Apartment Construction Continues

FAYETTEVILLE -- Developers have added more than 3,000 bedrooms to the private student housing market in the past three years in the city.

"You can't look around without noticing the explosion and development of a number of purpose-built apartment complexes," Kathy Deck, director of the Center for Business and Economic Research at the University of Arkansas, said Wednesday.

The Grove, The Vue, University House and Sterling Frisco have brought millions of dollars of outside investment to Fayetteville.

For students, the complexes have filled a housing gap the University of Arkansas has been unable to cover.

And with low vacancy rates and continued university enrollment growth, off-campus student housing projects are likely to continue to proliferate in the years ahead.

"Apartment market fundamentals remain strong," Brian Donahue, senior associate with CBRE Northwest Arkansas, reported in a midyear 2014 apartment survey.

The Latest

Students began moving into Fayetteville's latest apartment complex, The Cardinal at West Center, about two weeks ago.

The 471-bedroom complex, at Center Street and Duncan Avenue, offers state-of-the-art amenities -- a ground-floor fitness center, rooftop sun decks and an infinity-edge saltwater pool -- all just a stone's throw from campus.

"This is closer to classes than many of the dorms," Jeremy Hudson, partner and CEO of Fayetteville-based Specialized Real Estate Group, said earlier this month.

The company opened Eco Modern Flats on Hill Avenue in 2011 and partnered with the Dinerstein Cos. of Houston to build the Sterling Frisco apartments, on West Avenue between Maple and Lafayette streets, in 2013.

Like other student housing developments, The Cardinal offers furnished apartments with utilities paid. Tenants rent private bedrooms in mostly four-bedroom suites. The suites have a shared living room and kitchen.

The arrangement, for students and their parents, takes the headache out of trying to arrange rent and utility payments with multiple roommates.

"It provides the simplicity of a dorm with some of the higher amenities of living off-campus," Hudson said.

The Cardinal advertises rooms starting at $605 per month. Rates at The Vue, a 656-bedroom complex on the hill south of Fayetteville High School, are between $580 and $665 per bedroom, depending on the floor plan, according to the complex's website.

It costs $7,610 per bedroom to live in the suite-style Northwest Quad for the 2014-15 academic year, according to the University Housing website. That works out to about $895 per month for 8 1/2 months.

Boston Woodworth, a university junior, said he decided to live at The Cardinal because of its proximity to campus. And, he said, as someone who didn't start as a freshman at the UA, the apartment community is a good way to meet people.

"In the grand scheme of things ... it's a lot better than some of the other apartments that have been built," Woodworth said.

Occupancy

As of Wednesday, 459 of The Cardinal's 471 bedrooms were rented, according to Sarah King, marketing and community outreach coordinator for Specialized Real Estate Group. That's an occupancy rate of about 97.5 percent.

A University House representative said Wednesday 100 percent of the complex's 654 bedrooms are leased. University House is south of Martin Luther King Jr. Boulevard on the west side of Beechwood Avenue, about two blocks from Baum Stadium.

Emily Prevost, marketing director for The Dinerstein Cos., said 569 of 640 bedrooms at Sterling Frisco have been rented, an occupancy rate of about 89 percent.

A spokeswoman for University Student Living, the company that owns The Vue apartments, would not provide specific numbers, but, she said, the complex was "mostly full." The owners of The Grove apartments, west of South School Avenue where the Washington County Livestock Auction used to be, did not return a phone message or email last week.

CBRE Northwest Arkansas, in its 2014 apartment survey, put the overall occupancy rate at 95.5 percent for complexes with more than 50 units in Fayetteville.

Deck, with the Center for Business and Economic Research, said having vacancy rates at 5 percent or less is indicative of a "fairly healthy" market that's "set for more apartment growth."

"When you get to 10 percent, that's when you start to worry about the general health of the market," Deck said.

The university last year added 630 bedrooms in two residence halls: Hotz Honors Hall and Founders Hall. Maximum on-campus occupancy is 5,732.

A recent update to university's housing master plan calls for another 1,500 beds in two dorms by 2020. The projects are planned along Virginia Avenue, east of Bud Walton Arena, and south of the Maple Hill dorms, near the Center of Excellence for Poultry Science.

Even with those additions, university officials do not expect to be able to provide living arrangements for all of the students who want to stay on campus after their freshmen year.

Official enrollment figures for fall 2014 won't be released until after the 11th day of classes. Enrollment was 25,365 last fall and is expected to approach 26,000 students this semester, according to a recent university news release.

That would be an increase of about 2,800 students since fall 2011. During the same time period, 3,053 bedrooms have been added to the off-campus student housing stock.

Fits And Starts

The new off-campus projects haven't been without a share of hitches.

Shortly after The Grove opened in fall 2012, tenants complained of thin walls and loud living conditions. An occupancy permit for one of The Grove's buildings was on hold for several months while street repairs were completed and final landscaping was installed, according to City Engineer Chris Brown.

There were a series of construction accidents, including two deaths, at The Vue when it was being built in 2013. Brannon Rhine, 20, of Springdale, was buried alive when a trench collapsed on him while he was working on a ditch for underground sewer lines. Jess Wilson, 44, of Joplin, Mo., was electrocuted by overhead power lines in June 2013 while installing siding at The Vue. The Occupational Safety and Health Administration fined Houston-based Parkcrest Builders Group and two subcontractors for safety violations.

Brown said city officials discovered a faulty sewer line serving several buildings shortly before The Vue opened in fall 2013. He said the line functioned OK, but it was laid at grade, so it didn't drain properly. The city allowed tenants to move into the buildings, but required regular maintenance on the sewer line. The Vue's clubhouse could not be used for an extended period of time.

The sewer line was replaced this summer. The work closed the main street leading to the apartments.

Dale McCullough, spokeswoman for University Student Living, the company that owns The Vue, said Wednesday repairs are "virtually" complete.

"We're fully functioning now," McCullough said.

Ava Walker, a senior psychology major, who has since moved back to Murfreesboro, Tenn., to attend Middle Tennessee State University, was one of several students unable to move into the Sterling Frisco apartments when they opened last fall.

Walker said, after about two weeks being put up in a hotel, when she and her three roommates moved in, they couldn't access their mailboxes or use the complex's workout facility. "That space was a construction zone," Walker said.

She said Sterling Frisco management took a long time to respond to repeated maintenance requests -- for broken appliances, stalled elevators and doors that wouldn't lock properly.

"The longer we lived there, the more things started to go wrong," Walker said. She eventually moved out in late February.

Hudson, with Specialized Real Estate, acknowledged the realities of ongoing construction even after students have moved in. About a week after The Cardinal opened, workers were still putting the finishing touches on the complex's hallways and lobby.

"There's always kinks to be worked out," Hudson said. "All over the country, apartments are being built on fast timelines."

"But that doesn't mean they can't be quality-built," he added. "Overwhelmingly, we've had a very positive move-in experience."

Brown, the city engineer, said, even with The Cardinal, there was "a bit of scramble" to schedule all final inspections before tenants started arriving.

"We're learning as a staff what needs to happen and understanding the level of effort needed to make that last big push," Brown said. "And developers are learning that as well. Hopefully it will get smoother as time goes on."

What's Next

Four more off-campus complexes with as many as 1,900 bedrooms are in various stages of development.

Specialized Real Estate's next project, called Beechwood Village, is set for a fall 2015 opening. The complex, a partnership with Fountain Residential Partners of Dallas, will add 670 bedrooms across on Beechwood Avenue from University House.

Specialized also is planning a complex called Harvey's Hill to open in two years across Duncan Avenue from The Cardinal. Hudson said company representatives are working to determine the size and scope of the project.

Hudson said Specialized is no longer involved with plans for a multistory complex down the street from Sterling Frisco at Lafayette Street and Campbell Avenue, where University Baptist Church's activity center once stood. A sign posted on the property by The Dinerstein Cos. says leasing will begin in August 2015 for fall 2016 move-in.

City planning staff in December approved a 233-bedroom complex called Gather on Dickson three blocks away, at St. Charles Avenue and Watson Street, across from the Dickson Street Post Office and behind Collier Drug Store.

Brown said Wednesday developers were "very close" to obtaining building permits for the project. Demolition permits for three houses on St. Charles and Watson were approved earlier this month.

Developers said they are monitoring data to determine when supply could exceed demand.

Hudson, with Specialized Real Estate, said his company has built its projects with a close eye on market conditions. "We're building projects in strategic locations," he said.

"What we have done thus far has been successful," he said. "We believe there is still demand for truly walkable student communities. How far that will continue in the future, I can't tell you."