Report: Little Rock metro stabilizing in all CRE sectors
Commercial real estate firm Colliers Arkansas said the state’s largest metro market is stabilizing with declining vacancy rates across all sectors.
The company’s latest quarterly report also revealed significant sales transactions in the Little Rock metro’s multifamily sector and industrial space becoming harder to find.
“The office market is stabilizing,” Colliers said in the report. “The hybrid work environments are expected to stay in place with many companies, but leasing activity should continue to increase throughout 2022. As such, cost of new construction and the Federal Reserve’s continual raising of interest rates should, in turn, make second-generation office leasing an attractive alternative to purchasing and/or new development.”
Colliers analysts said industrial vacancy rates dropped to 3.4%, and there’s not much space left on the market.
“Industrial has been filling up fast, and that’s led to a lack of availability,” the report said. “In response, several speculative facilities are under construction or have already been built, such as Central Commerce Center along I-40 in North Little Rock (completed May 2022) and the new South Port Commerce Center, a 500,000-square-foot facility at the Port of Little Rock that broke ground in Q3.
“Additionally, flex space [properties with a combination of office and warehouse space] vacancy tightened from 8.4% in Q2 to 7.5% in Q3, another strong signal for this sector.”
Colliers said the revitalization of mature retail centers, coupled with new energy from entertainment concepts and restaurants, is bolstering the retail sector, where vacancy rates dropped from 14.4% in the second quarter to 13.7% in the third quarter. Topgolf’s announcement of a Little Rock facility at Village at Brodie Creek was the most important retail news.
Colliers has Arkansas offices in Little Rock and Rogers. For a more detailed analysis of each submarket in central Arkansas’ commercial real estate market, click here for a PDF.