The vacancy rate for retail space in the Pulaski County market continued to loosen slightly with a first quarter reading of 6.3 percent. A year ago, that number stood at 5.2 percent.
In all, nearly 1.1 million SF is empty and available for lease among 357 properties tracked by the Central Arkansas Commercial Data Exchange.
The biggest contributors to the vacancy blip are a pair of west Little Rock properties.
Whole Foods left behind a 24,000-SF vacancy at The Village at Pleasant Valley when it relocated. Its new 32,984-SF location at 501 S. Bowman Road in west Little Rock was developed originally as a Linens N Things store.
Kroger closed its 315 N. Shackleford Road store in west Little Rock, which added 45,528 SF to the vacancy tally.
“There is no shortage of small retailers prowling the market,” said Jeff Yates, managing partner at ARK Commercial & Investment Real Estate of Little Rock.
Some larger retailers such as Costco, Lowe’s and Cabela’s also are checking out possibilities in the market. Demand is said to be sufficient for a new 300,000-500,000-SF center in Little Rock, but a project has yet to form.
“Right now there is more demand than what there is in inventory,” said Mark Bingman, executive broker and vice president at Little Rock’s RPM Group. “We need a new development with new inventory, big boxes, little spaces, space of all sizes. Somebody is going to have to step up.
“Our biggest challenge is finding something that will work. Everyone wants to be on a corner. Those choices are pretty slim.”
The grand opening of The Outlets at Little Rock is scheduled for Oct. 16, although some tenants are expected to open shop in the preceding weeks.
Names have already begun dropping for shops in the 325,000-SF outlet mall at Little Rock’s Gateway Town Center: Banana Republic, The Children’s Place, China Max, Dress Barn, Express, Gymboree, Gap Factory, Kay Jewelers and OshKosh B’Gosh/Carter’s.
“In the last year, we have seen several retail shopping centers being bought and sold — purchases by local as well as out-of-state investors — with new ownership investing in capital improvements and taking advantage of the upside with aggressive leasing efforts,” said Brooke Miller, partner with Little Rock’s Flake & Kelley Commercial.
Notable Sales Transactions
A quartet of transactions, all featuring out-of-state buyers, was among the notable retail deals in the market during the past 12 months:
• Midtowne Little Rock at 201 N. University Ave. The 126,288-SF center in midtown Little Rock sold for $41.45 million.
The big boys in this deal were IREIT Little Rock Midtowne LLC, an affiliate of Inland Real Estate Income Trust Inc. of Oakbrook, Illinois, buyer; and IMI MTLR LLC, a co-investment venture owned by an affiliate of Miller Capital Advisory Inc. of Skokie, Illinois, and CalPers, the nation’s largest public pension fund, seller.
• Markham Square Shopping Center at 9101 W. Markham St. in west Little Rock. The 125,000- SF project was acquired for $11.15 million.
• Gander Mountain at 5450 Landers Road in Sherwood. The 123,872-SF store was purchased for $7.2 million.
• Geyer Springs Shopping Center at 8717 Geyer Springs Road and the 21,760-SF Geyer South project at 8521 Geyer Springs Road. The neighboring properties in southwest Little Rock sold for a combined $6.1 million.
• Westgate Shopping Center at 6813 Cantrell Road. The 53,000-SF center in Little Rock sold for $6 million.
“National retailers continue to look for second store opportunities in Little Rock as well as expanding into new markets throughout the state, with national restaurant chains and locally owned restaurants continuing to be an active category,” Miller said.
A $2.5 million Del Frisco’s Grille project at 17707 Chenal Parkway in west Little Rock is the most prominent new restaurant development to make the scene this year.
The location on an outparcel at The Promenade at Chenal will open later this year and mark the first Arkansas venture for the publicly traded restaurant chain.
Dave & Buster’s has yet to land in the market after legislative accommodations were made to facilitate their gaming entertainment amenities.
Mark Bingman has heard a common refrain while working with franchise retailers looking at potential locations in the market.
“They are just astounded at the price of land in Little Rock,” Bingman said. “When they compare it to Atlanta or Dallas and other top tier markets, they’re scratching their head: Why is land so high here?”
Overshadowing it all is the supply and demand of good locations in the Little Rock market. Some retailers are finding better price points for their projects
“With the economic recovery, there are retailers looking at the Little Rock market,” Yates said. “We’re not seeing significant activity in Little Rock. We’re seeing it at Benton, Bryant and Conway.
“For the expense and trouble in Little Rock, they can go elsewhere with less cost and hassle and higher return on their investment. They’re looking for deals are the lowest hanging fruit.”
Projects in Benton and Conway
In Benton, the 250,000-SF Hurricane Creek Village developed by The Retail Connection of Dallas is bringing its first wave of retailers on line this year, a 123,000-SF Kroger Marketplace and a 62,182-SF Academy Sports. Meanwhile the Benton Town Center project has letters of intent from T.J. Maxx and Dick’s Sporting Goods, among others.
Two large announced projects in Conway are still taking shape. The 365,000-SF to 442,000-SF Lewis Crossing is planned for the southeast corner of Interstate 40 and Dave Ward Drive. A 750,000-SF lifestyle center is planned at the Central Landing, a redevelopment of the municipal airport property.
Retail Occupancy
Little Rock – Downtown
Buildings 1 Inventory 30,000 SF Total Vacant 0 SF
Little Rock – East
Buildings 1 Inventory 45,696 SF Total Vacant 0 SF
Little Rock – Midtown
Buildings 27 Inventory 1,366,929 SF Total Vacant 29,976 SF
Little Rock – South
Buildings 58 Inventory 1,704,137 SF Total Vacant 144,739 SF
Little Rock – Southwest
Buildings 15 Inventory 686,359 SF Total Vacant 21,380 SF
Little Rock – West
Buildings 127 Inventory 6,453,234 SF Total Vacant 458,727 SF
Maumelle
Buildings 15 Inventory 510,780 SF Total Vacant 38,833 SF
North Little Rock
Buildings 53 Inventory 4,009,427 SF Total Vacant 194,051 SF
Sherwood
Buildings 24 Inventory 783,910 SF Total Vacant 63,892 SF
Benton
Buildings 17 Inventory 128,230 SF Total Vacant 0 SF
Bryant
Buildings 7 Inventory 37,563 SF Total Vacant 6,782 SF
Cabot
Buildings 8 Inventory 275,464 SF Total Vacant 17,302 SF
Conway
Buildings 15 Inventory 134,450 SF Total Vacant 6,623 SF
Jacksonville
Buildings 36 Inventory 1,509,722 SF Total Vacant 118,282 SF
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