A notable real estate sale closed Sept. 9 when a group of Arkansas investors purchased the Legacy Building at 401 W. Watson St., a block north of Dickson Street in downtown Fayetteville.
Conway businessmen Todd Ross and Chris Crain and former developer Mitchell Massey of Fayetteville paid $3.2 million for the property, which includes 13 luxury condominiums that remain empty and unsold. The purchase also includes the building’s second floor, an approximately 8,000 SF space, which is built out but not finished.
Danville-based lender Chambers Bank provided financing with a $2.72 million mortgage.
Ross is president and CEO of Preferred Medical, a customer-focused, service-oriented medical supply company in Conway.
Crain is president of Crain Automotive Holdings of Sherwood, which has numerous franchised dealerships throughout the state. He is the son of company owner Larry Crain Sr.
Ross said the improved health of the local real estate market made the purchase an attractive proposition. He noted the redevelopment activity taking place on Dickson Street, specifically the $22 million renovation and expansion of Walton Arts Center, and the recent addition of popular Fayetteville-based restaurant JJ’s Bar & Grill in the former Jose’s property, just a stone’s throw from the Legacy.
Ross and Crain also own residential units in The Dickson, a nine-story, mixed-use building at 609 W. Dickson St., and are frequent visitors to the area.
“We have watched the area develop, and we believe there is a nice resurgence going on in Fayetteville and Northwest Arkansas,” he said. “I’m not implying that it happened just last week, but there’s been a sustained uptick. We believe in what’s going on up there.”
Ross said of the 13 acquired units, five are currently under contract and one just recently sold.
“They are literally flying off the shelf, which is exciting for us,” he said.
The other condos in the 38-unit, seven-story building are independently owned, and are not part of the acquisition. The Grillehouse Seafood & Steaks, a casual fine dining restaurant in the Legacy Building, is also not part of the sale. The 4,377-SF space and restaurant is owned by Clint Boutwell of Oxford, Mississippi.
As for the additional 8,000 SF, Ross is hopeful that it won’t take long to find a tenant for the space.
“If you look at everything that is going on in the area, we are very bullish on being able to find someone that is looking for some nice office space,” he said. “Whether that’s all 8,000 or splitting it up. We think we got in at the right time to have a really good product that the whole market will be excited about.”
The building had previously been owned since January 2013 by The Broe Group, a Denver-based private investment firm. The company took over the distressed asset when it paid $4.26 million to three other banks that helped Springdale lender Legacy National Bank fund the building’s $17 million construction — First National Bank of Fort Smith, First National Bank of Green Forest and Little Rock lender Metropolitan National Bank. (MNB was acquired by Simmons Bank of Pine Bluff in 2013).
“We were around for all that,” Ross said. “Now that everything is healthier, the building is in a great spot. All the warts, if you will, are gone. It’s just a completely different environment now.”
The Legacy Building was built in 2007 and was a notable development of convicted developer Brandon Barber, who pleaded guilty in July 2013 to three charges — conspiracy to commit bank fraud, money laundering and conspiracy to commit bankruptcy fraud — and was sentenced in October 2014 to 65 months in federal prison.
CBRE Northwest Arkansas brokers Clinton Bennett and Sterling Hamilton worked cooperatively to market the property, which sold at auction to Legacy National Bank in November 2008 for $11.25 million. LNB also filed the initial foreclosure on the property in January that year.