Recent data from commercial real estate information firm CoStar indicates multifamily developers still view Northwest Arkansas as a favorable environment despite the two-pronged economic shock of a pandemic and a recession.
Bill Kitchens, CoStar’s market analyst for Northwest Arkansas, said construction of about 3,500 new apartment units is underway as of the second quarter of 2020, or about 11.1% of inventory. That rate is the highest in about 15 years.
In the past five years, the area’s multifamily inventory has grown over 25%, Kitchens said. Central Benton County added about 4,600 apartment units since 2015, while Fayetteville added 1,275 units.
“Construction activity is expected to taper in the market as the volume of construction starts have steadily tapered in the past two quarters,” Kitchens wrote in a recent report. “Despite aggressive building, healthy absorption — the difference between move-ins and move-outs — has kept vacancy rates in check. As of the second quarter, vacancy rates are trending near 5.4%, which is below the national rate of 6.8%. That rate is anticipated to rise given the pandemic-induced recession.”
According to Brian Donahue, a multifamily specialist with commercial real estate firm CBRE, notable developments that are scheduled to come online later this year are Crystal Flats in Bentonville (487 units) and 49 West in Rogers (337 units).