Plaza West Building Rebounds From Southwest Power Pool's Departure

by George Waldon  on Monday, Sep. 23, 2013 12:00 am  

Little Rock’s Plaza West office building experienced the upside of a small tenant growing into a very large one during its 40-year history. The 12-story project at 415 N. McKinley St. also endured the downside of that transformation when the anchor tenant moved out and left a 65,000-SF vacancy in its wake.

Occupancy at the 126,800-SF midtown property plummeted to 47 percent when Southwest Power Pool Inc. relocated last year after developing its own west Little Rock campus.

The nonprofit corporation, which oversees an electricity power grid in eight states, was the last original tenant in Plaza West.

But the rent roll recovered quickly. (See slideshow above.)

Thanks to pent-up demand for more space by existing tenants and an influx of new ones, occupancy bounced back to about 81.7 percent.

“What we have leased as of today is 103,600 SF,” said Melinda Martin, building manager at Plaza West, said last week.

Martin admits she was a little worried about refilling the building because of the general economy and a glut of office space in the market. Helping allay her concerns was the building’s out-of-state ownership.

The J. Rogers Badgett Sr. family of Kentucky has been a part of the Plaza West story since the project was launched in the early 1970s. Rog Badgett became the sole owner after buying out the other limited partners in an internal transaction a few years after the building opened in 1973.

Over the decades, his family has maintained a willingness to invest in the project and avoid overleveraging the 2-acre development.

“What they have done is make it easy to lease,” said Jeff Yates, leasing agent for Plaza West.

When Badgett died eight years ago, Plaza West was listed among the most valuable assets in his $30.5 million estate. The project’s paper value of $6 million in 2005 was second only to the $11.5 million value of his Cessna Citation X business jet.

Today, Plaza West carries an appraised value of $8.5 million.

 

 

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