Apartment market tightens in Pulaski County

Apartment vacancies in Pulaski County dropped to 8.1 percent in the second quarter, compared with 8.8 percent in the first three months of the year, owners of a Little Rock firm that tracks the central Arkansas apartment market said.

There are about 25,000 apartment units in Pulaski County, said Richard Cheek, who owns The Multifamily Group with Ted Bailey.

The average monthly rent in Pulaski County was $738 in the second quarter, up from $728 in the first quarter. Including discounts and other specials offered by landlords, the effective monthly rent in the market was $707 in the second quarter.

The second quarter saw 550 new units open. They included 262 units at LIV Riverhouse, at 1200 Brookwood Drive in Little Rock; 144 units at Fountaine Bleau, phase III, at 10801 Paul Eells Drive in Maumelle; and 144 units at The Pointe Brodie Creek, phase III, at 3400 S. Bowman Road in Little Rock.

Another 299 units are scheduled to be completed this year and 439 more are expected to be finished next year.

The occupancy rate in the newly built complexes -- those opened since 2010 -- is 95 percent, Cheek said. That is for about 3,300 units, Cheek said.

"That represents a good, strong occupancy," Cheek said.

Those newly built complexes have had an annualized 11.5 percent increase in monthly rent to $993, Cheek said.

The central market in Little Rock is the most popular in the county, Cheek said. That area generally runs from the Arkansas River south to Markham Street, west to Mississippi Street and east to the Missouri-Pacific Railroad, Cheek said.

"That area has scarcity of [apartments] and access to major employers, recreation and entertainment," Cheek said.

That area is attractive to millennials, those between 20 and 34, Bailey said.

"They want to be closer to their jobs and to amenities and don't want to drive as much in their cars," Bailey said. "They like places to meet. So the apartment unit itself may not be quite as important. They average [renting] smaller [units] because social places are more important to them."

Nine apartment complexes in Pulaski County were sold in the second quarter. The highest price paid was $36 million for Park Avenue Lofts, a luxury apartment complex in Little Rock with 258 units. Park Avenue sold in May to Equity Resources LLC of Birmingham, Ala.

The price per unit was about $139,000 and the price per square foot was almost $150.

"Equity Resources has great confidence in the Little Rock market," Jack Fiorella, chief executive officer of Equity Resources, said in a prepared statement. "We expect that our strategy to own high-end luxury communities will be well received by the community."

Riverwalk, a 262-unit complex in Little Rock, sold at the next highest price, about $25 million.

Nationally, apartment rents in the second quarter increased 1 percent compared with the first quarter to an average price of $1,144 a month, according to Reis Inc. of New York, which follows the commercial property market. The national apartment vacancy rate was 4.2 percent in the second quarter, Reis said, up slightly from 4.1 percent in the first quarter.

Business on 10/06/2015

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