The Central Arkansas commercial real estate market picked up momentum in the third quarter, as most key submarkets in the region saw more activity. West Little Rock gained the most business, boosted by the Simmons Bank announcement that it would occupy the former Bank OZK headquarters on Chenal Parkway.
In the quarter, the region's overall office market made gains for the first time this year, and the industrial sector, which has been leading the way this year in the commercial real estate sector, showed no signs of slowing down.
"Growth is a common theme" was the headline for the quarterly overview produced by Colliers of Arkansas, a leading real estate management and ownership group in the state.
Three regional real-estate trends were evident in the third quarter ending Sept. 30:
• Office markets are rebounding though downtown Little Rock is lagging.
• Industrial land is a "hot commodity" and will continue to be for months to come.
• Suburban communities, principally in Conway and Saline County, are growing.
Office-market activity picked up in the quarter and the vacancy rate was recorded at 14.7%, down nearly two points from the previous quarter and an improvement from 18% at the end of 2020. Those improvements are coming without accompanying major price increases.
Office tenants seem to be settling in to meet their future needs. "Bigger deals closed and tenants began to get more comfortable signing longer-term deals," the report noted.
Downtown Little Rock, however, continues to have the greatest vacancies and the most space available for leasing. The city's traditional core office market is being left behind by growth in west Little Rock and other markets such as the Riverdale area.
The downturn is highlighted by Regions Center being put up for sale, a move that could lead to similar for-sale signs at other downtown skyscrapers, according to the report.
Industrial activity continues to sparkle, though vacancy rates inched up to 8.3% from 8% the previous quarter. Nevertheless, vacancies in the sector improved from 10.2% at the end of the year.
Ongoing supply chain disruptions fueled by the pandemic are leading users of large industrial space to expand their requirements to house the goods they need for customers. And Amazon's move into the area has gobbled up space as the company spreads across Central Arkansas, occupying more than 5 million square feet of warehouse space.
"Most industrial users are expected to increase their inventory due to supply chain woes and with that comes larger footprints," Colliers reports. "Industrial users are now looking for land to expand their businesses, which could bring more large industrial space for future development."
Moreover, the report said the Little Rock region is ripe for more industrial growth and "the scope will continue to be at historic levels for the market."
Retail is a different story.
Traditional retail models -- already devastated by the pandemic -- that encourage a stop-and-shop approach and invite customers to shop on site seem to be on the way out. "Retailers with drive-throughs or grab-and-go models are here to stay and seem to be dominating the retail submarket over the traditional retailers," according to the report.
Regional retail vacancy rates increased to nearly 19% in the third quarter, up from about 17% at the close of 2020.
The suburbs are growing, adding population and attracting new service-oriented businesses as a result. Conway has seen substantial retail and mixed-use projects being developed while the Benton-Bryant corridor has a new hospital and restaurants coming to the Saline County cities.
Colliers of Arkansas operates offices in Little Rock and Northwest Arkansas with 115 employees. The firm manages 18.7 million square feet of space in the state representing more than $201 million in leases. Sales involving Colliers, which is part of a global operation with offices in 68 countries, have reached nearly $400 million in Arkansas.
More details on the quarterly real estate report are available at colliers.com/Arkansas.
NARRATIVE TRAINING
Telling an effective story to promote your business is a core leadership and organizational practice that is essential to growth and development.
Tomorrow, the Sam M. Walton College of Business is hosting an executive education course that teaches skills needed to build a narrative around your business that can motivate others to act. The virtual course is available from noon-4 p.m. and will be led by Sara Bishop, a communications consultant who is an executive in residence at the University of Arkansas.
Participants will learn how storytelling with a strong narrative can build a common purpose for employees and key stakeholders. The session also will offer tips on how to communicate the story strategically and consistently to build a shared vision of the future. Techniques will outline how to create a narrative that will engage employees and attract customers.
The program is offering a 50% discount to leaders who participated in previous narrative sessions led by Bishop. The fee for the course is $325 outside of the discount.
More details and information are available by emailing execed@uark.edu.
PITCH YOUR BUSINESS
The Conductor in Conway is holding several events to promote Global Entrepreneur Week, including a business-pitching competition Thursday that promotes minority entrepreneurs.
The entrepreneurial support organization will award $2,000 in prizes at the event, with pitches starting at 6:30 p.m. on the University of Central Arkansas campus. Anyone with a great business idea or who wants to network with minority entrepreneurs is invited to attend.
The competition will be at the UCA Welcome Center, 205 Donaghey Ave. in Conway. Doors will open at 6 p.m. and the event is scheduled to end by 7:30 p.m.
Participants have 60 seconds to pitch their business -- but can't use notes or slides -- using their own powers of persuasion.
Two winners will be selected and each will receive $1,000: an audience-choice pick and a judge's choice favorite.
To learn more about the event or for more details on other events celebrating global entrepreneurship, go to arconductor.org.
Column ideas or recommendations? Thoughts or musings that need pursuing? Contact me at amoreau@adgnewsroom.com or at 501-378-3567.