Demand for apartments in Northwest Arkansas continues to reach unprecedented heights, and with the area’s robust population growth, developers have taken notice.
There are 17 properties totaling 2,616 units under construction in the region, according to CoStar, which tracks commercial real estate information. Nearly all of them are due to be completed this year. There are several other projects in the proposal stage, according to the company’s latest report.
Much of the focus is in Bentonville, where two projects make up nearly half of the development in the pipeline. Crystal Flats is a 616-unit property at 1401 N.E. John DeShields Blvd. near Memorial Park, and Walton Crossing is a 600-unit development on Southeast C Street near Phillips Park. Two other projects in the city — Brick Avenue Lofts and Red Barn — combine for another 642 units. Crystal Flats and Red Barn are being developed by Springfield, Mo.-based Green Circle Projects. Walton Crossing is a project of Fayetteville-based Lindsey Management. Brick Avenue Lofts is a project of Specialized Real Estate Group, also of Fayetteville.
Demand for apartments is also being driven by rising home prices, which have appreciated nearly 50% over the past five years. Averages are now exceeding neighboring metro areas Tulsa and Oklahoma City, and because of rising labor costs, it might not be the peak, CoStar said.
“On the flip side, household incomes have kept pace with the rising rental rates since the recession, making it easy for residents to afford apartments that average about $750 per month,” the report said.
The CoStar report, though, says rents are likely to increase with new supply in the market.
“The Central Benton County submarket, which has seen many of the deliveries in the metro over the past 12 months, boasts the highest rents in the metro at just about $850 per unit,” the report said. “The nearly 3,000 units delivered in Central Benton County since 2015 have particularly high asking rents, averaging about $1,100 per unit, and were at about 93% occupancy as of February. This is because most of these newer properties are heavy in amenities.”
Northwest Arkansas’ overall multifamily vacancy rate, according to CoStar, is 5%, down 0.8% from the same period of 2017.