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Real Estate Headwinds (Editorial)

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At this time last year, many economists were predicting a recession in the U.S. It didn’t come.

Inflation, while still too high, has fallen. Unemployment — the November rate in Arkansas was 3.3%; nationally it stood at 3.7% — remains at historic lows. Real gross domestic product nationwide rose at an annual rate of 4.9% in the third quarter of 2023. In Arkansas, the GDP growth rate was 0.7%. The S&P 500 index gained 24.2% last year.

That’s not to say that the economy doesn’t face headwinds, among them high mortgage rates depressing real estate investment, including commercial real estate. These headwinds are being felt in Little Rock, with Heifer International suing over the unsuccessful sale of its Little Rock headquarters to OneHealth for Lyon College’s planned dentistry and veterinary schools.

In an email, OneHealth CEO Merritt Dake cited “the need to shore up construction financing in a commercial real estate lending market that has turned decidedly unfavorable … .”

We remain hopeful that Lyon and OneHealth will be able to move forward with their bold vision for the schools and for their location in Little Rock, wherever that might be.

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