Tony Mueller is a director at GRS Group. He can be reached at 312.476.7621 or via email at email@example.com
So, comparing something to the latest Super Bowl in terms of excitement isn’t entirely fair. If television ratings speak for a anything, more people might have rather watched the television show “Atlanta” than this year’s version of what’s billed as the biggest annual American sports event, which took place in the same city.
But the commercial real estate environment in vibrant Atlanta is anything but boring, as is proved by its multifamily sector. A recent CBRE report calls the outlook “bright” in the city for apartments, due, in part, to its strong overall economy.
This is leading to a consistent construction pipeline for the property sector. CBRE says there are an average of 2,200 new units in the metro area planned per quarter in the near term. The report pointed out that most of this new product is infill in the already established Buckhead and Midtown markets, while the Gwinnett County suburbs have about 2,000 units under construction.
Investor interest in this activity is apparent, with $7.3 billion in apartment transactions last year, CBRE says.
Though the development is putting pressure on short-term vacancy rates, it hasn’t made a negative impact on rents. Atlanta multifamily rents were tenth in the country in terms of year-over-year basis-point rent growth, according to a national RealPage report on the sector. In the metro area, year-end 2018 rent grown came in at 4.8 percent from the previous year, a 190-basis-point rise from the end of 2017’s uptick. Meanwhile, Atlanta’s 4.8-percent rent growth was the second-highest in the top 10 metros in terms of rent-growth momentum, second behind the Phoenix area’s 7.4 percent.
Part of the reason for the rent hikes is Georgia’s job growth, which is outpacing the rest of the country. Industry employment is increasing the most in construction, education, healthcare, leisure and hospitality and financial services. Reportedly, no major sectors are losing jobs.
RealPage says that as of last year’s fourth quarter, the Atlanta multifamily occupancy rate stood at 94.7 percent, and the average rent price hit $1,209, still below the national average of $1,353. So while rents and jobs are increasing, Atlanta is still relatively affordable compared to many major cities and has a lot going for it on several levels, despite a less-than-thrilling Super Bowl for many viewers.