Missouri-based O’Reilly Development acquires Fayetteville multifamily property for $8 million

A real estate and development firm based in Springfield, Mo., has acquired a renovated Fayetteville multifamily asset for $8 million.

O’Reilly Development Co. acquired the South Creekside Apartments, situated on 8.2 acres at 900 N. Leverett Ave., less than a mile from the University of Arkansas campus.

The five-building development includes 137 units (one-, two- and three-bedroom floor plans) and was built in 1967. Amenities include a tennis court, swimming pool and picnic areas.

Justin Larson, O’Reilly’s multifamily director, said the property was 99% occupied at the time of sale.

ALS Management LLC of North Little Rock was the seller. ALS purchased the development in 2010 for $4.7 million, financed with a $7.7 million loan administered by the Arkansas Development Finance Authority. The funds came through the Neighborhood Stabilization Program (NSP) authorized by the Housing and Economic Recovery Act of 2008.

Larson said it’s one of two properties in Arkansas that received NSP funds, which were intended to redevelop foreclosed properties. ALS Management purchased the apartment complex from The Bank of Fayetteville, which took over the property from Garden Park Apartments LLC in 2008 in a foreclosure.

The NSP funds were partly meant to provide affordable living to those making less than a certain percentage of area median household income. Qualifications were determined the by U.S. Department of Housing and Urban Development, which means that the leasing office can’t make exceptions.

“This is a unique property,” Larson said. “Most income-based properties don’t allow students. We have a lot of graduate students. We have a lot of young families who work. We have a lot of students who do both. We have a handful of veterans. It’s essentially a community for people who work and go to school.”

Larson said O’Reilly assumed the remaining principal — $6.8 million — of the NSP note, and also secured additional private financing to complete the deal.

Most of the major renovation to the property is complete. Larson said O’Reilly will be doing a few light improvements over the next 18 months, ranging from flooring and bathroom improvements on the interior, and grounds improvements on the exterior.

O’Reilly’s development portfolio includes student living, historic preservation, affordable housing and senior living. Larson said the firm is exploring locations to develop a senior living facility in the region.

“We’ve got a couple of promising locations that we’re looking at,” he said. “Northwest Arkansas is full of potential and a great place to hang your hat.”