In The News

Judy Shelley Gets in Gear To Make 2011 Heart Ball a Success

Whether she’s cycling or sailing with husband Michael, spending quality time with their three children and 11 grandchildren, organizing large dinner parties or volunteering with local organizations or her church, Shelley stays occupied both physically and mentally. When she and Michael were approached to chair the 2011 Central Arkansas Heart Ball, themed “Young at Heart,” the couple signed on without hesitation. As co-chairs, the Shelleys are responsible for helping make the Heart Ball a hit.

“Our primary role was to recruit the committee of volunteers,” Shelley said. We have pulled together a strong group from the community to ensure this year’s ball is a success. In addition, it is our responsibility to recruit the 2011 corporate chair, who will serve as the 2012 Heart Ball co-chairs. We turned to our good friends Hugh and Michelle McDonald for this.”

This year’s ball will begin at 5:30 p.m. on Saturday, Feb. 19, at the Statehouse Convention Center. Guests will enjoy a reception and silent auction, followed by dinner, sweetheart presentations, a live auction, awards and dancing to The Rockets. Dinner will be a pepper-crusted filet with brandy demi glace and wild mushrooms, served atop creamy polenta. According to Shelley, the décor will take on rich red and eggplant tones, accented with splashes of orange and bright green. “This will set the canvas for five beautiful, monochromatic arrangements by Tipton & Hurst,” she added.

The Heart Ball is far more than just another volunteer project for Shelley. Since both her grandfather and father died of heart attacks, heart health is vitally important to her. Supporting American Heart Association (AHA) programs to spread awareness and prevention of heart disease are at the top of her philanthropic to-do list.

Born and raised in Decatur, Tex., Shelley graduated with a BBA in accounting from the University of North Texas, where she met Michael. “We met in an English class in college,” said Shelley. “It was an advanced writing class that I took thinking it was ‘normal’ sophomore English—big mistake! I am a math girl and do not care for English. Michael was in the class on purpose; he loves to write. I spotted him right away and cast my net, though I let him think he was doing the chasing. We were engaged a couple of months later and married eight months after we met.”

In 2004, Michael was recruited by U.S. Bank, and he and Judy moved from Houston to Little Rock, where the Texans settled easily into Little Rock’s embrace. “We love Arkansas and know we are home,” said Shelley, who is a CPA at Flake & Kelley Commercial, where she serves as chief financial officer.

In addition to her involvement with AHA, Shelley is also a volunteer and board member for the Red Cross. “Michael and I ran the financial support portion of the service center here during the Hurricane Katrina aftermath,” she said. “We are active members at Immanuel Baptist Church and sing in the choir. Michael is past chair of both the Arkansas Symphony Orchestra and Baptist Health Foundation, and we are very involved with both organizations.” to view the full article written by Amanda Hoelzeman.

Movers & Shakers – Arkansas Business

Maggie Hogan is a new certified property manager at Flake & Kelley Commercial in Little Rock. Hogan’s primary focus is managing office buildings and mixed-use properties. to view the full article.

Downtowns Get a Fresh Lease, Suburbs Lose Office Workers to Business Districts, Reversing a Post-War Trend

As the market for office space shows signs of recovery, the suburbs are getting left behind. A succession of mayors have revitalized downtown Houston, above, persuading companies like BG Group to relocate there from the suburbs. For decades, the suburbs benefited from companies seeking lower rent, less crime and a shorter commute for many workers. But now, office buildings in many city downtowns have stopped losing tenants or are filling up again even as the office space in the surrounding suburbs continues to empty, a challenge to the post-war trend in the American workplace and a sign of the economic recovery’s uneven geography.

Even some forlorn cities are showing signs of revival. In Detroit, Health insurer Blue Cross Blue Shield of Michigan next spring will start moving thousands of suburban employees into the downtown.

Like many cities, Detroit offered an incentive package, including giving Blue Cross employees free annual passes to a public-transit system that connects its downtown buildings. Another motivation: to have more people in one place as the insurer adjusts to the health-care overhaul.

Vacant office space in many downtown areas is filling up while their suburban counterparts continue to lose tenants. Kelsey Hubbard discusses the new trend with WSJ’s Anton Troianovski.
“We believed having everyone together would very much benefit us when we had to make quick changes as a result of national reform,” Blue Cross vice president Tricia Keith said.

Statistics show that suburban office markets were hit harder by the recession than their downtown counterparts and are recovering more slowly. The national office vacancy rate in downtowns was 14.9% at the end of the third quarter, the same level as in early 2005—while the suburban vacancy rate hit 19%, 2.3 percentage points higher than in 2005, according to data firm Reis Inc.

In the first three quarters of this year, businesses in the suburbs vacated a net 16 million square feet of occupied office space—nearly 280 football fields—while downtowns have stabilized, losing just 119,000 square feet.

Things were different after prior recessions. As commercial real estate recovered in 2003 and 2004, office space in the suburbs filled up faster than in downtowns, Reis’s data shows. For much of the 1990s, as businesses abandoned downtowns to be closer to their suburban work forces, suburban office buildings tended to be more occupied. But since early 2009, the opposite has happened in major metropolitan areas including Houston, Las Vegas, Miami, Pittsburgh and Phoenix—occupied office space increased downtown but dropped in the suburbs. Suburbs have been clobbered harder by a recession that hit businesses that are often based there, including mortgage lenders and home builders. Downtowns, on the other hand, have benefited from being home to less hard-hit sectors of the economy, such as government, and companies that have recovered more quickly, such as big banks.

To be sure, most American office workers continue to work in the suburbs—home to nearly twice as much office space as in central business districts, Reis says. And many real-estate developers largely expect suburban office markets to recover when job growth strengthens. But some scholars, urban advocates, and developers believe a secular shift is under way in the American workplace. “Young people don’t want to be out on the fringe…and as people are beginning to figure that out, it’s beginning to get factored into office relocations,” said Christopher Leinberger, a real-estate developer and a visiting fellow at the Brookings Institution. “It’s a major structural trend that we in real estate are going to have to adjust to.” Tale of Two Markets As the economy recovers, the suburbs, in many cases, are getting left behind. The metropolitan areas below have lost occupied office space in the suburbs since early 2009 while gaining occupancy downtown.

In suburban Los Angeles and Orange County, Calif., the amount of occupied office space has dropped by a combined 12.4 million square feet from January 2009 to the end of September 2010, or more than 5% of the entire inventory. The pain was much less severe in downtown Los Angeles, which lost 659,000 square feet over the same time period, or 1.8% of the total inventory, Reis data shows.

Detroit’s suburbs have lost more than two million square feet of occupied space since early 2009, 3.4% of its inventory, while the hard-hit downtown has lost just 42,000 square feet, just 0.3% of its total.

Progress made by cities from Denver to Pittsburgh in revitalizing their downtowns in the last decade also has played a role. New retail, nightlife and condominium projects have helped attract some tenants who had long been based in the suburbs.

In Chicago, UAL Corp.’s United Airlines is leaving its one-million-square-foot, 1960s-era office park near O’Hare International Airport for the tallest downtown office building, the Willis Tower.
In Houston, British energy company BG Group PLC is moving its U.S. headquarters from the suburbs to 164,000 square feet in a new skyscraper downtown. The company surveyed its employees and found downtown was a more convenient commuting destination, policy and corporate-affairs vice president David Keane said. BG also saw a recruitment edge thanks in part to the downtown-revitalization efforts of a succession of Houston mayors. “When you’re looking at new graduates coming into Houston, I think they want to be located downtown,” Mr. Keane said. Just this year, the country’s biggest office market, Manhattan, had gained 1.8 million square feet of occupied space as of September. Meanwhile, New York’s suburbs, from northern New Jersey to Westchester County, Long Island and Connecticut’s Fairfield County, continued to lose occupancy—to the tune of a combined 1.4 million square feet, Reis data shows.

That difference has been felt by big landlords such as SL Green Realty Corp., a major Manhattan skyscraper owner that also owns dozens of office buildings in New York’s suburbs. “Whereas New York is recovering, I’m not sure most of suburban America is recovering,” SL Green Chief Executive Marc Holliday said at the company’s annual investor meeting last week. In Denver, a light-rail system has contributed to a more vibrant downtown. Colliers International broker Brad Calbert, who helped arrange moves by energy companies SunCor Energy Inc. and Black Hills Corp. from the Denver suburbs to downtown, said, “There is a cultural transition going on.” For real-estate investors, the difference between suburban and downtown markets is stark. Downtown office buildings are sparking bidding wars especially in major cities like New York and Washington D.C. Meantime, many suburban office parks continue to languish on bank balance sheets, attracting few buyers. “We’re gravitating toward the well located, well leased sites mostly in the traditional urban areas,” said a spokesman for one of the country’s biggest real-estate investors, the California State Teachers Retirement System.

Harkins living lifelong dream at Flake & Kelley

Jay Edwards

It is not unusual for children to have hopes and dreams about their futures. Astronauts, firemen, and sports heroes are just a few of the careers where young boys might see themselves as adults. But for James Harkins, for as long as he can remember, to work in real estate has been his goal.

I have known James all his life, having started working for his dad Tommy on the bond floor at T. J. Raney and Sons back in 1980.

“When I was seven I knew I wanted to be a real estate broker,” Harkins told me from the offices of Flake & Kelley, on the third floor of Metropolitan Tower in downtown Little Rock.

It didn’t take him long to start making his real estate dream a reality. After graduating from Catholic High School, he headed to Conway and Hendrix College. While there he would land an internship at The Hathaway Group in Little Rock.

Two years later he transferred to the business college of the University of Arkansas in Fayetteville, so he could major in Finance and Real Estate. While there he got his real estate license and worked part time in residential sales, while going to school full time.

“It’s almost impossible to sell houses as a full time student,” Harkins says. “People would call me when I was taking tests and want to see a property. So I didn’t do much business but I learned a lot about market values and contracts.”

After graduating he moved back to Little Rock and went to work for Bailey Properties, where he trained agents on a new software program.

It was during this time that Harkins met and developed a friendship with John Flake. “We were working out at the same place and just hit it off.”

His mother saw an ad one day in the paper for a property manager and told her son about it. He sent his resume and they called him in for an interview. The company was Flake & Kelley.
“I was interviewing with Hank Kelley and after we talked a while he said he thought I sounded more like a candidate for a junior broker position, which sounded great to me. He said ‘Let me go get John,’ and before I could say anything he had gone and was back. John looked at me, kind of surprised and said, ‘What are you doing here?’

He was offered the job and accepted. “I was 22,” he says. “And began doing what I’d always dreamed of.

Harkins says he works for, “The two best real estate brokers and property managers in the state. Today, among other projects, he handles the leasing for Metropolitan Towers.

“I enjoy the business and practical standpoint of commercial real estate. It’s not emotional. I love the numbers and being able to evaluate and present the facts, so that an investor can make an educated decision. And I like seeing a deal come together and being able to move on to the next one.”

He has been involved in industrial, office and some retail leases here and there. He says lately his focus has been on getting the word out about the space available in Metropolitan Tower.
“I’m excited about that and am really working on getting some increased activity,” he says.

One reason for the focus on Metropolitan is because Hewlett Packard recently moved from the Tower to their headquarters in Conway. HP was a 43,000-square-foot tenant. “We knew they were temporary, a two-year tenant, but when they left it gave us that space, on three floors, that needs to lease. That has been a main focus for me,” he says.

The Faulkner County economy is benefiting from Hewlett Packard and Flake & Kelley are benefiting from that area’s growth as well. Harkins says they have a mini storage facility there, which was one of the first deals he put together. “I’m really thankful that we did that deal when we did it. It’s in the heart of Conway.”

While the commercial market has been a challenge the last 18 months, Harkins says Central Arkansas is fortunate because it has not seen the steep declines that other parts of the country, like Las Vegas, California, Atlanta and even Northwest Arkansas have undergone.

“It’s because we didn’t have as far to fall,” he says. This part of the state has always been steadier in its growth patterns; when the economy took its big downturn, we flat lined. We didn’t have the big drop because we didn’t have the big peak.

“I think we are really blessed here because of that. What I believe we will begin experiencing now will seem like a windfall, when we start to see any deals come back, whether in leasing, brokerage, investment or development. I really see us coming back on a steadier, stable curve. That is the Central Arkansas nature.”

Through all of the challenges a major recession brings, Harkins says he is still having fun. “It is not without stress, but everyday I come into work there is something different that occurs, something I haven’t encountered before. So there is always something to learn. It keeps it exciting. We really have a great team here. We know what each of us is doing and if there is an opportunity to help another then we are going to do it.”

James is married to the former Amy Kemp, and tells that it wasn’t only real estate he was focused on at the early age of seven.
James was seven and at the lake in Hot Springs when he first saw Amy and asked his friend, Seth Ward, who she was. “That’s Amy Kemp,” Seth said. “Well I’m going to marry her,” James told his friend. It was a defining year.

Today James and Amy are parents to a four-year old son named Alex. He’s doing what he loves and married the girl he loves; which proves it’s never too early to have a plan.

“This is what I want to be doing,” Harkins says, “what I’ve always wanted to do.” He’s known it for a long time.

Little Rock Again Named Nation’s Fourth Strongest Economy by Brookings Institution

The Brookings Institution’s MetroMonitor, a quarterly, interactive barometer of the health of America’s 100 largest metropolitan economies, has ranked the Little Rock region the nation’s fourth strongest.

The Brookings Institution ranked the 100 largest metros by averaging the ranks for four key indicators: employment change, unemployment change, gross metropolitan product, and home price change. Employment was measured by the change from the peak quarter for each metro to the second quarter of 2009. The peak was the quarter in which the metro had the most jobs during the past five years. Unemployment was ranked by measuring the percentage-point change from the first quarter of 2009 to the second quarter of 2009. Gross metropolitan product was measured from the peak quarter to the second quarter of 2009. And the ranking of home prices compared the second quarter of 2009 to the previous quarter. The employment data were provided by Moody’s, the unemployment data were collected from the U.S. Bureau of Labor Statistics, and the home price index came from the Federal Housing Finance Agency.

According to the report, the Little Rock region achieved the following rankings:

– Job Growth (Since Peak) – 11
– Gross Metro Product (Since Peak) – 24
– Unemployment Change (Year over Year) – 7
– Home Price Change (Year over Year) – 11

As reported by Business Week, “the economy in Little Rock, the state capital, has remained strong though the local unemployment rate has been rising… Employment in the Little Rock metro peaked in the first quarter of last year. Gross metropolitan product in the second quarter was down just 2.8% from the peak in the third quarter of 2008. Home prices grew 3% in the second quarter compared with the same period a year earlier. And the unemployment rate in June was 6.6%, up 2.1 points from a year earlier.”

The MetroMonitor examines trends in metropolitan-level employment, output, and housing conditions to look “beneath the hood” of national economic statistics to portray the diverse metropolitan trajectories of recession and recovery across the country. The aim of the MetroMonitor is to enhance understanding of the particular places and industries that drive national economic trends, and to promote public- and private-sector responses to the downturn that take into account metro areas’ unique starting points for eventual recovery.

Read the Full MetroMonitor Report