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Reaching a plateau?

Property Managers Hope For The Best In The Central Arkansas Retail Market

Figures compiled for the Arkansas Business Retail Lease Guide reflect what many central Arkansas property managers already know.

There is plenty of retailing space in Pulaski County, and the glut has impacted average occupancy figures and average lease rates.

The average occupancy rate among the 122 retail properties in the new guide was 86.36 percent in 1991, a 2.64 percent drop from 1990's 89 percent average occupancy rate.

Those figures translated into a slightly lower lease rate per SF of $8.16 in 1991. The average lease rate was $8.34 per SF in 1990.

Net rentable space dropped from 9.24 million SF in 1990 to 9.14 million SF in 1991. This contrasted with total available space, which increased from more than 1 million SF in 1990 to 1.2 million SF in 1991. The two developments are deceiving, however.

More than 500,000 SF of new retail space came on line since the previous guide was assembled. The 65th Street Shopping Center in southwest Little Rock remains on the list even though a Nov. 5 fire destroyed much of the 50,000-SF project.

However, 253,350 SF of retail space was removed from the list or put in a new category. About 52,000 SF is now part of the Arkansas Business Office/Warehouse Lease Guide, and 201,500 SF is outside Pulaski County. Also excluded are 225,900 SF of projects that were part of the previous list but still are not complete.

The changes should make the new guide more accurate than previous efforts.

Two Maumelle properties, Lakepoint Place (15,000 SF) and One Maumelle Center (15,750 SF), now are listed in the Office/Warehouse Lease Guide. So are two Little Rock properties, Arbor Cove Center (9,600 SF) and Kavanaugh Building (11,500 SF).

Outside Pulaski County

Three properties were excluded because the projects are located outside Pulaski County. They are:

* Central City Shopping Center at Hot Springs, a 76,500-SF project that is 98 percent occupied and managed by Barnes Quinn Flake & Anderson Inc. of Little Rock.

* Market Place Shopping Center at Hot Springs, a 25,000-SF project that is 100 percent occupied and managed by Vogel Realty of Little Rock.

* Military Plaza Shopping Center at Benton, a 100,000-SF project that is 96 percent occupied and managed by Vogel Realty.

Seven first-time entrants to the lease guide totaled 181,754 SF. The projects are:

* Asher West Shopping Center in southwest Little Rock (15,285 SF).

* Broadway Plaza Shopping Center in Little Rock (42,740 SF).

* Cross Roads Shopping Center in North Little Rock (63,290 SF).

* North Taylor Street Plaza in Little Rock (9,800 SF).

* 7415 Asher Ave. in southwest Little Rock (32,000 SF).

* 1512 Macon Drive in Little Rock (7,700 SF).

* 10901 Rodney Parham Shopping Center in west Little Rock (10,939 SF).

Two other new listings present unusual situations.

A former Kmart store represents 68,337 SF of empty space at Little Rock's Riverdale Center. The space is listed separately from the rest of the shopping center because a different leasing agent is handling it.

The 84,000-SF former Kmart store in downtown North Little Rock is also empty, but Kmart remains obligated to lease both that space and the Riverdale property for several years to come.

Market Place I and Market Place II in west Little Rock now are managed by one company and represent a single listing.

So what happened to the 733,700-SF onslaught of new retail space scheduled to come on line this year?

More than 199,000 SF didn't materialize.

McCain Plaza in North Little Rock weighed in at 270,500 SF, far shy of its expected 300,000-SF impact. The project wooed Kmart from downtown North Little Rock, as well as attracting tenants entering the market for the first time and those opening a second outlet. McCain Plaza also attracted smaller tenants looking to benefit from the draw of a power center.

On Hold

The center's arrival, heralded by some cutthroat leasing deals, was enough to prompt Metropolitan Trust Co. to shelve its 85,000-SF Sycamore Plaza proposal.

"We don't think it's a good time to build right now," says Terry Paff of Metropolitan Trust. "Our land is paid for and debt free, so we're in no hurry."

The planned site for Sycamore Plaza is on Landers Road in Sherwood next to the 70,000-SF Megamarket Center.

Plans for the Markham Park Shopping Center, a 50,000-SF development proposed by Basham & Co. of Little Rock, disappeared in the midst of Charles Basham's financial downfall.

However, Clary Development Co. of Little Rock has picked up the concept and is running with it. Clary has an option on the west Little Rock site and has lined up an anchor tenant. The company is trying to secure a supporting cast of tenants to make the project fly.

A 35,000-SF development proposed by J.D. Ashley Sr. remains on the drawing boards -- 1991 marked the third consecutive year the site at 37th Street and Camp Robinson Road in North Little Rock had lain dormant.

Folmar and Associates of Mobile, Ala., developed McCain Plaza, which is 98 percent leased. Seven other projects accompanied it onto the central Arkansas retail scene in 1991:

* The 140,000-SF Wal-Mart Center in Jacksonville, which is 82 percent leased.

* The 63,000-SF Candlewood Station on Arkansas 10, which is 86 percent leased.

* The 27,000-SF Office Depot outlet in the Megamarket Shopping Center in west Little Rock, which is 100 percent leased.

* The 25,000-SF Shackleford Plaza project in west Little Rock, which is 100 percent leased.

* The 15,500-SF JFK/Kiehl Shopping Center in Sherwood, which is 15 percent leased.

* The 13,200-SF Westside Plaza project across from Candlewood Station, which is 73 percent leased.

* The 10,440-SF Stagecoach Plaza project in southwest Little Rock, which is 74 percent leased.

One of 1990's most dramatic changes was the disintegration of Basham & Co. and the emergence of Diversified Equity Properties. DEP, led by Basham's former partner, John Grillo, manages four Little Rock properties -- The Colonnade, The Colonnade Terrace, West Markham Center and 1400 South University Plaza.

Will the retail market begin a recovery like the one occurring in the central Arkansas apartment market?

This year could mark a turning point.
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Title Annotation:Arkansas Business: Retail Lease Guide; Central Arkansas retail market
Author:Waldon, George
Publication:Arkansas Business
Date:Jan 20, 1992
Words:1065
Previous Article:Going to new Heights.
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