FAYETTEVILLE, Ark. (KNWA/KFTA) — The overall vacancy rate for commercial property in Northwest Arkansas fell slightly in the second half of 2022.
According to the Commercial Skyline Report sponsored by Arvest Bank, the overall vacancy rate in Benton and Washington counties at the end of the second half of last year fell from 5.8 percent in the first half to 5.6 percent. The vacancy rate was 8.3 percent in the second half of 2021.
The report said that a total of 383,628 square feet of new, leasable commercial real estate entered the market during the period. That amount was down from the 521,750 square feet of new space that entered the market in the first half of last year.
The commercial real estate market in Northwest Arkansas region is extremely healthy right now. To have the lowest vacancy rate since we began tracking this data in 2005 despite the emergence of remote and hybrid work options is a testament to the market’s performance. The commercial market never really took any long-term hits from the pandemic, which is something almost no other market in the U.S. can say.Mervin Jebaraj, CBER director and Skyline Report lead researcher
Year over year, vacancy rates declined in five of the seven submarkets of commercial real estate, with only the office/warehouse and retail/warehouse submarkets experiencing vacancy rate increases.
A total of $240.9 million in new permits were issued in the second half of 2022, with $218 million of that total for developments other than Walmart’s new HQ project. The report said that is the highest non-Walmart HQ total since the second half of 2005.
“It is obvious from the historically low vacancy rate in NWA commercial properties that there are opportunities for commercial real estate developers to intelligently take on new projects,” said Gene Gates, Arvest Bank of Fayetteville loan manager. “At Arvest, we are working closely with our development customers to meet the region’s need for office and warehouse space.”
The Arvest Skyline Report is a biannual analysis of the latest commercial, single-family residential and multifamily residential property markets in Benton and Washington counties. The report is sponsored by Arvest Bank and conducted by CBER.