At first glance, it may seem like the basis for a television sitcom. A real estate magnate leaves the firm he established 40-something years ago to work for his daughter, who just started her own real estate company.
The scenario isn’t being developed for Hollywood — at least not yet — but it is playing out in Arkansas.
In May, John Flake, founder and chairman of Little Rock-based commercial real estate firm Flake & Kelley Commercial, left the company. He immediately went to work for one of his two daughters, Jessica Flake Dearnley.
Dearnley worked for Flake & Kelley for eight years and spent 17 years working in Northwest Arkansas before returning to her native Little Rock in October 2019, when the company announced she was relocating to the real estate firm’s Little Rock headquarters. Dearnley previously managed the firm’s Northwest Arkansas office in Springdale as the principal broker, partner and executive vice president. She joined the Little Rock office Nov. 4, 2019, to work alongside her father, she said, before ultimately leaving in March to launch her own business.
It’s named Flake & Co., the name Flake used to launch his real estate development business in 1979. This time, though, the child is in the lead of the business venture. Dearnley is the principal broker and CEO. The parent is on board to assist. Flake described his role as an adviser.
It’s a real role reversal between the two generations, and Flake is excited to see his daughter in a position traditionally dominated by men.
“She fits it to a ‘T,’ and she’s proven that,” the 72-year-old Flake said. “I think she’ll be a true pacesetter. Not just in the Arkansas industry, but regionally and nationally. Because of her intelligence and drive and interest in the business.”
Before joining her father’s company in 2012, Dearnley was a consultant for Frost PLLC and Chambers Bank. Before that, she was chief operating officer for Midwest Mall Properties, a partnership between Flake, Doyle Rogers and Sam Mathias. The trio purchased the Northwest Arkansas Mall and malls in Oklahoma City and Colorado Springs in late 2006 for about $400 million.
Dearnley earned her MBA from the University of Miami in 2001, became a licensed Chartered Financial Analyst in 2008, earned her master’s degree in accounting from the University of Arkansas in 2010, and became a Certified Public Accountant in 2011.
Dearnley is also a Certified Commercial Investment Member, an elite designation that denotes expertise in the disciplines of commercial and investment real estate.
She said one of the better decisions in her professional career was working for her father in the commercial real estate business. Now, her dad feels that way.
“She is one of a kind in her abilities, and this is an enormous opportunity for me to work with her,” he said. “We’re enjoying it a lot.”
The Flake family has a long history of involvement in Arkansas real estate. John Flake’s father, Leon Flake, and a business partner started one of the first real estate companies in Little Rock in the early 1930s. His brother, Dickson Flake, who died on June 30 at age 81, started his own real estate business in 1971. That firm is now known as Colliers International Arkansas, the state’s largest commercial real estate firm.
“My brother Dickson and I had been very involved in Jessica’s decision to start this company,” Flake said. “He was extremely enthusiastic and encouraging about it. If [the family business] would have ended with me, well, we’ve had a good run since 1932. We want to continue that run, and that’s what Jessica is doing. Dickson and I, we felt like we owed Jessica a debt of thanks for that.”
John Flake’s legacy in the industry is cemented. He was just 35 when in 1983 he announced the development of what is still considered his signature project — a 40-story building in downtown Little Rock.
Known initially as Capitol Tower, it was the state’s tallest building when it was completed in 1986. Now known as Simmons Bank Tower, it is still the state’s tallest building.
Flake also developed several corporate office complexes in Arkansas, including Fairfield Communities, Beverly Enterprises and Acxiom Plaza. He also completed projects for healthcare institutions, office, retail and multiple energy projects. His client portfolio includes Baptist Health, CenterPoint Energy, Walmart Inc., Dillard’s, Verizon, Acxiom, Entergy and the Electric Cooperatives of Arkansas.
Darnley said continuing the family’s commercial real estate legacy has a particular sentimental value. She is the company’s majority owner in a partnership, but that doesn’t include her father. Without discussing too many details, she said the ownership structure is still being finalized.
Dearnley said working for her father and working with him are different dynamics. They became more involved in projects together through the years, but there’s no substitute for proximity. Flake & Co. opened its office earlier this year at 200 River Market Ave. in downtown Little Rock.
“He tried to involve me more and more on projects, but I was [based] in Northwest Arkansas,” she explained. “John needs someone in the office right next to him. That’s what he’s always had. I could drive to Little Rock for a meeting, but then I wasn’t there the next day.
“The collaboration between the two of us is so different when we are in the room together. The energy is amplified.”
Dearnley’s partner and co-founder at Flake & Co. is Thomas Schmidt, who also previously worked at Flake and Kelley Commercial. Flake & Co. has secured six new management accounts this year, primarily medical-based. Dearnley said the company has aligned with a real estate investment trust (REIT) for most of the recent activity. Working with institutional investors is sometimes more comfortable in an industry that’s still male-dominated, she said.
“In Arkansas, it’s hard,” she said. “It seems like a lot of the male landlords and property owners are still not ready to work with a woman. They still sometimes want someone that’s going to go turkey hunting with them or play golf and whatnot. Maybe that’s valued more than expertise and education. That’s one of the big hurdles.”
Just as it’s beneficial having her dad as a real estate adviser, Dearnley said having her mom in the office is also helpful. Karen Flake is an established business owner and civic leader in her own right. In the late 1990s, she was the majority owner of Flake-Wilkerson Market Insights. It was sold in 2007 to Market Strategies International, and Flake became vice-chair.
Flake was also president and CEO of Mount St. Mary Academy, an all-girls’ private school in Little Rock, for seven years (2012-2019) and the Arkansas Women’s Hall of Fame inducted her in 2018.
Flake, who is retired, handles the company’s corporate accounting, Dearnley said.
“My sister is a psychologist, and she told me, ‘I can’t believe you work in the office with mom and dad all day,’” Dearnley joked. “But it’s been perfect. I have incredible resources. And they work for free.”
The family connections do not end there. Matthew Dearnley, Jessica’s husband, joined the company in August. He was previously CEO of Flake & Kelley Commercial’s Northwest Arkansas office in Springdale.
“We’re really glad to get Matt down here with us,” John Flake said of his son-in-law. “He will be a great partner.”
Flake & Co. has five full-time employees.
ON THE HORIZON
Dearnley said Flake & Co. is working on two “signature” development projects in downtown Little Rock but did not disclose specifics. COVID-19 slowed those plans, but they are still on the table.
“Downtown Little Rock has not had any [new] Class A office space since John developed Simmons Bank Tower,” she said. “While we hear there is a lot of demand, when I tell tenants what the rent is on new construction, they aren’t ready for it.”
In Northwest Arkansas, where new office buildings continue to pop up with regularity, Dearnley said tenants are paying twice the amount in rent than tenants in the Little Rock market.
“[Little Rock] is a less efficient market,” she said. “We’re not dealing with Walmart suppliers there. But I’m still positive about Little Rock. We are putting together a lot of proposals.”
Dearnley said a medical office project in Northwest Arkansas also is in development. She said both markets are important for Flake & Co.’s growth strategy. The firm will establish an office in Northwest Arkansas when it makes sense, she said.