The Heat Is On (OPINION)

“The Heat is On.” 

That was the title of a song in the early 1990s by former Eagles front man, Glen Frey.

That seems to be the new sentiment of the real estate market in Northwest Arkansas as well. Over the last several months, we’ve heard rumors of new things coming to our area. We’ve seen groundbreakings, heard official announcements, eaten at new restaurants that weren’t around a year ago, and we’re about to hear and see outdoor concerts at the new Walmart AMP in Pinnacle Hills. Things seem to be bouncing back and bouncing back in a fantastic way.

With major announcements in Bentonville, it seems as if the industrial/warehouse market is poised for another big run. The downtown in Bentonville appears more robust than ever.

Fayetteville is still strutting its stuff after learning it will get the first Whole Foods in our part of the state. That announcement will create more buzz in the future as we wait to see what’s next at College Marketplace.

Springdale’s downtown seems to be the land of plenty lately with buildings being bought and sold, where speculation and rumor abound. And it looks like the new Walmart Supercenter at Elm Springs will be opening to much fanfare soon.

In Rogers, we’ve seen retail and restaurant announcements in downtown, including a new Walmart Neighborhood Market.  In Pinnacle Hills, there is always something happening on every empty corner, and with every piece of raw land. In the Pleasant Crossing area, we are seeing land sales and leasing activity, and we are hearing whispers about big things to come.

The office market is also heating up. The Xceligent Office Market report, for the first quarter of 2014, shows a 9.3 percent overall office vacancy for the area. We are waiting to see big office buildings breaking ground around the Pinnacle area soon.

Rumor has it Hunt Ventures is in the process of building a 10-story office building, and that pre-leasing is going well. The national average for total vacancy rate (according to the National Association of Realtors) was 15.8 percent this quarter.

Apparently we need more space, and there seems to be plenty of optimism and capital chasing new deals.

In my office, we thought a good sign of the real estate market coming back would be the sales of the prime real estate pieces being held by the banks after the fiscal crash. That is happening now.

In the Pinnacle Hills area, you’d be hard-pressed to find much in the way of a bank-owned property deal at the moment. Over the past year, there have been several bank-owned lands sales in this area, and there’s a former Metropolitan National Bank branch that is creating a lot of chatter about who’s going to acquire it.

Another good indicator of deal activity would be a peek at the past few planning commission agendas of the area’s four largest cities. New residential subdivisions are being approved, rezoning efforts are taking place, and large-scale development plans are being reviewed at most every meeting.

On a more regional and national level, a few weeks back the International Council of Shopping Centers hosted its annual RECon event in Las Vegas. The experts agreed that the show was an overwhelming success and that attendance is headed back in the right direction. Over 34,000 people attended the show this year, the most since 2008. With leases signed and deals done, optimism is back to a more normal level than anytime of over the last several years.

From an optimist’s point of view — and I have always been an optimist — the commercial real estate markets of Northwest Arkansas most definitely have the heat on.  Hopefully, on this side of the last Great Recession, no one will get burned.

We are blessed to be living and working in this great place. Things are heating up, and the commercial real estate market is fun again. In the words of another popular song co-written by Frey and recorded by the Eagles: “Take it Easy.” 

Burke Larkin is a senior vice president with Whisinvest Realty LLC, leading the Little Rock-based company’s Northwest Arkansas office in Rogers. He can be reached at 479-268-5706 or by email at [email protected].