New construction provides little relief, apartments still full in Fayetteville and NWA

Gather on Dickson / Photo: Todd Gill, Fayetteville Flyer

Finding an apartment in Northwest Arkansas is more expensive, and just as hard, as it was a year ago.

Rental rates have increased 7.1 percent across the region over the last 12 months and occupancy is at 97.5 percent, according to the findings of the biannual market survey conducted by commercial real estate brokerage firm CBRE Northwest Arkansas.

Student Housing Construction

New and planned student housing near the UA campus in Fayetteville (since 2012):

The Grove – 632 beds, 2012
University House – 654 beds, 2013
The Vue – 656 beds, 2013
Sterling Frisco – 640 beds, 2013
The Cardinal – 470 beds, 2014
Beechwood Village – 670 beds, 2015
Gather on Dickson – 238 beds, 2016
Sterling Phase II – 559 beds, 2016
@MOSPHERE – 628 beds, 2016
Champions Club – 232 beds, 2016

Non-student Construction

New and planned non-student complexes in Northwest Arkansas (since 2013):

Copperstone Phase II (Bentonville) – 96 units, 2013
THRIVE (Bentonville) – 62 units, 2015
The Trails (Bentonville) – 487 units, 2015
Woodlands (Bentonville) – 50 units, 2015
The Promenade (Rogers) – 200 units, 2015
The Pointe (Bentonville) – 170 units, 2016
Towne Park (Springdale) – 157 units, 2016
The Links Phase II (Fayetteville) – 484 units, 2017
Palisades (Rogers) – 208 units, 2017
The Parc (Bentonville) – 216 units, 2017
Uptown (Fayetteville) – 308 units, 2017
Watermark (Rogers) – 220 units, 2017
Watermark (Fayetteville) – 306 units, 2017
Source: CBRE Northwest Arkansas

“Northwest Arkansas’ thriving local economy and unprecedented population growth continue to provide support for the strong performance of the multifamily market,” said Brian Donahue, an apartment specialist with CBRE.

And despite the continued addition of new units in Fayetteville, apartments are still full.

Seven new student housing complexes have added 3,960 bedrooms near the University of Arkansas campus since 2013, but apartments in Fayetteville are 97.5% occupied.

Three more student properties are currently wrapping up construction, which will add another 1,419 bedrooms, but Donahue doesn’t expect much drop-off in occupancy rates.

“With Fayetteville being named the #1 on list of most affordable places to live in the US and #3 on best places to live in the US by U.S. News & World Report, it appears the local economy, job market and overall population growth will continue to keep apartment fundamentals strong,” Donahue said.

Seven non-student complexes are currently under construction across the region, including three in Fayetteville, and two each in Rogers and Bentonville. The 157-unit Towne Park @ Har Ber was recently completed in Springdale.

The Links, Uptown Apartments and Watermark at Steele Boulevard will add 1,098 units in Fayetteville, while Palisades at Pleasant Grove, Watermark on Walnut Creek, The Pointe, and The Parc will bring 814 new units to Benton County.

Still, when looking forward, Donahue said he does not expect occupancies or rental rates to drop by much.

“We have always maintained the strength of the multifamily market is closely tied to the strength of the job market and local economy,” he said. “Looking forward we expect robust rent growth to continue in the near term as new market rate construction wraps up and begins leasing at higher rates than seen on 2000’s vintage assets across Northwest Arkansas.”

Northwest Arkansas occupancy rates

Average rates at mid-year 2016.

NWA as a whole: 97.5% occupied, down from 98% a year ago

Fayetteville: 97.5% occupied, down from 98% a year ago
Springdale: 99% occupied, up from 98% a year ago
Rogers: 98% occupied, down from 99.5% a year ago
Bentonville: 98% occupied, down from 98.5% a year ago

Northwest Arkansas apartment rents

Rogers and Bentonville carry the highest average rents for apartment complexes with 50 or more units.

 1 bed/1 bath2 bed/1 bath2 bed/2 bath3 bed/2 bath

Source: Northwest Arkansas Apartment Market Survey (PDF) for mid-year 2016. CBRE surveyed just over 22,000 of the area’s approximate 32,000 units. The survey does not include complexes with less than 50 units.