As the building boom rolls on in Northwest Arkansas, the region can feel like one giant construction zone at times. Red dirt and new developments appear seemingly overnight, to say nothing of the perpetual project to widen Interstate 49 from Fayetteville to Bella Vista.
But when it comes to commercial development, there’s not a more concentrated area right now than the vicinity surrounding the Pauline Whitaker Parkway roundabout, west of Interstate 49 in Rogers.
The parkway — named for the philanthropist whose late husband Don Whitaker managed the first Wal-Mart store in Rogers — has, in developer’s jargon, “unlocked” hundreds of acres near the interstate for development. It spans from Champions Drive at the front gate of Pinnacle Country Club eastward across I-49 to the Perry Road interchange at the Pinnacle Hills Promenade.
Construction on the $3.28 million parkway and roundabout began in June 2007 and was substantially operational one year later. The first phase of construction had “stub-outs” for the north and south legs of the roundabout to tie into Pinnacle Hills Parkway at a later date. That, too, is now finished. The southern portion — connecting from the roundabout to West Pleasant Grove Road — was declared complete on March 18, 2016.
New roads offer potential traffic relief for drivers. But for developers, they offer opportunity. Restaurants, banks and other service businesses have followed to Whitaker Parkway, and more are on the way.
“That roundabout is the center of gravity for development right now in Northwest Arkansas,” said Lance Beaty, president of Beaty Capital Group Inc., a privately held Fort Smith-based investment group primarily focused on real estate investments.
Beaty has gained the approval of the Rogers Planning Commission to develop a 37,500-square-foot office park on South Pinnacle Hills Parkway. He is one of several developers and commercial real estate executives who spoke with Talk Business & Politics-Northwest Arkansas Business Journal to give updates on current projects in the Whitaker Parkway vicinity, or share details of developments in the pipeline.
Here’s a roundup of the particulars, broken into areas north and south of Pauline Whitaker Parkway.
• To the South
One of the success stories of the Pauline Whitaker vicinity so far has been Country Club Plaza, a $20 million Class A office and retail development completed last year at the southwest corner of the roundabout.
A three-story, 86,000-square-foot office building and a single-story 21,489-square-foot retail building are each about 90% leased. The project was developed and leased by the Northwest Arkansas office of Colliers International.
“Tenants of the retail building are reporting strong sales and good traffic,” said Steve Lane, managing director of Colliers’ NWA office.
Lane said easy access to the interstate is helping drive development in the area.
“I think you will really start to see this area being built out in the next two years,” he added.
One of the largest undeveloped tracts available between Pauline Whitaker and West Pleasant Grove Road belongs to Bill Adams. It’s an approximately 50-acre tract dissected by South Pinnacle Hills Parkway. Colliers International is marketing the land to the east of the road. Sage Partners is listing the property to the west of the road.
The area that catches the most attention on Whitaker Parkway is, of course, The District at Pinnacle Hills. Whisinvest Realty of Little Rock is leading development of the 54-acre commercial project, which will include a mixture of retail, office and restaurant space, as well as a boutique hotel. Construction began in earnest last year. Two retail buildings have been completed, and a 31,885-square-foot office building is scheduled for completion this fall.
Burke Larkin, a senior vice president who heads up Whisinvest’s local office in Rogers, said the initial site plan has been updated since construction began. The long-term design now includes a multifamily component at the eastern edge, near the Razorback Regional Greenway. It will ultimately make The District at Pinnacle Hills a “work-live-play” community. He said aspects of the development are being guided by the same facets of other developments in the Whitaker Parkway area.
“We want to drive as much traffic to this area as we can,” Larkin said. “We’re just a small part, but we’re all after the same thing, and that’s creating the destination of Pinnacle Hills.”
The District will also include an Arvest Bank location at the southeast corner of Whitaker Parkway and J.B. Hunt Drive. The bank paid $2.3 million ($22.96 per square foot) to Whisinvest for the land last year. Arvest Benton County President Craig Rivaldo said construction on a 24,000-square-foot building is still a few months away. When it’s complete, the bank will vacate its nearby Rogers branch at Village on the Creeks (5201 W. Village Parkway).
Springdale-chartered Legacy National Bank was the first bank to have a presence on Whitaker Parkway, opening a banking center in 2014.
Beaty’s project is called Beaty Office Park and will include three office buildings — one at 7,500 square feet and two at 15,000 square feet each. The site is west of the South Pinnacle Hills Parkway/West Highland Knolls Road intersection. The buildings will be built in close proximity to the headquarters of Ernest R. Coleman (ERC), the multifamily and commercial real estate company headed up by Rob Coleman. ERC built its new headquarters there last year and relocated from Fort Smith.
Beaty said he bought the land (three commercial lots totaling 4.2 acres) as a speculative land purchase, closing the deal in December 2015 for $565,000, several months before the South Pinnacle Hills Parkway connector road was finished.
“It’s good when you’re right,” Beaty joked. “I’ve been wrong plenty of times, too. I’ve had those two-year holds turn into five years before.”
Beaty said he’ll likely apply for his building permits in September. The first building out of the ground will be the single-story, 7,500-square foot building that fronts South Pinnacle Hills Parkway. The two 15,000-square-foot buildings, both two story, will be built later.
Clinton Bennett, first vice president with CBRE Inc. in Fayetteville, is working with Beaty on the project. He said the first building is a build-to-suit for a financial services group.
“His [Beaty’s] thought, and I agree, is that there are product types that haven’t been delivered in our market,” Bennett said. “There continues to be opportunity, but there’s a balance of what a project will cost and what the end user will pay for it. That’s a fine line you have to walk. Between land costs, development and construction costs, you reach a point where opportunities aren’t sustainable for tenants.
“We’re hitting a new level of rent that we’ve not seen in this market before. I don’t think that trend is going to change because there’s going to continue to be so much demand.”
Bennett also emphasized the proximity to the interstate as an important factor in the Whitaker Parkway development.
“The one thing you absolutely cannot underestimate in this market is the importance of the proximity to Interstate 49,” he said.
At the northeast corner of South Pinnacle Hills Parkway and Highland Knolls, Joshua Bryant, who works for JC Construction of Rogers, has successfully petitioned the city to rezone a 2.48-acre parcel from agriculture to residential office. The property is owned by the nearby Rogers First Church of the Nazarene. Bryant said he would likely have project details finalized by the end of July, but declined to comment further.
In addition, a $7.75 million senior living community called Grand Brook Memory Care of Rogers at Pinnacle Hills is being built at the northwest corner of West Pleasant Grove Road and South Pinnacle Hills Parkway. Constant Care Management Company of Plano, Texas, is the developer.
• To the North
A major player in the Whitaker Parkway development continues to be Sage Partners, which was reorganized last year with the merger between the firm and Hunt Ventures of Rogers.
The firm has structured a number of ground leases in the area for restaurant tenants including Chuy’s, Pei-Wei and most recently Chick-fil-A, and sold off a 1-acre parcel earlier this year to Arkansas-based Tacos 4 Life. Sage Partners has also ground-leased a 19,000-square-foot retail center at the northeast corner of the roundabout, anchored by Pinnacle Bar & Grill.
Sage Partners still owns roughly 50 acres in the area, but that number is expected to decrease later this year. Tom Allen, an executive vice president and principal of the company, said the 15.8-acre site at the northwest corner of the roundabout — known as the White Barn Property — is under contract.
“In a couple of months we’ll have some more information,” Allen said. “It’s for a mixed-use development, with Class A amenities and offerings.”
The crown jewel of Sage Partners’ portfolio in the Whitaker Parkway vicinity is the 10-story Hunt Tower at 5100 W. J.B. Hunt Drive. The first tenant moved in just before the end of the year in 2015, and the 230,000-square-foot building is now about 77% occupied. Allen said the company doesn’t have any immediate projects on the table for the Whitaker Parkway region.
“Every day we look at what the market can absorb and what the demand is,” he said. “We think the area has a good reputation now, given the proximity to the interstate.”
To the west of Hunt Tower, across South Pinnacle Hills Parkway, there are two projects in development in the Pinnacle Hills Office Park area. Northwest Arkansas Pediatrics, a Medical Associates of Northwest Arkansas (MANA) clinic, is building a 14,200-square-foot building to house its full-service pediatric clinic. MANA will also share the building with Ear, Nose and Throat Center of the Ozarks.
“We have seen an increase in demand for pediatric care in Benton County,” said Dr. Brent Silvey, president of Northwest Arkansas Pediatrics.
The group has operated a clinic in Lowell with six exam rooms since 2010. The Lowell location will close when the larger Rogers facility with 15 exam rooms opens early next year. Milestone Construction of Springdale is leading the development, which will be MANA’s first clinic in Rogers.
Behind that construction site, developer John Schmelzle of Rogers is building an 18,800-square-foot single-tenant office building. It will serve as the global headquarters for consumer goods company Cheyenne Products. Hart Cone Construction of Little Rock is the general contractor. The $3.7 million building is scheduled to be completed by December, and Cheyenne will relocate from its existing office further south on Walsh Lane.
“We had an office user who was growing out of their old space on Walsh Lane, but wanted to remain in the Pinnacle Hills area,” Schmelzle said. “They didn’t want to be in a tower, and surprisingly there was little to no space available for this size floor plate. We were able to make a deal work.”
As other projects make their way through the city planning pipeline, Allen said a busy activity level is good for everyone.
“The developers here are all experienced and know what they’re doing,” he said. “They know how to get a quality building built and everyone complements each other out here. We’re glad to see the Country Club Plaza did so well. We know what Burke is doing is going well. There are some other developments going on. It’s going good for everybody. It’s a good place to be right now.”