Retail Space Realities
By Lana F. Flowers
Northwest Arkansas has too much vacant retail and commercial space, a local economist says.
"You can see from our most recent numbers we were at remarkably high levels of excess inventory," says Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas.
Benton and Washington counties had about 1.8 million square feet of vacant office space in the fourth quarter of 2009, the most recent numbers Deck had available.
"It is providing a significant drag on our economy," she says.
It’s a circle of struggle. Commercial space that’s not generating income for builders and developers puts their businesses in crisis. Capital ratios fall. Banks suffer and stop lending, which stymies the community’s business development.
Still, there are signs that things have picked up. More inventory means more options for businesses that are looking to expand.
"I would say overall, the first indication is when the phone starts ringing again," says Rick Hawes, an executive broker with The Griffin Company Realtors commercial division.
Hawes says his phone was not ringing much last summer, when the recession still gripped the nation and region. He is now showing commercial properties to local businesses wanting to expand.
The right retail space and location can make all the difference for business. Rolf Wilkin, owner of Eureka Pizza, has proof. In May, he opened a drive-through Eureka Pizza in Springdale just blocks away from a previous location.
On South Thompson Street, Wilkin says, he averaged about $12,000 in weekly sales.
Sales at the new location increased about 80 percent, he says. Wilkin attributes the increased sales to better visibility and a better location.
Getting credit or a loan to buy a property is a challenge for prospective buyers, Hawes acknowledges, but he says there are creative ways to leap that hurdle.
"Look out of the box at things like owner financing and property trades,” he suggests.
