The residential units of the mixed-use Uptown Fayetteville Apartments+Shops development were sold earlier this week for $55.6 million. The deed was filed Wednesday (Sept. 5) at the Washington County Courthouse.
The deal transfers ownership of 308 units — a mixture of one- and two-bedroom apartments, some with spiral staircases leading to private rooftop decks — to Houston-based Sun Holdings Group, a real estate investment and management company in the apartment, hospitality and commercial retail sectors. The occupancy rate was approximately 95% at the time of the sale.
The purchase price equals $180,520 per unit. The seller was a limited liability company controlled by the developer — Specialized Real Estate Group (SREG) of Fayetteville — and The Carlyle Group, a publicly traded, private equity powerhouse based in Washington, D.C. The LLC paid $3.25 million for the land in November 2015.
Jacob Blatt, president of Sun Holdings, said the acquisition brings the company’s multifamily portfolio to 4,812 units.
“This apartment community is very unique in terms of product quality, micro location and tenant profile,” Blatt said in a statement. “We are confident that this property will continue to serve as the market leader for the entire Northwest Arkansas MSA.”
The approximately 17,000 square feet of retail space remains under the holdings of a partnership managed by SREG.
The first building in the 14-acre development at the southwest corner of Joyce and Steele boulevards, across from Razorback Cinema and Academy Sports+Outdoors, opened in December 2016.
Seth Mims, president and partner of SREG, said all but about 1,800 square feet of the retail space is spoken for. Local tenants include Puritan Coffee & Beer, Burton’s Creamery, MarleyMack Boutique and Juice Palm.
“We have been really picky about only leasing to local operators, and not larger chains,” Mims said. “That is the audience we built Uptown for — young professionals who really desire authentic experiences.”
Modus Studio of Fayetteville designed the pedestrian friendly community, which also has a public art program, a green roof outdoor lounge, co-working space, a strength and cardio studio and a community garden with farmer-in-residence. The apartments are LEED and Energy Star Certified, and the development is adjacent to the Razorback Regional Greenway.
Mims said the sale points to the prosperity of Northwest Arkansas.
“We’re really growing as a region and attracting some major investment,” he said. “It also speaks to the need for more housing and the lack of supply for all of Northwest Arkansas. But, especially Fayetteville it seems. The demand is off the charts, and we’ve pretty well got a housing crisis on our hands. A deal like this confirms that. It makes the appeal of an apartment community purchase very alluring.”
Affordable housing has become a hot topic in Northwest Arkansas, due in large part to the region’s population boom. University of Arkansas economist Mervin Jebaraj told Talk Business & Politics earlier this year that Arkansas leaders need a plan to maintain housing for all income levels, or parts of the state could see uncontrollable housing costs with which fast-growing coastal communities have struggled.