Virtus Real Estate Capital LLC of Austin, Texas, paid nearly $4 million for two self-storage projects in Benton County.
Virtus bought the 72,025-SF A&A Stor It at 104 N. 24th St. in Rogers for $2.17 million and the 57,700-SF A&A Stor It at 804 S.E. J St. in Bentonville for $1.62 million. Together, the two facilities have more than 800 storage units.
The sellers were separate but related to A&A Storage limited liability companies based in Tarzana, California. The A&A Storage groups paid $2.12 million for the Rogers project and $1.77 million for the Bentonville project in March 2007.
Scott Humphreys, acquisition director for Virtus, said the company will spend about $120,000 to upgrade the facilities.
Humphreys said the properties will be managed by a third-party group, Absolute Storage Management of Memphis. The two projects are Virtus’ first in Arkansas. Humphreys said the company had reached an agreement to buy a third Arkansas storage project but hadn’t closed the deal yet.
Northwest Arkansas was an attractive area for Virtus because there was no strong ownership group of storage units in place. That, coupled with the price value and strong economic base with companies such as Wal-Mart, Tyson and J.B. Hunt, made Virtus decide to enter the market.
“You’ve got a lot of local owners, which is normally a great opportunity for us to come in and capitalize on some of our industry practices,” Humphreys said.
“I think northwest Arkansas is a highly targeted market for us now. What we had to get our heads around in northwest Arkansas is the rents were fairly low given where your median income was.”
The projects will be renamed Bentonville Storage and Rogers Self Storage, Humphreys said.
He said Virtus owns about 50 self-storage facilities across the southern and southeastern part of the United States. The group owns 11 facilities in Memphis, and Virtus recently entered the Oklahoma market.
Humphreys said Virtus generally concentrates on smaller markets because it is much more difficult to break into major metropolitan areas such as Houston and Chicago where existing chains can wall off potential competitors. Northwest Arkansas had no such barriers but still showed the promise of a growing economy.
“The underlying growth element is there,” Humphreys said. “Their economic drivers have been stable. We can afford to go in and be a little more aggressive than the local buyers.”
Dickson Street Buy
Collier Diversification Specialties LLC, led by Mel Collier, paid $2.7 million for 1.4 acres in downtown Fayetteville.
The land at the southwest corner of Dickson Street and Block Avenue across from Collier Drug was bought from Dickson Street & Church Development LLC, led by Sam Alley.
Alley is chairman and CEO of the Little Rock general contracting firm VCC and is an investor in The Chancellor Hotel in downtown Fayetteville.
Mel Collier said he met with city officials about putting in a parking lot to improve the attractiveness of the area for shoppers. He and other members of the Dickson Street Merchants Association have wanted to increase parking on the east end of Dickson.
“We got a positive vibe from the meeting,” said Collier, who stressed that it would still be a long process. “We need more parking down here. Someone said to put your money where your mouth is.”
Collier doesn’t know how many parking spots the property will provide and his best-case scenario is the project could be completed within six months to a year.
He said the parking would be paid but without the technological confusion of the city’s computerized parking system.
“We want more people to come down here and park on Dickson Street,” Collier said.
The land he purchased was once owned by an affiliate of The Barber Group, Lynnkohn LLC. Brandon Barber planned to develop the $70 million, nine-story Divinity Hotel on the site.
Alley’s group doubled its money in the sale to Collier after buying the property for $1.35 million in April 2010 from First State Bank of Northwest Arkansas of Huntsville, since renamed Today’s Bank. The lender recovered it from Barber’s Lynnkohn in September 2009.
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