Arkansas investors buy Bentonville office park for $44 million

Beau Terre, the largest office park in Northwest Arkansas, recently sold for $44.6 million, according to a news release. The purchase price equals $117 per square foot.

The 35-building, 378,493-square-foot office park east of Interstate 49 and intersected by Arkansas Highway 72 in Bentonville was purchased by an investment group, led by George Dunklin, the release shows. Dunklin owns Five Oaks Duck Lodge in southeast Arkansas and is a Ducks Unlimited board member.

The sellers were BH Property Ventures, whose members include Rogers businessmen Patrick Byrd and Alex Baumeister. The sellers retained 9.7% ownership of the property at 1005 Beau Terre Drive.

“We bought it for $24 million,” Byrd said. “We sold it for $44 million. So, in less than about seven years, the return for our investors is pretty significant.”

He said the investors typically hold properties for three to seven years before selling them.

“We hit all our numbers that we wanted to hit…with the sale price,” said Byrd, adding that this was the right time to sell it. “And then we’ll take the money, and we’ll reinvest. And, hopefully, we’ll go do it again.”

Focus Commercial Real Estate, led by Butch Gurganus, represented the seller and will continue to lease and manage the property. Gurganus and Byrd are co-founders and principals of Focus Commercial Real Estate, based at Beau Terre. The firm has 13 staff and manages about 700,000 square feet of real estate.

The buyer was represented by Ted Dickey of Lighthouse Asset Advisors in Little Rock and Marshall Saviers, Aaron Nicholson, Johnny Galloway, and Ethan Fowler of Cushman & Wakefield / Sage Partners, with offices in Rogers and Little Rock.

“The value proposition is simple,” Dickey said in a statement. “Construction costs are up, office vacancy is down and Beau Terre is incredibly well-located. We are five minutes to the new Walmart Home Office, nine minutes to the Pinnacle Hills/Rogers area and directly connected to the bike trails to the north.”

“Beau Terre’s location with 77 acres on a major exit of I-49 gives tenants a competitive advantage,” Saviers said. “Its proximity to the new 350-acre Walmart HQ, Crystal Bridges (Museum of American Art), and downtown Bentonville make it a highly attractive option for companies looking to grow in Northwest Arkansas.”

OFFICE PARK BACKGROUND
According to information provided by Focus Commercial Real Estate, infrastructure work on Beau Terre started in 1996, and the office park was under construction for the next eight years.
In 2004, Dallas-based Behringer Harvard formed a 28-entity tenancy in common to purchase the property for $56.2 million.

Gurganus started working on the property in 2007 while at another firm. Previously, the Trammell Crow office in Tulsa handled its leasing and management. In 2011, the lender foreclosed on the property, and CW Capital in Washington, D.C., was the receiver. Gurganus and his team flew to Washington to retain management and leasing of the property.

In 2014, Sabal purchased a CW portfolio of properties, including Beau Terre. The purchase price for Beau Terre was $21.75 million. In 2017, BH Property Ventures bought the property for $24.4 million. Since then, the office park’s occupancy rate has risen by about 20 percentage points to 84%. It has about 85 tenants, Gurganus said.

“We filled it up, increased the rents, and … increased the tenant satisfaction,” Byrd said. “It’s become a place that people want to go to. You can drive right up to the buildings. It’s nice for those people who want that close to home office…It’s right in the middle of everything. That’s how growth happens.”

Byrd said some improvements and added amenities to the property included renovating the gymnasium, bringing in food trucks, and adding a new fountain and trailhead. Plans for the property include continuing to fill the vacancy, improve customer service and grow the office park community involvement. Renovations are also completed as new tenants move in to meet their needs.

“We’re Arkansas guys and bought this and sold it with the intention of reinvesting more with our groups into Arkansas and beyond, but it’s going to be with a lot of great people,” Byrd said. “That’s important to us.”

Byrd noted the challenges with selling the property and that Dickey was instrumental in seeing the deal completed.

“We feel like it’s a really good opportunity, not only for us but for the whole group,” Byrd said.

An investment group whose members include Byrd and Baumeister also recently sold 13 storage unit facilities in the Oklahoma City metro area for $75 million. Byrd said part of that money is being used to purchase developments and invest in Northwest Arkansas, including Centerton and Pea Ridge.

“We’re looking for more opportunities,” Byrd said. “We like our phone to ring, so when people have some opportunities, we like to know about it.”