Multifamily vacancies drop in NW Arkansas

The vacancy rate for commercial real estate in Northwest Arkansas remains virtually unchanged in the first half of the year when compared with the last half of 2018 while multifamily vacancy rates dropped for the same period, according to a report released Tuesday.

Commercial real estate vacancy rates for Benton and Washington counties stood at 11% for the first six months of 2019, up from 10.9% for the last six months of 2018. Commercial permits issued for the period remained strong with a combined value of $169.7 million, according to the Skyline Report released Tuesday by Arvest Bank.

Multifamily vacancy rates stood at 3.1% for the first half of the year, down from 3.5% from the last half of 2018. The report credits strong absorption rates in Fayetteville and Bentonville as primary drivers for the vacancy rate drop. A vacancy rate under 5% is considered healthy.

A little more than 12,000 multifamily units are under construction or are planned in the area, with more than half of those in Bentonville and Rogers, according to the report. Average monthly rent for multifamily units for the first six months of the year was $691.49. The median lease rate was $625, up from $605 during the last six months of 2018.

“During the first half of this year and consistently over the past several years, there has been significant addition of new office space in the region, particularly in Benton County, and the market has showed consistent strength by keeping pace with these additions and remaining wellbalanced and with a healthy vacancy rate,” said Mervin Jebaraj, director of the Center for Business and Economic Research at the University of Arkansas, Fayetteville and the lead researcher for the Skyline Report.

Arvest Bank first sponsored the Skyline Report in 2005. Researchers at the University of Arkansas, Fayetteville’s Center for Business and Economic Research compile data for the report.