SPRINGDALE (KFSM) — Vacancy rates for multifamily and commercial real estate across the Northwest Arkansas region are at the lowest level ever recorded, according to Arvest Bank’s first-half 2015 Skyline Report.
Vacancy rates throughout the region fell to 2.3 percent, much lower than the 6.5 percent for the same period in 2014. At 0.4 percent, Bentonville has the lowest vacancy rate for multifamily real estate, such as apartment complexes.
While this is good news for apartment complexes, this could mean a spike in lease rates if new construction doesn’t catch up, said Kathy Deck, lead researcher for the Skyline Report and director for Business and Economic Research. Increased demand raised the cost of rental space in Northwest Arkansas from $576.23 for the second half of last year to $581.72 for the first half of this year.
Investors and developers were hesitant to build immediately following the recession even though there was steady growth throughout the region, Deck said. This precaution caused a lag in multifamily construction, which is now constraining the market.
However, more than 1,100 new rental units are under construction or have been announced in Bentonville, according to the report. In Fayetteville, the number of units scheduled for construction is 4,400.
Fayetteville saw the largest year-to-year decrease in vacancy rates, dropping from 7.2 percent in the first half of last year to 3.6 percent for the same period in 2015, the report states. The college students are filling the apartment complexes as they are completed and the demand is still growing, Deck said.
This increased occupancy rate is also reflected in the commercial sector. Deck said the stabilizing economy has helped businesses and companies make the decision to move into a newer or better space.
The biggest vacancy rate decrease was in warehouses. The rate of available buildings fell from 16.4 percent in the latter half of 2014 to 13.1 percent for the first half of this year.