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Vacancy rates subsiding as vaccinated workers refill offices

by Andrew Moreau | May 9, 2021 at 2:17 a.m.

A year into the pandemic, it appears that vacancy rates for commercial and retail properties in Central Arkansas are improving as vaccines spread and workers return to offices.

Colliers of Arkansas, in its first quarter 2021 analysis of the real estate market, noted some optimism related to an across-the-board turnaround for the sector.

"Office vacancy rates have been on a downward trend the last two quarters," the real estate management firm reported. "There have been fewer long-term lease renewals, but landlords have still been able to sign leases."

Vacancy rates in three key sectors -- office, industrial and retail -- have shown stability over the past two quarters. From the second quarter of 2020 through the end of March, the office vacancy rate has dropped to 15.2% from 20.3%; industrial has declined to 10.2% from 12.5%; and retail has remained relatively flat, going from 17.5% to 16.5%.

In the office sector, Colliers reports that long-term lease renewals have slowed but building owners are still signing up tenants. "Corporations seem to be retaining office space while employees begin to return to the office," the report said.

The office market, however, is volatile. Downtown Little Rock vacancy rates are higher than the average while southwest Little Rock has the lowest vacancy rate in the region at 4.2%. North Little Rock is the highest in the area at nearly 23%.

Lease rates are improving in the industrial sector and more buildings are being constructed. New speculative buildings are adding available space as owners broaden their real-estate portfolios. "Ownership confidence is growing by the month as industrial vacancy rates continue to decline," Colliers reported.

Retailers are getting a boost from increased vaccines, which is giving shoppers more freedom to move about, with the management firm reporting "we're seeing more retailers reopening and expanding their spaces."

Retail sectors with low vacancy rates include medical and pharmacy, banking, groceries and auto-service businesses.

Overall development of new projects is picking up in the Little Rock market. "The demand is strong for industrial, multifamily, banking and senior-living projects," Colliers found. "But material pricing has gone up and has caused either delays or developers to switch materials to meet deadlines."

Colliers has two offices in Arkansas and manages about 18.7 million square feet of space in the state.

RESEARCH GRANTS AVAILABLE

The Arkansas National Science Foundation is looking for research proposals that strengthen ties to Arkansas businesses and provide unique educational opportunities.

The foundation is awarding grants as part of a $20 million project related to the organization's Established Program to Stimulate Competitive Research. That effort provides seed funding to university researchers across the state.

"This project is spread across more than a dozen four-year and two-year Arkansas colleges and universities and involves more than 60 university researchers," said Steve Stanley, the statewide program director for the initiative.

The program provides grants for cutting-edge research in data analytics and machine learning. The state is matching the grant with the $4 million it is contributing to the overall effort.

Researchers holding appointments in research or teaching positions at colleges and universities in Arkansas may submit proposals.

Proposals are due June 30. More information is available at arkansasepscor@gmail.com.

ARKANSAS WORKING MOMS

As we honor our mothers today, the news for working moms in Arkansas is not so good. The state doesn't fare well in a national study that surveys working conditions for mothers across a range of categories.

The state's best ranking for life as a working mom is 15th -- for the unemployment rate for women. The state is ranked 17th for median women's salary.

Arkansas ranks 18th in two categories: the gender pay gap measuring women's earnings as a percentage of men's and for parental-leave policies at businesses.

Working moms in Arkansas also face other challenges in day care quality, average length of a work week and the percentage of single moms in poverty -- all categories where the state ranks 40th or worst. Arkansas is dead last in measuring pediatricians per capita.

Factoring in all categories, Arkansas was listed as 43rd in the nation. Louisiana finished last and Massachusetts ranked first as the friendliest state for working moms.

The study, conducted by WalletHub, compared the 50 states and the District of Columbia in three key dimensions: child care, professional opportunities and work-life balance. More information is available at wallethub.com.

RESTAURANT AID

Restaurateurs are beginning to rely on federal loans to help recover from the covid pandemic.

The U.S. Small Business Administration reported last week it received more than 186,000 applications for loans through the Restaurant Revitalization Fund.

The initiative is a $28.6 billion program that provides economic aid to restaurants and other establishments struggling to recover from the pandemic.

"Our nation's restaurants have been among the first and worst hit by this pandemic, which is why we've been working as fast as possible to meet businesses where they are and get this much-needed relief into their hands," said SBA Administrator Isabella Casillas Guzman.

"As directed by Congress, we're prioritizing historically underserved communities and smaller businesses to ensure this relief is going to those who need it the most."

In the first two days of the application window, SBA has received 97,600 applications from businesses owned and controlled by women, veterans, socially and economically disadvantaged individuals or some combination of the three.

No statistics for Arkansas were available in the early days of the program.

Under the program, restaurants and bars are eligible for economic aid equal to their pandemic-related revenue loss, with a cap of $10 million per business and $5 million per location.

Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at amoreau@adgnewsroom.com or at 501-378-3567.

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