Industrial space deals moderating in Northwest Arkansas

Palmer Hays, an industrial and land specialist with Bennett Commercial Real Estate, is seeing a decline in Northwest Arkansas industrial space deals with “some caution within the investment community.”

In his latest “Industrial Real Estate Rant,” Hays noted that the average industrial space deal price per square topped $110 for the first time in the market’s history, but that comes during a decline in the number and size of deals.

Following are a few points in his recent report.
• Just below 390,000 square feet of property was traded in the first half of 2024, the third consecutive half-year period where total square footage traded has fallen below the post-COVID average of 800,000 square feet traded.
• Total transaction value of $42.7 million in the first half of 2024 was below the post-COVID half-year average of $49.2 million. For reference, the highest half-year transaction total was $96.6 million in the second half of 2021.
• Bulk trades — 100,000 square feet and above — have nearly reached a standstill in Northwest Arkansas. In 2021 and 2022, there were 11 transactions of this size, but since the start of 2023, only one such transaction has occurred.

“Optimism in the market solely depends on who you’re talking to. Some believe the rate cut announced on Sept. 17–18 will significantly increase activity, but I disagree, to an extent,” Hays noted in his report. “If we had an ample amount of product sitting on the market waiting for the ‘bid/ask’ spread to shrink, I do think this would be the case. The fact of the matter is that there are only 11 industrial facilities listed for sale in NWA at the moment, most of which have sat on the market for a decent amount of time.”