Streetsmart Cautiously Optimistic on Market

Despite an overall slowdown in the Northwest Arkansas commercial and residential real estate markets, the outlook for the area economy continued to be positive during the inaugural Streetsmart Coffee Hour, hosted by the Streetsmart Data Services Inc. of Fayetteville.

“I think we’re bottoming,” Jeffery Collins, researcher and partner with the Streetsmart said. “I think some stuff on the market will continue to sit, even as new subdivisions come online. Some things will live and some things will just have to die. There are still lots of good opportunities in the market. We just need to be smarter about it.”

Collins noted that nearly 7,000 new jobs have been created every year in the Northwest Arkansas market since 2003 and data indicate the trend will continue for at least the next five years.

The new jobs, Collins said, will continue to bring new residents to the area, which will help continue the demand for housing and commercial space.

The market slowdown has hurt different parts of the commercial market more than others, Collins said.

Retail lease space saw the largest increase of all commercial space, across the board, from 2003 to 2006. Benton County retail space increased 65.4 percent from 2005 to 2006, due in large part to the Promenade at Pinnacle Hills coming opening.

Vacancy for class “A” retail space was 7.44 percent while rates for class “B” retail space were higher at 14.18 percent for the Northwest Arkansas market.

Lease rates for all Class “A” and “B” commercial space are holding Tom Reed, researcher and partner with Streetsmart, said. But landlords are starting to make concessions with lease agreements.

The continued growth of the retail market is a good indicator that the economy will continue to grow, just at a much slower pace than in years past, Collins said.