Developers Exit Downtown Little Rock Apartments After Two Decades

The Rock Street Lofts were sold earlier this month. (Sophie Baker)

Downtown Little Rock real estate developers have sold a pair of well-known apartment properties in recent months, and Hank Kelley, CEO of Kelley Commercial Partners, told Whispers that market timing, investors’ needs and some fatherly advice were among the factors in the sales.

Earlier this month, Kelley and a group of partners that included Bo Briggs and Kelley’s wife, Stephanie, sold the 47-unit Rock Street Lofts for $4.7 million to Alabama real estate developer John Chapman. The group had renovated the former TufNut-Sterling-Dailey Building, which had been in Stephanie Kelley’s family, and turned it into loft apartments in the early 2000s.

Kelley said he and other partners were in or near the “fourth quarter of our careers” and that he believed they had accomplished their goal of keeping the building alive and it being a “credit to the family.” Hank Kelley named the group’s limited liability company Yellow Rock LLC, because the building had once been painted bright yellow. “We saw a golden opportunity,” he said.

But Kelley added that he and his partners are near retirement age and that it would be better if the property were in the hands of someone who wanted to reinvest in it over the next 20 years.

In December, Kelley and a group of partners including Bryan Hosto, Tim Heiple and Briggs sold The Residences at Gracie Mansion at 503 E. Sixth St. for $5.7 million to Jill Judy and Mark Brown of Downtown Dwellings. They had bought the property at a bankruptcy auction in 2011 for $1.1 million and renovated the 75-unit property, including a historic home built in 1837.

Kelley said lower interest rates played a role in the decision to sell, since it is easier for buyers to get financing. He said he was also mindful of advice from his father 40 years ago when he told him “every piece of property you own, owns a piece of you.”

“We think about that analytically and try not to be overly emotional about it, but it’s a business investment and so we try to be prudent in handling that investment from start to finish.”