Record enrollment at the University of Arkansas has administrators scrambling to find places to house all of the students. Enrollment is expected to pass the 28,000 mark in 2015, up from about 18,000 students in 2005.
The university added more than 600 bedrooms on campus when two dormitories, Founders and Hotz halls, opened last fall. Another 1,500 beds are planned by 2020.
At a Glance
Four apartment complexes with more than 200 bedrooms have opened in Fayetteville in the past three years. Five others are under construction or in the planning stages.
Built
• The Grove — School Avenue and Ninth Street (632 bedrooms)
• University House — Martin Luther King Jr. Boulevard and Beechwood Avenue (654 bedrooms)
• The Vue — Martin Luther King Jr. Boulevard and Stadium Drive (656 bedrooms)
• Sterling Frisco — West Avenue and Lafayette Street (640 bedrooms)
Under Construction
• The Cardinal — Center Street and Duncan Avenue (480 bedrooms)
Planned
• Harvey’s Hill — Center Street and Hill Avenue (432 bedrooms)
• Eco Downtown — Lafayette Street and Campbell Avenue (559 bedrooms)
• The Dickson — St. Charles Avenue and Watson Street (233 bedrooms)
• Beechwood East — Martin Luther King Jr. Boulevard and Beechwood Avenue (682 bedrooms)
Source: City of Fayetteville
The new projects are only expected to cover about half of the university's housing deficit. That means hundreds of students will move off campus after their freshman year.
What the university can't provide, the private sector is looking to fill.
National investors specializing in student housing projects have spent millions of dollars in Fayetteville to meet market demand. Of 2,757 residential units approved for construction during the past three years, 1,923, or roughly 70 percent, were part of multifamily projects, according to city records.
Tenants at three complexes that opened in 2013 -- University House, The Vue and Sterling Frisco -- rent by the room in what's typically a furnished unit. Prices range from $599 to $629 per person per month for a four-bedroom, four-bathroom unit at Sterling Frisco, according to the complex's website.
Several tenants at Sterling Frisco said earlier this year said they're happy with their new accommodations two blocks north of Dickson Street.
Emily Miquelson, a UA junior, said she doesn't have a car and likes the convenience of being a five-minute walk from campus. Miquelson is a member of Pi Beta Phi and can easily get to the sorority house across the street. She works at Jammin Java on Sterling Frisco's ground floor.
"It's all right here," she said.
Jeremy Pate, Fayetteville's Development Services director, said the apartment complexes reflect what residents said they wanted when the city adopted a downtown master plan in 2004.
"Infill was the No. 1 priority," Pate said. "This is infill development in sites that were either undeveloped or underdeveloped. We feel like the principle is being met."
All of the construction doesn't seem to be affecting occupancy rates at other large apartment complexes.
Average occupancy at complexes with more than 50 units was 96.5 percent in Washington and Benton counties at year's end, down just slightly from 97 percent in 2012, according to a 2013 market analysis published by CBRE | Northwest Arkansas in January.
Average rental rates were $572 per month, a $19, or 3.3 percent increase, compared to 2012.
CBRE's report predicted continued apartment growth in the region as university enrollment soars.
"Multifamily just kind of seems to be the leader for where most commercial real estate investors want to put their money," said Brian Donahue, CBRE senior associate. "There just seems to be a large amount of capital nationwide chasing apartment deals."
Construction is beginning on a 487-unit apartment complex called The Trails at Rainbow Curve in Bentonville. Rogers planning commissioners in January approved plans for a 200-unit complex called Promenade Point.
The Vue, across Martin Luther King Jr. Boulevard from Fayetteville High School, was a partnership between University Student Living in New Jersey and ParkGreen Properties in Houston. University House, at King Boulevard and Beechwood Avenue, was built by Houston-based Asset Campus Housing and then sold to Inland American Communities Group of Dallas for about $42 million in July 2013, according to Washington County property records. Sterling Frisco is a joint venture between Fayetteville-based Specialized Real Estate Group and The Dinerstein Companies.
Developers of the three projects spent more than $110 million on construction alone, according to building permit applications filed with the city.
"That's boom town mentality," said Steve Clark, president and CEO of the Fayetteville Chamber of Commerce. Clark didn't provide specific employment numbers, but said dozens of jobs have been created for leasing agents, property managers and temporary construction workers.
"Even if they're here just 90, 150 days, they're buying gasoline, food and entertainment," he said.
According to Fayetteville records, last year's apartment projects paid the city about $404,000 in parkland dedication fees; $290,000 in building permit fees; $277,000 in water and sewer impact fees; and $192,000 in fire and police impact fees. And development means more property tax money for the city, Washington County and the Fayetteville School District.
Five other complexes with more than 200 bedrooms are under construction or in the planning stages in Fayetteville.
Clark, the chamber president, said demand for apartments hasn't yet been supplied. Clark said he's not sure where the tipping point is when developers run the risk of building complexes that go unfilled.
"We try to say to folks, 'Just because it looks like it's a red-hot market, look to see if there's some cooling impact,' because there may be," he said.
NW News on 03/23/2014