The Little Rock MSA, also known as Central Arkansas, is the most populous area in the state of Arkansas. The region is made up of Little Rock, North Little Rock, and Conway, and is an important educational, economic, and political center for the State, and more broadly for the Southern United States.
Investors have been drawn to this region for its growth prospects and are compelled to the multifamily market for several reasons.
Rents in Central Arkansas continue to rise
Median rents in Little Rock grew 15% during the pandemic1 and 1-bedroom apartments, popular with young professionals in the city, have seen a 19% YoY growth as of August 2022.2
North Little Rock has also seen similar growth, with 14% YoY growth for both 1-bedroom and 2-bedroom apartments.2
North Little Rock 2-Bedroom Rents over The Past Decade
Source: Zumper
Conway, which is a suburb of Little Rock, has seen the biggest growth in apartments that can support families, with 3-bedroom and 4-bedroom apartments seeing 21% and 18% YoY growth respectively.2
These rising rents are potentially an upside for investors, and show how desirable the area has become to renters.
Central Arkansas has a robust jobs market
The unemployment rate in Arkansas remains at 3.2%3 which is below the national average as of July 2022.4 The State has increased employment for six consecutive months, and the trend continues with 60,000 more employees in demand.3
The region’s central location puts it in a strong position as a warehousing, distribution and e-commerce hub, with numerous Amazon centers taking advantage of the geographical positioning, infrastructure, and local workforce.
As the state capital, Little Rock is home to many government jobs (Federal, State and Local government), accounting for 71,900 jobs in the city.5 Other big industries that provide stable employment in the area include healthcare and the military. Industrial vacancy rates, in particular in the medical/pharmacy sector, have been low, even during the pandemic.6
The strength of the jobs market is reflected in the growing population for the metro area, saw an increase of ~7% as of the last census.7
Housing prices rising steeply
Housing prices in the metro area have been on a steep increase since 2021, leaving many residents looking for more affordable alternatives (i.e. multifamily rentals).There has been a 17.9% YoY increase in home prices8 and these numbers indicate that more people, e.g. young professionals and young families, are likely to rent vs buying a home.
Little Rock House Prices over The Past Decade
Source: Zillow
Our latest multifamily deal is capitalizing on the robust job market, rental trends, and rising home prices in the Little Rock metro area. The sponsor has a strong track record in the value-add process required to bring units to market rate.
If you’re interested in this market, you can log in to our platform to see detailed information on our current offering.
Sources:
(1) THV11: Little Rock Rent Rises Nearly 15 Last Two Years
(2) Zumper: Little Rock / North Little Rock / Conway AR
(3) Arkansas Online: Jobless rate flat at 3.2% for June
(4) Bureau of Labor Statistics
(5) Little Rock Chamber
(6) Arkansas Money and Politics: Prospects Good: Stability, Growth Seen Ahead for State’s Largest Markets
(7) Talk Business: Population rises in metro areas; U.S. representatives allocated to Arkansas unchanged
(8) Zillow: Little Rock, Arkansas
