The greater Little Rock area dominates Arkansas Business’ first list of the state’s largest office buildings with the 22 largest.
All 22 are in Little Rock except for the 120,000-SF Twin City Bank building in North Little Rock. Among the 26 largest buildings, only one is outside Little Rock: the 107,000-SF Simmons First National Building in Pine Bluff.
The largest building in the state, as it has been since it opened in 1986, is Little Rock’s 40-story TCBY Tower. The building has 740,000 gross SF, with just over 625,000 SF rentable. It is 96 percent leased.
The 19-year-old, 30-story First Commercial building, just across Capitol Avenue from the TCBY Tower in downtown Little Rock, is the second largest building. It has 600,000 total SF, with about 478,000 SF rentable. It is 90 percent leased.
Little Rock has more than 8.5 million SF of rentable office space, an increase of more than 100,000 SF in the past year. Occupancy is about 90 percent.
More than 500,000 SF of office space is in North Little Rock. Occupancy is also about 90 percent in North Little Rock. The average price per SF for office space in the two cities is a little more than $10, according to Arkansas Business’ “Office/Warehouse Lease Guide.”
“The key thing we’re seeing is that there are no large blocks of space,” says Rett Tucker of Flake Tabor Tucker Wells & Kelley Inc., a Little Rock real estate firm. “If anybody needs 15,000-20,000 SF, there is just no place to go. What you see is 1,500 SF here and 2,000 SF there. It’s definitely turned in the landlord’s favor in the last two or three years.
“What we’ve seen as a consequence of that is some new buildings being built.”
Tucker notes Health Advantage’s new 30,000-SF building under construction in west Little Rock’s Corporate Hill office park and a new 25,000-30,000 SF building for the U.S. Geologic Department off Financial Center Parkway in Little Rock.
Flake Tabor Tucker Wells & Kelley did the site study, was the development consultant and will manage the building for Health Advantage.
“The key thing about new construction is that rates at many of the existing buildings are much more competitive than the cost of a new building,” Tucker says. “You almost have to have a perfect situation where the new building is 100 percent preleased and you can hard-bid the contract to build and get the best rate for the tenant.”
Speculative Buildings Unlikely
For that reason, Tucker says, it’s not likely anyone would build a speculative office building in the near future in the Little Rock area. He says at least 60-70 percent of the building would need to already be leased before the builder could get financing.
“I know one business, which I can’t name, is in four different buildings, and they’ll obviously be a candidate to consolidate somewhere if they can find something that would be cost-effective for them,” Tucker says.
Tucker is the leasing agent for the TCBY Tower. Every tenant in the 40-story building except one has been there since it opened. Everything else in the building is still shell space, Tucker says, which has never been rented. The building’s occupancy rate is 96 percent.
Several of the state’s largest buildings, which are not included on the list, are corporate headquarters for some of Arkansas’ biggest companies. Office space for outside tenants normally is not available in these corporate headquarters.
The headquarters building for Wal-Mart Stores Inc. in Bentonville is only two stories tall but has about 700,000 SF.
Alltel Corp.’s two twin towers in Little Rock are each six stories and about 100,000 SF. Alltel is building another 318,000-SF building near those two. The Technology Center Building in west Little Rock for Alltel’s subsidiary, Systematics Information Services Inc., is seven stories and 190,000 SF.
The new ABF Freight Systems Inc. headquarters building in Fort Smith will be 195,000 SF.
The One Capitol Mall building in Little Rock, also known as the “Big Mac building” and housing many state governmental offices, has about 250,000 SF. n
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