Report: NWA’s office market continues steady growth
by November 14, 2023 11:58 am 929 views
Analysts with Arkansas commercial real estate firm Cushman & Wakefield/Sage Partners said Northwest Arkansas’ office market continued its steady growth in the third quarter despite national turbulence and uncertainty.
The firm’s latest quarterly report also revealed recent deliveries are responsible for driving negative net absorption in the industrial sector, while rent growth and vacancies remain historically strong.
“Northwest Arkansas continues to see a slowdown in commercial sales volume year-over-year,” Sage Partners analysts wrote. “However, transactional volume remains on pace with the 10-year historical average.”
The region’s office market vacancy stood at 6% in the third quarter, up slightly from 5.9% in the same period last year.
The report said national “return to office” narratives have not hindered Northwest Arkansas’ vacancy rates, likely due to lower commute times in comparison to larger metros, according to research conducted by the University of Arkansas’ Center for Business and Economic Research.
Trailing 12-month office deliveries totaled 333,000 square feet, with most of the new development “for the foreseeable future” happening in Rogers’ Pinnacle Hills area, downtown Bentonville and the new Walmart Inc. corporate campus construction in Bentonville.
In the industrial sector, the overall vacancy rate remained historically low at 2.4% for the quarter. Average industrial rents came in at $8.40 per square foot. Sage Partners analysts reported that industrial rent growth continues to rise rapidly (up 9.4% year-over-year), keeping up with the rise of acquisition and construction costs for new industrial space.
In the retail sector, Northwest Arkansas has delivered 330,000 square feet of retail space since the third quarter of last year, but vacancy rates remain low at 2.9%.
Sage Partners has offices in Rogers and Little Rock. For a more detailed analysis of each submarket in Northwest Arkansas’ commercial real estate market, click here for a PDF.