WMT Walmart Inc

In the retail behemoth's hometown of Bentonville, Ark., new cosmopolitan amenities have drawn upscale buyers downtown; bike trails and a culinary school.

By Sarah Nassauer 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (March 9, 2018).

Near Walmart's headquarters in Bentonville, Ark., the locals speak fondly of founder Sam Walton's distaste for ostentatious cars and homes -- even as he became the richest man in the world. His disdain ran so deep, say former employees, that he also expected his executives to keep signs of their wealth subtle.

Twenty six years after Mr. Walton's death, what was once a sleepy company town has become a mecca for luxury-home buyers. Many of the homeowners in the northwest Arkansas region of around half a million people are the company's executives, as well as top brass from consumer-goods companies that sell their products through the retailer.

More recently, Walmart's battle with Amazon has brought in more tech-savvy urbanites. At the same time, Mr. Walton's heirs have invested in local projects that appeal to cosmopolitan tastes and a growing preference for downtown living, including an art museum, a boutique hotel, a culinary school and a bike-trail network, in part to help Walmart recruit talent.

Median home prices in the school district of Bentonville and neighboring Rogers, Ark., rose to $200,750 last year, up 3.4% from 2016 and 20% over the past five years, said John Mayer, a local agent.

Sales in the top 10% of the market have stayed relatively steady over that time as population growth and Walmart's continued wooing of technology workers have helped counter the company's job cuts in other sectors. Although median prices in that top tier slipped 1.5% last year, after rising 2.5% the year before, the number of houses sold for over $500,000 grew to 226, up from 163 two years earlier. Homes in the $500,000 to $600,000 range are most popular, as buyers in less-expensive homes trade up, said Mr. Mayer.

Homes in the region are still cheaper than other comparable cities. The average price per square foot in Bentonville is just $131, according to Realtor.com. That's a 52% increase since 2012, but is still lower than cities such as Seattle at $824, Nashville at $278, or Madison, Wis., at $181.

Investments in Bentonville's downtown by Mr. Walton's heirs have given the city a cosmopolitan presence. In 2011 Alice Walton, Mr. Walton's daughter, spearheaded the opening of Crystal Bridges Museum of American Art in a modern building designed by architect Moshe Safdie. The Walton family helped fund the opening of 21c Museum Hotel. Two of Mr. Walton's grandsons, Tom and Steuart Walton, have more recently supported an extensive bike-trail network, dozens of restaurants and bars and a culinary school.

Downtown improvements have drawn wealthy buyers who typically had clustered in a handful of golf-course communities, including Pinnacle and Talamore, which offer a clubhouse, grand homes and gated security.

Buster Arnwine and his wife, Sarah, have lived in the area multiple times for his job with Reckitt Benckiser Group, a seller of household goods. When moving back in 2015, the Arnwines, who have a 10-year-old son, initially lived in a sprawling home in St. Valery Downs, a subdivision. Last year they moved to a townhome downtown, in part to socialize more often with people who don't work at Walmart or their vendors, said Mr. Arnwine. From the front deck of the two-bedroom, $605,000 home, the family enjoys "watching city life go by," he said.

Last year David Redfield, a senior vice president at Walmart, moved into a $700,000, three-bedroom condo near Bentonville's center. Recently divorced and with two nearly grown children, downtown became "a place I want to be part of, not just read about," said Mr. Redfield. Over a 28-year career with Walmart, he has lived in larger cities including Minneapolis, Toronto and Buenos Aires, giving him a taste for an urban lifestyle, such as walking to restaurants or biking to work, he says. He was able to design the interior of his condo, part of a five-unit row house development, adding modern, industrial lines and a 100-bottle wine cave in the kitchen. "I wanted to make it feel less like small town Arkansas."

The average sales price for homes in downtown Bentonville over the past six years jumped to $192 per square foot up from $63, according to a recent study by the University of Arkansas commissioned by the Walton Family Foundation. The jump is large enough that the foundation has started to consider how to support "attainable housing" for those with middle-class incomes, said a spokesman.

More local buyers want beautiful homes, but less space and no yard maintenance, said Dana Renfrow, one of four co-owners of Lamplighter Restoration, which has worked on real-estate projects downtown for decades and has helped craft the prevailing aesthetic of new high-end properties, often a mix of modern farmhouse meets Restoration Hardware.

Ms. Renfrow and her husband, Todd Renfrow, built a new space downtown last year for themselves and their music school, the Bentonville Academy of Music. The building has eight teaching rooms on the ground floor. An upstairs living space has a light-filled wraparound kitchen, dining and living rooms, and three bedrooms, all with salvaged fireplaces, columns and other reclaimed materials.

Still, the priciest homes in the region are typically found in Pinnacle, a gated community of homes around a golf course and private golf club in Rogers, Ark., just south of Bentonville. Of the 11 homes that sold for over $1 million in the Bentonville region last year, nine were in Pinnacle. Property owners include U.S. Sen. John Boozman, former Walmart CEO Lee Scott and John Furner, the current chief executive of Sam's Club, the warehouse chain owned by Walmart.

Wealthy buyers often choose Pinnacle over downtown because "it provides that instant community," said Paige Ferguson, a luxury real-estate agent who has lived in Pinnacle since 2008. Many residents are executives who move frequently for work and have a trailing spouse. They want to be "in that bubble of your peers in the same socio-economic group," she said. "They want that easy life."

Though homes over $1 million have been selling at a steady clip in recent years, there is an oversupply, said real-estate brokers, who noted that the market for those homes is still small compared to larger cities and that executives move frequently.

"Nobody is a lifer anymore," said Kristen Boozman, who grew up in the area and now owns Portfolio, a luxury real-estate agency that specializes in selling homes in Pinnacle. That means buyers often spend less than they could afford, anticipating a future move, she says.

The priciest homes can still languish on the market. A six-bedroom home built by an early Walmart executive to resemble a French château, with a limestone exterior, Tibetan temple hardwood floors and French crystal chandeliers with an asking price of $4.75 million, has been on the market since early 2016.

"Last year we sold more homes over a million than we ever had," said Ms. Boozman. But "big picture, over a million bucks is still hard."

Write to Sarah Nassauer at sarah.nassauer@wsj.com

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March 09, 2018 02:47 ET (07:47 GMT)

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