Posted 7/17/2013 03:09 pm
Updated 9 months ago
The market for industrial space in Pulaski County firmed slightly during the past 12 months as occupancy increased from 87.6 percent to 88.2 percent.
That movement was registered among 863 buildings with more than 45 million SF, according to the Central Arkansas Commercial Data Exchange.
“It seems like the market has picked up compared to this time last year,” said Gary Smith, director of business development at Flake & Kelley Commercial. “There’s a lot of activity in that 50,000 SF range. That seems to be the sweet spot right now in the industrial market.”
A transaction 18 months in the making closed in May and made a big splash in the market.
An affiliate of Mohr Partners of Dallas bought the former Champs Sporting Goods facility in Maumelle for $5.4 million from Scholastic Distribution Services. On the backside of that acquisition, Mohr struck a deal to lease 200,000 SF of the 484,932-SF project to Leisure Arts.
“That is a classic transaction where you see a property built for a specific purpose, and they’re taking it from one use and converting it to another,” said Dan Robinson, president of Little Rock’s NAI Dan Robinson & Associates. “That’s a big-boy deal and shows some real creativity.”
Leisure Arts will relocate from its 26.7-acre west Little Rock campus at 5701 Ranch Road. Baptist Health has reached an agreement in principle to buy the Leisure Arts property, which includes a 71,762-SF office building and a 175,305-SF distribution center.
Rick Freeling, vice president of Little Rock’s RPM Commercial, said canvassing activity among industrial representatives increased, indicating that manufacturers might be gearing up for more production and need more warehouse space.
“We saw a lot of tire kickers during the past 12 months,” Freeling said. “Usually when those type of people start calling, that’s a good sign. But not much materialized out of it.”
Drew Holbert, industrial specialist with the Little Rock office of Colliers International, said national indicators are favorable in barometer markets such as Memphis, Dallas and Indianapolis, which are starting to see some speculative industrial developments.
“We’re still seeing really good activity now,” Holbert said. “Several groups are looking for space in the 25,000-SF to 75,000-SF range and some greater than 100,000 SF. Some are looking at acquiring rather than leasing.”
A sampling of industrial properties that have sold during the past few months includes:
• A 42,662-SF project built in 2007 at 10303 Col. Glenn Road in west Little Rock for $4.45 million.
• A 104,000-SF project at 2901 W. 60th St. in Little Rock for $1.85 million.
• A 43,750-SF project at 7701 Industry Drive in North Little Rock for $1.8 million.
• An 87,500-SF cold storage facility at 1400 Gregory St. in North Little Rock for $1.56 million.
• A 100,000-SF warehouse at 4717 Asher Ave. in Little Rock for $1 million.
The market for industrial space in the Little Rock area is even tighter considering the condition of a big piece of the 5.2 million SF is vacant.
“We believe there is a significant amount of that product currently on the market that is functionally obsolete,” Holbert said.