The dollar total of $1 million-plus commercial real estate transactions in Pulaski County grew by 7 percent during 2015. Last year’s tally of nearly $642 million compares with more than $597 million in 2014.
The increase came despite a slight drop in the count of deals: 115 in 2015 versus 119 in 2014. The largest 75 transactions of last year are listed beginning on Page 17.
Retail-related properties (27) and apartments/multifamily land (26) accounted for nearly half of Pulaski County’s 115 $1 million-plus transactions in 2015.
Out-of-state investors liked what they saw in the retail sector.
“Rent rates are going up or at least staying stable,” said Mark Bingman, executive broker and vice president at Little Rock’s RPM Corfac International. “So it’s attractive.”
The $11.1 million sale of the 125,000-SF Markham Square project in west Little Rock (No. 13) was the largest retail transaction during 2015. It was followed by the $9 million deal for the 89,724-SF Kohl’s in Sherwood (No. 17).
Investors are buying into a retail market where available space is becoming scarcer.
“The vacancy rate keeps going down,” Bingman said. “It’s clearly a market where we’re needing more development. There are just not a lot of choices. We’re playing musical chairs here,” he said, referring to tenants. “We’re definitely needing something new and shiny to catch everyone’s attention.”
While retail-related properties were scattered throughout the list, apartments made a strong showing with 15 of the 25 biggest commercial real estate transactions in Pulaski County.
Two Little Rock projects, Riverhouse Apartments (No. 2 at $39.6 million) and Park Avenue Lofts (No. 3 at 36 million), stood in tandem to lead the procession of multifamily transactions.
Jerry Webster, president of Little Rock’s Webster Corp., helped broker 11 apartment transactions around the state last year, including several Little Rock projects: Crestwood Manor (No. 15 at $9 million) Holcombe Heights (No. 33 at $5.4 million) and Westland Heights (No. 35 at $5.5 million).
Webster feels like a broken record in assessing the Little Rock-area apartment market.
“The answer is still the same,” he said. “Investors have multifamily as their No. 1 investment property. If they’re interested in commercial real estate, apartments is the first thing they look at.
“Our market is just very stable. Developers and lenders have done a good job of maintaining supply and demand.”
Helping keep the transaction train rolling are favorable interest rates combined with a wider array of credit venues for apartments (Fannie Mae, Freddie Mac and FHA), which aren’t available to fund other commercial deals.
“All types of apartment property are selling: new, older, acquisition-rehab, upscale, sub-sidized,” Webster said. “The same thing is happening up in northwest Arkansas.”
Eight of the 25 largest commercial real estate deals in Washington County centered on apartments during 2015, and two more transactions involved land bought for multifamily development.
Eight retail-related transactions last year supplied another third of the Washington County list.
The biggest of the retail deals was the $39.5 million deal for Fayetteville’s Northwest Arkansas Mall (No. 2).
“Land prices have come back up, maybe not to the craziness they were,” said Butch Gurganus, principal in the Bentonville office of Colliers International. “Stabilized in-vestment properties are asking a lot, too.”
Multifamily deals topped the Benton and Washington County lists for 2015: the Ranch at Pinnacle Point in Rogers at more than $41 million and The Academy at Frisco in Fayetteville at $49 million.
The Ranch at Pinnacle Point led a quartet of apartments that filled the top spots of commercial deals in Benton County: the Parc at Rogers, No. 2 at $29.5 million; Stone Manor, No. 3 at $28.4 million; and Stoneleigh Centerton, No. 4 at $22.5 million.
Overall, the count of apartment transactions in Benton County was five out of the 25 largest commercial real estate deals for 2015.
In Pulaski County, the $56.6 million sale of the Arkansas Surgical Hospital in North Little Rock supplied the chart-topping deal last year.
Hotel transactions provided 10 entries in Pulaski County and three in Benton County. At $9 million, the largest hotel deal was hosted by the Fairfield Inn & Suites in Rogers, No. 5.
“A lot of the people that were interested in the stock market were hit pretty hard the past several years and have turned to good real estate investments,” said Sue Cato, executive broker of the hotel-motel division of Little Rock’s RPM Group. “The hospitality industry is one of the largest.”
How does a head-to-head comparison of the 25 largest commercial real estate transactions compare among the three counties?
Pulaski County surpassed $403.6 million. Benton County approached $241.3 million. Washington County exceeded $225.3 million.
This is the first time Arkansas Business has assembled a list of the largest commercial real estate deals in Benton and Washington counties.