Where Do You Live?
Quick! Open your calendar app. Mark lunch on Feb. 7 and after-work on Feb. 21. The Q1 CCIM/LRRA Commercial Real Estate Lunch is Feb. 7. IT IS IN A NEW LOCATION! Lunch will be in the Tom Glaze Auditorium at One Allied Drive in Little Rock (originally built as the Alltel campus in Riverdale). Doors open at 11:30 a.m. for lunch. The program starts at noon and will be over by 1 p.m. The program is “Jobs! Arkansas’s Economy! Commercial Real Estate! 2019 Outlook!”. State Economist Dr. Michael Pakko is giving a commercial real estate presentation that is exclusive to this lunch program.
Register right now at ccim-ar.org. Don’t miss it! And on Feb. 21 the Commercial Real Estate Council of Metro Little Rock is hosting a reception and awards ceremony recognizing the brokers of the biggest deals in the market in 2018. There will be hors d’oeurves (that’s finger foods), beer, wine and an awards program hosted by Rex Nelson, who is, in addition to many other cool things, Senior Editor at the Arkansas Democrat Gazette. This event location is Main Library Darragh Center, 100 Rock Street. You can register for that event at crecmlr.org. Come on down and celebrate with the award winners. It might be you next time!
Where do you live? Or, maybe people ask you where you are from. For some of us that is a different question. Typically, though, the questioner has the same goal. They are seeking to know in which part of the country, or specifically which city, you reside. You are wondering right now how this has anything to do with commercial real estate. Am I right? OK. Give me a few more sentences to explain.
Commercial real estate growth, and residential real estate growth for that matter, directly correlates with job growth. Job growth is a function of economic development. Economic development efforts include marketing that place to prospective employers and investors. Most, maybe even all, of the largest markets or MSAs in the country are known by one name even though there are several towns or cities in that metropolitan area. People around the country don’t generally distinguish Decatur, Georgia as a separate place from Atlanta. It is part of the Atlanta metro. The same applies to Richardson, Texas. Everyone recognizes Dallas, or maybe even DFW. Anyone noting that they are from Richardson will recognize that is near Dallas, or a suburb of Dallas. Little Rock is indeed a city.
To most of the country, the entire metro area of what some call central Arkansas is Little Rock. It behooves everyone in the 6-county Metropolitan Statistical Area, and even the 10 counties of the Combined Statistical Area to leverage the Little Rock brand to bring jobs and investment to central Arkansas. When you travel and someone asks you what it is like where you live, how do you answer? Because if any part of your answer is negative, then the whole metro may be painted that way in the mind of the person that asked. Their next conversation could be with a site selection specialist for a company that was considering a location for hundreds of new jobs in or around Little Rock. So, where do you live?
In the contest of “most-interesting-name-of-the-month,” the buyer of property at 4500 Burrow Drive in North Little Rock is the winner. The name is ‘Hidden Lovester LLC.’ Hidden Lovester paid $860,000 for a 6,763 square foot office building built in 1983. If you are Hidden Lovester, I mean you no offense, but WTH? Also in North Little Rock, over on Northshore Drive, Foxden Enterprises paid $3,700,000 for the 19,692 square foot Helping Hands Daycare Center. I don’t know how much that is per kid, but it works out to be about $188 per square foot. Perin Holdings paid $200,000 for a namesake metal building of ~8,400 square feet at 4 Perin Road. We found a 2,250 square foot auto service shop at 11914 MacArthur Drive that sold on the 15th for $175,000. And rounding out the quintet of properties sold in North Little Rock this month, Westrock Coffee Roasting, LLC paid $385,000 for 2.79 acres ($3.17 per square foot) over on Collins Industrial Place.
The sale of the Sedgewick Centre at 400 Hardin Drive already made the news. This sale, though, challenges my long-held assertion that adding a superfluous, or relocated, “e” to the name of a property demands a premium. This office building fetched just over $90 per square foot. Then again, maybe that is a premium for this building. I’m not really in a position to say. The seller sold it for $550,000 more than they paid after holding the property just a little under five years. A Holiday Inn, right across the street for Sedgewick Centre, also sold last month. This 129-room hotel was built around 1990 and sold for $5,500,000. That works out to around $42,635 per room. Those of you who know something about hospitality properties can evaluate this price for the rest of us.
Pies In The Sky gave $510,000 for the Damgoode Pies building and parking lot at 6700 Cantrell Road. The building is right at 3,000 square feet and there’s right at three-quarters of an acre of land. If we divide $510,000 by 3,000 square feet we get (um … give me a minute) $170 per square foot. Personally, I see more value in the land than in the building. Just sayin’. Let’s say you’re a runner (you – not me) and from Damgoode Pies you run down Cantrell Road a ways, to 7915 Cantrell Road. You would find a well-known business there in a building that sold. It was the building that we’re reporting sold, not the business! The building, and the land, sold for $600,000. And the buyer very imaginatively named the entity buying the building the same as the address of the building. So, 7915 Cantrell Road, LLC paid almost $120 per square foot for 7915 Cantrell Road.
Going back to hotels, the Residence Inn by Marriott at 219 River Market Avenue sold for the tidy sum of $20,375,000. The assessor counted 107 rooms in the property. The math on that my friends works out to be over $190,420 per room. That is almost $200,000 per room. That seems like a very healthy price to me.
Changing from short-term sleeping arrangements to longer-term stays, we have some apartment sales to consider. Eight apartments at 2021 Sanford Drive delivered the seller a total of $680,000. At $85,000 per unit the apartments brought over $100,000 less than the hotel rooms above. Across town, Otter Creek Apartments, LLC gave $5,700,000 for the Otter Creek Cottages. The cottages include 19 buildings of four units for a total of 96, plus a clubhouse. The price per unit for these steps down a bit from the previous property and comes in at $59,375. And in the “other” category, the Chenal Rehab & Healthcare Center at 3115 South Bowman Road (help me, if it is on Bowman, not Chenal then why does it have Chenal in the name?) sold for $5,900,000, or just about $84,285 per unit.
On the west side of Little Rock, along Chenal Valley Drive, the residents of the Germay subdivision and the Deauville subdivision may be getting some new across-the-street neighbors. A 252-unit apartment home project named Hampton Astoria Apartments is scheduled to be in front of the Planning Commission on Jan. 31 for a site plan review. A few years ago the Planning Commission worked with the developer of Valley Falls Estates to arrange for LaMarche to be connected to Highway 10. Since then there has been a proliferation of new homes built in the area. Another small neighborhood is now proposed at the corner of LaMarche and Taylor Loop. It doesn’t hurt anything that award-winning Don R. Roberts Elementary School is just down the street.
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.