LITTLE ROCK — A Colorado real-estate investment group has purchased the Block 2 Apartments in downtown Little Rock and plans to acquire other complexes in the city.
Monarch Investment and Management Group of Denver on Oct. 13 bought the building with 145 multifamily units and 33,000 square feet of retail space, Ron Skelton, an executive with Monarch, said Wednesday.
Skelton declined to disclose the price Monarch paid for the property. The transaction has not yet been filed at the Pulaski County courthouse, according to an employee in the real-estate division.
Monarch owns about 6,500 apartment units in the Midwest, New Mexico and Colorado, Skelton said.
“Little Rock is a place we’ve been considering for a while,” Skelton said. “This opportunity came up and fit within the parameters of what we needed for our investors.”
Monarch is likely to maintain its investment in the apartments for at least 10 years, Skelton said.
Monarch wanted to invest in property in Little Rock because of the city’s diverse economy, Skelton said.
“We like the city of Little Rock and we’d like to expand there,” Skelton said.
Five years ago, Little Rock financier Warren Stephens had a contract to purchase the apartments. At the time,the property included a requirement for low-income housing.
Stephens requested that the low-income residential land-use requirement be dropped.
But the building received annual federal low-income housing credits, which made it mandatory that the building continue to have apartments for subsidized residents, the Arkansas Development Finance Authority said at the time.
The apartments were foreclosed several years ago, said Bart Wickard, a broker for Apartment Realty Advisors, a Dallas investment advisory brokerage firm that focuses on multifamily housing.
Dallas-based Hudson Advisors bought the building out of foreclosure along with other troubled assets, Wickard said.
The low-income housing requirement was dropped in the foreclosure, Wickard said.
“Part of the repositioning for Hudson was to turn over the tenant base,” Wickard said. “[The building] did not have the best reputation. Over the last two years, Hudson made great strides, changing the reputation, changing the marketing strategy and getting the urban professional who wants to have that loft style urban living.”
The apartments are now 96 percent occupied and the retail space is 50 percent occupied, Wickard said.
Business, Pages 25 on 10/27/2011