Northwest Arkansas Apartments Stay Full

A view of The Links at Rainbow Curve apartments and golf course, a Lindsey Management Co., Inc. property, from Southwest Maple Road in Bentonville on Thursday January 16, 2014.
A view of The Links at Rainbow Curve apartments and golf course, a Lindsey Management Co., Inc. property, from Southwest Maple Road in Bentonville on Thursday January 16, 2014.

Apartment complexes are staying full even with all of the new construction in Northwest Arkansas.

A year-end market analysis released last week by CBRE Northwest Arkansas indicated rental rates are trending up and overall occupancy is holding steady.

“Supply is meeting the current demand,” Brian Donahue, CBRE senior associate, said Thursday.

Developers added more than 600 units to the Washington and Benton counties apartment market in 2013, according to CBRE’s report.

WEB REFER

On the Web

Go to the online version of this report at nwaonline.com to read CBRE Northwest Arkansas’ 2013 Northwest Arkansas apartment survey.

Source: Staff Report


At A Glance

Vacancy?

Average percent of apartment occupancy and rental rates in 2012 and 2013 for a two-bedroom, one-bathroom unit in Northwest Arkansas’ four biggest cities:

20132012

OccupancyRentOccupancyRent

Fayetteville97.5 percent$53198 percent$521

Springdale95 percent$47994.5 percent$480

Rogers98.5 percent$48497.5 percent$488

Bentonville93.5 percent$59097 percent$584

Source: CBRE Northwest Arkansas

Average occupancy was 96.5 percent in the two-counties at year’s end, down slightly from 97 percent in 2012.

The average cost to rent a two-bedroom, one-bathroom unit was $525 per month, a 1.7 percent or $9 increase from the previous year.

The bulk of last year’s apartment construction was in Fayetteville, driven by increased enrollment at the University of Arkansas, developers have said.

The university added 5,889 students from fall 2008 to fall 2013, according to the university’s Office of Institutional Research.

Increased enrollment set off a flurry of construction, including the 180-unit Vue apartments, 183-unit Sterling Frisco and 228-unit University House, which used to be called The Domain.

The rent-by-the room complexes include utilities, are typically furnished and feature a common living room area, like many suite-style dorms. Two dorms, Founders and Hotz halls, opened this fall on campus. The dorms have space for 630 students. The university’s long-range housing plan calls for another 1,500 beds in two locations by 2020: along Virginia Avenue east of Bud Walton Arena and on undeveloped land south of the Maple Hill residence halls.

The construction doesn’t seem to be having an impact on occupancy rates at older apartments in Fayetteville.

“It’s not having an effect on properties that Lindsey Management manages,” said Scott Rogerson, chief financial officer for the Fayetteville-based company.

Lindsey manages more than 10,000 units at 53 properties in Washington and Benton counties, nearly half the 22,000-plus units analyzed in the CBRE report. The study includes only complexes with 50 or more units. Donahue estimated there are about 29,000 or 30,000 units in the two counties.

Whereas occupancy rates remained largely unchanged in Fayetteville, Springdale and Rogers from 2012 to 2013, Bentonville occupancy dropped from 97 percent to 93.5 percent, according to the report. Lindsey opened the 96-unit Copperstone Phase II complex last year on Southwest Wagon Avenue in Bentonville.

Donahue said he didn’t know when apartment construction would reach a tipping point where complexes run the risk of not being filled.

“Multifamily just kind of seems to be the leader for where most commercial real estate investors want to put their money,” Donahue said. “There just seems to be a large amount of capital nationwide chasing apartment deals.”

The apartment market is in line with other parts of the economy.

Northwest Arkansas home sales were up $260 million, about 25 percent, in 2013 compared to the $1.06 billion in sales in 2012, according to MountData, a real estate marketing firm.

About 1,500 jobs were added between November 2012 and November 2013, according to a Bureau of Labor Statistics report issued earlier this month.

The area is chock full of renters, too.

According to 2010 U.S. Census Bureau estimates, nearly half of occupied housing units in Washington and Benton counties’ four largest cities are filled with renters.

In Rogers, 41 percent of occupied units are rentals. In Bentonville, it’s 44 percent. In Springdale, it’s 46 percent. And in Fayetteville, there were 18,087 renters in 30,726 units, or 59 percent.

Nationwide, 35 percent of the country’s 117 million occupied units were filled with renters in 2010, according to Census estimates.

Outside investors have poured money into the Fayetteville apartment scene in recent years.

Inland American Communities Group of Dallas purchased University House from Houston-based Asset Campus Housing for $42 million.

The Dinerstein Cos. of Houston partnered with Fayetteville-based Specialized Real Estate Group to build the Sterling Frisco apartments at West Avenue and Lafayette Street.

The Vue on Stadium Drive is a joint venture between New Jersey-based University Student Living and ParkGreen Properties of Houston.

All three complexes opened in fall 2013.

Another Specialized Real Estate Group complex, called The Cardinal, will add 250 units at the southwest corner of Center Street and Duncan Avenue in Fayetteville. It’s expected to open this fall. The city’s Planning Commission earlier this month approved plans for a 130-unit complex called Harvey’s Hill, across Duncan Avenue from The Cardinal. Two other Specialized complexes could be in the works — along Lafayette Street where the University Baptist Church activity center is and across Beechwood Avenue from University House.

Construction is about to start on a Lindsey complex in Bentonville, according to Rogerson. The complex, called The Trails at Rainbow Curve, will feature 487 units north and east of the Links at Rainbow Curve. Rogerson said construction should last from 18 to 22 months.

Rogers planning commissioners last week approved plans for a 200-unit apartment complex called the Promenade Point apartments east of the Pinnacle Hills Promenade on the south side of New Hope Road. Daniel Ellis, vice president of Crafton Tull, the engineering firm designing the project, said Thursday developers with a company called HSB Rogers Apartments haven’t set a timeline for the project.

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