The retail vacany rate in west Rogers, including Pinnacle Hills Promenade, is 4.4 percent.
Occupancy in the northwest Arkansas retail market has tightened to 6 percent during the first quarter. That figure stood at 6.7 percent a year ago, according to data collected by Xceligent Inc. of Independence, Mo.
In response to the dwindling inventory, new projects are in motion such as the 70.2-acre Hall Crossing development at the northwest corner of Interstate 540 and Elm Springs Road in Springdale.
The property is anchored by a Wal-Mart Supercenter that will open later this year, and the site plan is configured with 11 outparcels, two of which have sold to Arvest Bank and McDonald’s. Hall Crossing also has attracted two multi-tenant retail projects now in the planning stages.
“We’re seeing, finally, some tenant-driven, new construction, and some new space coming on the market, which we needed drastically for the last 18 months,” said Alan Cole, principal at the Bentonville office of Colliers International.
“It’s really rolling again. We’re very bullish on northwest Arkansas for the foreseeable future.”
Of the more than 14.5 million SF of retail space tracked by Xceligent in Benton and Washington counties, 866,414 SF is vacant. Much of this unoccupied space is in older strip centers and neighborhood centers, outside the core retail areas of Bentonville, Rogers, Springdale and Fayetteville.
“The main retail spots are very tight on space,” Cole said. “There’s been some pent up demand that is finally bringing new space to the market.”
The retail vacancy rate in the west Fayetteville market has dropped steadily during the past five quarters from more than 8.9 percent to 5.4 percent. Its Wedington Drive corridor continues to thrive.
The retail vacancy rate in the two largest submarkets in the region is low as well: 4.4 percent in the 3 million-SF West Rogers market, home to Pinnacle Hills Promenade; and 5.4 percent in the nearly 3.2 million-SF North Fayetteville market, home to the Northwest Arkansas Mall.
The average vacancy rate for retail space across the nation is 10.2 percent. The upswing in activity that has helped absorb space has become a calling card drawing still more attention to northwest Arkansas.
“The attitude has improved, and people are more open to looking to expand in our market,” said Rick Oliver, commercial real estate broker at Mathias Properties in Springdale. “A few years ago, you couldn’t even get people to talk to you.
“There is a lot of interest in the restaurant sector. That is the forerunner of more activity and improvement in the retail market.”
Clinton Bennett, managing broker of CBRE Northwest Arkansas in Fayetteville, is working with some sizable retail tenants but is unable to find space that is the right fit.
“There will be some large new retail developments in the pipeline during the next 12 months,” said Bennett.
“We’re at a stage in the market cycle where new development will have to happen. Someone will step up to the plate and get it done.
“There’s been a big shift with lenders. They’re willing to support builders who come in with a good plan and some preleasing.”
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