Retail Leasing Activity Regains Momentum

Changes during the past year reflect positive activity in the Pulaski County retail market, as recorded by the Central Arkansas Commercial Data Exchange.

Retail occupancy improved from 89.4 percent to nearly 91.2 percent, according to the affiliation of local commercial real estate professionals who pool sales and leasing information for office, retail and industrial properties.

The amount of vacant retail space was reduced from nearly 1.8 million SF in 2010 to about 1.5 million SF this year. Improved leasing activity is visiting two west Little Rock lifestyle centers slowed by the two-year economic lull: Shackleford Crossings (278,000 SF) and The Promenade at Chenal (241,000 SF).

“It’s all starting to get absorbed, but I don’t see any new retail center coming soon,” said Isaac Smith, principal at Colliers International in Little Rock.

Occupancy at Shackleford Crossings is at 70 percent, with potential leases pushing that figure to 85 percent by year’s end. The momentum swing is especially dramatic at The Promenade at Chenal, where since January about 50,000 SF of tenants have opened or have begun the process of opening.

“We project that we will be close to 90 percent leased by the end of the year — not opened, but leased,” said Ron Lazenby, owner’s representative at The Promenade at Chenal.

Joining the rent roll are a Nike store, 12,000 SF; W by Azwell, women’s clothing, 10,000 SF; J. Crew, 5,000 SF; and Big Orange restaurant, 3,500 SF.

Other tenants include Crazy 8, children’s apparel and accessories, 1,500 SF; Perfume Max, 1,500 SF; Warren’s Shoes, 1,400 SF; Francesca’s Collections, women’s apparel and accessories, 1,200 SF; and Select Comfort, bedding products, 1,000 SF.

Rounding out the list is the official unofficial Apple Store, 7,500 SF. More announcements are expected this summer.

“There’s definitely some activity compared to this time last year,” said Mark Bingman, associate broker at Little Rock’s Coldwell Banker RPM. “Everybody seems to be getting back into the game. This time last year, there just wasn’t that much interest.

“Are we ricocheting and bouncing back? I don’t know if I’d say that, but more players are looking for space.”

The Park Avenue Shopping Center in Little Rock’s midtown area was off and running with the opening of a 137,000-SF company-owned Target store last fall. The south end of the 28-acre development, which replaced University Mall, is home to the current round of activity, too.

Signage indicates a 17,880-SF Staples is “coming soon” and will set up shop east of Target. Between the two national chains will be more than 7,600 SF of retail space, according the latest plans by Strode Properties Co. of Dallas.

Carter’s, a children’s apparel chain, will occupy a 4,016-SF slot, and the remaining 3,600 SF is unclaimed. The store would be the first in Arkansas for Carter’s Inc. of Atlanta, which also owns the OshKosh B’gosh chain and brand.

Other Park Avenue tenants listed include Verizon (4,055 SF), Mattress Firm (3,572 SF) and SportsClips (1,023 SF). This trio and 16,630-SF of planned, unclaimed space are part of a future 25,280-SF building.

This piece of the project is between the Staples site and the 7,918-SF Cheddar’s restaurant under construction at the southeast corner of the development, at South University Avenue and St. Vincent Circle.

A 4,500-SF AT&T store is on the drawing board for a 0.45-acre site at the northeast corner of the Park Avenue site. South of this location, a 6,000- to 8,000-SF retail building is planned.

The mixed-use, open-air lifestyle center development is backed with a $22.86 million funding agreement with Little Rock’s Bank of the Ozarks. If the current leasing site plan comes to fruition, more than 105,000 SF of retail space will come on line and join the Target at Park Avenue.

One piece of that puzzle is envisioned as a future two-story, 29,000-SF building to adjoin the old University Mall parking deck. Another is 15,000 SF of ground floor retail space with four stories of apartments above.

Two nearby four- or five-story buildings with 60,000-75,000 SF of residential space also are planned. The wild card at Park Avenue is Phase II at the west end of the parking deck with frontage on McKinley Street.

Depending on market demand, the site could be home to a 70,000-SF office building, 127-room hotel, 50,000-SF retail project or a 127-unit apartment complex.

Absorption of older, vacated retail space is picking up pace.

The former National Home Center project in west Little Rock is undergoing redevelopment as a Windstream data center. Ross Dress For Less is filling space formerly occupied by PC Hardware at 9101 W. Markham St.

Wal-Mart Market is said to be in the works for the former Harvest Foods store in Riverdale, and the old MM Cohn space at North Little Rock’s McCain Mall is undergoing a redevelopment as 12-screen movie theater as part of a $5.5 million project.

“Large, big-box retail space keeps getting gobbled up, which is great,” said Isaac Smith, principal at Colliers International in Little Rock.

At last report, the vacant 150,000-SF Wal-Mart store at 700 S. Bowman Road is destined for conversion into a supercenter.

Vacancy Rate in Pulaski County Declines
The first-quarter 2011 vacancy rate for commercial retail real estate in central Arkansas has dropped to 9.8 percent from the 10.6 percent of first-quarter 2010. It also has slipped when compared with the 10.1 percent of fourth-quarter 2010. Mark Bingman of Rector Phillips Morse was cautiously optimistic. “While it would appear that the retail market is improving with a positive absorption of approximately 52,500 SF, no new space was built during this last quarter.”