Like many industries, the pandemic had a significant impact on the current state and trajectory of the commercial leasing market in Arkansas. As a result, our leasing agents, brokers, and the entire team are busy serving our clients and keeping up with the ever-growing and changing commercial leasing industry. Our leasing agents are experts in the local and national markets and are always in the know about what is currently available and what is becoming available to help their tenants find the right fit.
“I think about a year ago there was a general concern about what the future held for office space,” said Leasing Associate Stephanie Farmer. “No doubt, there have been some shifts in mindset, but I will say that we are finally in a place where tenants are making decisions, and they’re feeling comfortable signing leases, which is great. The biggest trend I’ve seen recently is office users willing to downsize their office in exchange for paying class A rates, which we weren’t seeing before. During COVID, Northwest Arkansas in general experienced a lot of growth in population, which has also spiked a need for more industrial options.”
Arkansas is in a unique position when it comes to the commercial real estate market. With large commercial companies, including Walmart, J.B. Hunt and Tyson, all headquartered in the state, the commercial real estate market continuously stays busy, especially when compared to other regions of the country. With current vacancy rates nearing 6% compared to the 12% national average, the office market in Northwest Arkansas has remained stable and leased space has already outpaced the market average from 2017 to 2019, according to CoStar.com.
“The Walmart, J.B. Hunt and Tyson influence, no matter the economy on a national level, keeps the Northwest Arkansas market even-keeled,” said Tommy Van Zandt, Vice Chairman and Principal. “Walmart’s not going to stop selling things in stores because their price points are at the same level, whether there is a pandemic or other hard times, and people are going to have to buy necessities such as toilet paper, food and clothing. They appeal to all types of people, and we’re not affected nearly as much as other parts of the country might be because of the influence from those three main companies, Arkansas keeps growing, pandemic or otherwise. We really didn’t see any drastic changes in office occupancy rates.”
The story is much the same in Central Arkansas where vacancies are also hovering around 6%. Major players such as Bank OZ, Dillard’s and First Orion are helping to maintain stability in the region, and submarkets such as Riverdale continue to expand as a desire to be near the Arkansas River increases. The central business district continues to pick up steam, and the area is transformed into a “creative corridor” riding the live/work/play movement.
It’s not just the office sector that is hot these days. The industrial market continues to strengthen, and vacancies have tightened over the past decade nearing all-time lows in the 4% range. While existing inventory supports local businesses and manufacturing, new development remains modest in Central Arkansas, but the e-commerce boom has made it a destination for Amazon.
“There is no doubt that we have to be more creative with our client solutions in Central Arkansas. Inventory is low and development is modest, but with access to waterways, rail and ground transportation, Little Rock is becoming a regional distribution hub bringing in big names such as Amazon,” said Jason Parker, vice president who represented Amazon in recent lease transactions and land acquisitions.
Armed with extensive knowledge of the local, national, and even global markets, we strive to be a trusted partner and advocate providing real estate solutions that meet the needs of the tenant’s business strategy, financial goals, and operational objectives. We utilize an array of technologies and tap experts from around the country through our alliance with Cushman & Wakefield.
“Leasing activity nationwide has come back to a steady pace,” said broker Derek Groshek. “Not utilizing a tenant agent can only hurt the user. We have a fiduciary responsibility to protect our clients, so utilizing us, we get the client the best deal possible, and we offer the best protection for our clients. We utilize different databases, whether that be demographic or local MLS, to compile information on the market. That paints a very good picture of the status of the area, where people think the market is going to be going, and that helps educate our clients into making the best decisions possible.”
While having experts who focus on tenant representation and those who focus on agency leasing, our goal remains the same – realize client real estate objectives and develop relationships that result in long-term partnerships. If you are interested in learning more about how Sage Partners’ leasing services can benefit you, please visit https://www.sagepartners.com/contact/.
