The region’s commercial real estate market is expected to maintain its upward trend
The commercial real estate market in central Arkansas is expected to continue to stabilize in the final nine months of 2022 as covid anxieties ease and more workers return to the office.
The region ended 2021 with a recovery in sight for key industrial, office and retail sectors, with the industrial market generating low vacancy rates and a boom in speculative construction to meet growing demand. That momentum has continued through the first three months of this year and is expected to remain strong through 2022, according to a report from Colliers of Arkansas that outlines real estate market trends in central Arkansas.
“As the pandemic persisted and user needs for mixed-use spaces increased, industrial vacancy tightened and remained so throughout the year,” notes the report on last year’s activity. . “Speculative construction began to appear on the metro to help alleviate the unprecedented demand. Still, there was minimal availability throughout the central Arkansas industrial market and rental rates continued to fall. increase.”
No change seems in sight. Investors need more flexible multi-tenant properties, and that need should fuel an increase in rental rates in the region, Colliers predicts. Industrial markets will continue to outperform other sectors this year as landlords and lessors remain in a prime position to demand higher rents.
It’s a different story for the office market, which held steady in 2021 – with vacancy rates remaining stable from January to December. Still, the rest of 2022 is an open book, though Colliers projects a “stable” approach as suburban markets continue to outpace downtown Little Rock, which is filled with older high-rises with towering towers. halls that were built for a different banking environment.
Suburban growth and downtown decline are expected to continue. “This trend will likely continue for the foreseeable future as major downtown properties struggle with oversized lobbies that are no longer in demand by banking institutions,” Colliers reports.
The outlook for 2022 is more similar for the office market. “Overall, the Central Arkansas office market held up reasonably well during the two-year COVID-19 pandemic,” the report said. “We are cautiously optimistic that this will continue in the short term.”
Retail trade is expected to boom with rising consumer spending and “explosive growth” in the leisure and hospitality sectors. Hotel and restaurant owners report that this year business is expected to return to 2019 levels and a pre-covid environment. However, low population growth and inflation are of concern and could dampen the retail sector.
Real estate development increased in 2021, supported by a favorable credit environment that fueled growth in multi-family, single-family, industrial and banking developments. Much of this growth, like the office market, is occurring in suburban areas such as Benton, Bryant and Conway.
While construction has accelerated, supply chain issues and labor shortages remain challenges for the real estate industry. “While 2022 looks promising, we expect to see continued tension due to supply chain disruption, rising material costs and rising interest rates,” Colliers reports.
Colliers, a global real estate investment and management firm, has offices in Little Rock and northwest Arkansas. It has over 19.3 million square feet of space under management and over $550 million in total Arkansas sales.
Little Rock-based Windstream Holdings Inc. reports that it is rapidly deploying the nearly $523 million in federal funding it has won to expand 1-gigabit service across its 18-state footprint. The company says it will eventually reach more than 19,000 new Arkansas residents and businesses with the funding.
Company officials say about 2,800 Arkansas customers will receive the service this year. Under federal funding rules, Windstream has six years to complete construction.
“As the pandemic has demonstrated, robust broadband has become an essential service as more of the national economy moves online, and public-private partnerships are essential to make it available in the most remote areas. rural areas in America,” said Tony Thomas, president and CEO. CEO of Windstream. “That’s why Windstream participates in network expansion partnerships at the federal, state and local levels to deliver future-proof fiber broadband connectivity to our customers, and we have a strong track record of of our commitments.”
Windstream’s efforts are funded through the Rural Digital Opportunity Fund, which was established by the Federal Communications Commission to accelerate the delivery of high-speed Internet to rural communities in hard-to-reach and expensive areas.
The federal funding will allow Windstream to provide fiber internet access to more than 192,000 locations in its service area, according to the company.
Entergy Arkansas customers are eligible for cash rebates when they purchase electric technology under a new initiative that has been approved by state regulators. This includes purchases of forklifts, cranes, golf carts and electric vehicle chargers.
The program will help the utility in its sustainability efforts and improve control of greenhouse gas emissions, the company said. “This will help manage greenhouse gas emissions while supporting the advanced technology options our customers want,” said Laura Landreaux, president and CEO of Entergy Arkansas.
The eTech initiative, which is known as a beneficial electrification program in the industry, can be used by any Entergy Arkansas customer, including homeowners and businesses. More than 40 utilities in North America offer similar programs.
The Arkansas Public Service Commission has approved 14 technologies eligible for rebates, such as refrigerated trucks, school and transit buses, drayage trucks, digital billboards, scissor lifts , scrubbers and sweepers, tugs and tow tractors and belt loaders.
Rebates range from $150 for a golf cart to $5,000 for a digital billboard. The company said it has no annual limit on the number of discounts per customer.
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