First Security Bancorp’s office park purchase last month brings new vitality to a landmark corporate campus in west Little Rock.
The $28 million acquisition by the parent company of Searcy’s First Security Bank will bring an influx of white-collar workers to the former Systematics office park at 4001 N. Rodney Parham Road.
Staffers of the $7.7 billion-asset bank will be joined by members of its First Security Finance and Crews & Associates affiliates.
“We’re planning for 200 initially with our company,” said John Rutledge, First Security Bank’s central Arkansas market president. “It’s an amazing opportunity to acquire 31 acres in the middle of the largest metropolitan area in Arkansas.”
The real estate transaction, which includes three office buildings with a combined 285,000 SF under roof, embeds the state’s fifth-largest banking concern deeper in Little Rock.
“This solidifies our ability to grow in the future with all the space there,” Rutledge said of the property near the major crossroad of Interstate 430 and Cantrell Road.
First Security entered the market with the May 2000 purchase of Crews & Associates, the regional broker dealer specializing in public finance, fixed income sales and trading.
The bank followed up four years later by opening its first office in Little Rock.
Since then, First Security has expanded its Pulaski County footprint with six more full-service branches in Little Rock, four in North Little Rock and one each in Maumelle and Sherwood.
During the past three years, First Security has recorded healthy growth that was reflected in its total assets, which leaped from $5.8 billion in 2019 to $7.2 billion in 2020 to $8.2 billion in 2021.
Total loans increased from $2.6 billion in 2019 to nearly $2.9 billion in 2020 to $3.1 billion in 2021. Total loans registered $3.6 billion as of Sept. 30, 2022.
The value of its securities portfolio climbed from $2.4 billion to nearly $2.8 billion in 2020 to $3.5 billion in 2021. That tally dipped to $3.2 billion through the first nine months of 2022.
Numbered 1-3, the former Systematics office buildings purchased by First Security are in various stages of occupancy. Three-story, 77,110-SF
Building 1 is full and leased as the headquarters of Windstream Holdings.
The four-story, 104,147-SF Building 3 is partially occupied by Windstream, and an as-yet unnamed local company is set to move in on a 60,000-SF lease.
The four-story, 103,834-SF Building 2 will be empty after it is vacated by Fidelity Information Services by March 31.
“It definitely was one of the largest office deals for our market,” said Kevin Huchingson, CEO of Colliers International Arkansas. “The timing for the opportunity was so good for First Security. In light of the office market, it’s really exciting news for Little Rock and to see a local company grow and absorb space.”
FIS retained ownership of its seven-story, 177,410-SF office building on about 14 acres. It was built in 1997, a last addition by Systematics.
Looking Back & Forward
Alltel Corp. entered the ownership picture of the west Little Rock office park when it bought Systematics in a 1990 stock swap valued at $528 million and renamed it Alltel Information Services in 1995. Eight years after the name change, Alltel sold AIS for $1 billion to the predecessor of Fidelity Information Services: Fidelity National Financial Inc.
The commercial realty firm of Sage Partners became involved with the former Systematics/Alltel office complex in west Little Rock in the wake of that 2003 acquisition.
“I knew Fidelity wasn’t in the real estate business, so I cold-called them after they bought Alltel Information Services to discuss their goals for the property,” said Mark Saviers, principal broker at Sage Partners.
Saviers helped make Windstream’s ongoing office lease with Fidelity happen back in 2006, more than 100,000 SF at the time.
Fidelity Information Services didn’t set out to sell most of its west Little Rock property last year. But when First Security came knocking, one thing led to another.
“The buildings were never marketed for sale,” said Ryan Gibson, vice president at the Little Rock office of Cushman Wakefield-Sage Partners and local leasing broker for FIS. “We ran across someone who was interested in buying the property.”
The off-market transaction with First Security Bancorp took six months from initial inquiry to done deal in December.
“It was an all or nothing deal,” Gibson said. “They essentially had to buy all three buildings, or they could lease any available space.”
FIS also required that, in addition to the three office buildings, First Security must buy the 7,966-SF guest lodge on the western end of the property.
The stand-alone structure, used to house out-of-town corporate visitors, was developed as part of the original Systematics campus in 1983-84.
The bank data processing startup founded in 1968 by entrepreneur Walter Smiley and financier Jack Stephens was a pioneering fintech firm before fintech was a thing.
Systematics developed the $35 million office complex on the heels of its initial public stock offering in 1981, allowing it to consolidate its Little Rock operations.
“We were out of space and were spread all over town,” Smiley said in a 2007 interview with Arkansas Business. “It was not efficient.”
Those same considerations are in play with First Security bringing together personnel scattered among various locations.
“We’re excited about that and think there is a lot of synergy in that and will create a lot of excitement for our employees,” Rutledge said. “We’re in the planning process now. We’re trying to get a grasp on everything and make it all fit together.”
While still sorting out details of its future move, First Security Bancorp is already marketing its downtown Little Rock office space.
The holding company owns floors seven-10 in the 14-story First Security Center at 521 President Clinton Ave. along with a 2,607-SF residential con-do on the top floor.
The four floors contain office space totaling 44,618 SF, according to real estate records.
“As far as our office space downtown goes, we’re working on plans to find people who might want to use it,” Rutledge said. “We’re exploring on how the market is receiving it.
“We suspect that anyone who would want this space would want it how we have it occupied. It’s really set up to be for one user, and we suspect that’s how it will be used by someone else.”
First Security will retain ownership of its 2,637-SF office on the building’s ground floor. Opened in November 2004, the full-service branch marked the bank’s first location in Pulaski County.
“Our downtown branch is one of our more critical locations for a number of reasons,” Rutledge said.
First Security Center serves as a brick and mortar billboard with signage for First Security and Crews & Associates. The sale of the First Security office space could entail a new name appearing on the building’s exterior.