After crashing on takeoff, Fayetteville's Legacy Building is finally approaching full developmental realization under its fourth ownership group.
More than a decade after the first condominium changed hands, only three of the 38 units remain unsold in the seven-story project overlooking the Dickson Street Entertainment District.
Brisk sales of $2.7 million during the past nine months reduced the inventory of never-been-sold residential units from 12 to three.
"The ink's not dry, but we have a loose commitment on another unit," said Mitchell Massey, a northwest Arkansas real estate investor and partner in Legacy Investors Group. "It's been a great project. The demand is very solid for the Dickson-area condos, and the values seem to be on the rise."
Back in September, Legacy Investors Group paid $3.2 million for the remaining unsold condos and 8,741 SF of unfinished second-floor space.
The group stepped onto a meandering ownership trail that began in 2005 with the launch of the Legacy Building project by local developer Brandon Barber.
When his fortunes cratered in 2007, Legacy became bogged down in the ensuing financial chaos and the bursting of the real estate bubble a year later.
Foreclosure and four years of bank ownership followed. In 2012, the Broe Group of Denver acquired the unsold pieces of Legacy as part of a multi-property transaction with Metropolitan National Bank of Little Rock.
"Broe got the property in a grab bag purchase, made improvements and spruced it up," said Whitley Dunn, manager of the property since February 2010. "The Legacy Building has really come around."
By his count, more than half of the units are owned as second homes. Also in the mix are eight resident owners and six tenants renting condos.
When Broe decided to sell its remaining stake last year, Legacy Investors Group entered the picture and began marketing units at $285 to $305 per SF.
"We thought the timing was right to make this investment in the Dickson Street area," Massey said. "We were a little more flexible on our pricing strategy. There were more buyers ready to buy in that area.
"The three of us have been great friends for a long time. It was something fun to do together."
Massey and his fellow partners, Conway businessmen Todd Ross and Chris Crain, were encouraged by the market response to add four new condos.
Unfinished second-floor space originally envisioned for commercial use will instead be turned into a pair of two-bedroom units in the 1,100- to 1,200-SF range and two three-bedroom condos with a total living area of 1,600 SF to 1,900 SF.
"That's where the train is headed," Massey said. "The other thing we toyed around with is the idea of: Could we convert that space into some sort of an inn?
"There's probably enough space to have 12-15 rooms, more of a luxury boutique hotel. We haven't gone through full due diligence to see if it would work.It's interesting to think about having some type of top-notch hotel play there. We've left question marks on that."
Originally, the space was marked for potential office or retail use when the project was launched. That didn't take flight although Legacy Investors Group waded into negotiations for an office deal.
"We were in pretty deep discussions with Terry Turpin and his Acumen Brands to move their offices onto the second floor," Massey said. "That didn't pan out, which probably worked out better for us since they ended up closing shop.
"When we went down that path, we had done enough analysis on the market that we determined we could get $15-$20 per SF rental rate for residential space and not be tied to office. If I want to sell, I can. Residential rental has less risk associated with it than an office space rental."
Other nonresidential efforts in the Legacy Building have not fared well either. Three restaurants have called the project home.
Legacy Blues, featuring live music along with food and drink, opened in September 2011. The venture, owned by the Jim "Jimmy the Biscuit" Lefler family, closed in January 2013.
Next up in February 2013 came Table Mesa, renamed Table on the Hill in October 2014. The dining destination for modern Latin cuisine, operated by the Table Mesa Restaurant Group, closed in August 2015.
The Grillehouse Steak & Seafood restaurant, dubbed "a tradition for years to come" when it opened in October 2015, was closed in May "for the summer." Its future is uncertain with a possible relocation in play.
Its 4,377-SF space, bought in July 2016 for $808,426 by restaurateur Clint Boutwell of Oxford, Mississippi, is now listed for sale at nearly $1.2 million.
Envisioned by Brandon Barber to be his legacy development, the building has become a Fayetteville landmark.
Sept. 6, 2016
Ownership: Legacy Investors Group LLC, led by Mitchell Massey, Chris Crain and Todd Ross
Bought 12 condominiums for $3.2 million plus second-floor space that will be developed into four condos. Sold nine condos for more than $2.7 million.
Dec. 28, 2012
Ownership: Legacy BDF III LLC, an affiliate of the private investment firm Broe Group of Denver
Bought 24 condos for $4.2 million plus undeveloped second-floor space that was originally planned for commercial use. Sold 12 condos for $4 million.
Nov. 24, 2008
Ownership: Metropolitan National Bank of Little Rock, 47.3 percent; First National Bank of Fort Smith, 35.3 percent; and First National Bank of Green Forest (now AnStaff Bank), 17.4 percent
Recovered 30 condo units at an $11.2 million foreclosure sale plus undeveloped commercial space and recovered an additional unit through a separate foreclosure. Sold seven condos for $4 million and commercial space for $700,000.
Sept. 26, 2005
Ownership: Lynnkohn LLC, led by Brandon Barber and Seth Kafka
Developed space for what became 38 residential condos along with space planned for commercial use.
Construction is backed with a $19.4 million financial package from Legacy National Bank of Springdale, Metropolitan National Bank, First National Bank of Fort Smith and AnStaff Bank on Dec. 15, 2005.
Sold eight condos beginning in March 2007 for nearly $2.9 million before lenders landed an $18.7 million foreclosure judgment in July 2008.