When the first of 260 luxury apartments open at the Park Avenue development later this year, it will complete the city of Little Rock’s vision for a mixed-use center in midtown.
But some real estate watchers aren’t sure how well the apartments will do at the former University Mall site at 300 S. University Ave.
“They’re going to have to get some high rents to justify the costs of the construction and the land costs,” said Jerry Webster, president of the Webster Corp., a Little Rock apartment broker. “And it will be interesting [to see] if people will pay those rents in that location.
“If you want urban living, you’re going to live in the River Market area,” he said.
The 28-acre site features eight stores, including Target and Radio Shack, and a restaurant, Cheddar’s Casual Cafe. More stores and restaurants are expected to open by the end of the year.
See Also: Park Avenue Development Took Longer Than Expected
In February, Park Avenue Apartments LLC, an affiliate of Lang Partners of Dallas, spent $4.6 million to buy 3.03 acres at the site to build the apartments. The company received a loan of $21.6 million from Arvest Bank of Fayetteville for the construction costs.
Representatives from Lang didn’t return calls for comment. Rents for the 600-SF studio apartments to 1,500-SF two-bedroom apartments will range from $800 to $1,750 a month, according to a Feb. 25 article in the Arkansas Democrat-Gazette.
Meanwhile, the commercial side of the development continues to gain momentum after the 137,000-SF Target opened in the fall of 2010, months later than developer Strode Properties Co. of Dallas had hoped. Strode bought the property in 2007 for $21 million.
“We’re substantially complete,” Charles Keller, a partner in Strode, told Arkansas Business last week.
He said Strode was trying to complete a deal with a retailer to occupy a 12,000-SF spot for a junior anchor.
Keller wouldn’t say which companies he was talking to and wouldn’t give a timetable for when a deal would be completed.
Construction is under way for an approximately 7,000-SF Jared jewelry store, which is expected to open in the fall.
And more businesses are coming to the ground floor of one of the four apartment buildings at the site. A Panera Bread restaurant, a Sprint store and a Dos Margaritas restaurant have signed leases to locate in the development, Keller said.
Keller said he didn’t know when the first of the apartments would be ready, but it could be at late November to mid-December.
Once one of the buildings is complete, Strode will buy the retail space from Lang, Keller said. He declined to reveal a price.
LR Officials Pleased
The grounds of the apartments will feature a resort-style pool and a residents’ club room that will be on an elevated deck between two buildings, according to Strode’s website.
The units will include granite counters, custom cabinets and faux wood flooring in the kitchen and bathrooms, the site said.
“Park Avenue features abundant community amenities and upscale interior finishes, combined with the convenience of walkable shops and restaurants,” Lang said on its website.
Tony Bozynski, director of planning and development for the city of Little Rock, said he thought the project would be successful.
“I think it’s a very desirable location,” he said. “Just having that residential aspect, I think, is a big plus.”
Stacy Hurst, a Little Rock city director and a member of the Midtown Redevelopment District No. 1 Advisory Board, said she was happy with the way the project was turning out. It is appealing to be close to where people shop, play and work, she said.
The Park Avenue site is in the Midtown Redevelopment District. The Little Rock Board of Directors adopted a design overlay for the district in 2003. In 2007, the city approved the current version of the district based on recommendations from the advisory board.
Jim Bell, who also is on the advisory board, told Arkansas Business in an email response to questions that he wished there were more green space around the apartments and hopes that feature will come eventually.
“The greenery in the finished section in the southeast corner of the center, around Cheddar’s restaurant, has turned out very well,” he wrote.
Webster, who specializes in multifamily real estate investments, said he was cheering for the project, which has some pluses.
The demand for new apartments “is higher than it’s been in a long time,” he said. “So that helps you right off the bat.”
He also said midtown hadn’t seen new apartments in years, and that could be a draw.
Still, Lang will be competing with River Market District developers for tenants, and that area already has the bars and restaurants that urban residents want in a mixed-use development. In addition, when apartment dwellers look out their window, they want to see the Arkansas River or a golf course, not a Radio Shack, he said.
“I think [Lang’s] got their work cut out for them,” Webster said.
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