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Arkansas Business – Office Space Q&A
June 29, 2020 by Haag Brown in News Articles

 Arkansas Business


Office Space Q&A :
Flexible Spaces Flex Muscle in Market

 

What types of properties seem to be most in demand in your sector and why?


JEFF HATHAWAY
: Highest demand has been for “flex” space (portions of space allocated to warehouse, storage, service functions) and for modern, open-plan Class A space in suburban locations with comfortable parking. However, there is still a solid base of demand for urban spaces with “cool” vibes that are valued most by younger employees.

HANK KELLEY: Some activity in Class A suburban office space has continued and slightly less activity in the downtown office market. Convenience oriented and visible locations are active for a variety of users both service and medically related.

CLINTON BENNETT: We had seen kind of sustained and growing interest in office leasing. The businesses that call on Walmart and the businesses that call on them and just the businesses that are growing just naturally because of the expansion in this market. They all seem to need additional office space. We’d seen a pretty robust office leasing market and a pretty tight inventory. That was a strong segment of the market.

ZACK KIFER: Most people are not wanting to make long-term decisions right now. They’re wanting to kind of sit this next six months out and see what the world looks like then.

TOM ALLEN: In northwest Arkansas we’ve seen a shift of many Class B office space tenants migrating upwards to Class A. Class A has been a new entry into this market. … There are many tenants that are looking to upgrade. So that’s probably what’s most popular right now.


Do you expect these trends to continue?


JEFF HATHAWAY
: Yes. I don’t want to dismiss the value of live/work/play trends in urban core areas, which is real and will continue, but our market will continue to be primarily “commute by private auto” for the near future. In addition, the aftereffects of the pandemic will include a general turning away from dense occupancies and elevator rides, so I see a trend toward smaller, shorter buildings with more spacious layouts, which bodes well for high-quality suburban development in Central Arkansas.

TOM ALLEN: I don’t think the B spaces are necessarily doomed to have any long lasting negative effects as long as the B space upgrades. I think they’re going to have to offer some amenities in B spaces as well.


 

Pre-pandemic where did you see downward trends?


JEFF HATHAWAY
: Aside from the pandemic, we continue to have rental rates in our market that are tenant-favorable and make it difficult to justify speculative, multi-tenant office development, so our pace of ground-up construction has been slow.


 

How did your sector perform in the previous year?


JEFF HATHAWAY
: It was stable in 2019 and early 2020. As brokers facilitate moves and serve the needs of users, we’d like to have more options for large space requirements, but we’re also pleased that we have some market equilibrium. Landlords don’t need to make ridiculous concessions in structuring deals, and tenants enjoy rent levels that compare favorably to what they’d be paying in other markets.

TOM ALLEN: Class A, it was trending upwards. We had more inventory coming on the market. We had some people concerned about too much inventory. I was not one of them.


How has the pandemic affected the market from your perspective?


JEFF HATHAWAY
: We’re hoping there will be a net balance between more people working from home and more square footage per person for the many businesses that conclude they work best by being together physically. For now, prospects are keeping us busy as we help them plan for growth and relocations, but the actual transaction volumes for 2020 are likely to reflect a dip due to the disruptions caused by the virus. Of course, no one yet knows how long or severe the pandemic will be.

HANK KELLEY: Most of our leasing and sales activity slowed significantly as no one wanted to make a long term purchase or lease commitment or even look at space for relocation or a new location. Some buying activity happened during the pandemic that had gone to contract prior to the pandemic. Over the last 75 days we have had less leasing and sales activity than any time in my 35 years in the industry.

ZACK KIFER: During the first couple months we’d do, on average, I’d say 50 to 100 calls a day. We did drop to five calls a day for a good month and a half during the heaviest of the COVID issues. We’re starting to see that activity picking up in the past month. … People were starting to call again, and not necessarily making decisions but at least looking.


How has the pandemic affected the day-to-day ways in which you do business?


JEFF HATHAWAY
: Like most, we’ve used Zoom for both internal and client meetings. We take more videos of space for “virtual tours” than we used to. We’ve seen a diverse mix of how careful the prospects are when physically looking at space, but we remain very sensitive to the issue and take every possible precaution when accommodating a request to see space.

JOSH BROWN: Our employees have been able to work from home. Some of them like it. My partner asked me if I was able to fully utilize them — my response was easy — no way. We perform much better and more efficient when our team is in the office.


What was the biggest surprise of the past year?


JEFF HATHAWAY
: Our firm was involved in two separate acquisitions of 100,000 SF suburban office buildings at pricing slightly below and slightly above $100/SF, dramatically less than it would cost to build the same properties now. Until we see a healthy dose of new construction around here to increase the supply of products, we may not see many more of those opportunities for a while.

TOM ALLEN: I guess I’ve been surprised at how strong the demand for Class A office space has been.


What’s the outlook for the office market for 2020-2021?


JEFF HATHAWAY
: The office market will see a continuation of moderately rising rental rates, upgrades of older space, a vacuum of speculative new construction, and a solid occupancy rate hovering right around 90% and beating the national average.

JOSH BROWN: I think large office markets may be impacted the most. Little Rock may have some impact, but Jonesboro and other tertiary types of markets I think will be relatively stable.

HANK KELLEY: The office sector will reflect more vacancy as a result of an accelerated attitude about employees working from home instead of an office. This movement will cause most companies to experiment with pushing the envelope on which employees really have to be in an office versus an employee that can work remotely.

CLINTON BENNETT: My prediction is that we will see a little softening of demand for leases, leasing space, late this year and early 2021, but I feel like we move through that pretty quickly and get back on the path of strong absorption and expansion of the market. I’m extremely bullish long term. I may be wearing rose colored glasses because I’m up here living in what I feel is a very special place but I feel like we’re really going to keep growing in a very strong manner.

TOM ALLEN: I’m optimistic. The glass is half full for me. It’s actually three quarters full. With what we’re going through worldwide, the office market is really holding up strong. That’s the good news. If we can come out of this pandemic relatively quickly … I’m optimistic that we’re going to pick back up. Maybe not as strong because we were extremely strong when it hit.

 

Arkansas Business Article | June 29th, 2020

Haag Brown

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‼️ For Lease : Crossroads Center @ 2302 E. Hig ‼️ For Lease : Crossroads Center @ 2302 E. Highland, Jonesboro, AR

If you are wanting to open a new business, move a current business, or add another location in this market, you'll want to check out this property. 👀  This 2,900 SF space is located 📍directly across from Kroger Marketplace and The Uptown, the city’s newest retail development at the site of the former Indian Mall. 

The Crossroads Center has been a staple at the corner of Highland Drive and Caraway Road, the city’s primary center of trade, for decades. 💎The property has exposure to over 44,000 cars per day 🚗 and is highly recognized by the 550,000 consumers that frequent Jonesboro. 

⭐ This great opportunity sits at the epicenter of the retail revitalization taking place along Caraway Road. The site is surrounded by a host of new tenants, including:  Ross, Tuesday Morning, Bargain Hunt, Play-It-Again Sports, Tommy's Express Car Wash, Texas Roadhouse, and Golden Corral.
#cre #forlease #jonesboro 

Details ::
☑️ 2,900 SF Suite 
☑️ Located At Signalized Intersection of Highland and Caraway
☑️ Amazing Retail Visibility - Highest in Jonesboro!
☑️ Exposure to Over 44,000 CPD
☑️ In the Crossroads Shopping Center with Office Max, Nails of America and Mattress King
☑️ On Main Corridor Between the Mall at Turtle Creek and Wal-Mart
☑️ Abundant Parking and Easy Access

For More Info, Contact :
Zac Qualls or Joshua Brown
Haag Brown Commercial
870 336 8000
⚠️ HB Construction Update :: In the last 3 mon ⚠️ HB Construction Update :: In the last 3 months, this amazing structure has completely changed the landscape at the intersection 🚦 of Highway 49 and School Street in Brookland. With a new roof and brick from top to bottom, the future home of First Community Bank looks massive, 🏦 towering over the surrounding businesses. 

We are proud to have made the deal to finally bring a bank to Brookland! This location will feature a large community room for public use, which has been a huge asset for the Jonesboro community. 😎

⭐ As one of the fastest growing cities in the state of Arkansas, Brookland has an ever expanding list of retail/business needs. If you have a colleague, friend, or family member looking to locate their business within this fertile market, 👀 HB has several lots available at this very prominent intersection. Contact us for information.
#cre #constructionupdate #brookland
"Finally, brothers and sisters, whatever is true, "Finally, brothers and sisters, whatever is true, whatever is noble, whatever is right, whatever is pure, whatever is lovely, whatever is admirable—if anything is excellent or praiseworthy—think about such things."

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‼️ We are excited to announce our new HB Medic ‼️ We are excited to announce our new HB Medical Website! You have seen our hundreds of retail projects over the years, but what you don’t see, 👀 is how we have been a project partner for physicians, health systems and medical related industries 🩺 since our beginning over a decade ago. 
 
⭐ Right now, Hb is developing almost 100,000 SF of medical office in 3 states, and have transacted over $200 million in medical real estate! WOW! 😲
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To find out more on all of our medical projects, visit us at:

https://www.haagbrownmedical.com
🤔 Everyone likes options and that is exactly wh 🤔 Everyone likes options and that is exactly what we have within the Township Centre development (formerly known as the NEAR District Fairgrounds) 📍 on the corner of Parkwood Drive and Fair Park Boulevard.

☑️ You want to purchase land and build a project, we’ve
 got it!

☑️ You want to have someone else custom
build a building and lease it to you, we can do it!

☑️ You want to lease some existing space in a brand
new center, you can!

⭐ Starbucks, Chicken Salad Chick, Tacos 4 Life, Academy Sports, Sissy’s Log Cabin, and Panera Bread all call Township Centre home and so could your business.
#cre #forsale #forlease

Even though we have some great opportunities, the development is filling up quickly, so don’t wait around or you might miss out 👇

3️⃣ 2,000+ SF Suites Available
2️⃣ 1+ AC Sites Available
1️⃣ 5+ AC Site Available

Up to 24,000 SF of Build To Suit Space

Exposure to 34,000 Cars Per Day

For More Info, Contact :
Zac Qualls or Joshua Brown
Haag Brown Commercial
870 336 8000
⚠️ Hotel Construction Update :: If you haven’t been by this hotel project lately, it is really starting to come together! Check out the modern new color scheme! 🤩

The multi-million dollar Residence Inn by Marriott is the most recent addition to the Sumo Development. 📍 Situated between Sumo and FFO Home, the project can be seen by the 39,000+ motorists traveling along Race Street and Red Wolf.

⭐ If you would like to become part of this rapidly growing development, 2 lots remain available for sale or lease.
#cre #construction #jonesboro

For more info, contact Zac Qualls or Joshua Brown @ 870 336 8000.
‼ Barton's Home Outlet is now open in Tulsa, Okl ‼ Barton's Home Outlet is now open in Tulsa, Oklahoma! The store is located 📍 adjacent to Burlington at 7030 S. Memorial Drive, Suite B, near the intersection of Memorial Drive and East 71st Street.

Not only has E.C. Barton & Company been a Jonesboro-based company since 1885, they are 100% employee-owned which creates a great atmosphere ☀️ for the customers they serve. Home Outlet provides top quality kitchens, baths, floors 🚽🛁 and more at the Guaranteed Lowest Price.

⭐️ We love supporting the natural state and home grown businesses and look forward to planting many more stores throughout the country over the course of the next few years! #nowopen #cre #tulsa

For more about Home Outlet Tulsa, visit :: https://www.homeoutlet.com/store/home-outlet-tulsa
It’s very rare 💎 to see a medical project in It’s very rare 💎 to see a medical project in the double-digit MILLIONS on a single facility in our market. 

‼️ HB is excited to announce there will be a ground up, first-of-its-kind project on 5 Acres adjacent to NEA Baptist. The state-of-the art facility will tie directly into the Reserve at NEA, an 11-acre lifestyle medical park 🌳 adjoining NEA Baptist. 

This will be a meaningful, pioneering project for Northeast Arkansas and an exciting development for the community for years to come. 🤩 We will be sharing specifics on the project in the coming weeks.
 
What do you think is the biggest medical need in Northeast Arkansas? 🤔
#comingsoon #cre #jonesboro
❗️HB is excited to announce that the former Bu ❗️HB is excited to announce that the former Burger King building in Mountain Home is now for lease. Help us out and send to someone you think may be interested. 🤔 You will not beat the location for a restaurant or retailer. 

This well-known building is centrally located 📍 between the Wal-Mart Super Center and Twin Lakes Plaza on the city’s main retail corridor, US Highway 62, lending it exposure to over 20,000 cars per day. 🚗 
#cre #forlease #mountainhome

Details :: https://tinyurl.com/5cpxme4 

☑️ Former Burger King Location along US Hwy 62 East
☑️ Exposure to 21,300 Cars Per Day
☑️ Sits on 1.33 AC with Ample Parking and Drive-Thru
☑️ 2,405 SF For Lease "As-Is"
☑️ Seller Offering Build to Suit Option
☑️ Perfect for Fast Casual or Sit Down Dining
☑️ Easily Converted to Retail, Office or Medical 

⭐️ For More Info, Contact :
Zac Qualls or Joshua Brown
Haag Brown Commercial
870 336 8000
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- 6 days ago

Barton's Home Outlet is now open in Tulsa, Oklahoma! The store is located 📍 adjacent to Burlington at 7030 S. Memor… https://t.co/RMXo1ENCZl
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Chipotle! That’s the 🆕 announcement from HB! HB is developing Chipotle's newest prototype WITH A DRIVE THRU 🚗 in f… https://t.co/KHro6PafMc
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