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Optimistic outlook; positive signs surround $9.2 million retail market as new projects and expansions continue growth.

Optimistic Outlook

The retail scene in central Arkansas has remained relatively stable over the past year in terms of both occupancy rates and lease rates. These key indicators have even firmed up slightly while the market has continued its modest growth track with a handful of new projects and expansions.

Figures compiled in the 1990 Retail Lease Guide survey conducted by Arkansas Business indicate the occupancy rate in central Arkansas is just shy of 89 percent, an increase of almost 1.2 percent over last year.

The average lease rate in the market rose from $8.09 per SF in 1989 to $8.34 this year, which represents a nice rebound after dipping from $8.57 per SF in 1988.

Hank Kelly, a partner with Flake & Co., shares the upbeat perspective of many players in noting these positive signs surrounding the local market. "I feel better about the retail space we manage this year than I did last year," remarks Kelly, a certified property manager.

According to this year's survey, there is currently an inventory of existing and planned retail space totaling a hair over one million SF among 120 properties reporting occupancy rates. These projects represent an overall retail market of more than 9.2 million SF.

Increased Demand

Despite the addition of as much as 700,000 SF of new space, the improved occupancy rates reflect an increased demand that is helping boost the absorption rate. Vaughn McQuary hopes the spillover impact on lease rates will continue as well.

"I think we would all like to see the market activity among tenants pick up so the rate structure will strengthen," says McQuary, property manager and commercial leasing agent with Rector Phillips Morse.

Only four properties in this year's survey failed to disclose their occupancy rates, and all of those have yet to be completed or announce any tenants. These projects are included in our list but were disregarded for purposes of figuring the overall occupancy rate in the market.

There is at least 733,700 SF of new retail space that has recently opened or is expected to open in the coming months. Of that, more than 417,000 SF is known to be pre-leased, and additional commitments should become public before year's end.

Among the existing developments adding space are:

* Sycamore Plaza in North Little Rock, a 70,000-SF Megamarket under construction plus 85,000 SF more retail space scheduled for completion in 1991.

* Wal-Mart Center in Jacksonville, 40,000 SF of new retail space now under construction.

* Megamarket Shopping Center in Little Rock, a 27,000-SF Office Depot outlet slated to open in 1991.

New projects coming on line this year include:

* Candlewood Station in Little Rock, a 63,000-SF development on Arkansas Hwy. 10 anchored by a 53,000-SF Kroger store that will open for business in December.

* Shackleford Place in Little Rock, 25,000 SF expected to open in November.

* JFK/Kiehl Shopping Center in North Little Rock, 15,500 SF developed by Basham & Co.

* Westside Plaza in Little Rock, 13,200 SF of small tenant space under construction near Candlewood Station.

* Stagecoach Plaza in Little Rock, a 10,000-SF strip center with a planned November opening.

Retail centers on the horizon for 1991 are:

* McCain Plaza in North Little Rock, a 300,000-SF power center by Folmar and Associates of Mobile, Ala., set to open in April 1991 with a lineup featuring K mart, Phar-More, T.J. Maxx and Cinemark USA.

* Markham Park Shopping Center in Little Rock, a 50,000-SF development by Basham & Co. just west of the Megamarket Shopping Center.

* The Unnamed Center at 37th Street and Camp Robinson Road, still on the drawing boards with 35,000 SF of planned retail space.

The Little Rock-North Little Rock area has begun to draw more attention from a fresh assortment of out-of-state retailers, according to some sources like Drew Basham. "We're real optimistic about large national tenants," states Basham, marketing director at Basham & Co. "We're getting a lot of interest from them. I think there's a lot of potential for those kinds of tenants in the market."

Eye-Catching Renovations

A combination of overbuilt markets elsewhere and the maturity of the local metro scene are touted as two reasons for the heightened interest. The extensive renovations and expansions of Park Plaza and University Mall in Little Rock are responsible for catching the eye of many prospective retail players new to the market.

There is still a carryover impact from those big splash projects too. The facelifts at The Other Center in North Little Rock and University Plaza in Little Rock contribute to that vibrant and competitive activity.

Serious talk is still making the rounds that The Summit Mall at Shackleford Road and I-430 will begin to materialize during the next two years. At this point, Wilson and Associates in Montgomery, Ala., haven't announced if they will carry out their initial plans for phase one: a 975,000-SF mall and two 10,000-SF restaurants.

In addition to the big-picture projects, demand appears to be strong among primarily local players for retail space in the 800-1,200 SF range.

The trigger for the next round of frenzied retail growth in west Little Rock is already in place with Chenal Valley. As it continues to fill out, commercial types are wondering who's going to make the first big move to take retail development farther west?

In the meantime, the McMain Mall area in North Little Rock continues to blossom more and more retail growth. West and north remain the favored directions for development on the retailing compass. No surprises there.

Table : RETAIL LEASE GUIDE
 1990 1989 1988 1987
Net rentable 9,248,417 8,518,536 8,051,503 7,534,662
SF available 1,019,351 1,039,107 887,421 1,148,046
Properties 124 116 102 85
Occupancy rate 89.0 87.8 89.0 84.8
Rate/SF (avg.) $8.34 $8.09 $8.57 $8.51
No. of properties(*) 120 93 72 54


(*) Properties not listing rates/SF or SF available were not included in the totals and averages; also, the low end of ranges given were used. (C) Journal Publishing Inc.

Table : 10 LARGEST PROPERTIES IN CENTRAL ARKANSAS
Property Leasing Firm Net Rentable
McCain Mall Melvin Simon & Assoc. 854,284
Park Plaza Marathon Realties 600,000
University Mall Melvin Simon & Assoc. 567,554
McCain Plaza Lomar & Assoc. 300,000
Southwest Mall Flake & Co. 260,000
University Plaza S.C. Flake & Co. 240,000
Riverdale Center Dusty Edwards 215,500
Market Plaza General Properties 202,137
Gregory Place S.C. J.D. Ashley 190,000
The Other Center Metropolitan Trust 180,000


Source: 1990 Retail Lease Guide (C) Journal Publishing Inc.

Table : TOP 10 HIGHEST RATES PER SF
Property Leasing Firm Rate/SF
Lakewood S.C. General Properties $14.00
Lakewood Village General Properties $14.00
Stephens Building Doyle Rogers Co. $14.00
Market Street Plaza Freeling Properties $12.50
Candlewood Whisenhunt Investments $12.50
240 S. Shackleford Hathaway Group $12.00
Bowman Curve Allison Moses Redden $12.00
McCain Plaza Lomar & Assoc. $12.00
Rock Creek Square Rector Phillips Morse $12.00
Sycamore Plaza Metropolitan Trust $12.00


Source: 1990 Retail Lease Guide (C) Journal Publishing Inc.

PHOTO : FETCHING FACELIFT: Renovations and expansions at Park Plaza as well as other retail properties are catching the eye of many prospective players new to the market.
COPYRIGHT 1990 Journal Publishing, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1990 Gale, Cengage Learning. All rights reserved.

Article Details
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Author:Waldon, George
Publication:Arkansas Business
Date:Aug 1, 1990
Words:1234
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