Construction crews in Northwest Arkansas had a productive month in July with combined permit values in the four largest cities totaling $71.33 million, up 57% from the same month last year.
The robust growth in permit values is linked to commercial expansion as well as more multifamily projects, unlike a year ago when 80% of the permits were single family residential. However, it’s the commercial sector that is drawing the largest investments.
Commercial permits, which include multifamily projects totaled $41.092 million in July, roughly 58% of the building activity in Bentonville, Fayetteville, Rogers and Springdale. This shift toward commercial investment is on trend with the nation as a whole. The Associated General Contractors of America reports construction spending reached its highest level in July since December 2008.
“It is encouraging to see signs of a broad-based recovery in private construction along with a recovery — at least for now — in public construction investment,” said Ken Simonson, the association's chief economist. “Private nonresidential construction should remain strong through the rest of 2014 and beyond, while residential spending is likely to keep growing, though at a more moderate pace.”
U.S. construction spending in July totaled $981 billion at a seasonally adjusted annual rate, up 1.8% from the June total, Simonson noted. The July total was 8.2% higher than in July 2013. Private nonresidential spending increased 14% from a year earlier, while private residential spending grew 8% year-over-year.
The number of commercial permits in the Northwest Arkansas area are split between a mixture of public and private ventures. Public projects receiving permits across the two-county area totaled $6.786 million in July. Springdale is building two fire stations and a football stadium at Har-Ber High School, and those permits issued in July totaled $2.3 million. The new community center in Bentonville got a permit for $3.02 million and the new trampoline park in Rogers was issued a permit valued at $1.466 million last month.
Private investment is also showing signs of strength. In Fayetteville, Idyll Village, another multifamily project, secured four permits valued at $4.473 million. This is a 1,100-bed neighborhood located just two blocks from the University of Arkansas campus. The first phase of the traditional neighborhood development, a partnership between Fountain Residential Partners and locally based Specialized Real Estate Group, will offer 670 beds.
This multifamily boom shows no sign of letting up. There are at least four more complexes with nearly 2,000 bedrooms in various stages of development near the UA campus.
Private commercial projects are also picking up steam across the region. In Springdale, Tyson Foods is building a new data center on its corporate campus. That permit issued in July was valued at $2.437 million.
In Rogers, Cavender’s got a permit valued at $2.279 in July for its new store at 2604 Pleasant Crossing. Other office space for Hunt Ventures along Promenade Boulevard is also under construction.
Hunt Ventures recently broke ground on 10-story 225,000 square foot Class A office building at the corner of Pinnacle Hills Parkway and J.B. Hunt Drive near the Walmart AMP in Rogers. This project comes on the heels of two other large nearby office buildings constructed in the past few years and operated by Hunt Ventures. Last year the group finished a 60,000-square-foot office building directly across the Walmart AMP.
Bentonville issued a permit for warehouse space at 4600 SW Regional Airport Blvd. That permit project titled “CrossMar” is valued at $14.1 million. The project appears to be 550,000 square feet of flexible industrial space located near Wal-Mart’s distribution center and one of three buildings in CrossMar Park.
According to health department records there are several other new retail businesses on tap for the local region. This report precedes city permits by up to four months.
• Deluxe Burger, 5001 Pauline Whitaker Pkwy., Suite 104, Rogers
• Roma Italian, 5001 Pauline Whitaker Pkwy., Suite 102, Rogers
• Pei Wei Asian Dinner, 4895 W. Pauline Whitaker Pkwy., Rogers
• Newk’s Eatery, 637 E. Joyce Ave., Fayetteville
• Puritan Brew Company, 205 W. Dickson St., Fayetteville
RESIDENTIAL PERMITS MODERATE
Residential permits accounted for 42% of the total values in July. The local residential sector reports 135 housing starts in July, with combined values of $30.238 million shared between Bentonville, Fayetteville, Rogers and Springdale. The home building pace slowed from July 2013, with residential permits totaling $34.278 million for 151 new home permits.
Residential Permit Values (July)
Bentonville $10.143 million, down 3.87%
Fayetteville $9.059 million, down 12.7%
Rogers $6.908 million, down 21.2%
Springdale $4.175 million, down 8.68%
Unsold new home inventory stood at 462 homes at the end of July, up 35% from 341 completed and unsold homes on the market a year ago, according to Paul Bynum of MountData.com.
Several builders polled by The City Wire in the past couple of months have said they expect to top last year’s sales. They say buyer demand is robust enough to keep their crews working.
Brent Hanby, co-owner of Encore Flooring & Building Products in Springdale, recently said his business is bustling thanks to builders and remodelers. He said every contractor he has spoken to is busy with work throughout the summer. Builders said they have spent much of the summer playing catch up after a wet spring and long winter.