Looks like the Little Rock metropolitan real estate market is continuing to pick up momentum, carried by strong gains in the industrial sector.
The sector experienced declining vacancy rates and increasing demand for space in the second quarter, according to Colliers of Arkansas, part of one of the world’s leading real estate management companies. The company produces a quarterly analysis that reviews sectors of the area’s real estate market.
Key findings for the second quarter show the overall Little Rock market continuing to stabilize as industrial vacancies improved by 8%, and banks are leading the way in new office development.
“Industrial continued to carry the day with declining vacancy rates and the demand for product, office began to stabilize somewhat, retail held steady even as users remained unsure, and banks led the way with new development” the report said.
“The industrial market, which emerged as the breakout star of 2020, continued to shine with no hint of dimming anytime soon.”
The area’s real estate market shows encouraging signs of continued improvement.
“Office vacancy rates are expected to remain stable throughout 2021 even with users still determining whether or not to keep large footprints as they continue to debate working from home vs. in-person,” Colliers reports. “As a result, average lease rates held steady, as well. Once the costs of building materials level out, we expect to see more movements in both the vacancy and lease rate numbers.”
Compared with the industrial sectors 8% vacancy rate, other areas are not fairing so well. The office sector has a 16.3% vacancy rate, though that is an improvement from 20.3% in last year’s third quarter. Retail vacancies are at 17.75% – flat with the third quarter of 2020.
In the office sector, Colliers reports suburban markets are recovering as rental rates go up and vacancies go down.
The retail sector will remain challenged for some time. Colliers notes that rental rates dropped in west Little Rock, increased in Conway and remained stable in the suburbs — Saline County, Cabot and the North Little Rock/Maumelle areas.
What’s it mean?
“These slight trends in rates and the higher market vacancy prove that consumers and retailers still do not have full confidence back,” the report adds.
Meanwhile the sector is adapting to the new environment of fewer customers in stores but increasing demand from online sales. “Retail continues to adapt their stores with increased speed and self-service options as well as continuing pick-up and to-go services,” Colliers reports.
Banks, meanwhile, are driving growth, with the report noting five major financial institutions have expanded in the area over the past 18 months, with the largest being the new headquarters for Bank OZK on Cantrell Road. That, of course, draws other businesses to cluster around the developments.
“This significant activity in west Little Rock will continue to spur demand for additional service-oriented businesses and should lead to more growth in this corridor (i.e. Costco),” the report said, referring to the opening of Costco in mid-July.
The industrial sector, though, is the star of the show “and shows no signs of letting up.” Spec buildings are being thrown up in anticipation of future business growth.
Colliers of Arkansas is part of Canada-based Colliers International. In Arkansas, the company has offices in Little Rock and Northwest Arkansas. The company manages 18.7 million square feet with more than $201 million in total leases.
Ritter Communications is continuing to march across the state. The Jonesboro company is investing $12 million to bring 100% fiber internet services and advanced cloud solutions to businesses in the Arkansas River Valley region.
Four River Valley markets will be fiber-connected beginning with Alma and Ozark in this month, Fort Smith in the fourth quarter and Van Buren in the first quarter of 2022.
“Access to quality broadband internet is a must-have for all Arkansas businesses,” Ritter Chief Executive Officer Alan Morse said. “Our highly-advanced internet services utilize the latest technology to provide rural communities with the most reliable and affordable broadband connectivity.”
Construction is underway in Fort Smith, and company crews will be working in the area through the summer. Fort Smith businesses will be connected by zone beginning in late fall.
Ritter Communications is a regional telecommunications provider serving 100 communities in four states.
Private investment firm The Stephens Group, announced last week that its portfolio company DISCO completed its initial public offering. The shares began trading on the New York Stock Exchange on July 21, under the symbol “LAW.” They traded Thursday at $45.75.
DISCO is an online research tool for law firms, legal services providers and governments. The company was founded by Kiwi Camara in 2013.
“We congratulate the entire DISCO team on this well-earned milestone,” said Aaron Clark, managing director at The Stephens Group. “We first invested in DISCO in 2016 and have enjoyed an amazing partnership.”
BIKE.co is now offering its bike service and rental shop in Northwest Arkansas, offering service in Bella Vista, Bentonville, Fayetteville, Fort Smith, Rogers and Springdale.
“BIKE.co fills a gap in the marketplace by providing a high-quality and attentive mobile bike service at a cost-effective price point,” said Nate Nead, BIKE.co founder. “Our model allows bike enthusiasts to spend less time dealing with the complex issues of maintaining their bikes and more time enjoying the hobby.”
BIKE.co also offers a mobile rental service with rental shops that feature a variety of makes, models and sizes for business and personal use.
More information is available at bike.co.