The commercial vacancy rate in northwest Arkansas remained at 6.4% in the second half of 2023, according to the Arvest Bank Skyline Report.
The report, which studies Benton, Washington and Madison counties, said the vacancy rate held even though more than 623,000 SF of new commercial space became available in the second half of the year. The vacancy rate for the year is an increase from when it was 5.6% in the second half of 2022.
The Skyline Report is sponsored by Arvest Bank with research conducted by the Center for Business and Economic Research at the University of Arkansas’ Sam M. Walton College of Business.
“Commercial real estate in the region remains very healthy,” said Mervin Jebaraj, the director of the CBER. “We continue to see new space enter the market and get leased fairly quickly. While many regions in the country are experiencing rising vacancy rates, the Northwest Arkansas region has remained very balanced in terms of supply and demand.”
The Skyline Report breaks down the commercial real estate market into seven segments. The major three — office, warehouse and retail — saw vacancy rates remain the same or drop.
The warehouse segment’s vacancy was 3.2% in the second half of the year, down from 3.6% in the first half of 2023 but up from 1.6% in the second half of 2022. The segment added 575,000 SF of space in 2023.
Office space vacancy remained unchanged at 8.8% in the second half of 2023 compared to the first half, but up from 8.4% in the second half of 2022. The segment added 203,815 SF of space in the second half of 2023.
Retail vacancy rate was 7.9% in both halves of 2023 as well as the second half of 2022.
In the smaller subsets, medical vacancy was 5.5% in the second half of 2023, down from 5.7%; office-retail vacancy was 6.7%, down from 9.4%; office-warehouse vacancy was 7.6%, up from 6.4%; and retail-warehouse vacancy was 4.8%, down from 6.3%.
The Skyline Report said a record $287.1 million in non-Walmart commercial building permits were issued in the second half of 2023. Walmart, which is building a new home office in Bentonville, had permits that totaled $500,000 in the second half of 2023.
In the first half, Walmart had $25.4 million in permits in the first half of 2023 while non-Walmart permits totaled $168.5 million.
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