Apartment Market Sees Upscale Shift

Apartment Building
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Washington County continues to lead the multifamily market in new permits issued in 2004, although numbers are still down 30 percent from 2003.

Based on comparable year-to-date figures, Washington County had a total of 124 permits valued at a combined $65.4 million, which was down from 156 permits in 2003 valued at $96 million. Benton County multifamily starts totaled 93 and were valued at combined $26 million, a 38 percent increase in value over 2003’s $18 million.

Roy Stanley, president of Fayetteville-based Lindsey Management Inc., said Washington County typically leads the rental market because of the University of Arkansas.

“Washington County is more mobile,” Stanley said. “You see more transition there.”

Lindsey Management owns, operates or has under construction more than 25,000 units in all of Arkansas’ contiguous states save for Louisiana. About 9,500 of those units are in Benton and Washington County and half of those are in Fayetteville alone. Stanley said he has seen a 100 percent increase in the demand for its executive-style, short-term apartment units in the last few years.

James Mathias, owner of Mathias Rentals in Springdale, said he’s seen more interest in the higher-dollar units in Centerton and Bentonville.

“I’m in the $300 to $500 rent market, but in Bentonville and Centerton, I’m building ones for $600 and that will work,” Mathias said.

Mathias, who has 1,000 units under construction or managed, said he left the Fayetteville market long ago because of all the competition.

Another new customer is the “renter by choice,” Stanley said.

“[They are] people who have the income to buy, but chose to rent because of the convenience,” Stanley said.

Stanley said that as the baby boomers get older, the market will probably see more and more of that type of renter.

When asked who the typical Lindsey customer is, Stanley said Lindsey’s communities are really a cross section.

“We have the college student, the newly marrieds and the single person,” Stanley said.

Lindsey said developers have to change with the times.

“You can’t build a 1980’s apartment today,” Stanley said. “You have to offer the kinds of amenities with features people want. You have to build with the idea that it has to be accepted by the marketplace.”

The typical Lindsey apartment building follows a formula: a two-story, 12-unit building with four one-bedroom units and eight two-bedroom units.

“That’s pretty much all we build,” Stanley said.