Investors Showing Interest in Bentonville Office Niche

by Paul Gatling  on Friday, Nov. 9, 2012 9:06 am  

New Commerce

The Commerce Centre addition began its initial development in the late 1990s, led by investors Collins Haynes, Rick McCullough, Dan Dykema, Vic Evans and Mark Marquess. It’s a commercial development of retail and office space, near Walton Boulevard and Arkansas 102.

The eight office buildings that are now owned by Bentonville Commerce LLC — whose owners declined an interview for this story — were constructed between 1999 and 2002 as Wal-Mart vendors began to set up offices in Bentonville. Local developer Bill Lazenby previously owned and managed all eight of them, entering the picture in 2000 by purchasing an existing building, then later building more of his own.

As a result of difficulties relating to the real estate bust — and coupled with less than satisfactory property management, according to one source — the buildings passed into receivership in 2010.

“It was just day-to-day stuff,” said the source, who did not wish to be identified, about the property management issues. “And one day it finally all added up, was going to cost a bunch of money to fix, they didn’t have it, the market tanked, then they had even less money to fix it.”

Colliers International of Bentonville had the property listed after that, but didn’t lease any new tenants.

“We didn’t even try because of the work that was needed,” said Butch Gurganus, a CCIM and principal with Colliers. “We didn’t even push it. We did a property condition assessment for each building on what needed to be done and it was an inch thick. It was bigger than the marketing book.”

Mathews recently signed a new tenant to a five-year lease, and said the eight buildings are now 34 percent leased. Each of the buildings has flexible floor plans with spaces ranging from 917 SF to 18,747 SF, with an asking rate of $15.50 per SF.

The new landlord has invested about $1 million to upgrade and revitalize the image of Bentonville Commerce. They range from complete window replacements, to roof improvements, new signage and landscaping.

Mathews said the owners intend to create a “top-notch” Class B office development.

“All the issues related to the previous neglect have been remedied,” Mathews said. “And after five years of working with this particular landlord, I can assure any potential tenant that the ownership goes above and beyond for their tenants. They are extremely hands-on with their properties and pay attention to the details.”

Mathews currently has proposals out to seven different tenants for consideration.

 

 

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