Apartments, occupancy rates both on rise in NWA

Multifamily residential development is on the rise in Northwest Arkansas, but occupancy rates also continue to increase, according to a report released in January.

Occupancy rates increased about 0.5 percent to 98.5 percent in 2015, states the annual report released by CBRE Group, a real estate services and investment firm.

Four apartment complexes totaling 799 units were built in Bentonville and Rogers last year, according to the report. Another seven have been announced for 2016 and 2017, the report states. It states that the complexes will bring about 2,000 more units to Bentonville, Rogers and Fayetteville.

Bentonville had the most multifamily growth in 2015, the report states. Three of the four complexes built were in Bentonville, totaling about 600 units.

The city also was the only market that saw a drop in occupancy rates, the report states. It shows the city dropped from 98 percent to 97.5 percent.

Bentonville still needs more multifamily, said Troy Galloway, planning director. It is estimated that the city grows by 1,200 to 1,600 people a year, he said.

“As long as the region continues to create jobs like it has there is no reason to believe that the growth rate will change,” Galloway said.

The report states that it is likely that occupancy rates will continue to stay at 95 percent or above in future years even as development continues in Northwest Arkansas. It also states that population growth is one reason for this.

Galloway said steps have been taken to make the process of developing multifamily easier.

“We are doing everything we can to encourage a wide range of housing types and price points,” Galloway said.

Identifying locations best suited for multifamily developments on a land use map is one example of what the city is doing, Galloway said.

Fayetteville has seen a shift in development in recent years, the report states.

“The boom from student housing construction around the University of Arkansas has tapered,” the report states.

One student housing complex was built in Fayetteville in 2015 and another three are expected for 2016. Yet the city also is seeing the addition of three complexes catering to multifamily that is not necessarily for students in the next two years.

Sarah E. King, Specialized Real Estate Group spokeswoman, said her company has built two student housing facilities in Fayetteville. It currently is constructing a multifamily complex called Uptown Apartments across from the Malco Theater.

“It is just clear that there is a demand for apartments in general,” King said. “This includes a demand for ones located where people can be active and connected to the community. It is a key approach for us to build things that keep people active.”

Fayetteville has had limited options for multifamily living, King said.

The report shows Fayetteville is averaging a 98.5 percent occupancy rate.

“There was no construction for decades,” King said. “There is a lot of pent up demand. The student market has been the conventional market.”

Springdale has the highest occupancy rate of 99 percent, the report shows.

Patsy Christie, Springdale planning director, said the city hasn’t seen a multifamily complex built in several years. She said the city expects to consider a large-scale development for a 76-unit complex in the near future.

The city rezoned property at 3300 Butterfield Coach Road from low-density single family residential to planned unit development for the proposed project last month.

Skip Motsenbocker, project developer, said it should be obvious why he wants to develop in Springdale.

“It is the highest rental rate in the whole four city region,” Motsenbocker said. “We see a need.”

There are no plans to target a certain population, Motsenbocker said. He said the multifamily need is so high in the region that a specialized approach is not needed.

“It is just clear that there is a demand for apartments in general,” King said. “This includes a demand for ones located where people can be active and connected to the community. It is a key approach for us to build things that keep people active.”

— Sarah E. King, Specialized Real Estate Group