Report highlights commercial real estate’s importance to economy
Commercial real estate remains a powerful force supporting Central Arkansas’ economic recovery, part of a national trend that should continue throughout the year.
These conclusions are provided by a local study along with national research showing that commercial and industrial assets will remain the hottest commodity in real estate in 2022.
Colliers of Arkansas notes that 2021 ended with the Little Rock metro area’s industrial sector continuing to gain momentum throughout the year, which began with a vacancy rate of 10.2% and ended at 5.8%.
“The industrial sector continues to tighten and outperforms all other commercial sectors in central Arkansas,” the Colliers team wrote in its fourth-quarter report, which examined key real estate sectors, including office and retail. “Increasing demand and a lack of supply continue to drive up asking prices and reduce the need for landlords to offer tenant concessions demanded in previous years.”
This trend is nationwide. CBRE Group Inc. notes that the booming industrial sector is likely to move forward again this year. “We foresee a record year for commercial real estate investment,” reports the real estate services and investment firm in its outlook for US real estate markets in 2022.
“After record transaction volumes and rental growth with extremely tight supply and high demand, the industrial real estate market will remain very strong in 2022,” the report reads.
In Central Arkansas, interest in office and retail space has remained relatively flat since opening in 2021. Vacancy rates in each sector have been essentially flat when comparing Colliers’ results for the first quarter of the year to last quarter.
The office vacancy rate was 15.2% in the first quarter and rose slightly to close the year at 15.7%. Office space outside of downtown Little Rock — including the Little Rock neighborhoods and nearby towns like Cabot, Conway and Sherwood — had declined slightly, although areas like West Little Rock and Riverdale are thriving and “remain high in demand for office space.” says Colliers in his report.
Retail vacancies stood at 16.5% in the first quarter of 2021 and ended the year at 16.1%, and investments in this sector are in high demand this year.
“The pandemic continues to create unpredictability in the marketplace, both nationally and locally,” reports Colliers. “However, given where we have been in terms of vacancy and rent anomalies over the last 24 months, we are beginning to see some flattening in rents and appear to be overcoming the vacancy spikes.”
Average retail rents in Southwest Little Rock increased the most from the start of the year through close, and the area traded at par with West Little Rock rents through the fourth quarter of 2021.
Colliers of Arkansas has offices in Little Rock and Rogers. The commercial real estate management firm has more than $553 million in revenue and more than $163 million in total leases in the state.
IMPROVING WORKER HEALTH
The US Department of Agriculture will distribute approximately $1 million to improve the health and well-being of farm workers in four Arkansas counties: Mississippi, St. Francis, Phillips and Chicot.
Federal funding has been targeted to rural communities because residents there have higher rates of chronic disease, health risk factors, and other health-related inequalities.
Known as the SHARE project (Supporting Health Advances for Rural Employees), the program aims to reach up to 20 employers or workplaces, 100 employer managers, 4,000 employees and up to 16,000 family members in the region.
Winrock International is leading the Arkansas effort along with other partners including the College of Osteopathic Medicine of the New York Institute of Technology at Arkansas State University, the Arkansas Community Health Worker Association and Community Health Centers of Arkansas.
“A healthy workforce is an integral part of overall economic development,” said Linsley Kinkaide, Winrock’s senior director of US programs. “This project fosters a culture of health in our existing industries, promotes improved health for our residents and creates opportunities for both workers and employers.”
The four Delta counties rank in the bottom 10% of Arkansas on health outcomes and health determinants.
SLIM CHICKENS BREAKS OUT
Fayetteville-based Slim Chickens was recognized as one of the hottest brands of the year in fast casual dining.
QSR magazine, which covers the restaurant industry, says Slim Chickens is the industry’s “Breakout Brand of the Year” for 2021. Slim Chickens now has 150 stores and the goal is to reach 600 by 2025.
The company was recognized for its growth driven by equity partners who invested in 2019. Franchise development accelerated with the investment, company officials said.
Slim Chickens says it opened a record 23 stores in 2019, another 19 in 2020, and grew another 40 over the past year. Same-store sales have increased 14% in each of the last two years.
REVOLUTIONARY BRANDING
Little Rock-based Revolution Plastics is also bringing some branding news – the recycling and manufacturing company says all product offerings will be consolidated under the Revolution brand.
The company manufactures plastic film products using up to 100% recycled resin for various industries including agriculture, construction and hospitality. Revolution develops certified recycling resin, creates customized closed-loop recycling programs for companies, and recovers and recycles plastic waste.
“The continued rapid growth of our business has necessitated this transition to a single, unified and collaborative brand,” said Sean Whiteley, Chief Executive Officer of Revolution. “Uniting our business units under one identity will allow us to deliver a unified message more effectively by championing solutions that empower everyone to contribute to a more sustainable future.”
The company operates a proprietary circular approach to plastic film, where products are recovered, recycled and manufactured within its own facilities.
Visit revolutioncompany.com for more information.
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