The Commercial Real Estate Council of Metro Little Rock program on March 26 was terrific! More than 100 commercial real estate professionals from a wide variety of professions attended the Broker Awards. Congratulations to all the award winners; yours truly is humbled to be one of them. More information is available at crecmlr.org.
That things change is some sort of law of the Universe. To quote the timeless Bob Dylan “For the wheel’s still in spin and there’s no tellin’ who that it’s namin’.” Along those lines, in the Riverdale area of Little Rock there’s a street name change proposed. Why? Well, some years ago a building was built for Morgan Keegan. The building and the short street leading to it were both named Morgan Keegan. A few years ago, Morgan Keegan became Raymond James. Since then, Raymond James downsized, shuffled offices and moved around town like so many companies do. The building owners have plans to remodel the building and have asked the city to rename Morgan Keegan Drive to River Bluff Drive. Presumably the river and bluff overlooked by the building will both be around long enough for a subsequent name change to be unnecessary.
Backtracking on past news that might, or might not, have a wrinkle of change in it, I’m putting out a call for tips—or at least a call for direction. I was told something about the purchase of Building Four of the Verizon, f/k/a Alltel, campus by the Arkansas Development Finance Authority that is interesting, at least to me. Regular readers of this column know that it is not investigative journalism. My boss doesn’t give me enough down time to be out on the streets doing some sort of “7 on Your Side” or Geraldo Rivera interviews. If you are reading this and you’d like to point me in the right direction, you can be assured that I will quickly forget who tipped me. Heck, I can rarely remember breakfast by dinnertime.
Part of what was in this column last month regarding Building Four was pondering the overall occupancy and absorption of office space in the Metro Little Rock market. Having participated last month in the office advisory board meeting for Catylist, a commercial real estate information exchange serving the market, I can attest that the office space market is active. Because of changes in service providers to this market, year-to-year data is apples-to-oranges. Current data though suggests that the overall occupancy rate is holding steady with modest improvement. An aside to the Building Four questions is news that the remaining Verizon employees located there will be relocating later this year to the west side of Little Rock, out on Centerview Drive. I understand that Verizon leased 35,000 square feet of the building at 1400 Centerview Drive. Some of you may remember reading of the sale of this building a few months back.
With the space and time I have available, the deals recorded in the past month of more than $1,000,000 are what’s summarized in this issue. A pair of convenience stores each traded over that mark. An 8,000 square foot building on 2.5 acres at 9909 Hwy. 5 in Cabot was recorded on February 25 as sold for $1,331,000, or $166 per square foot. In North Little Rock, a 3,360 square foot building on 0.71 acre was recorded sold on March 15 for $1,420,000. That’s about $423 per square foot. In Little Rock, there was a pair of buildings on Louisiana Street that sold together March 15 for a combined total of $1,640,000. Pulaski County carries the building at 200 Louisiana Street at 5,227 square feet and the other building at 209 W. 2nd Street at 9,192 square feet. Breaking out some fourth-grade math provides the sum of 14,419 square feet for the two. That’s right at $114 per square feet combined; there are 15 parking spaces with these.
In Midtown Little Rock, an office building at 901 N. University was recorded sold on March 14 for the sum of $1,590,000. The building shows as being 13,056 square feet sitting on one acre. That’s $122 per square foot. An interesting side note is that the buyer of this property was Cherokee Investments, LLC, and the seller of the two buildings at the corner of 2nd & Louisiana was also Cherokee Investments, LLC. There were a couple of sales in the hospitality and restaurant sectors of the commercial real estate industry. Filed under hospitality is the 100-room motel at 6100 Mitchell Drive in Little Rock that sold for $2,100,000, or $21,000 per room. In the restaurant category, the Zaxby’s on Carnahan Drive in Maumelle sold for $1,789,000. That’s a hefty $523 per square foot.
Please allow me space here to step up on my soapbox. I was asked last month what my thoughts were regarding a proposed Design Overlay District planned for The Heights. I’ll ask the readers of this column a couple of questions here and provide some color following. Does it make sense for the City of Little Rock to change zoning rules and regulations from neighborhood to neighborhood and even street to street? Have you looked at the patchwork quilt of design overlay districts and zoning area across Little Rock? I am not a proponent of no zoning. Neither am I a proponed of micro-planning, or the microeconomics policy that seems to be supported by the good people at 500 W. Markham. When the rules and requirements (read costs) are different for one neighborhood than another, it has the effect of city government playing favorites, of providing incentive (or disincentive) to investments in those areas. I am a fan of public-private partnerships and economic development efforts by government. However, I think these efforts should be overt, not covert.
By writing arcane rules for one area and not for another or placing requirements on one part of town that are not observed for another, it creates rules of Byzantine complexity that stifle investment and economic development rather that encourage such investment. There are dozens, if not hundreds, of examples around Little Rock. A recent one is an application at 1509 Rebsamen Park Road for the redevelopment of a building formerly occupied by Marshall Clements. The building has been empty a while and a group has come along with a proposal to remodel and renovate the building to be a sake brewery and restaurant. Given the gathering of other restaurants in the area that seems reasonable, yes? Actually no. Not unless the business meets a parking requirement of 52 parking spaces. The site provides only 32. Is the requirement of 52 parking spaces reasonable? Maybe, maybe not. That’s not the question at hand. Is the same amount of parking required for the same business to locate in any other neighborhood in town? The answer is no. The parking requirement will vary by neighborhood, by design overlay district, by area zoning, or maybe even by whim if the applicant finds themselves stuck with a Planned Development application. Think about it. Is this a decision that can be resolved by customers deciding if they will frequent a business where they can’t park? Or is this a decision best made by some bureaucrats stuck working with a hodgepodge of zoning regulations cobbled together over years from the comments and complaints of special interests and NIMBYs?
As a former Chairman of the Little Rock Planning Commission, I support the comprehensive overhaul of the planning and zoning regulations of the City of Little Rock to reflect the 21st Century, foster economic development, and support the goals of the community as a whole. There will be a substantial cost for such an effort. I offer the idea that such a cost could be an investment in the economic development future of Little Rock.
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.