From posh multifamily apartments to bargain fashions and grocery alternatives, outside investment continues to pour into Benton and Washington counties in 2015. And with good reason, according to David Erstine and Clinton Bennett of CBRE in Fayetteville.
Their latest report indicates about 50 new commercial building projects underway from Fayetteville to Bentonville and the three cities in between. That’s on top of the 26 new commercial projects completed since the last CBRE report issued in September 2014. Erstine told The City Wire at that time that Northwest Arkansas was “selling itself” to investors thanks in part to a plethora of infrastructure projects to facilitate the region’s growing population.
“Nearly 50% of Arkansas’ population growth since 2000 has settled in Benton and Washington counties,” the report stated.
PAVING THE WAY
The report also draws attention to what is nearly $750 million in highway construction and road improvements in the two-county area that was recently completed, underway or planned. State highway officials recently told The City Wire that about $700 million of that road infrastructure is along the Interstate 49 spine between Fayetteville and North Bentonville and associated feeder roads.
Erstine said job and population projections for the region indicate continued highway construction zones are inevitable. He said businesses and outside investors often prefer for increased infrastructure to be in place or at lease planned.
“Most do not like to bet on under-developed areas,” Erstine added.
Erstine explained that North College in Fayetteville shows daily traffic counts rose by 800 cars between 2007 and 2014, according to the Arkansas Highway Transportation Department.
“During the last 12 years, there have been typical fluctuations of 10% or less depending on the year. This helps support that North College has continued to be a viable retail corridor over the years … the area just needed the support of a major retailer, like Whole Foods, to kick-start a redevelopment movement,” Erstine said.
Conversely in the Pinnacle Hills area of western Rogers, the early developments like Village on the Creeks were ahead of the infrastructure catching up. He said in that region infrastructure has mostly stayed ahead of commercial development thanks to the foresight of city leaders and area land developers.
After retail made its grand splash in this region in 2006 other sectors began to follow with office buildings and residential. Erstine said the burgeoning single family housing development in western Rogers is also supportive of the prediction that more retail will flow into Northwest Arkansas.
The CBRE agents said city involvement has been huge in recent years. From the $6.3 million Fayetteville flyover to the $23 million Don Tyson interchange in Springdale, the investments have helped open up those areas for future development.
Erstine said the completion of the Fayetteville flyover was important to Whole Foods’ decision to build on North College Avenue. That $2.55 million project is expected to open this summer. Whole Foods will anchor a $10 million shopping center and has also drawn Raisin Cain Chicken, a New Orleans-based restaurant building next door.
Moving north up I-49 it’s clear investors are showing more confidence in Springdale. Wal-Mart’s investment’s are substantial with the new supercenter, fueling station and mini convenience store at Elm Springs Road. Also, a new Neighborhood Market is set to open May 6 at the Don Tyson interchange, and Sam’s Club will soon break ground near the U.S. 412 interchange.
Springdale Mayor Doug Sprouse has said the investments are already boosting the city’s sales tax revenue. Through April the city’s sales tax revenue is up 14.3% over the same period last year.
The city is also widening 56th Street to four lanes from Don Tyson, west of I-49 past the Arvest Ballpark to U.S. 412 and theHar-Ber area. This project is expected to cost about $15 million. The mayor said the work is slated for completion by the end of the year and will provide better access to the ballpark area and beyond when the second phase is completed. It will provide an alternative route to the planned Sam’s Club which is to be located along U.S. 412 or Sunset Street. Sam’s Furniture also is relocating to a new facility along 58th Street between Sunset and Elm Springs Road with visible frontage along I-49.
Sprouse said the city will also widen the interchange at Elm Springs Road later this year to help with heavy traffic flow. Arvest Bank has planned a new branch, Whataburger has staked-out a spot and McDonald’s recently completed its new restaurant there.
North in Benton County there are several large projects underway. One of the most active in new building since the last CBRE report has been the Pleasant Grove Road and Pleasant Crossing area. Cavender’s moved from Springdale to a new $2.55 million building in Rogers at the Pleasant Grove road exit. The Pleasant Crossing retail trip was recently completed and about 90% leased with tenants like Moe’s Southwest Grill, Papa Murphy’s Pizza, Snap Fitness, SuperCuts, A-Loft Nail & Spa and Mattress Firm.
Work has begun on a new Burlington Coat Factory store located across the street at 4325 S. Pleasant Crossing Blvd. The city of Rogers issued the building permit with a value of $3.6 million on April 28. Construction crews are at work on the 60,000 square foot store that will bring up to 100 new jobs to the city.
One mile north along I-49 the largest commercial project in the region is visible along the skyline. Hunt Ventures’ 10-story 225,000 square foot Class A office building is under construction at the corner of Pinnacle Hills Parkway and JB Hunt Drive near the Walmart AMP in Rogers. This project comes on the heels of two other large office buildings constructed in the past few years and operated by Hunt Ventures. Last year the group finished a 60,000 square foot office building near the Walmart AMP.
Other commercial projects underway in the Pinnacle Hills area of Rogers include Promenade Point Apartments, Pei Wei and Uncle Maddio’s Pizza.
In Bentonville near the I-49 corridor, the Walmart Neighborhood Market and fueling station recently opened on Central Avenue and Martin Luther King Boulevard. The retailer has a grocery store planned for downtown Bentonville and one along North Walton Boulevard, close to exit 93 on I-49. This comes on top of the Pick-up Grocery facility completed near South Walton Boulevard since the last report.
Other commercial projects underway in the city near I-49 include Landers McClarty dealership on Moberly Lane, Wal-Mart supplier offices for Campbell and Jarden, and the Scott Family Amazeum, a $28 million children’s discovery museum located on J Street at the entrance to Crystal Bridges Museum of American Art.
A $53 million road improvement and new interchange known as the 8th Street extension is part of the $750 million in road infrastructure in the region and slated for construction next year. This project has been nine years in the works but the city of Bentonville, the state and Wal-Mart Stores Inc. are in the midst of extending 8th Street from Walton Boulevard with five lanes all the way to Interstate 49 with an interchange located north of Exit 86 and NorthWest Arkansas Community College.
Bentonville Mayor Bob McCaslin said Wal-Mart is kicking in $15 million toward the work, and another $32 million came from a federal earmark in 2005 gleaned from then U.S. Rep. John Boozman, R-Rogers. The city will cover the balance.
Bennett and Erstine said they expect commercial development to continue at present-day levels for the near future.
“While historically low interest rates have certainly helped, most of what we are seeing would have occurred regardless of a moderate increase in interest rates as several projects are cash intensive. However, with the local banking community being so competitive, we’ll likely see speculative building increase,” Erstine said.
CBRE recently reported multifamily vacancy rates between 1.5% and 2% in Rogers and Bentonville. With recent job growth announcements and population growth projections, Erstine and Bennett also expect to see more multifamily housing in Benton County in the next 18 to 24 months.