Apartment tenancy in 4th quarter of ’13 falls 1% in LR area

Occupancy rates at Pulaski County apartment complexes fell about 1 percent in the fourth quarter last year compared with the same period in 2012, a company that tracks the apartment market in central Arkansas said Tuesday.

Occupancy of the 24,100 apartments in Pulaski County was at 91.9 percent in the fourth quarter of 2013, down from 92.8 percent a year earlier, The Multifamily Group said. In addition to following the central Arkansas apartment market, the company specializes in apartment brokerage and consulting.

Apartments typically have lower occupancy rates in the fourth quarter, but leasing is expected to rebound in the first quarter this year, the firm said.

Winter weather has affected apartment leasing, said Richard Cheek, a partner with the company.

“The high point of the leasing season runs from March until September or October,” Cheek said. “But for the last two years, we haven’t seen a lot of seasonality. This year for the first time we’re seeing a real slowdown in leasing because of the cold weather.”

Nationally, construction of apartments and condominiums was up 27 percent in December compared with December 2012, the Commerce Department said this month. Rising home prices have led to increased interest in renting, encouraging developers to build more apartments, the federal agency said.

“The aftermath of the housing boom and collapse of a few years back is still playing out,” said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock. “The relative demand for rental units will remain higher than it was a few years ago.”

The trend of an ever-increasing rate of home ownership has reversed in recent years, Pakko said. The lure of owning a home for investment purposes is not as strong as it used to be, he said.

“That has created a little bit of an extra demand for rental units,” Pakko said. “And some people find it attractive not to have to mow the lawn or keep up with maintenance.”

There were 1,266 new apartments built last year in central Arkansas, The Multifamily Group said. The average for the past 10 years has been about 650 new apartments, Cheek said.

The largest complex built last year was The Greens at the Rock in North Little Rock, near Maumelle. The 432-unit complex was developed by Lindsey Development of Fayetteville, which also built the nearby The Links at the Rock, which has 634 apartments. Rents range from about $565to about $825 a month at the two complexes.

“They are a little more affordable,” Cheek said of the Lindsey complexes. “We talked to them in the third quarter, and they were leasing about 56 units per month.”

That is higher than a good monthly leasing rate of 25 to 30 apartments a month, Cheek said.

Upscale apartment complexes also are doing well, said Ted Bailey III, a partner at The Multifamily Group.

The 202 apartments in the Park Avenue Lofts on University Avenue opened last year. It is the first complex in Little Rock with apartments built over retail spaces, Cheek said.

About 60 percent of the apartments at Park Avenue Lofts are leased, Bailey said. Its luxury suites range from about $835 to more than $1,900 a month, according to its website.

“That’s obviously some of the higher rents [in central Arkansas],” Bailey said.

There are 912 apartments scheduled for completion in Pulaski County this year, The Multifamily Group reported.

There were six older apartment complexes in Pulaski County that sold last year at a combined price of $32.4 million, the company said. With a total of a little more than 1,000 apartments, that was an average of about $32,100 each.

Business, Pages 25 on 02/12/2014

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