11.1.24 – Arkansas Business – Colliers
Lyon College School of Dentistry Signs Long-Term Riverdale Office Lease; Office Market Vacancy Shows Slight Decrease
Retail vacancy rates in the Little Rock metro experienced a slight uptick from the second quarter of 2024 to the third quarter, settling in at 4.9%. Average rental rates across the market increased slightly from $16.75 per SF to $17.23 per SF. The long-expected interest rate cuts from the Federal Reserve finally arrived in the third quarter, teeing the retail market up for increased activity in both investment sales and leasing opportunities. Overall, the market continues to show resilience and, despite economic challenges, has adapted and continued to grow.
The metro’s overall office market vacancy rate saw a third-quarter decrease of 1.5% with Riverdale scoring the largest lease of the year thanks to the Lyon College School of Dentistry, which took 121,905 SF at Riverfront Plaza in a 25-year lease.
A recurring off-market theme that we continue to observe is tenants asking for space reduction and shorter-term leases as landlords continue to generally offer limited tenant improvement packages. Construction costs ticked slightly down in the third quarter, yet remain near all-time highs. As a result, there are currently no significant office construction projects in the market.
The industrial market continued its trend in consistency, ending the quarter at the same vacancy rate that it started the year with: 4.4%. Much-needed new inventory on the market remains hard to come by. Lease rates continue to either hold steady or climb, with flex products in the west submarket pushing above the $10 ceiling while the Saline County submarket is just behind at $9.75.