More than 2.1 million square feet of commercial real estate opened in Northwest Arkansas during the second half of 2023, but the overall vacancy rate dropped to slightly to 5.8%, according to the biannual commercial Arvest Skyline Report released Tuesday.

Why it matters: Commercial property is an indicator of an area's economic vitality. Vacancy rates in the single digits are generally good for developers but can drive up rent and make desirable space harder to find.

• The latest numbers in the report show the market remains "balanced and healthy."

By the numbers: The 5.8% rate combines all commercial real estate — from class A office space to warehouse — and is down from 6.4% half-way through 2024.

• The area's three largest submarkets closed the year with office space dropping from a 7.5% vacancy rate to 6.3%; warehouse from 8% to 7.6%; and retail from 6.2% to 4.9%.

The big picture: Nationwide, vacancies hit a new high in 2024, with 20.4% of office space in the country's top 50 metro areas empty, per a Moody's analysis.

Flashback: There was almost no available warehouse space to lease in late 2022 as contractors snapped it up to stage construction materials for the Walmart Home Office.

• "There was clearly demand for various types of … the big warehouse space, and also the flex warehouse space," Jeff Cooperstein, researcher with the Center for Business and Economic Research at the University of Arkansas, told Axios.
• "And we're seeing it get built, which is good, and then it's getting absorbed … at a good speed, I'd say."

Reality check: Medical office space remains tight, with a 1.9% vacancy rate.

• Yes, but: Medical office space is somewhat dependent upon larger institutions being completed — such as the Heartland Whole Health Institute and Alice L. Walton School of Medicine.
• Adjacent office space likely won't be built until the full scope of the needs are understood, Cooperstein said.

What we're watching: Building permits — an indicator of commercial space being developed — fell to $195.7 million in the second half of 2024, down from $287 million a year earlier.

Share this

Roughly 30% of elected municipal offices in Arkansas are filled by women, per a new analysis from the Center for American Women and Politics at Rutgers University.

The big picture: Arkansas ranks 28th in the nation for gender parity at the local level, up from No. 38 in 2024.

• The state's share of women in such offices is slightly below the national average of 32.4%.

🔌 The Bentonville City Council may vote to raise electrical rates after a consultant recommended a 4-8% increase. (Northwest Arkansas Democrat-Gazette)

🔎 The Chickamauga Nation urged residents of Franklin County to file Freedom of Information Act requests to see if Arkansas has performed an archaeological study on the land it purchased for the proposed 3,000-bed prison. (5News)

🧑‍🎨 Artist Jacob "NTEL" Schell of Cassville, Mo., was selected to create a mural on the retaining wall on Nelson Hackett Boulevard in Fayetteville. (Fayetteville Flyer)

The Northwest Arkansas Regional Planning Commission is seeking feedback on Forward2050, NWA's long-range transportation plan that will provide a framework for the next 25 years.

Why it matters: NWA is on pace to hit nearly 1 million residents by 2045 and that means more traffic and related safety issues.

Driving the news: The organization is holding an open house tonight from 4-7pm at the Fayetteville Public Library and Thursday from 4-7pm at the Bentonville Public Library.

• Spanish and Marshallese interpreters will be available at the event tonight.

The bottom line: Attendance isn't required. Anyone can provide their feedback by taking the survey online.