The apartment-vacancy rate in Pulaski County was 8.8 percent in the second quarter this year, owners of a company that tracks the apartment market in central Arkansas said Tuesday.
That was up from about 7.5 percent in the second quarter of 2013, said Richard Cheek and Ted Bailey, co-owners of the Multifamily Group. In addition to following the Pulaski County apartment market, the company specializes in apartment brokerage and consulting.
Nationally, the apartment-vacancy rate was 4.2 percent in the third quarter, up from 4.1 percent in the second quarter, Bloomberg News reported.
Even with the high vacancy rate, the Pulaski County market is filling up, Bailey said. Some of the newer apartment complexes -- those built since 2010 -- are "doing outstandingly well," Bailey said.
The newer complexes typically fill up in relation to the number of jobs announced, Cheek said.
"That can also change due to timing," Cheek said. "If a bunch of apartment communities come on the market in November, that would make the market soft through March or even May. The reason is that leasing is also seasonal. It falls off in the winter time."
Recently, there has been a trend toward renters upgrading to newer properties, Cheek said.
Most of the market softness in terms of occupancy is in the older properties built before 1980, Cheek said. That portion of the market has a vacancy rate of 10.4 percent.
The Pulaski County market typically adds 750 to 850 new units a year, Cheek said. Through the first six months of the year, 116 new units became available, and a total of 634 are scheduled to be completed by the end of this year.
During the recession, there were few apartment complexes built, Bailey said.
"What we are doing now is really meeting some pent-up demand," Bailey said.
As many as 1,980 apartment units could be completed next year, Cheek said. Some of those projects, however, are only in the rumor stage, Cheek said.
"I highly doubt we will get all of that built," Bailey said. "People are going to have to get rezoning on some different properties."
Still, if only 1,500 are built, that would be about twice the normal annual rate.
"At that point, it becomes a renters' market, and you start seeing concessions pop back up or certainly [there would be] price adjustments at apartment communities," Cheek said.
Construction has begun on several apartment complexes set to open in 2015.
Little Rock investors Brandon Huffman, James Barnes and Graham Smith started work last week on an approximately $18 million, 168-unit apartment complex at Kanis Road and Cooper Orbit Road in west Little Rock, Huffman said Monday. The as-yet unnamed complex should be completed next summer, Huffman said.
"Overall occupancy rates [in Pulaski County] are above 90 percent, and a lot of the [units] that have been built are filling up quickly," Huffman said in explaining why the three decided to start the apartment complex. "It's a good market."
The complex will have one-, two- and three-bedroom units, Huffman said. Rental rates have not been determined, Huffman said.
The three investors have built apartment complexes in Conway, Pine Bluff and Monticello, Huffman said.
Two other major apartment projects under construction are a 260-apartment complex at Brookwood Drive and Cedar Hill Road in Little Rock's Riverdale area, and MacArthur Commons, a 59-unit Moses Tucker Real Estate project at Capitol and River Market avenues in downtown Little Rock.
Business on 10/07/2014