The overall vacancy rate for commercial property in Benton and Washington counties is down for the first half of the year on the strength of the warehouse sector but the vacancy rate for office space was up, as more employees continue to work from home because of covid-19 concerns.
The vacancy rate for all commercial property in the two counties stood at 8.9% for the January through June period of 2021, compared with 10.8% for both halves of 2020, according to the Skyline report released today.
Mervin Jebaraj, director of the University of Arkansas Center for Business and Economic Research, said in an interview that demand in the warehouse sector is being driven by a need for space as more and more people shop online.
The value of building permits hit an all time high in the first half of this year at about $647 million, with $435 million attributed to the new Walmart headquarters project in Bentonville. With that project excluded, the value of permits for the first half of 2021 was about $212 million, up from nearly $189 million for the last half of 2020 and the second largest total since the report began.
The warehouse sector was a major driver of the reduced vacancy rate for the first six months of the year, posting a 6.6% vacancy rate down almost 3% from 9.3% in the second half of 2020. No new warehouse space was added during the period.
The office sector saw its vacancy rate tick upward to 11.2% from 10.8% for both halves of 2020. During the first half of 2021 companies consolidated multiple Class A office spaces with more employees working remotely while the pace new and renewed leases slowed because of the covid-19 pandemic. According to the report, the office sector added about 165,000 square feet but only about 1,000 square feet were absorbed.
Vacancy rate for the retail sector was 10.8%, unchanged from the second half of 2020.
The Skyline Report examines the residential, commercial and multifamily real estate market in Benton and Washington counties. Researchers at the University of Arkansas, Fayetteville’s Center for Business and Economic Research compile data for the report. Arvest Bank first sponsored the Skyline Report in 2005.