Now known as the Simmons Tower, the 40-story skyscraper in Little Rock has been the tallest building in Arkansas since its construction in 1986.
A look at the trends and vacancy rates in our three areas of interest — office, retail and industrial space — shows a mix of hot and cool markets.
But perhaps nothing is more interesting than what’s happening in retail, a market that is definitely in transition. As brick and mortar locations compete with online entities to attract shoppers, people are trying to figure out what the shopping experience of the future is going to look like for consumers.
Trends show nontraditional tenants — schools, medical clinics, interactive entertainment — are filling the empty spaces that were once homes to retail stalwarts like clothing and accessory stores. Some retailers are finding new opportunities in smaller to medium-sized markets that don’t require huge volume to make an acceptable profit.
Brooke Miller, a partner with Flake & Kelley Commercial, says her firm, for example, works with local building owners and city leaders to find second generation space in good locations at low rents.
She notes a “bleak picture” being painted in the media but says all is not lost. Miller points out that some retailers are seeing the environment as favorable and says specific Flake & Kelley clients had no closings and close to 200 openings in 2016.
As the retail landscape continues to shift, people are looking to marry innovative ideas with existing space. In a sign of interest in commercial real estate, Miller noted that a record number of exhibitors registered for the International Council of Shopping Centers (ICSC) RECon, the world’s largest real estate convention, in Las Vegas in late May.
Retail occupancy in central Arkansas declined to 94.3 percent during the first quarter compared to 95.1 percent a year ago.
According to the Central Arkansas Commercial Data Exchange there was 1.2 million SF of vacant retail space during the first three months of 2017. Total space among the 426 retail projects in the market was close to 21.3 million SF.
In 2015, the vacancy rate rose to 6.3 percent after reaching 5.2 percent during the first quarter of 2014.
While the retail market is in flux, the office and industrial markets show stability and activity.
On the office front, demand and available space are combining to create slow but positive movement. The vacancy rate in the Pulaski County office market was near 7.8 percent during the first quarter of 2017, an increase from 7.2 percent in 2016.
The vacancy rate in the industrial sector dropped to 9.6 percent in the first quarter of 2017, with local experts describing the market as “hot.”
Plenty of activity and low vacancies are strengthening the market, which showed vacancy rates of 11 percent and 10.5 percent, respectively, in the first quarters of 2016 and 2015.
Without a lot of product on the market the time appears ripe to build, as most of the nicer, newer industrial space is already taken. At least that appears true when it comes to facilities ranging from 3,000 to 20,000 SF.
In this year’s Lease Guide veteran Arkansas Business writer George Waldon offers a snapshot of all three central Arkansas markets to provide some meaning behind the numbers.
We also hope you’ll use the comprehensive listings, again provided by Xceligent, to navigate the waters and find the right space and location for your own business needs.
To update listings, resolve omissions or correct errors please contact Dannelle 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.
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