A Benton County lake house has turned into a nightmare for a Garfield man.

Kapales Properties LLC and Kevin R. Kapales said in a lawsuit filed in Benton County Circuit Court that the seller of the $657,000 home, Patricia Ann Gardner of Benton County, failed to disclose that the 3,228-SF house "has long suffered from water intrusion and related deterioration."

Kapales is suing Gardner for fraud. He bought the house in 2015 and wants the contract rescinded and damages of not less than $500,000.

Kapales said Gardner is a licensed real estate agent and was acting as the buyer and seller agent in the transaction. 

After moving in, Kapales found a laundry list of problems with the home because of water damage, including two instances of interior leaking in the attic, according to the recently filed lawsuit. 

"There is staining on the gypsum board ceiling veneer that was patched. When the patch was removed, rotten board was revealed," the lawsuit said.

The current bid to repair the property, which sits on 2.76 acres, is nearly $64,000, the lawsuit said.

A message left for Gardner at the Beaver Lake Realty Inc. office in Garfield wasn't returned.

Ownership of a 62,688-SF building in downtown Little Rock shifted in a transaction valued at $2.13 million.

Deep Creek LR LLC, led by Victor Pereboom of Prescott, Arizona, bought the M.M. Cohn Building at 510 Main St. The seller is Main Street Lofts LLC, led by Bryan Pereboom and Jacob Spellmeyer.

The 0.29-acre property is now tied to an $824,784 mortgage held by AMR Construction LLC of Little Rock and helps secure an October 2012 mortgage of $916,000 held by the Pulaski County Brownfields Revolving Loan Fund.

The building previously was linked with a December 2016 judgment of $896,756 held by AMR and a July 2015 mortgage of $2 million held by Riverside Bank of Sparkman.

Main Street Lofts, originally led by Scott Reed of Portland, Oregon, purchased the property in August 2012 as part of a $1.5 million deal. The seller was Lafayette Plaza LLC, led by Stephen Marks Sr.

Dollar Deal

A 12,380-SF store in Little Rock weighed in at $1.55 million.

SS Realty Ltd. of North York, Ontario, acquired the Dollar General at 7710 Col. Glenn Road from PB General Holdings (Asher) LLC, led by Leonard Boen.

The 1.56-acre development previously was linked with an April 2015 mortgage of $943,288 held by Simmons Bank of Pine Bluff. The site was bought for $258,000 in June 2010 from the Carolyn Ann Hougland Revocable Trust.

Industrial Sale I

A 56,540-SF facility in the Little Rock Port Industrial Park sold for $700,000.

Amrap Holdings LLC, led by Scott Senyard and Justin Marshall, purchased the 8423 Frazier Pike project from L&D Rentals LLC of Fort Smith. The deal is backed with a $625,000 loan from First State Bank of Lonoke and a $700,000 mortgage carried by L&D Rentals.

The 6.07-acre development was ac-quired for $269,000 in April 2013 from Leggett & Platt Inc. of Carthage, Missouri.

Industrial Sale II

A 42,260-SF industrial complex in Little Rock drew a $595,000 transaction.

Little Rock LLC of Topeka, Kansas, bought the Goldman Recycling project at 1701 E. 14th St. from Goldman & Co., led by Randy Pierce. The deal is funded with a $550,750 loan from Intrust Bank of Wichita, Kansas.

The 2.32-acre development previously was tied to May 2007 mortgages of $500,000 and $300,000 held by Bank of Little Rock. Goldman & Co. purchased the property through Paul Fenley for $432,500 in December 1978 as part of its Chapter 11 bankruptcy reorganization.

Barwood Buy

A mobile home park in southwest Little Rock changed hands in a $307,000 deal. Barwood Trust, led by Tony Anthony, acquired its namesake project at 9500 Reck Road from Finest Place Inc. of Guyton, Georgia.

The deal is financed with a 15-year loan of $232,000 from Clifton and Jan-ice Williams and a 30-year mortgage of $75,000 carried by Finest Place.

The 6.93-acre property was bought for $550,000 in December 2010 from the Williams family.

Office Transaction

A 4,076-SF office building in Jacksonville rang up a $275,000 sale.

BRT Enterprises LLC, led by Mary Alice Hughes and Lisa Jo Bamburg, purchased the Access Rehab project at 1200 W. Main St. from John Zumwalt.

The deal is backed with a $275,000 mortgage carried by Zumwalt.

The 0.55-acre development was ac-quired for $217,000 in June 2010 from Thomas Bond. 

Rental Purchase

A small multifamily property in Little Rock is under new ownership after a $185,000 transaction.

Windy Point LLC, led by Mark Babbitt, bought the 101-105 Battery St. project from Little Rock Community Mental Health Center Inc.

The 0.3-acre development was purchased for $87,000 in August 1992 from the estate of Wayne Wilkins. 

Sologne Manor

A 7,086-SF home in west Little Rock's Sologne Circle neighborhood of west Little Rock's Chenal Valley development tipped the scales at $1.2 million.

Alfred and Brenda Herget acquired the house from Craig and Gretchen Farrell.

The deal is funded with a seven-year loan of $1 million from IberiaBank of Lafayette, Louisiana.

The residence previously was linked with a January 2015 mortgage of $765,000 held by Bank of Little Rock Mortgage Corp.

The location was bought for $280,000 in September 2009 from Stanley Spangler.

Cliffewood Abode

A 3,048-SF home in Little Rock's Cliffewood neighborhood sold for $825,000.

Daniel and Emily Heard purchased the house from James and Allison Dowden. The deal is financed with a 30-year loan of $550,000 from Wells Fargo Bank of Sioux Falls, South Dakota.

The residence previously was tied to a February 2017 mortgage of $581,000 held by BancorpSouth Bank of Tupelo, Mississippi. The Dowdens acquired the property for $255,000 in July 1990 from Ellis Fagan III and his wife, Frances.

River Heights Home

A 3,722-SF home in Little Rock's River Heights neighborhood drew a $780,000 transaction. The Mehaffey Family Revocable Trust, led by Thomas and Sheila Mehaffey, bought the house from the Jennifer T. Barrett Revocable Trust.

The residence previously was linked with a March 2011 mortgage of $410,000 held by Merrill Lynch Credit Corp. of Jacksonville, Florida. The property was purchased for $570,000 in August 1999 from Saad and Naomi Taha.

PV Residence

A 4,173-SF home in west Little Rock's Pleasant Valley neighborhood changed hands in a $695,000 deal. Craig and Gretchen Farrell acquired the property from Daniel Heard.

The deal is backed with a 30-year loan of $424,000 from Bank of Little Rock Mortgage. The residence previously was tied to a June 2012 mortgage of $417,000 held by the mortgage company.

Heard bought the house for $645,000 five years ago from FTH Revocable Trust, led by Todd Hickingbotham.

Prospect House

A 2,627-SF home in Little Rock's Prospect Terrace neighborhood rang up a $639,550 sale.

Joshua and Audra Pettus purchased the house from JVRC LLC, led by Jett Ricks. The deal is funded with a 30-year loan of $375,000 from Little Rock's Bank of the Ozarks.

The residence previously was linked with an August 2016 mortgage of $380,000 and a January 2017 mortgage of $83,200 held by BancorpSouth Bank.

JVRC acquired the property for $300,000 10 months ago from the estate of Charles Wooten.

Deauville Place

A 4,183-SF home in the Deauville Place neighborhood of west Little Rock's Chenal Valley neighborhood is under new ownership after a $540,000 transaction.

Pamela Mobley bought the house from Manish Raj. The deal is financed with a 30-year loan of $424,100 from Caliber Home Loans Inc. of Irving, Texas.

The residence previously was tied to a July 2012 mortgage of $408,000 held by One Bank & Trust of Little Rock.

Raj purchased the property for $510,000 nearly five years ago from Amy and Brian Eble.

Oaks Abode

A 3,278-SF home in The Oaks neighborhood of west Little Rock's Chenal Valley development sold for $500,000.

Allen Bradley and Judith Garrett ac-quired the house from Tanya Toney.
The deal is backed with a 30-year loan of $400,000 from Regions Bank of Birmingham, Alabama.

The residence was bought for $529,000 in March 2006 from Jimmy and June Wilson.

Chad Raith was recently hired at Mercy Northwest Arkansas in Rogers as vice president of mission. He was previously an assistant professor of religion and philosophy and director of the Paradosis Center for Theology & Scripture at John Brown University in Siloam Springs.

Real Estate

Darryl Napolitano has been hired as a broker and development management associate at Colliers International Northwest Arkansas in Rogers. He was most recently managing director at Haag Brown Commercial's northwest Arkansas office.

The Northwest Arkansas Council named Nelson Peacock as its CEO on Tuesday.

Peacock, 47, has met with staff members at the council, a private nonprofit, and will take office in July. Peacock replaces Mike Malone, who was CEO from 2006 until he resigned last year to work for Runway Group LLC in Bentonville.

Nick Hobbs, the president of the Dedicated Contract Services at J.B. Hunt Transport Services Inc. of  Lowell, chaired the search committee that selected Peacock over six candidates who were interviewed. Hobbs said the search, aided by a search firm, was nationwide before choosing Peacock, who is the senior vice president of government relations for the University of California system.

"Nelson clearly rose to the top," Hobbs said. "We're really excited. We had the bar set high. We knew exactly what we were looking for and found the perfect individual."

Mike Harvey, the council's COO, served as interim CEO after Malone's resignation and interviewed for the CEO position. Harvey will remain with the council as COO, and Peacock opened his remarks by thanking Harvey for his assistance during the transition.

Peacock grew up in McCrory and earned a law degree from the University of Arkansas in Fayetteville. He served as legal counsel for then-Sen. Joe Biden and was appointed by President Obama to lead the Office of Legislative Affairs for the Department of Homeland Security.

Peacock said his priorities as CEO will be to develop strategic communications to help tell the region's story, to expand relations between the local governments and the council and to "foster" the innovation culture of northwest Arkansas.

"There’s a lot of positive energy," Peacock said. "This is a unique opportunity."

Peacock said the region is an attractive place to work because the cities of the area have a desire to work together, as do the various companies. 

"There is a common purpose," Peacock said. 

WASHINGTON — Americans cut spending at gasoline stations, department stores and electronics shops in May as retail sales registered their biggest drop in 16 months, a cautionary sign for the economy.

The Commerce Department said Wednesday that retail sales dropped 0.3 percent, the first decline since February and the sharpest since a 1 percent decrease in January 2016. Economists had expected sales to increase slightly in May after rising 0.4 percent in April.

Over the past year, retail sales have risen a solid 3.8 percent.

Last month, sales fell 2.8 percent at electronics stores, the biggest such drop since March 2016. They fell 2.4 percent at gasoline stations and 1 percent at department stores, which have struggled with competition from online retailers.

Economists have said they think consumer spending, which accounts for about 70 percent of U.S. economic activity, will pick up in the spring and summer after a slow start to 2017. A slump in consumer spending early this year is a key reason why the economy expanded at only a lackluster 1.2 percent annual pace from January through March.

The Trump administration has said it can accelerate economic growth to 3 percent a year by cutting taxes, loosening regulations and pouring money into roads, bridges and other infrastructure projects.

But President Donald Trump's agenda has been held up by political turmoil and a lack of details from the administration. And economists are skeptical that Trump could overcome longer-term problems that weigh on economic growth, including an aging workforce and a slowdown in worker productivity.

(All contents © copyright 2017 Associated Press. All rights reserved.)

WASHINGTON — Credit card holders will soon pay more. So will people with adjustable-rate mortgages or home equity lines of credit.

But most would-be home buyers needn't worry. And auto loan rates won't likely change much. For savers? Rates should creep up, at least for the highest-yielding CDs and saving accounts, though on average they'll still pay a pittance.

The cumulative impact of another Federal Reserve interest rate hike — its fourth in 18 months — will range widely for individuals and businesses with loans or income-producing accounts.

And the consequences range beyond U.S. shores. A series of Fed hikes generally means that overseas investors in search of interest income can increase their returns by shifting money into the United States. Higher U.S. rates also tend to cause an outflow of capital from developing countries that can ill-afford it.

The most immediate effects, though, are generally on borrowers in the United States. When the Fed lifts the short-term rate it controls by one-quarter of a percentage point, as it did Wednesday, it typically translates into a quarter-point rate increase for credit card debt and home equity lines, as well as for some adjustable mortgages.

Fed policymakers have raised their benchmark rate to a range of 1 percent to 1.25 percent and indicated that they foresee one additional hike this year, assuming that the economy remains on solid footing.

For someone with a $5,000 credit card balance who makes a minimum payment each month, the Fed's four rate increases since December 2015 equal an additional $700 in payments over the life of the loan, according to Greg McBride, chief financial analyst at Bankrate.com.

"That's where consumers are feeling it and are going to continue to feel it," McBride said.

But home and auto loan rates are another story: Despite the Fed's moves, they've barely budged since December 2015, when the central bank announced its first increase after seven years of near-zero rates.

Here are some questions and answers on what the Fed's moves could mean for consumers, businesses, investors and the economy:

Q. Why haven't mortgage rates increased?

A. Because fixed-rate mortgage rates don't typically follow the Fed's changes. Sometimes they even move in the opposite direction. So it doesn't necessarily make sense to rush into buying a home or refinancing a mortgage. The hike often won't translate into higher mortgage rates.

Fixed long-term mortgages tend to track the rate on the 10-year Treasury, which, in turn, is influenced by such factors as investors' expectations of future inflation to global demand for U.S. Treasurys.

In December 2015, a week before the first increase, the average 30-year fixed mortgage rate was 4.06 percent, according to Bankrate.com. It actually fell for most of 2016, then jumped later in the year and peaked at 4.44 percent in mid-March this year.

But since then, long-term mortgage rates have declined and are back to almost exactly where they began: The 30-year averaged 4.04 percent last week.

Even the increase that began in late 2016 had little to do with the Fed. Rather, investors dumped Treasurys and bought stocks in anticipation of faster growth and higher inflation after Donald Trump's election. Better growth overseas also raised optimism.

But as Trump's tax and infrastructure spending proposals have stalled, investors' outlooks have dimmed. Demand for the 10-year Treasury has risen, and so its yield has dropped, reducing mortgage rates with it.

Other factors can also keep rates low. When global investors grow nervous, they often pour money into Treasurys because they're seen as ultra-safe. That buying pressure holds down Treasury rates.

Q. So where will home loan rates go from here?

A. Hard to tell. The Fed expects to lift its benchmark rate one more time this year and three times in 2018. Eventually, those increases should put upward pressure on mortgage rates, but it's impossible to say when.

Mortgage rates are still very low by historical standards. Before the Great Recession, the 30-year rate had never dipped below 5 percent.

Q. How could the Fed's actions affect other countries around the world?

A. Higher rates in the United States tend to attract more investment from overseas. The European Central Bank and the Bank of Japan are still keeping their benchmark rates near zero to try to stimulate those economies. So investors can earn more by investing in dollar-denominated assets.

That inflow pushes up the value of the dollar, which can make U.S. exports costlier overseas. It can also pull money out of developing countries, where rates are usually higher but government bonds carry more risk. A flow of funds out of developing nations can lower their currencies relative to the dollar, making it harder for businesses in those nations to repay debts they have incurred in dollars.

Q. My credit rating isn't so great. How will I be affected?

A. Doug Amis, a certified financial planner in Cary, North Carolina, says consumers with less-than-sterling credit can expect to pay more, especially when financing the purchase of a used car.

"There's going to be an opportunity to increase those rates higher," Amis said. "So if you have poor credit, this is going to impact you."

Still, even with another rate hike, the impact on consumers and businesses is likely to remain mild, as rates remain very low, relative to years ago, Amis noted.

Q. Have the Fed's moves boosted the puny rates available for savers?

A. In a few cases, yes. McBride says some smaller banks are starting to offer higher rates on CDs and savings accounts than larger banks are. The huge national banks already have "more deposits than they know what to do with," McBride said, so haven't lifted their rates at all.

As a result, the disparity between the smaller local banks and nationwide institutions is widening, he said: "Exploit that difference. It's money in your pocket."

So far, the average rate on a one-year CD has barely risen since the Fed's rate hikes began, inching up from 0.27 percent in December 2015 to 0.35 percent now, according to Bankrate.com. But the highest-yielding CDs have risen from 1.35 percent to 1.5 percent.

Q. What if I'm a retiree invested in bonds?

A. Amis says he tells his fixed-income clients not to stress out over another rate hike.

"This is part of investing in fixed income, and it's not a signal to jump ship and go into dividend-paying equities," he said. "I would recommend they stay the course and earn the coupon."

Since rates began rising again, Amis has been advising retirees and others with fixed-income investments like bonds to ensure that their portfolios are balanced between very short-term and long-term bonds. Longer-term bonds typically pay higher rates, and as rates rise, the short-term securities will be replaced with higher-yielding ones.

(All contents © copyright 2017 Associated Press. All rights reserved.)

Gov. Asa Hutchinson's office said Thursday that President Trump has granted the governor's request for a disaster declaration for the state after damage due to storms, tornadoes and flooding from April 26 to May 19.

The declaration will allow residents and governmental bodies in the area who meet certain criteria to apply for assistance, the governor's office said.

Assistance for individuals and households will be available in Benton, Boone, Carroll, Clay, Faulkner, Fulton, Jackson, Lawrence, Pulaski, Randolph, Saline, Washington and Yell counties. The Arkansas Department of Emergency Management said citizens affected in those counties can seek help at 1 (800) 621-3362 or DisasterAssistance.gov.

"This is welcome news for the Arkansas families and businesses who have been waiting patiently for relief from these disasters," Hutchinson said in a news release. "These emergency funds will provide much-needed relief that will help those coping with the aftermath of these storms to recover, rebuild and get back on their feet. I am especially appreciative of our federal delegation, and their support and assistance during this process."

Public assistance for emergency work and repair or replacement of disaster-damaged facilities will be available in Baxter, Benton, Boone, Carroll, Clay, Cleburne, Conway, Craighead, Cross, Faulkner, Independence, Izard, Jackson, Lawrence, Madison, Marion, Mississippi, Montgomery, Newton, Ouachita, Perry, Poinsett, Prairie, Randolph, Saline, Washington, White and Woodruff counties.

ADEM and the Federal Emergency Management Agency will soon announce plans to open offices in the affected areas to accept assistance applications, the governor's office said.

James T. Ferstl of Little Rock has been named to the Real Estate Industry Council of the Federal Reserve Bank of St. Louis, the bank announced Thursday.  

Ferstl is the president of Ferstl Valuation Services in Little Rock, a real estate valuation and consulting firm.

The St. Louis Fed created four District Industry Councils in 2006, each designed to provide feedback regarding economic conditions within an Eighth District industry sector. The members' observations, along with economic data and information developed through the Beige Book and meetings of the Reserve Bank's boards of directors, help inform monetary policy deliberations in Washington.

Each council is supported by one of four of the Reserve Bank's offices: St. Louis (real estate); Little Rock (agribusiness); Louisville, Ky. (health care); and Memphis, Tenn. (transportation). The councils meet twice a year.

The vacancy rate in the 14.7 million-SF Pulaski County office market stood at about 7.8 percent during the first quarter of 2017. That marked a slight increase from 7.2 percent recorded a year ago.

“It’s a healthy office market,” said Bill Pendergist, partner at Little Rock’s Flake & Kelley Commercial. “There’s not a glut of space, and there’s good demand. Most of the property I’m handling is over 90 percent occupied.”

Vacant office space during the first three months totaled more than 1.1 million SF among 283 office properties tracked by Central Arkansas Commercial Data Exchange.

First quarter vacancy rates stood at 8.5 percent in 2015 and 11.3 percent in 2014.

“We’re still trending on a slower but positive direction with our vacancy,” said John Martin, principal and vice president of commercial brokerage at Little Rock’s Moses Tucker Real Estate Inc.

The 30-story Regions Center in downtown Little Rock and its adjoining six-story parking deck were pulled into Chapter 11 bankruptcy late last year to reorganize $30.4 million of debt.

The move by its out-of-state ownership group followed unsuccessful efforts to sell the building or refinance its debt and a $29.6 million foreclosure action by its financier group.

Occupancy at the 547,000-SF office tower has improved and is approaching 82 percent. Meanwhile, higher overall occupancy in the market is helping boost revenue.

“Our vacancy rate remains low, and we’re starting to see rents going north,” said John Hathaway, sales associate at Little Rock’s Coldwell Banker Commercial Hathaway Group. “The biggest news in the downtown market was Simmons Bank buying the Acxiom Building.”

The Pine Bluff bank acquired the 188,460-SF office building and supporting five-story parking deck at 601 E. Third St. for $25 million. The transaction will open up 65,000 SF of Simmons space in its namesake 40-story tower at 425 W. Capitol Ave. as the bank staffers relocate.

“That’s a significant footprint getting added to the inventory,” Martin said.

On the Acxiom side of the equation, the company has leased 11,215 SF of office space at 301 Main St. in Little Rock and dispersed other staffers elsewhere.

Office space was a major component of a $44 million transaction last year that encompassed three buildings and retail space on a 30-acre development at the northwest corner of Interstate 630 and University Avenue.

Little Rock Midtown Ltd., an affiliate of Provident Realty Advisors Inc. of Dallas, bought the 115,274-SF Doctors Building at 500 S. University Ave., the 69,734-SF Midtown Medical Park Building at 6119 Midtown Ave. and the 56,060-SF Doctors Plaza at 600 S. McKinley St.

Plans call for razing the Doctors Plaza to make room for more retail and expand the footprint occupied by parking and the 162,082-SF former Sears store at 600 S. University Ave. and the 14,137-SF Sears Auto & Tire Center at 602 S. University Ave.

The pending demise of Doctors Plaza put in motion construction of a new 80,000-SF medical office building off site to house its former tenant, Arkansas Specialty Orthopaedics. The group is developing its own $16 million project at 800 Fair Park Blvd. and expects to move there during the first quarter next year.

In west Little Rock, Bank of the Ozarks purchased 46.2 acres in 2016 for more than $12.5 million to develop a new corporate headquarters complex. Other large office transactions last year included:

• The 45,952-SF St. Vincent West Office Building at 10221 St. Vincent Way in west Little Rock, $14.1 million.

• The 124,900-SF Two Financial Centre at 10825 Financial Centre Parkway in west Little Rock, $11.3 million.

• Four office buildings and three parking lots for the Little Rock Technology Park in downtown Little Rock, $10.8 million.

“Activity is very strong,” Pendergist said. “We have lots of people out looking at space with some significant leases being wrapped up.”

Construction is under way on a two-story, 30,000-SF office building west of Old Town Road between Chenal Parkway and Markham Street.

At last report, the project is scheduled for completion by year’s end. New York Life Insurance is an anchor tenant for the development championed by Flake & Kelley Commercial.

Two spec office buildings brought on line by Little Rock’s Whisinvest Realty continue to lease up. The combined occupancy of the 32,000-SF project at 1400 Kirk Road and 10,000-SF project at 1700 Kirk Road in west Little Rock is at about 85 percent.

“Now we’re searching for tenants to give us an opportunity to do another office building,” said Jeff Maxwell, director of real estate development Whisinvest Realty.

Depending on what shakes out, that could be a single 60,000-SF project or the first of two 30,000-SF projects.

CENTRAL ARKANSAS OFFICE OCCUPANCY

Information reflects most up to date quarterly data available at time of publication. Figures provided by Xceligent.

See more of the 2017 Arkansas Business Office / Retail / Industrial Lease Guide.

Occupancy in the Central Arkansas retail market declined to 94.3 percent during the first quarter compared to 95.1 percent a year ago.

Vacant space tracked by the Central Arkansas Commercial Data Exchange totaled 1.2 million SF during the first three months of 2017. Total space among the 426 retail projects in the market: Nearly 21.3 million SF.

In 2015, the vacancy rate rose to 6.3 percent after reaching 5.2 percent during the first quarter of 2014.

“There’s just not a whole lot of excitement going on with retail,” said Mark Bingman, executive broker and vice president at The RPM Group in Little Rock. “The vacancy and absorption rates are relatively flat for the last three quarters.

“Everybody seems to be kind of in that holding pattern, which is not a bad thing. I’m saying that as a positive.”

Retail redevelopment plans are still shaking out for a 16.2-acre tract in midtown Little Rock. For now, the property at the northwest corner of University Avenue and Interstate 630 is home to Doctors Plaza, Sears Auto & Tire Center and former Sears store.

All three buildings are anticipated to go the way of the wrecking ball as early as next year to make way for new retail construction.

“Everybody’s talking about internet sales and how brick and mortar will no longer be relevant,” Bingman said. “The demand may be slowing down, but there will still be a need for structures.”

Build out of new retail projects continues in Benton, west Little Rock and Conway.

GBT Realty Corp. of Brentwood, Tennessee, is moving toward a Labor Day opening of its 170,000-SF Shoppes of Benton. Among the lineup of tenants at the $36 million project are TJ Maxx, Hobby Lobby, HomeGoods, Ulta Beauty, Rack Room Shoes and Texas Road House.

At the Little Rock’s Gateway Town Center, construction of the $3 million Creek Plaza, a 14,500-SF retail project has joined building activity on two neighboring developments: the $9.8 million Movie Tavern and $9 million Tru by Hilton Hotel.

The 11-screen, 46,000-SF dine-in movie destination will join the nearby Dave & Buster’s that opened last summer, expanding Gateway’s entertainment offerings.

At the $65 million Lewis Crossing in Conway, Collett & Associates of Charlotte, North Carolina, is rolling out more pieces of the 441,871-SF project.

Hideaway Pizza and Red Robin are starting work on their stand alone buildings, while Success Vision, T-Mobile and Rita’s Italian Ice are set for finish-out work. Construction of David’s Burgers, another stand alone building, waits in the wings.

“The retail market is a little bit tame,” said Jeff Yates, managing partner at ARK Commercial & Investment Real Estate of Little Rock. “I’d like to see more activity.”

Road work and other infrastructure construction should be completed this year in support of the proposed Shoppes at Central Landing in Conway. While the city’s $28 million in improvements winds down, the redevelopment timetable of the municipal airport property remains fuzzy.

Jim Wilson & Associates LLC of Montgomery, Alabama, is championing this drawing-board project envisioned as a 750,000-SF lifestyle center anchored by a 100,000-SF Dillard’s.

“With the proliferation of online sales, it’s affecting a lot of big boxes and traditional purchase order retailers,” said Greg Nabholz, senior managing director at Newmark Grub Arkansas. “You see increasingly store closings and consolidation.

“My question is: Are there retailers who will come in to fill the gaps. As the dominos fall, how does that translate? The projects that will have greater success will be integrated into a mixed-use format. Where you have growth in the market are service-type retailers.”

Five of the largest retail transactions in the market during 2016 included:

• The 296,000-SF McCain Plaza at 4200 E. McCain Blvd. in North Little Rock, $23.1 million.

• The 90,000-SF Colony West Shopping Center at 10300 N. Rodney Parham Road in Little Rock, $7.1 million.

• The 60,148-SF Midtown Center 105 N. Rodney Parham Road in Little Rock, $6.2 million.

• The 17.2-acre site for a Lowe’s home center at the northwest corner of Kanis and Bowman roads, $6.1 million.

• A 13,536-SF CVS Pharmacy at 8902 Geyer Springs Road in Little Rock, $5.7 million.

As the retailing landscape keeps shifting, property managers are turning to shop alternatives to replenish rent rolls and boost occupancy.

“We’ll see non-traditional uses continue to fill vacant spaces,” said Brooke Miller, partner with Little Rock’s Flake & Kelley Commercial. “Instead of retail, medical clinics, school, and interactive entertainment concepts are backfilling empty boxes.”

CENTRAL ARKANSAS RETAIL OCCUPANCY

Information reflects most up to date quarterly data available at time of publication. Figures provided by Xceligent.

See more of the 2017 Arkansas Business Office / Retail / Industrial Lease Guide.

The vacancy rate of the Little Rock industrial market dipped to 9.6 percent in the first quarter of 2017. More than 281,000 SF of space was absorbed during the first three months of the year as tracked by Central Arkansas Commercial Data Exchange.

“The market to me right now is very hot,” said Gary Smith, director of business development at Flake & Kelley Commercial. “There’s a lot of activity. The market is strong, and the vacancies are low.”

“There’s not a lot of product out there on the market. If there’s a time to build, it seems the time would be now if you’re looking for space in the 10,000- to 20,000-SF range.”

A year ago, the vacancy rate registered more than 11 percent. That marked a slight increase from more than 10.5 percent in 2015 and 2014.

“We’re getting down to what’s old and what becomes available,” said Rick Freeling, director of sales for Little Rock’s RPM Commercial. “What’s new and nice looking is taken.

“We’re trying to get cranked up to build some small industrial space capable of supporting as small as 3,000 up to 15,000 SF.”

The inventory is housed among 857 buildings divided among four industrial categories: warehouse-distribution, manufacturing, light industrial and flex space. Combined space: Nearly 45.5 million SF.

“We’re starting to get a lot of phones calls for tenants to lease space and purchasers,” said Rick Freeling, director of sales for Little Rock’s RPM Commercial. “We’re also getting more calls from out of state inquiring about available warehouse space in the market. That’s an indication that manufacturers are preparing to ramp up inventory.”

Three of the largest industrial property sales during 2016 included:

• The 311,684-SF FedEx Ground facility at 8 Industrial Parkway in Little Rock, $31.7 million.

• The 223,880-SF industrial project at 7400 Scott Hamilton Drive in Little Rock, $5.6 million.

• The 42,662-SF Colonel Glenn Business Center at 10303 Col. Glenn Road, $5 million.

Warehouse users are scouting the market and exploring their options as reports of manufacturers boosting production are heard.

“Those are all good signs, but it never breaks wide open here in Little Rock,” said Dan Robinson of Little Rock’s NAI Dan Robinson & Associates. “Most of our growth comes from people willing to develop out of their own pocketbook.

“There is pent up demand. I’m familiar with major companies in Arkansas with industrial needs that are straining at the gut to get something going.”

The 557,950-SF Applica Consumer Products project at 6901 Lindsey Road in the Little Rock Port Industrial Park continues to prove an elusive riddle in search of redevelopment answer.

The property affords a great building at a good location. But no one has stepped up to formulate a battle plan to take on the large project and divide it into smaller, more marketable chunks of space.

“Outside a lack of new construction, I think we’re all happy with the market today,” said Stuart Mackey, vice president of brokerage with Little Rock’s Coldwell Banker Commercial Hathaway Group.

“Activity is up, and that’s good. People are broadening their criteria, so more of central Arkansas is being covered.”

Mackey believes lease rates need to climb before construction of new flex space construction breaks loose in the market.

“There’s a gap between covering debt service for new construction and what you can get for rent,” he said. “It’s too big, a $2-$5 per SF spread dependent on the size of the project.”

CENTRAL ARKANSAS INDUSTRIAL OCCUPANCY

Information reflects most up to date quarterly data available at time of publication. Figures provided by Xceligent.

See more of the 2017 Arkansas Business Office / Retail / Industrial Lease Guide.

Sales of luxury homes in Pulaski County jumped in 2016 to a number not seen since Arkansas Business began tracking them in 2004.

Last year, 29 homes sold for $1 million or more, up from 20 in 2015.

Arkansas Business has been keeping statistics on high-end sales since 2004, when 29 million-dollar homes were sold. Sales hit a low of 13 in 2012.

This year, strong sales should continue, Jon Underhill predicted in an email to Arkansas Business last week. Underhill sells upscale home through his agency, Jon Underhill Real Estate of Little Rock. “The economy and the stock market are both doing well, and that bodes well for real estate,” Underhill said.

Since January 2017, 11 seven-figure homes have sold in the county and five more are under contract, he said.

Underhill also said more high-quality luxury homes were for sale in 2016, which contributed to increased sales. “Inventory had been low on quality homes in good locations,” Underhill said. “Many of the homes that sold had never been offered for sale.”

Homebuyers’ ideas of a dream home change annually. Few are asking for dedicated theater and wine rooms these days.

The current trends are open floor plans with comfortable living areas and designer kitchens, Underhill said. Buyers want master bedrooms and one guest room on the main level, outdoor areas, a pool and four-car-plus garage. Smart homes are a must, and buyers aren’t “willing to pay for last year’s technology,” he said.

As of last week, 44 homes in the county were listed for sale with asking prices of $1 million or more.

Underhill said that he has a list of at least nine other homes that the owners would be interested in selling but that aren’t on the active market.

For those who wonder who bought these exclusive homes in Pulaski County, Arkansas Business, using interviews, public real estate records and other documents, has provided a brief description of the homes and the buyers.

$2.67 Million

Buyer: Mace Properties LLC, led by Harry Erwin III
Seller: Wendy and Stephen LaFrance Jr.
Neighborhood: Edgehill, Little Rock    
Date: Sept. 1    
Year Built: 1929
SF: 6,844

Harry “Chuck” Erwin III bought this home that, real estate website Zillow said, features open entertaining spaces and a chef’s kitchen. Zillow touts the Edgehill manor’s “fabulous open entertaining spaces,” and the backyard highlights include a pool and gardens. Erwin founded the certified public accountants’ firm Erwin & Co. in Little Rock in 1984. He graduated from the University of Texas and started his career in 1979, according to his company’s website. He supports the Arkansas Arts Center and Arkansas Symphony Orchestra. Erwin has served on the board of trustees of Arkansas Children’s Hospital since 1990.

$2.5 Million

Buyer: Scenic LLC, led by John Stephens
Seller: Demp and Paula Dempsey
Neighborhood: Scenic Heights, Little Rock
Date: April 1
Year Built: 1981
SF: 6,823

This home features a detached three-car garage and “chiseled Terrazzo floors throughout,” according to Zillow. The house also has three fireplaces and doors that open to decks with canyon creek views, Zillow said. Scenic LLC, led by John Stephens, bought the $2.5 million house on April 1, 2016. John Stephens’ father is Warren Stephens, the president and CEO of Stephens Inc. of Little Rock, one of the country’s top investment banks. Last year, Forbes listed Warren Stephens as one of the richest people in America with a net worth of $2.4 billion.

$2.2 Million

Buyer: NPS Holdings LLC, led by Jeffrey and Cara Nolan
Seller: Estate of Kula Kumpuris
Neighborhood: Country Club Heights, Little Rock
Date: Aug. 17

NPS Holdings LLC, led by Jeffrey and Cara Nolan, bought a $2.2 million house to tear it down. On Dec. 22, residential homebuilder Fred Lord Builder Inc. of Little Rock took out a building permit for the new home project valued at $1.65 million. The work was financed by a two-year loan of $2.1 million from BancorpSouth Bank of Tupelo, Mississippi. Jeffrey Nolan is president and CEO of the land and timber management firm Loutre Land & Timber Co. of El Dorado. Since 2012, he has served on the board of directors of Murphy Oil Corp. of El Dorado. As a Murphy Oil director, his compensation for 2016 was $265,000.

$1.8 Million

Buyer: Donald and Lucinda Phelps
Seller: John and Amber Meadors
Neighborhood: Edgehill, Little Rock
Date: May 26
Year Built: 1937
SF: 4,667

Donald and Lucinda Phelps bought this home that, according to Zillow, features vaulted brick ceilings and floor-to-ceiling arched windows that overlook a pool and “immaculate grounds.” A guest cottage also is on the property. Don Phelps is the CEO of Phelps Fan LLC of Little Rock, which was founded in 1915 and is one of Arkansas’ oldest companies. He is the fifth generation of the Phelps family to run the company, which manufactures industrial fans. “From routine industrial needs to the demands of nuclear age requirements, Phelps Fan’s commitment to innovation and technology meet the needs of today while positioning itself to meet those of the next century,” the company’s website said.

$1.79 Million

Buyer: Jill and Edward Penick III
Seller: Marilynn and Robert Porter Jr.
Neighborhood: Country Club of Little Rock
Date: Sept. 30
Year Built: 2011
SF: 5,076

Jill and Dr. Edward Penick III bought this estate that, Zillow said, includes a three-car 868-SF garage. Edward Penick III practices at Central Arkansas Ophthalmology in Little Rock. The Little Rock native received his bachelor’s degree in biology from Davidson College in North Carolina and his medical degree from the University of Arkansas for Medical Sciences, according to Central Arkansas Ophthalmology’s website. He completed his ophthalmology residency at the University of Missouri-Kansas City. He specializes in Lasik and cataract surgery and sees patients for medical and eye exams, the website said.

$1.7 Million

Buyer: WVM LLC, led by Rush Harding
Seller: Maxie and Patricia Bobbitt
Neighborhood: Hickory Pointe, Little Rock
Date: April 15
Year Built: 2007
SF: 6,327

Rush Harding bought this home, featuring three bedrooms, three full bathrooms and two half-baths, because of the privacy. It has a permanent green space that surrounds three sides of the home, Harding said in an email to Arkansas Business. “I have a large, spacious office and my wife has a quiet nook to work on her photography and other projects,” he said. Harding said his wife, Linda, likes to work in the yard. “She has created a magical setting with plants and landscaping,” he said. Rush Harding is CEO of Crews & Associates in Little Rock, an investment banking firm created in 1979. He also is the CEO of Crews’ subsidiary, First Security Finance.

$1.57 Million

Buyer: Rodney and Michelle Damon
Seller: CNC Family Trust, led by Christopher and Claire Pittman
Neighborhood: Sologne Circle, Little Rock
Date: May 12
Year Built: 2008
SF: 10,810

Rodney Damon said the house on Sologne Circle was too good a deal to pass up.
The home cost $2.8 million to build in 2008, said Damon, who splits his time between Florida and Little Rock. “I bought it as an investment,” he said. “Hopefully, I can retire at some point and make some money off of it.” The estate in the gated community has five bedrooms and eight bathrooms. The brick house is “well-built,” he said. “It has all the amenities of any luxury home that you would see,” he said. Damon is a senior vice president at BOKF, which does business as Bank of Oklahoma and Bank of Arkansas.

$1.4 Million

Buyer: Terri and David Snowden Jr.
Seller: Judith and David Snowden Sr.
Neighborhood: West Little Rock
Date: June 1
Year Built: 1999
SF: 5,494

The house that Terri and David Snowden Jr. bought for $1.4 million was part of a family residential deal. They swapped their 6,272-SF home near the Country Club of Little Rock for Judith and David Snowden Sr.’s estate on 20 acres in west Little Rock. David Snowden Jr. is vice chairman at Tarco Inc. of Little Rock, which manufactures roofing products and has plants in Arkansas, Texas and Pennsylvania. Both Snowden Sr. and Snowden Jr. are members of the Arkansas Outdoor Hall of Fame and have been involved with the Arkansas Nature Conservancy since it began in the 1970s, according to the website of the Arkansas Game & Fish Foundation, which sponsors the Hall of Fame.

$1.4 Million

Buyer: Celia-Anne Martindale
Seller: George and Deborah Makris
Neighborhood: Country Club Heights, Little Rock
Date: Jan. 15
Year Built: 1998
SF: 5,986

Celia-Anne “CeCe” Martindale bought this home just a block from the Country Club of Little Rock. The house features a “large family room open to gourmet kitchen with every amenity,” according to Zillow. It also has a private covered terrace that overlooks a landscaped oversized lot, the website said. Martindale’s husband, Howard, is a co-director of information technology at Fourjay LLC of North Little Rock, a franchise of Wendy’s International Inc. Founded in 1975, Fourjay now has 49 stores with more than 1,400 employees, according to the company’s website. In August, Franchise Times, a trade jounal, estimated Fourjay’s annual revenue at between $60 million and $70 million.

$1.35 Million

Buyer: Duane and Angela Birky
Seller: Lee Bodenhamer Trust
Neighborhood: Overlook, Little Rock
Date: Dec. 2
Year Built: 2009
SF: 6,385

Angela and Dr. Duane Birky bought this four-bedroom, six bathroom home that overlooks the Arkansas River and the Big Dam Bridge. It also has “expansive decks off the rear of the house,” multiple fireplaces and floor-to-ceiling windows, Zillow said. Dr. Birky specializes in neurology and works at the Baptist Health Specialty Clinic in North Little Rock. He received his license to practice medicine in Arkansas in 1999.

$1.35 Million

Buyer: Karen E. Flake Revocable Trust
Seller: Chuck Hamilton Construction Inc.
Neighborhood: Country Club Heights, Little Rock
Date: Oct. 11
Year Built: 2010
SF: 5,091

Karen Flake bought the 5,091-SF home because she wanted the extra family space for her six grandchildren. The four-bedroom home is “probably more than we would need,” but Flake and her husband, John, frequently keep their grandchildren, she said. The split-level home has three bedrooms on the first floor and the master bedroom on the second. Karen Flake is president and CEO of Mount St. Mary Academy in Little Rock. John Flake is chairman of the commercial real estate company Flake & Kelley Commercial of Little Rock.

Home Sales of $1 Million or More in 2016 in Pulaski County

*In millions   **Property being torn down
Sources: Pulaski County Assessor’s Office and real estate records

The number of seven-figure homes sold in Washington and Benton counties almost tripled in 2016 compared with the previous year.

Twenty-seven homes in the two counties sold for $1 million or more in 2016. In 2015, only 10 homes sold at or above that price point, while 18 homes reached or surpassed the $1 million threshold in 2014.

Brandon Long, owner and broker at Weichert Realtors-The Griffin Co. in Springdale, said inventory of high-priced homes turned over much quicker in 2016 — and so far in 2017 — than it had in recent years.

“I think one of the reasons is there are more buyers for the homes,” Long said. “The absorption rate has gone down quite a bit. The reason for that is not less inventory but just more buyers. That is what the trend was saying for sure.”

Long said there used to be about 10 buyers every month looking at and buying homes priced at $500,000 or more in northwest Arkansas. Now that number has doubled.

This week, we take a look at the 10 most expensive residential sales in the two-county region. The top home on the list is one of the most expensive in recent memory. While the most expensive home in 2015 sold for $1.4 million, 2016 saw Walton Enterprises pay $5.3 million for a 4,366-SF home on Old Whayne Road in Bentonville.

The home has sentimental value; it was the residence of Ferold Arend, the first president of Wal-Mart Stores Inc. and close associate of neighbor Sam Walton. The seller was Arend LLC, led by Arend’s daughter, Debi Havner.

A $1.75 million residential sale from last August has been omitted from the list. That’s because the 3,031-SF home and acreage on SW I Street in Bentonville that Orchard Properties of Fayetteville (through its SullivanSquareBentonville LLC) bought from Real Church Inc. has already been razed to make room for a 474-unit apartment complex.

Eighteen of the 27 seven-figure homes sold last year were in Benton County, with Pinnacle Country Club being a popular neighborhood. Four of the 10 most expensive homes are there.

“There are a lot of things going on in Centerton and in Rogers and in Pinnacle,” Long said. “Benton County is for sure leading the way as far as those million-dollar homes. The million-dollar properties are still pretty unique. I would still say that someone has to be in the market for that property.”

Long said homes in all price ranges are selling much faster than in recent years.

“With the economy doing as well as it is doing, everybody has a little more money anyway,” Long said.

$5.3 Million

Buyer: STJ Holdings LLC
Seller: Arend LLC, led by Debi Havner
Location: Old Whayne Road, Bentonville
Date: April 12
Year Built: 1968
SF: 4,366
 
STJ Holdings is a subsidiary of Walton Enterprises LLC, a commercial and residential property management company run by the Walton family. The home, which includes a 1,050-SF basement, is the former residence of the late Ferold Arend, the first president of Wal-Mart Stores Inc. and longtime member of the company’s board of directors. The home sits on 3½ acres and is close to Crystal Bridges Museum of American Art and downtown Bentonville.

$1.81 Million

Buyer: Karisa N. Sprague
Seller: Michael E. and Sherri K. Long
Location: West Pinnacle Drive, Rogers
Date: July 29
Year Built: 2013
SF: 6,697
 
Karisa Sprague is a senior vice president for Wal-Mart Stores Inc. of Bentonville, for whom she runs the North Central Division of its store operations. The residence is in the gated community of Pinnacle Country Club and has five bedrooms and seven bathrooms. It also features a heated pool, a cabana and an outdoor kitchen.

$1.66 Million

Buyer: Rickie Lynn and Dianna Lynn Ellis
Seller: Wilson Trust
Location: Pine Log Road, Garfield
Date: Sept. 12
Year Built: 2010
SF: 7,189

Rick Ellis is the owner and president of Mid-River Terminal of Osceola, a harbor service company on the Mississippi River. The home overlooks Beaver Lake and sits on 3 acres. It has four bedrooms and five bathrooms and a four-boat private dock. The property also features a two-level garage with space for eight vehicles, a heated storage area in the basement and two outdoor fireplaces.

$1.59 Million

Buyer: Monica Houle and Thomas McGurk
Seller: William A. and Cheryl Lester III
Location: Prestwick North Circle, Fayetteville
Date: June 30
Year Built: 2005
SF: 6,376

Monica McGurk is chief growth officer at Tyson Foods of Springdale, and Tom McGurk is an executive with the consulting firm BluWave. The home sits on 1 acre and has a pool, a four-car garage and 5½ bathrooms. It is adjacent to Blessings Golf Course, the private course founded by former Tyson CEO and current Chairman John Tyson.

$1.51 Million

Buyer: Bradley Scott and Alexis Lynn Smith
Seller: Smith Family Living Trust, led by Ryan Taylor and Catherine Rae Smith
Location: South Sechrest Circle, Rogers
Date: July 5
Year Built: 2004
SF: 8,983

This home sits on the golf course at Pinnacle Country Club, a gated community in Rogers. The home has five bedrooms, 5½ bathrooms and a 4,000-SF basement. It also has a three-car garage.

$1.47 Million

Buyer: David R. and Beverly A. Lamp
Seller: Lessley Joint Trust, led by Bill Lessly
Location: Rocky Ridge Road, Bentonville
Date: June 30
Year Built: 1997
SF: 6,844

Randy Lamp is the CEO of Apprentice Information Systems of Rogers. The property features a seven-bedroom, 5½-bathroom home on 24 acres. The home has a saltwater pool, horse barn and four-car garage.

$1.4 Million

Buyer: Samuel M. and Kelly A. Rothschild
Seller: Derek L. Collison
Location: Churchill Downs Drive, Springdale
Date: Dec. 15
Year Built: 2005
SF: 12,230

Sam Rothschild is the COO of the restaurant chain Slim Chickens of Fayetteville. The home has seven bedrooms, nine bathrooms and a two-story library. It also has a wine cellar and a large pool with three waterfalls and a swim-up bar.

$1.39 Million

Buyer: Tracy L. and Kevin O. Mitchell
Seller: Ismat Aziz
Location: West Pinnacle Drive, Rogers
Date: Aug. 12
Year Built: 2012
SF: 5,168

Ismat Aziz was the chief human resources officer at Sam’s Club before being hired by Sprint in July 2016 to be its senior vice president of human resources. No information about the Mitchells was available. The home has seven bedrooms, 7½ bathrooms and a 1,674-SF guest house. It also features a saltwater pool.

$1.3 Million

Buyer: Louis A. and Jennifer J. Martin
Seller: Kalpesh H. & Gina M. Patel
Location: Plymouth Lane, Rogers
Date: July 17
Year Built: 2011
SF: 5,310

Louis Martin is the president of the Coca-Cola Co.’s customer relations team for Global Wal-Mart and Sam’s Club. The home has five bedrooms, six bathrooms and a wine room. It also has a pool with a connected hot tub and a swim-up bar, a four-car garage and media and exercise rooms. It is located in the gated community of Pinnacle Country Club.

$1.3 Million

Buyer: James R. and Jacqui E. Lefler
Seller: Shelby P. Field Trust
Location: East Township Street, Fayetteville
Date: Aug. 16
Year Built: 2005
SF: 5,713

James Lefler is an executive with Dragonfly Industries International of Frisco, Texas  — the company that unsuccessfully attempted to put a wind farm in Elm Springs in 2015 — and Jacqui Lefler is vice president of Heartland Payment Solutions of Fayetteville. This home made the 2015 Expensive Homes list after Shelby Field bought it in June 2014 for $1.5 million before transferring it to the trust. The home has four bedrooms, 3½ bathrooms, a wine cellar and a media room. There is a pool with a guest house, and the 3-acre property is bordered by a creek.

Are dormant development plans for an Aloft Hotel in downtown Little Rock getting ditched in favor of apartments?

Chi Hotel Group LLC is looking at the possibility of up to 96 apartments in the Boyle Building at 500 Main St.

You might recall that the Little Rock group, led by Jacob and Jasen Chi, once had plans to redevelop the 12-story office building into a hotel.

Once upon a time, plans included a 3,500-SF upscale restaurant, 4,000 SF of meeting space, a rooftop pool and lounge plus a ground-floor coffee shop.

In preparation for the redevelopment, the building was gutted with only the load-bearing columns re-maining.

That’s as far as the project progressed since the property was acquired for $4.5 million more than three years ago.

Is the new vision for the Boyle Building preceding new activity for the adjoining M.M. Cohn Building?

The disarray of the unfinished redevelopment at 510 Main St. was said to be a contributing factor in the Aloft project entering limbo.

But new ownership and money have cleared up the legal cloud hanging over the 62,688-SF former department store.

Elsewhere on Main, the K Lofts project at 315 Main St. is nearing completion.

We’re told final inspections of the elevator system and sprinklers are the biggest items remaining for the 32-unit apartment redevelopment. July 2 is a target date for obtaining a certificate of occupancy.

Two blocks to the south, work to complete apartments at Main Street Lofts could begin in two weeks.

We’re told it should take about six months to finish work on 30 upstairs apartments in the 41,816-SF Arkansas Building at 524 Main St. and 21,000-SF Arkansas Annex at 514 Main St.

McCain Mall last week sued David’s Burgers alleging the burgeoning central Arkansas burger chain failed to open a location in the North Little Rock mall as promised.

The mall is seeking $447,804.

It’s the second lawsuit against David’s Burgers over a lease in the last six months. A suit filed by Arvest Bank in January asked a court to declare that a lease between David’s Burgers for its location on South Bowman Road in Little Rock has been terminated, that the restaurant is now a month-to-month tenant and that Arvest has the power to end the tenancy by giving David’s Burgers 30 days’ notice.

Both lawsuits were filed in Pulaski County Circuit Court.

The suit by McCain Mall Co. Ltd. names as defendants David’s Burgers McCain Mall Inc. and owners Alan Bubbus and his wife, Jessica. The suit said that David’s Burgers’ lease began Feb. 12, 2016, and continues through 2025.

However, “Burgers failed to open for business at the McCain Mall location by February 12, 2016, and has not done so as of the date of this Complaint,” the suit said.

On Feb. 23 of this year, according to the lawsuit, McCain Mall demanded that the defendants “pay all past due rent, late charges, and future rent, totaling $447,804.22,” but “Such demands have been ignored.”

No formal response had yet been made to the McCain Mall lawsuit, which was filed Wednesday.

Asked about the lawsuits on Thursday, Bubbus said, “This ain’t Mayberry, is it?”

David’s Burgers didn’t locate at the property, he said, because “long story short, it doesn’t have a grease trap.”

Lease Dispute
The lawsuit by Arvest, which owns the property at 101 S. Bowman Road, was filed against David’s Burgers Bowman Co. The suit describes a months-long effort to negotiate a new lease or a short-term extension of the lease instead of an automatic renewal of the agreement, which was set to expire May 1, 2016.

The suit said that in a Feb. 18, 2016, email Bubbus gave notice he was vacating the property and so terminating the lease. On Feb. 26, 2016, Art McWilliams, vice president of Arvest Bank, sent Bubbus an email that referred to a potential offer to buy the building, according to the suit.

That same day, Bubbus responded saying the company still had three five-year options on the property and was still under contract, the Arvest suit said. “Since that time, Bubbus has refused to acknowledge that he effectively terminated the Lease via e-mail and has taken the position that the Lease was renewed automatically on May 1, 2016.”

In an answer and counterclaim filed in March, David’s Burgers denied Arvest’s claims and said that the company had asked Arvest to lower the rent and had told the bank it was interested in buying the property.

David’s Burgers also said that Arvest had indicated that CVS Pharmacies was interested in buying the building and that Arvest later accepted an offer by CVS for the building. (Pulaski County property records, however, show that Arvest is still the owner.)

David’s Burgers asked the court to find that Arvest had breached the lease agreement and that the restaurant company had been injured by the breach. It asked for the suit to be dismissed and to be awarded unspecified damages and attorney’s fees.

On Tuesday, the court filed a protective order in the Arvest case to keep private material claimed as confidential by the parties to the suit.

Bubbus told Arkansas Business on Thursday that he thought that he and Arvest were close to an agreement in its lawsuit. “I think everything’s going to get worked out on that,” Bubbus said.

“Things are going to happen. You’ve just got to say your prayers and do the best you can.”

The main creditor in the Chapter 11 bankruptcy reorganization involving the 30-story Regions Center in downtown Little Rock has accused the building’s owners of dragging their feet.

The owners’ bankruptcy has been pending for six months, yet “Debtors have made no progress toward a reorganization,” Wells Fargo Bank, a trustee for a pool of investors who made the loan to the building owners in 2006 to buy the property, said in a recent bankruptcy filing.

(The investors have a massive legal name: the Registered Holders of COMM 2006-C8 Commercial Mortgage Pass-Through Certificates.)

The 32 LLCs with an ownership interest in the 547,000-SF building have asked a U.S. Bankruptcy Court judge in Delaware for more time to file their plan of reorganization. Wells Fargo, though, wants the request denied. Or if it is approved, the time frame should be short, Wells Fargo said.

The reorganization plan was due on April 8, but at the end of March, the owners asked for an extension until July 7.

The owners said they were “proceeding in good faith in negotiating a process for reorganizing,” according to the March 31 filing.

The owners said in the filing that they were in talks “with numerous replacement lenders and anticipate being able to file a plan of reorganization in the very near future which provides for a 100 percent recovery to all of the Debtors creditors, including unsecured creditors,” the owners said.

Wells Fargo said the creditors won’t take “anything less than the full amount owed under” the loan documents.

Last year, the 32 LLCs with an ownership interest in the building allegedly defaulted on the $32 million loan used to buy the property. The owners owed $29.6 million, according to Wells Fargo.

In December, the owners filed for Chapter 11. The total debt is listed at $30.4 million, according to bankruptcy documents. The building, the owners said, is appraised at $40.5 million.

A judge hasn’t ruled on the request for an extension to file the reorganization plan.

The Regions Center reported revenue of $1.55 million for the first three months of the year and a net income of $360,000, according to the latest operating report filed in April.

Pat Harris is the co-CEO of Coldwell Banker Harris McHaney & Faucette Real Estate of Fayetteville.

Raised in Rogers, Harris became a licensed real estate agent in 1972, going on to form Harris McHaney Realtors of Rogers in 1976. In December 1997, he bought Shearin & Co. of Rogers, which merged with Coldwell Banker Faucette Real Estate of Fayetteville in February 2010. The firm, which markets real estate in northwest Arkansas, northeast Oklahoma and southwest Missouri, is staffed by more than 200 agents who work out of three additional offices in Rogers, Bentonville and Siloam Springs.

Harris held the rank of petty officer third class and served with the Navy in Alaska supporting the USS Pueblo and monitoring the Soviet military in 1965-68. He graduated with a bachelor’s degree in marketing from the University of Arkansas at Fayetteville in 1970.

What is your favorite part of doing what you do for a living?

Working with our agents and brokers as they grow their businesses and mature in their profession. We are in the people business, and watching them help families sell and buy homes and properties has become a very rewarding experience for both them and myself.

What are the most significant changes you’ve seen in the residential real estate business?

Our business has grown larger than I ever imagined (thank you, northwest Arkansas). During this period of more than 40 years, our profession, like many other professions, has made many changes and improvements in how we operate, especially as it relates to the interaction with the public. The communication and marketing tools that we now have available to us are certainly state-of-the-art equipment. When I started in the business we had five different MLS boards and now we have one, the largest single MLS board of Realtors in Arkansas.

What is the state of the residential real estate market in northwest Arkansas?

The market through the first five months of this year is slightly ahead in number of units sold, and the average sales price has moved upward slightly. Inside the market, the homes under $300,000 are moving extremely well, and the homes above $500,000 have slowed down. You have to remember that we are comparing against a strong 2016 real estate market.

Who are your mentors, people who made a difference in your life?

My wife, Lynnette, Jack McHaney, George Faucette, Jim Shearin and a host of other brokers and agents that I have had the privilege to work with. The values and work ethic of each of these individuals set a standard and a commitment to excellence that has guided me throughout the years.

What’s the best advice you ever received?

Come to work early and stay until the job is done regardless of the hour of the day. Put each person that you are working with first in your mind and your heart. Your devotion to these principles will carry you throughout your professional life, and your reputation will be written by the smiles and satisfaction you had the opportunity to help make.

Mistakes are said to deliver some of the most meaningful lessons. What was the most important mistake that has helped shape your career?

Thinking that the market would always continue to move upward instead of an occasional downward drop and not being properly prepared for such action. The real estate market is much more complex than you think, even for someone like myself who has worked in it for so many years. The market is made up of so many different forces of supply and demand, job growth, culture, environment and human interactions that it makes it almost impossible to understand it, much less to forecast it. The free enterprise system is alive and well in northwest Arkansas’ real estate market.

The price of “luxury homes” in the United States rose 0.7 percent in fourth-quarter 2016 compared with the year-earlier quarter, reaching an average of $1.6 million. That’s according to Redfin, an online real estate company based in Seattle.

Redfin defines luxury homes as those among the top 5 percent most expensive homes sold in a city in each quarter.

“The bottom 95 percent of the market performed far better than the luxury market in fourth quarter,” Redfin said. “This marks the eighth consecutive quarter where non-luxury properties outperformed their luxury counterparts in price growth. An average non-luxury home sold for $312,000, up 6.1 percent compared to a year earlier, the largest such gain since the first quarter of 2014.”

Redfin said the supply of homes priced above $5 million rose 15.1 percent in the fourth quarter of 2016 compared with a year earlier, far outpacing the rise in the number of homes for sale above $1 million, which increased just 0.6 percent in the fourth quarter.

The top 10 residential real estate agencies in Arkansas didn’t change in 2016, but there was some shuffling of position as eight of the 10 reported higher sales volume than in 2015.

Memphis-based Crye-Leike Realtors, the perennial No. 1, retained the top spot with sales of $1.26 billion last year — up almost 4 percent. But the No. 2 firm was not as distant as in past years: By adding 125 licensed agents, Keller Williams Market Pro Realty of Fayetteville upped its sales volume by nearly half to overtake crosstown rival Coldwell Banker Harris McHaney & Faucette.

KW Market Pro was also helped along by having the top-selling individual agent in the state: Nicky Dou. She posted $48.81 million last year.

KW Market Pro also boasted the No. 3 selling team, Joseph Hayes & Associates, with volume of $42.5 million. Team sales are in a separate list led by the Limbird Team of Limbird Real Estate Group of Rogers, with $113.65 million, and the Eric Burch Team of Burch & Co. in Jonesboro, with almost $53 million.

At this point it’s important to explain real estate mathematics. The industry double-counts the sale of a house in recognition that the buyer and seller are often represented by different agents and companies.

The doubling reflects a system that rightfully acknowledges two sides to every transaction. However, instead of dividing the sales price of a property between the buyer’s agent/company and the sale’s agent/company to determine sales volume, both agents and companies get credit for the entire amount. The real-world dollar total of houses sold is more like half the sales volume reported by companies and agents.

Growth by the biggest agencies is reflected in the fact that the 10 largest claimed volume of $4.87 billion in 2016, up some 18 percent from the year before.

The top 40 listed this week reported total sales volume of $6.47 billion. That’s an increase of almost 15 percent from 2015. The No. 40 position belongs, for the second year in a row, to Weichert Realtors-Downum Group of Springdale, with sales volume just shy of $49 million in 2016, up almost 12 percent from the previous year.

Mergers and acquisitions were variables in play with this year’s lineup of residential real estate agencies. In Jonesboro, ERA Doty Real Estate, No. 20 on this week’s list with sales volume of $100 million, acquired Fred Dacus Associates in June 2016.

Fred Dacus Associates ranked No. 26 on last year’s list of the state’s top residential real estate agencies, with 2015 sales of almost $70 million. The company had 29 licensed agents — 11 of whom were $2 million-plus producers last year.

Linda Roster White Real Estate of Conway merged in August with Little Rock’s Coldwell Banker RPM Group, which landed at No. 6 this year. The combination expanded RPM’s central Arkansas footprint into Faulkner County.

Government scrutiny of Harbor Portfolio Advisors of Dallas has contributed more baggage to weigh down a would-be sale of Arkansas’ smallest bank.

Two of the three prospective buyers of an 87.3 percent stake in Community State Bank of Bradley (Lafayette County) are affiliated with Harbor Portfolio Advisors: Chad Vose, president of the company, and Farzana Giga, chief financial officer.

HPA, one of the largest sellers of foreclosed homes in the nation, has drawn fire for its alleged predatory lending prices.

The company’s seller-financed home sales and operations attracted the investigative crosshairs of The New York Times last year and more follow-up this year.

HPA’s foreclosure sales practices also have drawn fire from the federal Consumer Financial Protection Bureau and the city of Cincinnati.

A U.S. Appeals Court upheld the CFPB’s subpoena power to investigate Harbor for potential violations of the federal Truth in Lending Act, the Consumer Financial Protection Act and the Equal Credit Opportunity Act.

Cincinnati sued Harbor Portfolio Advisors for unpaid fines and alleged failure to properly maintain dozens of homes sold through a contract for deed.

The action is part of a crackdown on private investment firms that sold foreclosed homes on high-interest installment contracts to poor residents who could not get traditional bank mortgages.

Lex Golden, chairman and CEO of Allcorp Inc., said in a bankruptcy court creditors’ hearing last month that the inquiry into Harbor Portfolio Advisors was a contributing factor in last month’s termination of the proposed purchase of his family’s controlling stake in Allcorp.

Allcorp, the parent company of the $15.5 million-asset Community State Bank, entered bankruptcy court 11 months ago.

Allcorp’s prime debt, secured by all outstanding shares of Community State Bank, is $1.3 million owed to Heartland Bank of Little Rock. Unpaid interest on the loan will total more than $61,900 at the end of June.

Heartland advocates selling the bank to remedy Allcorp’s flagging fortunes. The Golden family thinks the situation can be reversed if the Heartland debt undergoes a generous restructuring.

Community State lost $246,000 last year. The bank recorded a $13,000 loss in the first quarter with total equity capital of $2.6 million.