At 20 years old, the Victory Building at 1401 W. Capitol Ave. in Little Rock has lived up to its name, at least in the view of its owner, the Arkansas Teacher Retirement System.
The 262,342-SF Class A office building near the state Capitol has triumphed over naysayers and writedowns, and is providing a solid return with steady occupancy of nearly 100%.
Greg Joslin, a senior broker at Colliers International in Little Rock, said the building has been doing its part for Arkansas’ retired teachers for years, “helping from a fiduciary standpoint.”
“It has been at or near 100% occupancy for years,” in many ways outpacing properties in Little Rock’s central business district, Joslin said. “Financially it has performed.”
But 20 years ago, the project was no sure bet.
That’s when CDI Contractors of Little Rock completed the large building from a design by Cromwell Architects Engineers Inc. of Little Rock. The retirement system spent about $44 million to develop the property before its value was written down to $20 million in 2008.
By 2010, the height of the real estate crisis, the building was briefly up for sale for $23 million, but financial doubts were already fading.
By that time, the Victory was creating net income of $2.5 million a year, a figure that has risen as rental rates per square foot have gone up from $14.50 to $20.05. The retirement system’s 2019 financial statement put the building’s market value at $33 million.
“This building goes back to Irwin Partners, where I was a principal before it merged with Colliers four years ago,” Joslin said. “In 2007, it was 54% occupied. Within a year and a half, occupancy had stabilized in the high 80% range, and there was interest in buying the building.” Joslin “advised the retirement system not to sell it,” he said.
For many years, the building offered the city’s newest Class A office space, and its location was always coveted for rubbing elbows with power.
“Any time you build a Class A office building in a market like Little Rock there are always going to be naysayers and conservative thinkers worried about risk,” Joslin said. “The location near the Capitol means that constitutional officers will have offices in the building. We have two state senators. Lobbyists and association groups need that access to the capital.”
ATRS has kept up the building and its maintenance, he said. “The amenities of the building are quite impressive, and we have one of the best property managers in the market with Dana Gray.