Apartment vacancies in Pulaski County dropped to 7.4 percent in the second quarter, down from 8.1 percent in the second quarter last year, according to The Multifamily Group, which follows the Pulaski County apartment market.
That compares with the national average apartment vacancy rate of 4.8 percent, according to the Apartment Realty Advisors.
The long-term national apartment vacancy rate since 2002 is 6.2 percent, said Ted Bailey III, co-owner of The Multifamily Group.
"The [Pulaski County] rate is a little bit softer than you'd like," Bailey said Friday. "But we're only [1.2 percent] above the long-term national [vacancy] rate."
For apartments built in Pulaski County since 1980, the vacancy rate is about 5 percent, Bailey said. For apartments built before 1980, the vacancy rate is about 10 percent.
The rate at which apartments are being built in the Little Rock area is one reason for the higher vacancy rate, said Michael Pakko, chief economist at the Institute for Economic Advancement at the University of Arkansas at Little Rock.
"That, in and of itself, would have a tendency to increase vacancy rates because new units are being brought on line faster than the absorption rate," Pakko said in a telephone interview Friday. "The absorption rate is generally going to evolve slowly over time but new construction is going to come online in big chunks."
At least five apartment complexes, about 700 new apartments, were completed this year or will be finished later this year.
"The very fact that there is all this construction of new units in the pipeline indicates that the developers and the landlords anticipate continued growth," Pakko said. "So that's a positive indicator based on a reading of the people who supposedly know the market the best."
The average rent for all complexes in Pulaski County is $755 and the average apartment size is 892 square feet, The Multifamily Group said.
The newest complexes, those built since 2010, have an average rent of $980 and average size of 975 square feet.
The Little Rock area remains a target for multifamily investing because the city is a state capital, it has numerous higher education opportunities, a strong medical district and a growing high-tech sector, Bailey and Richard Cheek, also co-owner of The Multifamily Group, said in their second-quarter report.
"The healthcare field in Little Rock is huge with over 35,600 workers," Bailey said. "If you go to a lot of these newer [apartment complexes], absolutely you are going to see a large group of healthcare people there."
The Multifamily Group generally surveys apartment complexes with at least 100 units. Of those, there are more than 26,000 apartment units in Pulaski County.
Business on 09/17/2016