CoStar News, a national publication that covers commercial real estate, reports that the state of Arkansas’s investment of real estate will add to an already weakening real estate market in downtown Little Rock.
We reported recently that the state had purchased a former Verizon building in Riverdale and, after a deal fell through to lease it to Raytheon for an economic development project, came up with a plan to move almost 1,000 state employees from several state agencies there. That, in turn, will mean the loss of tenants in other properties, some owned by the state and some privately owned.
CoStar says vacancies already were increasing downtown, by 350 basis points, to 6.6 percent in October. The state will vacate 200,000 square feet more and put vacancies around 1 million square feet, or 8 percent of the urban core inventory, the article said.
Downtown has lost tenants in big chunks, such as AT&T’s departure from its Capitol Avenue building with 340,000 square feet. The article comes with an ad to lease space in that building by the new owner at a rate half that of Riverdale properties, according to my industry source. All the downtown bank towers have significant vacancies, the article says.
The state didn’t intend to occupy the Verizon Building when it bought it for $26 million, the article says. State officials have said they had to buy, rather than take an option, as a conditon of landing Raytheon. The state has refused to release any information about negotiations with Raytheon (or even confirm it), citing secrecy afforded economic development recruitment.
The state has promised a report illustrating the efficiency of leaving existing office space for the Verizon Building.
PS: If anybody with city government supports the notion of providing more taxpayer money to BUILD YET ANOTHER BUILDING for the downtown tech park, refer them to this article.