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Occupancy estimates for the Pulaski County office market indicate little change from last year's 85 percent mark. The survey in the 2008 Arkansas Business Office Retail Warehouse Lease Guide covers about 10 million SF of office space.

The downtown Little Rock market once again contained the most office space available for rent at 761,364 SF. The occupancy rate for downtown office space is about 82 percent among more than 4.1 million SF in this year's listed properties.

Not surprisingly, some of the largest blocks of vacant office space include five properties in downtown Little Rock: 86,016 SF in the Bank of America Plaza, 78,277 SF in the One Union National Plaza, 62,147 SF in the Victory Building, the 57,750-SF former KARK-TV Building, 56,119 SF in the Metropolitan Tower and 50,000 SF in the Pyramid Building.

With a healthy amount of space available in the market, new office projects aren't generating much noise.

"There isn't anything happening with the office market," said Hank Kelley, CEO of Flake & Kelley Commercial in Little Rock. "If I could get a lead tenant, I was going to build an office building at the northwest corner of Col. Glenn [Road] and I-430."

That would-be west Little Rock development, like others, remains in the proposal stage awaiting increased tenant demand. Kelley isn't sure when a sizable office project will join the market.

"I don't think there are many new buildings getting built," he said. "Dealing with Acxiom space is my world."

Acxiom Corp. is paying lease on more than 125,000 SF of empty office space the company is marketing for sublease. The biggest block is 100,000 SF in the four-story Chenal Technology Center in west Little Rock.

An additional 26,600 SF, covering two entire floors, is in Acxiom Plaza in the Riverdale area of Little Rock.

"That building will re-emerge with a different ownership, possibly a condo conversion and the formation of a horizontal property regime," Kelley said of the Morgan Keegan project.

There is an expectation that more large blocks of vacant space will hit the market in the coming weeks. Fellowship Bible Church could leave behind 36,000 SF when its new west Little Rock facility opens later this year.

It's uncertain whether the Fellowship Administration Building will go on the sale/lease market or if Pulaski Academy, which bought the balance of the church property, will end up acquiring it.

More than 27,000 SF of Nuvell Financial Services space is on the market for sublease in west Little Rock's GMAC Building. It wouldn't be surprising to see more sizable blocks of sublease space hit the market with additional Nuvell scale-backs.

"The good news is there is no spec building space with appreciable amounts of space on the market," Kelley said. "Absorption is slow, and construction nil. It's a good time to be a tenant, if you fit the size space available."

Kevin Hutchingson, principal and broker at Colliers International in Little Rock, said indicators point to improving market conditions for office owners. However, numbers haven't reached the point to trigger development of multistory, tenant-driven office projects.

"Occupancies are up and rents are up, but rents can't justify new construction," Hutchingson said. "I have looked at it for a bunch for clients and just can't get the numbers to work."

Tenants will have to be willing to pay around $25 per SF to make a multistory office project financially viable, he said.

This year's publication breaks the market sectors into some new areas and in some cases some new boundaries.

The suburban market of old is now broken into West Little Rock and South Little Rock. Midtown Little Rock has grown in size, and East Little Rock joins the mix, with the familiar North Little Rock/Sherwood/Maumelle/Jacksonville and Riverdale sectors.

The changes make year-to-year comparisons an interesting math problem.

This year's survey also includes samplings of the office, retail and warehouse space in the Conway, Cabot and Bryant/Benton markets.

Two large blocks of space listed as vacant retail space are special cases.

The 149,400-SF 630 Metro project in Little Rock's Midtown area remains empty and in redevelopment limbo. The one-time home of Brandon House Furniture is listed as vacant retail, but in the past has been listed as vacant office space.

Who knows what the 8.7-acre development will one day become under the ownership of MBC Holdings Worldwide LLC, led by Jonesboro-based developer Bruce Burrow?

Construction of the 110,000-SF River Pointe Plaza isn't completed in North Little Rock, but the mixed-use project is listed as vacant retail space.

Three big boxes of empty retail space are the 45,000-SF Best Buy in Sherwood, the 43,560-SF former David Claiborne location in west Little Rock (originally developed as a Harvest Foods grocery store), and the 40,000-SF store owned and formerly occupied by M.M. Cohn at North Little Rock's McCain Mall.

About Our Surveys

The 2008 Lease Guide includes listings on 324 office properties, 255 retail properties and 94 warehouse properties. Listings in the guide are free.

Arkansas Business Publishing Group made no effort to independently verify the information contained in the survey. Database Administrators Bendy Brasher and Amy Witherow compiled the data during late January-March.

Some properties included in last year's lease guide were omitted from this year's effort if an owner or manager failed to respond to our survey.

Some entries exclude one or more items because the information was not provided by the property manager.

The 2008 Lease Guide is copyrighted by Arkansas Business Publishing Group, the publisher of Arkansas Business, and all rights are reserved.