ON THE COVER: The CrossMar Industrial building, a Sage Partners property, at 4901 SW Regional Airport in Bentonville.
The business real estate market in one of the nation’s fastest-growing areas is a mixed bag of mostly positive indicators.
The retail and office markets are humming along, while the industrial market continues to grapple with its own, built-in set of complications, though even that area is seeing some construction.
Fueled by new developments in Rogers, among other places, the retail vacancy rate is less than 5 percent. New shopping centers with targeted, complementary combinations of lessees have observers of the retail scene describing it as a hot market with areas that are ripe for expansion.
A trend is leasing to combinations of businesses to create destination shopping experiences — places where people go to shop for services and goods they simply can’t get online.
Centers are being built with specific types of businesses in mind, rather than being constructed in a “build first, lease later” mentality.
The fat market has allowed lessors to be selective and sign a mix of local, regional and national tenants to longer-term leases.
When it comes to office space, the landscape is being affected by the Rice Office Complex being planned for Bentonville. With ground not yet broken, the planned complex — developed by CrossMar and leased by Saviers and Sage Partners — is already advertising 71,000 SF of space for lease.
The Rice development, which will feature the well lighted, open spaces and modern technological wrinkles that are in vogue, is the first of a planned four buildings expected to add 210,000 SF of office space to the local market.
The demand has left the office vacancy rate in the desired single digits, at 8.6 percent, the same rate as last year and an indication of a healthy market.
Helping to fuel interest in the region are office buildings either planned or under construction by Whisinvest in the hot corridor, Pinnacle section of Rogers.
The industrial real estate market, by its nature, is slightly different. Industrial developers aren’t necessarily able to build targeted centers with space they can pre-lease before construction.
An example is the 130,000-SF structure Crossland Construction is building in Fayetteville. With the place 30 percent completed, Lindsey & Associates is reaching out to potential tenants, and sub-dividing the building is possible if several are interested.
Industrial developments don’t have the same rent rates so the cost of land is a factor. Commercial land attracts higher prices and generates higher rents that allow developers to pay higher prices for land. That means there isn’t a lot of land available that is zoned for industrial buildings, which in the region tend to be geared more to warehouses and distribution centers than for manufacturing, and there is a great diversity in the industrial market of the sizes of buildings people need.
With some potential industrial tenants needing smaller spaces, land becomes an even stickier problem, leading many developers to have to work with a city to rezone some plots.
Still, the Northwest Arkansas Metropolitan Statistical area continues to be one of the nation’s most vibrant and promising. An IHS Global Insight report on the Northwest Arkansas Council web site projects the area to rank No. 5 nationally in growth through 2021 and the analysis, prepared for the U.S. Conference of Mayors, predicts a 2017 jobs growth ranking of No. 8.
Forbes recently ranked the Fayetteville-Springdale-Rogers MSA No. 2 on its list of best mid-sized cities for jobs and U.S. News & World Report rated it No. 3 among its best places to live.
Additionally, a Northwest Arkansas Council analysis of U.S. Census Bureau figures shows the northwest Arkansas MSA is poised to be one of the nation’s 100 largest in three years. It is currently 105th.
Clearly, when it comes to the major markets presented in this special edition of the Arkansas Business Lease Guide, there will definitely be a foundation of demand to build on. In these pages our writer Marty Cook takes a look at the ins and outs of the market scene, giving us the latest on the major projects behind the numbers, and please check out the comprehensive listings, provided as always by Xceligent, to find the space that’s right for your and your business.
To update listings, resolve omissions or correct errors, please contact Danelle Allen at DAllen@xceligent.com or (816) 427-9202. Recommendations for improvements or inclusions are welcome at TTraub@abpg.com or by calling (501) 372-1443.
See more from the 2017 Northwest Arkansas Lease Guide.
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