Commercial real estate remains a powerful force propping up economic recovery in Central Arkansas, part of a national trend that should continue throughout this year.
Those conclusions are provided by a local study along with national research that shows commercial and industrial facilities will remain real estate's hottest commodity in 2022.
Colliers of Arkansas notes 2021 closed out with the Little Rock metro area's industrial sector continuing to build momentum throughout the year, which began with a 10.2% vacancy rate and ended it at 5.8%.
"The industrial sector continues to tighten up and outperform all other commercial sectors in central Arkansas," the Colliers team wrote in its fourth-quarter report examining key real estate sectors, including office and retail. "Increasing demand and lack of supply continues to bolster asking rates and decrease landlords' need to offer the tenant the concessions called for in previous years."
That trend is true nationwide. CBRE Group Inc. notes the booming industrial sector likely will charge ahead again this year. "We foresee a record year for commercial real estate investment," the real estate services and investment firm reports in its outlook for U.S. real estate markets in 2022.
"On the heels of record transaction volume and rent growth amid extremely tight supply and high demand, the industrial real estate market will remain very strong in 2022," the report said.
In Central Arkansas, interest in office and retail spaces have been relatively unchanged since the opening of 2021. Vacancy rates in each sector have remained essentially flat comparing Colliers' findings in the first quarter of the year with those of the last quarter.
Office vacancy, for example, was at 15.2% in the first quarter and climbed slightly to close the year at 15.7%. Office space outside of downtown Little Rock -- including Little Rock neighborhoods and nearby cities such as Cabot, Conway and Sherwood -- had declined slightly, though areas such as west Little Rock and Riverdale are thriving and "remain in high demand for office space," Colliers says in its report.
Retail vacancies were at 16.5% in the first quarter of 2021 and closed the year at 16.1% and investment in the sector is in high demand heading into this year.
"The pandemic continues to create unpredictability in the market, nationally as well as locally," Colliers reports. "However, considering where we have been the past 24 months in terms of vacancy and lease rate anomalies, we are starting to see some leveling out of lease rates and seem to be moving past the spikes in vacancy."
Average lease rates for retail space in Southwest Little Rock increased the most from the beginning of the year to the closing and the area was on par with rates in west Little Rock by the fourth quarter of 2021.
Colliers of Arkansas has offices in Little Rock and Rogers. The commercial real estate management firm has sales of more than $553 million and total leases of more than $163 million in the state.
IMPROVING WORKFORCE HEALTH
The U.S. Department of Agriculture will distribute about $1 million to improve the health and wellness of the rural workforce in four Arkansas counties: Mississippi, St. Francis, Phillips and Chicot.
Federal funds have been targeted for the rural communities because residents there have higher rates of chronic diseases, health risk factors and other health-related disparities.
The program, known as the Supporting Health Advances for Rural Employees (SHARE) project, has a goal to reach up to 20 employers or worksites, 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 New York Institute of Technology's College of Osteopathic Medicine at Arkansas State University, the Arkansas Community Health Worker Association and Community Health Centers of Arkansas.
"A healthy workforce is a vital component of comprehensive economic development," said Linsley Kinkaide, Winrock's senior director of U.S. Programs. "This project fosters a culture of health in our existing industries, promotes improved health for our residents, and creates opportunities for both employees and employers."
The four Delta counties rank in the bottom 10% of Arkansas for health outcomes and health factors.
SLIM CHICKENS BREAKS OUT
Fayetteville-based Slim Chickens has been recognized as one of the hottest brands of the year in the fast-casual dining sector.
QSR magazine, which covers the restaurant industry, says Slim Chickens is the "Breakout Brand of the Year" in the sector for 2021. Slim Chickens now stands at 150 stores and the goal is to reach 600 by 2025.
The company was recognized for its growth, fueled with the help of 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 increased with another 40 last year. Same-store sales were up 14% in each of the past two years.
REVOLUTION BRANDING
Revolution Plastics of Little Rock also brings some branding news -- the recycling and manufacturing company says all product offerings are being consolidated under the Revolution brand.
The company manufactures plastic film products containing up to 100% recycled resin for several industries including agriculture, construction and food-service restaurants. Revolution develops certified recycled resin, creates custom closed-loop recycling programs for businesses and recovers and recycles plastic waste.
"Our company's continued rapid growth has necessitated this transition to a single, consistent, and collaborative brand," says Sean Whiteley, Revolution's chief executive officer. "Unifying our business entities under one identity will enable us to more effectively convey a unified message in championing solutions that empower everyone to contribute to a more sustainable future."
The company operates a proprietary circular approach to plastic film that recovers, recycles and manufacture products, all within its own facilities.
More information is available at revolutioncompany.com.
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