Midtown, Downtown See Investment
I had the opportunity last month to be interviewed as part of the “AR Story” series being done by the Little Rock Regional Chamber of Commerce. In the interview we talked a little about some things happening in the Midtown area of Little Rock. Keep an eye out in the coming weeks for more announcements of investment and potential changes in that neighborhood. Some deals I know have been signed. Some deals I have some insight into, yet I haven’t seen with my own eyes. Some of it is big in area. Some of it is big dollars. It all promises to be interesting. And at least one of the potential deals could get exciting.
There are some things percolating in downtown Little Rock, too. One of the high-rises in the “Financial Quarter” is under contract and another is being evaluated to be put on the market. Downtown has seen a long steady reinvigoration. I had the opportunity last week to sit and listen to some people reminisce about the Main Street Mall. During the limited time that it was retail-oriented and the streets were reserved for pedestrian traffic, there were some really cool shops and restaurants there. That concept didn’t work. Retail left downtowns despite best efforts. What is left of the Main Street Mall effort is primarily State offices. If we use the opening of the River Market as a starting point, the current resurgence of downtown Little Rock is into its third decade. And it is still going. With the AC Marriott, redevelopment is turning off Main Street and west on Capitol Avenue. More and more things are extending interest to SOMA. Projects like Fassler Hall, Dust Bowl, and residential developments are adding to the infill and density of downtown. With more and more residents downtown, one question to me is when, and where, does a full-service grocery store open?
In other downtown news, KATV’s building at 4th and Main is part of the Little Rock Technology Park’s long-term plan for redevelopment. For that redevelopment to occur meant that KATV would need to find a new home. It seems that has happened. On May 31, 2019, a deed was recorded that transferred the Student Loan Guarantee Foundation building at 10 Turtle Creek Lane in the Riverdale area of Little Rock to KATV, LLC. The consideration for the 26,615 square foot building and 3.8 acres of land was $4,368,000. Measuring that as a price per square foot brings in a value of approximately $164 per square foot.
A couple of blocks away from KATV’s current location, at 2nd and Louisiana, several parcels sold as a package deal for the recorded sum of $4,372,000. Other sources have reported that the intended use for the parcels is to be parking. If that is the end result, that effectively makes this a land purchase. The final basis for the land will need to include the costs of demolition of the existing improvements. Based on the land area of the purchase before the costs of demolition, or future improvements, the total assemblage of 38,811 square feet works out to be a little more than $112 per square foot. Again, that’s before demolition costs, if any are incurred.
I found a couple of multi-family sales of interest, in part because of the number of parcels included in the sales. In the first of the two transactions, Midtown Townhomes, LLC purchased 18 parcels, translating into 18 condominiums, at 8120 West Markham Street. The total recorded sale was $1,050,010. One of the units transferred separately from the other for $10. Totaled that way for the 18 units translates into a value per unit of approximately $58,334 per unit. The second transaction included thirty-one (31) parcels with approximately 372 units, a laundromat, and a half-dozen vacant lots. Little Rock Midtown Apartments, LLC bought a collection of apartments, quadplexes, duplexes and even a single-family home or two southwest of Geyer Springs Road and Baseline Road. Most are along Stanley Drive and Lew Drive. Looking at the total price versus the total number of existing units, setting aside the laundry and vacant land, the price per unit works out to be just about $31,000 per unit. It took me a while just to gather together all the parcel information to report this. The people who actually closed this transaction deserve a hand. It had to take a lot of work to underwrite it from both a title standpoint and a lending standpoint. And the due diligence had to be a bear.
I’ve written before about the quality of development in Chenal Valley and wondered about the future of the planned development. I’ve also noted before that my writing is observational, not investigative. However, I was puzzled by the recorded $19,836,366 transaction from PotlatchDeltic Timber, LLC to Legacy Land & Timber, LLC so I made a couple of well-placed telephone calls. I certainly wouldn’t call it investigating because I didn’t get any clear answers. I looked at the Pulaski County records only. Many, maybe most of you know, that PotlatchDeltic’s holdings are in multiple counties. What I see in the Pulaski County records looks like the tracts are south of Arkansas Highway 10 and west of Ferndale Cutoff Road. This appears to very likely just be some timber trading going on. At only around 2,370 acres, the total land area was not a significant portion of the seller’s holdings. At the recorded value, it works out to be about $8,870 per acre. Because there were 10 parcels, this transaction jumped out at me. That’s what caused me to pause and have a look. If any of the readers of this column can shed a little light on the transaction, shoot me a note or give me a call, please.
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.