Again. Vote. Probably by the time most people get a chance to read this article the next mayor of Little Rock will be elected. There are other important runoff elections. Arguably though, choosing a mayor for Arkansas’s capitol, and largest city, may be important beyond the city limits of Little Rock proper. The candidates vying to be the next mayor of Little Rock have talked about schools, economic development, jobs, public safety and many other things. Often statistics have been touted. Let’s take a minute and look at an assortment of statistics that may, or may not, be of some interest to you.
Start with 50,689. That is the approximate number of acres inside the Little Rock city limits in 1979. 78,112—at the end of 2017 that is the approximate land area of the City of Little Rock. 54 percent. Fifty-four percent is the increase in land area over that period. The city is growing. That’s good. Right? What about population? Population has also grown. The 1980 U.S. Census placed the number of Little Rock residents at 159,024. The 2010 Census claimed 193,524 people living in Little Rock. The official Little Rock estimate of residents at the end of 2017 was 196,750. The population growth from 1980 to 2017 was 24 percent. Hillbilly math says that there’s 30 percentage points difference. Another way to look at that is that the land area grew more that twice what the population grew. “So what?” you say. Well, more land area means more streets, more sidewalks, more traffic signals, more fire stations, and presumably more police officers, as well as other services, to serve the expanded area. And if those needs and services are growing faster than the number of people paying for the services … well, that seems to present both a math problem and a societal problem. The dollars can only get stretched so far. In short, Little Rock has kept adding stuff to pay for without adding a commensurate number of people to pay for it.
As noted above, this has been an on-going trend. In 2001, the Little Rock Board of Directors authorized a special election to add one cent ($0.01) to the sales taxes collected in the city. With promises of more police officers, better roads, and beds of roses, the residents of Little Rock voted to approve the one cent increase. Five-eights (5/8) of that cent is an ongoing tax for “general operations.” The other three-eighths (3/8) of a cent tax was for “capital improvements of a public nature.” That’s where the money has come from for street and sidewalk repair and other big-ticket items like the digital police radio system and substations. That portion of the tax ends in 2021. What that means is that the glacial progress of investment in public infrastructure will be interrupted, or cease, with the expiration of that 3/8-cent sales tax. Riddle me this. What happens when this little 3/8 of a cent stream that is the band-aid on the bigger problems ends? The next mayor of Little Rock gets to find out. Let’s call this foreshadowing.
The numbers for new commercial construction in Little Rock include 329,053 square feet of office so far in 2018. Good news complementing that number is that CoStar has recorded 512,000 square feet of office space absorbed in the greater Little Rock market in the last 12 months. That’s not exactly an apples-to-apples comparison. It’s the best my under-paid researcher is going to deliver this month though. From the data available, supply and demand seem to be close to even. That is good news for stable pricing. It is not so good news for owners that have surpluses of available space or were hoping to see rents grow in excess of inflation. 325,091 square feet of other commercial construction has been permitted thus far this year. Some of that is industrial, some is multi-family and some of it is "other." One of those other things is retail. Retail absorption in the market, however, has been better than in some other markets. I haven’t drilled down into the data for metrics on what that number currently is. Anecdotally, I’ve seen a lot of available retail space lately while touring with clients. Some is in great shape and can be put back into production without much work. Some of it needs significant investment.
More numbers. Because why not? Besides, I’m just skimming the top of these things anyway. I’m just enough of a nerd that I could run down rabbit holes that could put 99.8 percent of readers to sleep before they finish this column. We don’t want to go there today. Pulaski County recorded 500 commercial real estate transfers by November 27 this year. Of those, 318 were >$100,000 and 267 of them were >$250,000. There have been 128 transfers for consideration of $1,000,000 or more. Getting into slightly more rarified air, 23 of those were in excess of $5,000,000.
Here’s the top 10 so far this year:
10. 1540 Country Club Road, Sherwood – $9,500,000
9. 5700 W. 10th Street, Little Rock – $9,550,000
8. 925 S. University Ave., Little Rock – $10,125,000
7. 8401 Ranch Drive, Little Rock – $11,100,000
6. 10401 Brockington Road, Sherwood – $11,375,000
5. 1301 S. Shackleford Road, Little Rock – $11,925,000
4. 10901 N. Rodney Parham Road, Little Rock $12,000,000
3. 11700 Valentine Road, North Little Rock – $12,800,000
2. 15000 Chenal Parkway, Little Rock – $17,800,000
1. 7601 Vestal Blvd., North Little Rock – $24,820,000
There are some properties on the market, or available “off-market,” right now that could make this list. None of the ones I know of seem able to close before December 3 though. Maybe we’ll see them on a 2019 list.
If you had a “Top Ten” deal that got missed, my email address is posted at the beginning of the column, under my mug shot. By the way, recommendations for a photographer to help me out with a head shot that is not ten years old would be appreciated. Merry Christmas! Happy New Year! Check back here next year for more commercial real estate news and trivia.
Tips and suggestions, well most of them anyway, are appreciated. Hope you found something interesting in the column this month. Check back again next month for the things that didn’t get included here this time and that pop up between now and then.