When it comes to shelter, the millennial generation has established a reputation for its lingering embrace of apartments over homeownership. The market impact of the 18-34 age group is helping drive occupancy rates higher, to the delight of landlords.
The demographic shift of the generation also is enlarging an affluent renter-by-choice class that isn’t lost on multifamily developers.
Richardson Properties of North Little Rock is among the developers tapping into apartment-bound millennials who can tote their college notes and still swing monthly rents for amenity-laden digs.
“We’ve never offered one dollar of concessions here,” Keith Richardson said of The Pointe Brodie Creek project. “From day one, we’ve had a waiting list.
“We’ve done a high-quality product that Little Rock hasn’t seen in a while. This is like condo living without the ownership hassles.”
The 356-unit project at 3400 S. Bowman Road in west Little Rock boasts a 25,000-SF clubhouse that resembles a resort.
Opened in October 2013 with the first phase of The Pointe Brodie Creek, the clubhouse is home to a sports bar, fitness center, cyber café and an 83-seat surround-sound theater with a catalogue of 3,000 movies on demand. Outside, a bocce ball court, putting green and huge pool courtyard provide more social options.
It’s a big departure from his roots developing more than 3,500 units with partner Arby Smith in more than 50 moderate-priced projects throughout Arkansas, Tennessee, Illinois and Louisiana.
In round numbers, The Pointe Brodie Creek is a $50 million-plus investment in land and improvements. “This is the most expensive investment I’ve made,” Richardson said.
Across the road, Richardson also has invested $25 million to date developing Bowman Pointe at 3321 S. Bowman Road with a planned buildout of 609 units. Completion of the first of 217 units of this equally upscale project is expected by year’s end.
Down the street, John Burkhalter’s $16 million Fountaine Bleau West project at 4216 S. Bowman Road will bring 240 units on line when it is completed next summer. The first building will open by the end of October, representing the first of 120 units that will open before the year’s end.
“We’re ahead of the construction schedule,” Burkhalter said. “It’s the highest caliber development I’ve ever done.”
The granite-topped kitchens and opulent bathrooms featured in the Burkhalter and Richardson projects have been a hit with the market, too.
“The lease-up velocity has been pretty brisk,” said Ted Bailey III, partner in The Multifamily Group LLC of Little Rock.
The apartment brokerage and consulting firm tracked a 92.6 percent occupancy rate as of June 30 in a survey of 27,534 market-rate units in the Pulaski County market.
The Little Rock market’s renter population growth rate of 7.9 percent during 2010-15 ranked 12th in the nation, tied with Charlotte, North Carolina, according to ARA Newmark. The company is touted as the largest full-service investment advisory brokerage firm in the nation that focuses exclusively on the multi-housing industry.
“The apartment market in Little Rock has been screaming hot for the last three to four years, with rent increases and high occupancy,” said Jerry Webster, president of Little Rock’s Webster Corp., an apartment broker.
Richardson announced last month his $150 million The Pointe North Hills development near the Lakewood neighborhood of North Little Rock.
Plans call for 960 luxury apartments, a 20,000-SF clubhouse, fitness center, resort-style pool, wine room, dog park and more.
In July, Richardson invested $2.8 million to buy the 64.5-acre tract bordered by Highway 67/167, Interstate 40 and North Hills Boulevard.
“Keith Richardson bought a dominant apartment site,” Webster said. “I think it will be the dominant apartment project in North Little Rock for the next 25 years.
“He’s not going to just hit a home run on that project. He’s going to hit a grand slam.”
Northwest Market
The same favorable millennial-driven variables are driving the tandem markets of Benton and Washington counties too.
“If Little Rock is screaming hot, northwest Arkansas is screaming hot squared,” Webster said. “Springdale is probably the strongest apartment market by far.”
Average rental rates increased 7.1 percent in northwest Arkansas during the past 12 months, while the average occupancy rate held firm at 97.5 percent, according to a midyear survey by CBRE Group Inc. of Los Angeles.
A breakdown of the four prime markets in Benton and Washington counties reflects sky-high average occupancies:
- Springdale, 99 percent (5,189 units surveyed);
- Rogers, 98 percent (3,822 units surveyed);
- Bentonville, 98 percent (3,643 units surveyed); and
- Fayetteville, 97.5 percent (9,622 units surveyed).
“Rogers and Bentonville are classic examples of supply and demand,” Webster said. “And their unemployment in northwest Arkansas is under 3 percent.”
Four apartment projects totaling 814 units were under construction this summer in Rogers and Bentonville.
The Rogers projects are:
- Watermark at Walnut Creek, a 220-unit complex developed by Watermark Residential Corp. of Indianapolis; and
- Palisades at Pleasant Grove, a 208-unit complex developed by Salter Properties of Conway.
In Bentonville:
- Gene Phillips of Dallas is developing the 216-unit first phase of The Parc @ Bentonville; and
- Keith Richardson is developing the 170-unit first phase of The Pointe Bentonville.
Richardson said he watched and studied the northwest Arkansas market for 10 years before taking the plunge. “We’re actually looking at two more locations up there,” he said.
Three Fayetteville projects totaling nearly 1,100 units are in motion. The Lindsey Management portfolio is adding 484 units with Phase 2 of The Links at Fayetteville this year.
Two projects near the Northwest Arkansas Mall are scheduled for completion in 2017: the 308-unit Uptown Apartments by Fayetteville’s Specialized Real Estate Group and the 306-unit Watermark at Steele Crossing by Watermark Residential.
Pulaski County Apartment Market
| Occupancy | Avg. Unit Size | Avg. Monthly Rent | |
| Overall | 92.6% | 892 SF | $755 |
| New Construction 2010-16 | 95.7% | 975 SF | $986 |
| Built 2000-09 | 93.8% | 963 SF | $863 |
| Built 1990-99 | 95.4% | 922 SF | $763 |
| Built 1980-89 | 92.6% | 834 SF | $698 |
| Built Pre-1980 | 89.7% | 854 SF | $644 |
Survey covers 27,534 market-rate units as of June 30.
Source: The Multifamily Group LLC, Little Rock