funds used for highway construction. There are many projects slated to start and many more still being considered. One of those projects includes Arkansas Highway 10 (a.k.a. Cantrell Road) and I-430. This project proposes changes to the intersection of the highways, including new and changed entrance/exit ramps, and the widening of Cantrell Road all the way to Sam Peck Road. Given the growth in the area and some changes announced and being considered, AHTD and this project may gain even more importance in the eyes of property owners on Highway 10 west of I-430, and in the minds of the drivers of the over 140,000 cars per day in Highway 10 and I-430 areas.
One recently announced change is the decision to proceed with converting the former Leisure Arts facility at The Ranch into a middle school serving students of the Little Rock School District. There’s a potential ripple effect in housing demand, prices and subsequent commercial development possibly related to the new school. That discussion is for another column. Sticking with potential commercial real estate development, there is a buzz about a proposed 40-50 acre office development at the west side of The Ranch. This new office campus is reportedly being considered by a well-respected local business for consolidation of operations from around the southeast. The jobs associated with it are substantial in number and in potential payroll. This potential multi-million dollar (hundreds of millions?) investment is still supposedly confidential. It certainly is not a secret though. I’ve heard many people speak of it and more than one person has asked me about it. It has not been announced publicly, though, and this column isn’t the place to start. Keep your ear to the ground and your eyes peeled.
The school and especially this potential large office development, will spur ancillary and peripheral development. Who knows, maybe the long-hoped/long-dreaded McDonald’s will materialize? Some development is already being planned. A 10,000 square foot retail building is proposed at the northeast corner of Highway 10 and Chenal Parkway. Retail properties, well really most properties, along Highway 10 have pretty strong occupancy rates with retail occupancy topping 97 percent. And vacancy in office properties at only around 22 percent even with the Leisure Arts property still being counted as ~55,000 of the ~95,000 square feet of office space available. So it appears the market can support new investment in the Highway 10 corridor, even before hundreds of students, parents and new employees are included in the mix.
On the subject of retail, a while back this column noted that Rock Creek Square on West Markham Street, home of Hobby Lobby & Mardel, was for sale. Multiple reports came out in the past month that the sale closed and the transaction price was $6,425,000. That’s more than the asking price. And based on the reported cap rate, the price suggests that the new owners may see value to be added. That might be in increased lease rates. Those rates could come in the form of new tenants. Let’s keep an eye on that property and see what happens.
I’ve been keeping an eye on the former location of Bank of America branch at 112 South University for years now, ever since selling it to Vision Value. The building was long-ago demolished and re-development was delayed for a myriad of reasons. Finally, in December the owner’s representative said construction was imminent. Sure enough, a building permit in the amount of $620,250 has been issued. Work should be in progress when this column is published. It is said to be a single-tenant building, pre-leased. The owner’s rep would not confirm at the time what business will be occupying the new building.
Lastly, and briefly, there’s been a bit of fruit-basket-turnover with a bunch of hotels in North Little Rock and Little Rock, maybe in some other areas too. The Wingate Inn on South Shackleford Road as well as La Quinta hotels on Fair Park Boulevard, Breckenridge Drive, Shackleford Road and on McCain Boulevard in North Little Rock have all recently changed hands. Some sold more than once apparently. The La Quintas were quickly re-branded “Sleep 6”. Khalil’s (once upon a time Julie’s Place) on Shackleford at Markham was included in the initial wave of transactions. Ownership not have subsequently transferred with next sale of the adjacent hotel.
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.