Anticipated Student Housing Glut Gets Lindsey & Associates Attention

At a recent market forecast luncheon at the Doubletree Guest Suites in Bentonville, commercial real estate broker Ramsay Ball with Colliers International said his office was tracking nine separate upscale housing proposals targeting students at the University of Arkansas.

“I don’t think that all nine will be constructed,” Ball wrote later in an email. “And several that are will be 2014 and beyond.”

The proposals, in various stages of zoning and development, would add more than 4,000 beds to the multifamily market if completed. Four of the developments seem certain to be finished before the fall 2013 semester begins, adding nearly 2,500 beds to the market.

The news of so many projects being lined out, most by out-of-state developers in response to the record enrollment numbers at the UA, is enough to make the industry leader in Northwest Arkansas take pause.

“It scares me a little,” said Job Branch, president of multifamily housing at Lindsey & Associates in Fayetteville. “We had some vacancy issues during the recession, but this past year is when the market has picked back up and I feel like we have recovered. But if we get a bunch more units in and there are more places for [students] to choose from, it could definitely saturate the market.”

Lindsey owns almost 25 percent of the multifamily units in Fayetteville. That’s about 4,000 to 5,000 units, according to Branch, who has been with Lindsey for 24 years, and the percentage of college students occupying those units is more than half.

Branch said the most popular complex among UA students is Southern View, with students estimated to occupy 80 percent of the beds. Leasing rates run between $465 and $650 per month. Cornerstone, Fair Park and Shiloh are other Lindsey developments that house predominantly students.

Rates are higher at The Links at Fayetteville, a property Branch said would be considered Lindsey’s most upscale. That might be a factor in the development’s current 20 percent vacancy rate.

Despite concerns about the potential for market saturation, Branch said his company will remain an attractive option by offering more affordable rates to compete with upscale housing that might offer more amenities.

“I will tell you this, and I have heard Mr. [Jim] Lindsey say this so many times: Price is always the No. 1 thing,” he said.