The 6.9-million-square-foot Little Rock community-neighborhood shopping center market improved very slightly through the first three quarters of 2012, after several weak years. Net absorption totaled plus 16,000 square feet through August, not a large amount, and the vacancy rate was 12.0% in the second quarter and 12.1%, according to First Glance data, in the third quarter. That is not much lower than the 12.3% rate at the end of 2011. The rent trends are better. In the second quarter both the average asking rent and the average effective rent increased 0.6%, to $12.48 psf and $10.66 psf. The asking average also increased slightly in the first quarter, according to First Glance data.
Reis expects no new community-neighborhood shopping center space to be added for the third consecutive year in 2012, allowing the vacancy rate to finish the year at 11.7%, due to 37,000 square feet of positive net absorption. Net absorption is forecast at about double that level over the next few years, with the vacancy rate finally falling below 10.0% in 2015. Reis predicts rents will increase by less than 1.0% in 2012 and less than 2.0% in 2013. With larger gains to follow, the effective average is forecast to finally surpass its year-end peak some time in 2015 as well.
Space under construction, meanwhile, is limited to the ongoing Park Avenue mixed-use project, a redevelopment of the former University Mall in central Little Rock, which was torn down in 2007. The replacement retail space at the project will eventually total 500,000 square feet according to Reis. The first store was a Target. In July, KTHV reported “the Park Avenue Development area, near I-630 and University Avenue, continues to boom with more building…According to the developer’s website, Panera Bread, a Mexican restaurant called Dos Margaritas, and a Jared jewelry store are all coming this summer and fall. Also under construction, is a 200-unit apartment complex.”