Building Sales Cause Dip In Office Occupancy

by George Waldon  on Monday, Jul. 23, 2012 12:00 am  

Southwest Power Pool is moving to a new west Little Rock campus. (Photo by Michael Pirnique)

The occupancy rate for office space in the Pulaski County market dropped to 85.7 percent in the spring, according to the Central Arkansas Commercial Data Exchange. That figure stood at 87.3 percent a year ago.

The exchange, an affiliation of local commercial real estate professionals who pool sales and leasing information for office, retail and industrial properties, tracks 266 office buildings housing nearly 14 million SF.

“I see our vacancy rate staying in that 15 percent range for awhile, and I don’t see rents moving up or down that much,” said Mark Bentley, director of brokerage, at the Little Rock office of Colliers International.

The one-year decline is largely attributable to three former Alltel buildings hitting the market with a combined 195,000 SF. Purchased from an affiliate of Verizon for $10.5 million in December by a local investment group, the office buildings in the Riverdale submarket have begun attracting tenants.

Centen Corp., which signed a 25,000-SF lease, will be relocating from quarters in west Little Rock’s Westlake Corporate Park.

“That was a significant deal that a lot of people were chasing,” said John Martin, senior broker at Little Rock’s Moses Tucker Real Estate Inc.

More inventory is coming on the market soon when Southwest Power Pool moves to its west Little Rock campus with a 34,000-SF control center, a 150,000-SF administration building and a two-story parking deck.

The consolidation to the 20-acre, $62 million headquarters campus at 16100 Pride Valley will leave a combined 90,000 SF vacant at the Plaza West Building (about 60,000 SF) at 415 N. McKinley St. in the Midtown submarket and at the GMAC Center (nearly 30,000 SF) at 16101 La Grande Drive in west Little Rock.

The move from tenant to owner will enlarge the market vacancy rate.

“We’ll see that number pop up,” Martin said. “We won’t see any change until new users come to the market. We can only cannibalize ourselves so much before we see some real growth.”

A 212,000-SF office building on the former Alltel campus also is available for sale or lease.

“We’ve got some pretty good sized blocks of space back on the market,” said Daryl Peeples, president of Flake & Kelley Commercial. “We’ve got some work cut out for us.



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