A little more than a year after the land was acquired, the possible tenants of a planned 13-acre office park in Fayetteville are beginning to come into focus.
Kyle Naples, owner of NAPA Construction in Fayetteville, is partnering with Fayetteville commercial real estate firm CBRE to develop the property into a small office park of Class A buildings called Vantage Drive Office Park. Naples paid $1.5 million last summer for the land, situated east of North Vantage Drive, north of the U.S. Postal Service at 1590 E. Joyce Blvd. The purchase price amounted to $2.65 per square foot.
David Erstine, a real estate broker with CBRE in Fayetteville, said four of the development’s five lots are now spoken for.
“Initially, CBRE had the site listed for sale, and through our market research, along with experience of representing both occupiers and buyers, we could see a gap in the market,” Erstine said. “We were pleased to identify a forward-thinking developer with a similar vision and capabilities to see the project through.”
Naples is a longtime developer in the region, and he said that familiarity made his decision to buy the property worth the risk.
Before Naples took ownership, the property had been bank-owned for a decade. He bought the land from Pine Bluff-based Simmons Bank, which took ownership after acquiring Metropolitan National Bank (MNB) of Little Rock in November 2013. MNB recovered the property in 2008 from the previous landowner, Brandon Barber.
Clinton Bennett, a real estate broker with CBRE who represented Simmons Bank in the land sale, said the activity of the Vantage Drive development confirms Naples’ reading about the type of projects needed in the market.
“The demand exists for high-quality real estate projects that can be brought to market at competitive prices,” he said. “The skill and experience of [Naples] and the team that he assembled created an opportunity to deliver finished lots and commercial buildings at a value that has been well-received and that will provide much needed high-quality commercial office space in north Fayetteville. The project has certainly been a lot of fun to work on.”
Naples credited Justin Jorgensen with Fayetteville civil engineering firm Jorgensen & Associates for designing different, sizable lots to market to potential buyers. Naples also acknowledged the work done by the city of Fayetteville to extend East Stearns Street through the property, creating a four-way intersection at Vantage Drive.
“All I did was clean the property up and follow the advice of Jorgensen and CBRE,” he said.
Naples is developing two of the lots himself as build-to-suit projects, and both buildings should be completed by late spring or early summer of 2020. The larger of the two is a 39,278-square-foot, two-story building. He said the entire second floor has been leased and will be occupied by an undisclosed agency of the federal government. The General Services Administration (GSA) is handling the lease details and buildout for the agency.
CBRE is marketing the first-floor space with a lease rate of $25 per square foot.
Naples is also building a 14,226-square-foot building that will be leased entirely by Little Rock-based McClelland Consulting Engineers Inc. The building, designed by Bentonville architect Dave Burris, would replace the company’s existing Fayetteville office at 1810 N. North College Ave., where 53 people are employed.
Daniel Barnes, who has led McClelland’s Fayetteville branch since it opened in 2008, said the company has been looking for a new location for the past three years.
“The size of facility that we need in the area for our needs, there’s just not much availability,” he said. “The [Vantage Drive] site is intriguing to us because of its proximity and access to the interstate and just everything that’s moving to that part of town.”
Barnes said the building size should cover the company’s growth needs for the next 10 years.
Two additional lots bordering the eastern edge of the 13-acre site have sold, both of them related to healthcare. The Neurologic Relief Center in Fayetteville paid $673,840 ($6.33 per square foot) for a 2.44-acre lot. Dr. Katinka van de Merwe, a chiropractor who owns the business, said the new building will replace the company’s existing office, which is in leased space in Colt Square.
Audy Lack, a principal of Miller Boskus Lack Architects in Fayetteville, is the building architect.
“Our [design] plans are in the final stages, but we have been working on them for a while,” van de Merwe said.
Another lot, at 2.05 acres, recently sold for $562,082 to a limited liability company controlled by Drs. Missy Clifton and Kattie Allen. The purchase price equals $6.29 per square foot.
Clifton and Allen are co-owners of Bentonville-based Premier Dermatology, which also has satellite offices in Bella Vista and Fayetteville. Allen said there are plans to build a new facility on Vantage Drive similar to the flagship Premier location in Bentonville.
“We have had a very successful couple of years at our satellite location in Fayetteville and felt that we needed to proceed with building plans rather than leasing long term,” Clifton said. “We plan to continue to serve patients in the Washington County market with a bigger facility more like our flagship location in Bentonville.”
Clifton said she plans to have the Vantage Drive building ready when the company’s current Fayetteville lease runs out in January 2022.
Erstine said even with the recent activity of lease transactions and lot sales, a pent-up demand remains in the north Fayetteville submarket. The vacancy rate among Class A office space in the area is at 3.67% through the first half of 2019. That’s a drop from 4.96% from the second half of 2018.
Typically, a range of 8% to 12% is considered full occupancy.