Vacancy rates in central Arkansas’ commercial real estate market increased in all three subdivisions (retail, office and industrial) in the third quarter of 2020.
A new report out Thursday (Oct. 29) by Little Rock-based firm Colliers International Arkansas says some industries are changing in creative ways in response to COVID-19, while some are a little slower in adopting a new direction.
“The overall state of the market has continued in the direction we anticipated,” the report said. “In the third quarter, the total square footage sold was nearly half of what was sold in the second quarter.
Despite the vacancy rate going up to 17.5% from 12.3% in the second quarter, the Colliers report says some retailers are adapting.
“Restaurants without drive-thrus are perfecting curbside orders and seeking permits for outdoor dining,” Colliers said. “Little Rock and North Little Rock have both added outdoor canopy seating to help their downtown restaurants provide safer environments. Essential retail services are continuing to expand. Some prominent sales this quarter have been gas stations and car washes — both considered to be part of essential retail.”
Office vacancy rates rose from 18.3% in the second quarter to 20.3% in the third quarter and average lease rates are ticking down.
According to the report, the industrial has seen the closest return to normal of all the industries. In multifamily, Colliers reports several new developments under construction and showing confidence in leasing activity.
For more detailed analysis of each submarket in central Arkansas’ commercial real estate market, click here for a PDF.