[Arkansas Money & Politics : June 13, 2024] –
Northwest Arkansas hogs much of the attention in the state when it comes to commercial real estate, but the state’s other upper corner has experienced its own growth spurt. Jonesboro, the de facto capital of northeast Arkansas, now boasts a population of more than 80,000 residents and a metro count of 135,000-plus. The cultural center and health care hub of the region, Jonesboro has seen its own commercial growth spurred by the 2016 completion of Interstate 555, the former Arkansas 63, connecting the city to I-55 at West Memphis. Joshua Brown, principal broker with Haag Brown Commercial Real Estate and Development, said commercial growth has been slow but steady.
“We do not see the highs of other areas, but we are also pretty slow to see the declines,” he said. “In my mind, Jonesboro has a more even ‘pie’ than most cities. We are pretty equal.” Jonesboro began seeing growth before an interstate-quality freeway was finished and has long provided quick, easy access to the Memphis metro. Brown said the completion of I-555 helped put Jonesboro on the map “both figuratively and physically.” Haag Brown has been there to answer when opportunity knocks. Since 2010, the firm has helped bring more than 100 national restaurants and retailers to Jonesboro, developed a dozen large-scale projects, including a lifestyle medical campus, a lifestyle office park and the Uptown, a retail redevelopment built on the site of a former mall that now houses former tenants of the tornado-damaged Mall at Turtle Creek. Haag Brown is a part owner in the development. Last year, Haag Brown announced plans for a lifestyle-focused, master-planned mixed-use development called Steel Creek in Trumann southeast of town on I-555. In 2022, the firm announced a partnership with Jonesboro-based Hytrol Conveyor Co. to open a 150,000-square-foot distribution center in Haag Brown’s new ultra-modern E-Commerce Park.
The move represented an eight-figure investment and helped meet a pressing need for local industry, Brown said. “It cannot be missed, being at the ‘Welcome to Jonesboro’ sign right on I-555,” he added. Haag Brown was also behind Amazon’s recent announcement of a 58,000-square-foot last-mile facility in Jonesboro.
Market-wide, Brown said, existing commercial and industrial buildings are in higher demand and therefore more valuable. “Looking at them like a commodity, the price of the physical things that make up buildings has gone up so much,” he said. “Rent and purchase prices are going to follow suit. Lease rates and leasing activity are extremely high. We are leasing spaces quickly at higher-than-normal rates.”
Brown said new construction is low, however, and pointed to sales-and-use tax revenue receipts since 2022. After a 9 percent jump from $13.3 million in the first quarter of 2022 to $14.5 million in the first quarter of 2023, the city saw just a 0.1 percent increase the first three months of 2024. “New construction is very low,” Brown said. He pointed to numbers for new commercial construction permits over the past three years — $70.8 million in permits the first quarter of 2022 to $38.9 million in 2023 and $17.1 million in 2024.
“We are the regional epicenter for several counties,” he said. “This means we have a lot of restaurants and retailers for a typical city of our size.” The industrial sector will remain strong, as well, he added, because two of the city’s major assets, conveyors and food production, perform well in economic downturns. Noting his firm’s new agricultural division, Brown said he believes the city should focus more on its agricultural base.
To realize the city’s full potential, though, Brown said Jonesboro should focus its strategy on workforce recruitment and quality of life.
“We continue to recruit industries by purchasing land and recruiting factories,” he said. “That doesn’t work anymore.” Brown said the intersection of Caraway Road and Highland Drive is the city’s “epicenter for trade” and will remain so. He expects the Southwest Drive corridor to be the next hot spot for growth, thanks in large part to the new, 175-acre Southern Hills mixed-use development. Other locations ripe for commercial growth are the area north of the interstate and west of the Nestle plant as a potential logistics hub and the Hilltop area on the city’s northeast side between the Arkansas State University campus and Brookland, he added. “It is experiencing tremendous growth, as well,” Brown said of Hilltop. “Also, distribution and warehousing are booming on Interstate 555 coming into Jonesboro from Memphis.”
Speaking of opportunity, Brown said that while northeast Arkansas is home, Haag Brown is not taking a pass on the rich vein that continues to provide in northwest Arkansas.
“We are headquartered in NEA, but we really have a focus on NWA right now,” Brown said. “What is happening in Bentonville cannot be ignored. It feels like Nashville 20 years ago, but with a better quality of life focused on outdoor activities. So far, the Walton family has made good on doing what they say in making NWA one of the best places to live.”
