Pinnacle Matures, Poised for Most Ambitious Building Yet

Pinnacle Hills in west Rogers continues to develop as the top-flight commercial zone in Northwest Arkansas, and by the end of next year, the most ambitious building yet is expected to loom over Interstate 49.

Hunt Ventures is about to begin construction on its 200,000-plus-SF, 10-story office building at the southeast corner of J.B. Hunt Drive and Pinnacle Hills Parkway. Though the list of clients that have pre-released office space there has not been made public, Advantage Sales and Marketing, a California-based vendor, has been confirmed as a lead tenant.

The national branding company is moving from its office at 1301 S.E. Eighth St. in Bentonville to Pinnacle Heights 1, Building 2, the sister building to Pinnacle Heights 1, Building 1, a 60,000-SF office complex that houses Wal-Mart Stores Inc. suppliers Kimberly-Clark Corp. and Unilever.

John George, executive vice president at Hunt Ventures, would not comment on specifics of the new tower, or the activity of suppliers who lease Hunt buildings, but he did speak to the overall interest in the area as a welcome sign that “The Golden Mile” has truly come into its own and now has enough amenities to anchor sustained growth.

“Pinnacle Hills is approaching a more mature stage for tenants wanting to be in close proximity to shopping, dining, groceries and drug stores, a premium medical facility, the largest convention center in the area, the Malco Cinema and now the new Walmart AMP,” he said. “As Northwest Arkansas moves past the 500,000 mark in population, the entire area, especially Pinnacle Hills, will probably begin to see interest by national and regional dining and shopping choices afforded to larger metropolitan areas.”

As the Pinnacle Heights tower rises, other commercial properties will sprout up as the area continues to build out southwestward toward the assortment of high-end subdivisions in the area: Pinnacle, Biltmore, Hyde Park, Shadow Valley and Liberty Bell, among others.

A grading permit has been issued for Pinnacle West, a 10-acre residential-office complex just north of Pinnacle Country Club; a 31,000-SF, three-building retail-restaurant complex by Hunt Ventures is underway at the northeast side of the roundabout at Pauline Whitaker Parkway; and the LaFrance family is building an 88,000-SF office building with adjacent service and retail, called Country Club Plaza, on the southwest side of the roundabout.

If it sounds like a real estate explosion, it is. But Ramsay Ball, executive broker and principal at Colliers International, and a leasing agent for Country Club Plaza, said the development of Pauline Whitaker and the surrounding area will be controlled chaos.

Only four landowners — Hunt Ventures, Joe Whisenhunt, Chad Hatfield and the LaFrance family — have property in the immediate area, and all four of them know what they’re doing.

“Everyone is well-funded and positioned to build when the time is right,” Ball said. “This is going to be rational, not speculative, development. There’s a long cycle of demand.”

Like George, Ball would not disclose the names of potential tenants, but he did say that moving forward the Pinnacle area would continue to attract companies of the highest caliber, and increasingly companies that do not yet have a presence in Northwest Arkansas.

The end result, Ball predicts, is that in about 10 years the Pauline Whitaker intersection will be completely built out. Looking at current and future indicators, it all makes sense, Ball said.

The Pinnacle Hills Promenade is essentially full, but the public’s appetite for retail has not yet been satisfied. In terms of offices, as long as Walmart is located here, there will always be a demand for both Class A and Class B space, and companies are now demanding floor plates of 10,000 SF and up.

And in terms of sheer growth, both the public and private sectors are trying to keep pace with the population. The Northwest Arkansas Council, using figures from the U.S. Census Bureau, estimates that as many as 23 people move to the region each day. Pinnacle and Pauline Whitaker, as well as places across the region, will have to grow to meet the pressure of that influx, Ball said.

 

Market Forces

While the latest surge in Pinnacle properties is being spurred by private dollars, Hunt, Whisenhunt, Hatfield and LaFrance are getting a big assist from the public sector. The city of Rogers is going to extend Pinnacle Hills Parkway from Pauline Whitaker to Pleasant Grove Road, and is also going to extend 28th Street Place west to Pauline Whitaker, among other important road improvements.

Pinnacle is also the beneficiary of the overall market. According to the Arkansas Realtors Association, Benton County continues to perform at the highest level in the residential sector. Through April, 1,480 homes were bought in Benton County, making it the hottest market in the state for the first four months of the year.

Meanwhile, real estate consultancy Xceligent Inc. is reporting an overall regional commercial vacancy rate of 9.3 percent, well below the national average of 15.6 percent. And in west Rogers, the overall commercial vacancy rate has plummeted from the first quarter of 2013 to the first quarter of this year, from 16.1 percent to 11.7 percent, according to Xceligent.

As infrastructure and market forces continue to drive growth in Pinnacle, the area will continue to cater to what it has always catered to — high-end office and retail. While state-based companies might want to locate in Fayetteville, the big national players crunch the numbers and come to the conclusion that Rogers and Pinnacle Hills is where they need to be, according to Ball’s colleague at Colliers, Steven Lane.

As reported by the U.S. Bureau of Labor Statistics, Northwest Arkansas only has about 60 percent of the lawyers and accountants and about 83 percent of the health care workers needed for a region of this size. As they and others continue to be recruited to the area, those who espouse the Pinnacle way of life will, in turn, recruit them to west Rogers — a process that’s getting easier by the day.

In the past, it was typical for a mid-level executive to come here, work for Walmart or a supplier, stay for a few years, and then head out for the next opportunity. But that trend has gradually changed.

“The pie is growing,” Ball said. “More and more people want to stay once their tour of duty is over.”