The Central Arkansas commercial real-estate market was not only stabilizing, but in certain areas thriving by the end of the second quarter in 2021, according to a report commissioned by Colliers Arkansas.
Colliers’ issues quarterly reports on commercial activity in Arkansas using data from CoStar, Real Capital Analytics and other sources. The 21Q2 report for the Little Rock metro revealed that industrial activity “continued to carry the day” in the state’s most populous region.
“The industrial market, which emerged as the breakout star of 2020, continued to shine with no hint of dimming anytime soon,” the report said.
Key takeaways from the report:
- The Little Rock market overall is stabilizing with west Little Rock leading the way;
- Industrial vacancy rate dropped to 8 percent;
- Banks lead the way in new development.
Lease rates rose across all submarkets as users scrambled for easy interstate access, the report found. Submarkets for the Little Rock metro are Downtown, East, Jacksonville, Maumelle, Midtown, North Little Rock, Sherwood, South, Southwest, West, Cabot, Conway and Saline County.
Colliers expects office vacancy rates to remain stable throughout 2021 even as businesses still debate remote working and the need to maintain large footprints. As a result, average lease rates held steady, according to the report. Other expectations include more movement in vacancy and lease-rate numbers once the cost of building materials levels out, and the continued adaption of retail with increased speed, more self-service options and the continued reliance on pick-up and to-go services.
Notable new developments in the metro include Costco’s first Arkansas store, which opened in west Little Rock July 21; Amazon’s e-commerce center near the Port of Little Rock, set to open in the fall; and the emergence of Chase Bank into the market with a west Little Rock location.
The report also noted the growth in new development for local banks and financial institutions with significant construction in the quarter, most of it in west Little Rock. The West submarket also leads in multifamily projects, single-family neighborhoods and senior activity.
“Look for more activity coming soon as new retail opens, neighborhoods expand and bank offices move toward the suburbs,” the report said.
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