Arkansas-based commercial real estate company Colliers Arkansas said stabilization continues in the state’s largest metro, vacancies continue to decline, and banks are leading the way in new developments.
Colliers’ latest quarterly report said the industrial market continued to provide the bulk of the growth in the commercial real estate industry in the Little Rock subway in the second quarter of 2021, with no signs of slowing growth.
The share of industrial space in central Arkansas fell from 10.2% in the first quarter of the year to 8% in the second quarter.
Colliers compiled the report based on information received from CoStar, Real Capital Analytics and other industry sources.
“The industrial market that became the star of the 2020 breakout continued to shine without a hint of fading away anytime soon,” the report said. “Vacancy rates declined again in the second quarter due to interest from both state and out-of-state investors. Rental rates rose across all submarkets as users fought for easy interstate access. ”
Colliers says speculative developments are moving forward for larger industrial properties such as the 200,000-square-foot Central Commerce Center (C3) being built along Interstate 40 in North Little Rock, near the Galloway exit. Directly across from C3, Amazon continues construction of a 1 million square foot fulfillment center and is nearing completion of its 3.7 million square feet fulfillment center near Little Rock Port.
The report also notes a noticeable trend towards financial expansion in the western Little Rock submarket. BancorpSouth, the Arkansas Federal Credit Union, Encore Bank, First Community Bank, and Bank OZK have established important branches and headquarters in the past 18 months.
“This significant activity in the west of Little Rock will continue to drive demand for value-added business-focused services and should lead to further growth in this corridor (such as Costco),” the report said. “Also underway are large upscale apartment buildings and residential areas, including The Fitzroy Promenade, The Blake and Bear Den Estates. Due to the geographic constraints of the city, look for further westward expansion as our city continues to grow. “
In the office sector, the vacancy rate in Little Rock metro increased slightly in the second quarter – from 15.2% to 16.3%. Many office users still have employees working remotely and have decided to reduce the existing floor space.
“We expect office vacancy rates to remain flat for the rest of the year as we continue to tackle unknown factors related to the COVID-19 pandemic,” the report said. “Certain Class A properties both west of Little Rock and downtown have maintained their asking rates, and in some cases even raised rents.”
For a more detailed analysis of each submarket in the central Arkansas commercial real estate market, click here to get the PDF…