Atlanta’s multifamily real estate market remains in glowing health, and that seems unlikely to change in the near future. The city’s economy is vibrant and growing, as is its population. The market is competitive, but there are still opportunities for proactive investing in multifamily homes in Atlanta, both on the development and acquisition markets. Most of those opportunities are on the city’s fringes and suburbs.
Jobs Attract Young Professionals to Multifamily Homes in Atlanta
The population of Atlanta is not only growing, it is becoming younger and more professional. According to the Bureau of Labor Statistics, Atlanta added 68,300 jobs in the 12 months leading up to September 2017, up 2.5 percent year-on-year compared to the national rate of 1.9 percent. Professional services and business experienced the greatest growth, adding 30,500 new jobs. The education and healthcare sectors added 8,900 jobs. Fifteen Fortune 500 companies, including The Home Depot, UPS, Coca-Cola, Delta Air Lines, and NCR are located in Atlanta, as is Turner Broadcasting System. As of late 2017, there was 3 million square feet of office space under construction in Atlanta, and a 45-acre healthcare facility that broke ground in suburban Brookhaven.
All of this is good news for multifamily real estate investors. The Atlanta market exceeds many national performance indicators by a sizable margin. In October 2017, rent growth in Atlanta reached 2.9 percent year-on-year, compared to 2.3 percent nationally.
By the end of 2017, effective rent in Atlanta was $1,147, which is significantly lower than the $1,306 national average. However, the price of housing in the urban core has been rising sharply for the past few years and is inaccessible to a large portion of the city’s population. Analysts think the development market peaked in Atlanta at the end of 2017, with 8,500 new apartments completed in 2017. A large portion of those are luxury units, and thanks to the influx of professionals, those apartments are expected to be absorbed relatively quickly.
Rents are rising fastest in Atlanta’s upscale northern and eastern suburbs as more people are being priced out of downtown. Price leaders in October 2017 were Tucker/Stone Mountain (up 10.6 percent year-over-year), Cliftondale (up 9.4 percent), and Redan (7.5 percent). The acquisitions market is also active and highly competitive. Assets worth $4.7 billion were traded in the first 10 months of 2017, which means the market was slightly slower than in 2016.
Greatest Activity in the Northeastern Suburbs
Young professionals are driving development in the northeastern suburbs of Atlanta, according to Marcus & Millichap’s Q1 2018 Atlanta market research report. Residents between the ages of 20 and 34 made up 21 percent of the Atlanta metro area population in Q4 2017, exactly keeping with the national average, but an increase over earlier Atlanta numbers. The Atlanta metro area is expected to grow by 620,000 people, or 255,000 households, by 2022, and many of those families will live in large, new multi-use complexes built near MARTA commuter train stations.
A complex under construction in Decatur, near the Avondale station, will include 400 apartments, plus 90 age- and income-restricted units. An 850-unit apartment complex with a hotel, offices, and restaurants, has been proposed in Buckhead, adjacent to that town’s MARTA station. These complexes will create an urban ambience and allow for easy and quick access to the city center and many entertainment venues.
The acquisitions market is also most active in the Atlanta suburbs, with several transactions occurring most weeks, many with the intention of repositioning.
Since the market is so desirable and active, investors will likely fare better with professional advice.
At CWS Capital Partners, we are a fully-integrated multifamily real estate investment management firm that offers everything from due diligence and risk management to transaction support and property management. We specialize in assisting our clients with 1031 exchanges, acquisitions, repositioning, and development. We own and manage luxury multifamily investment communities in major markets around the country, including 10 properties in the Atlanta area, and we employ a team of experts who can help you hone your investment strategy. Contact us today to get started on your next investment in Atlanta.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.