Q3 2012 | MULTI-FAMILY
ATLANTA
MARKET REPORT
Apartment Market Fundamentals on the Rise in Atlanta
Atlanta is ranked among the best in the nation for the lowest cost of doing business and holds the eighth position for the largest economy in America. Anchored by the world’s busiest airport, Hartsfield-Jackson, Atlanta remains to be a desirable location for business and is currently home to the headquarters of 14 Fortune 500 companies and 32 Fortune 1000 companies. Atlanta’s diverse economy and top-ranked workforce training program make it an ideal place for many college graduates and businesses alike.
Updated May 2012
Metro Atlanta’s unemployment rate has decreased to 8.9% from 9.2% in July 2012; but is still above the US average at 8.2%. Atlanta’s workforce has increased by 29,400 workers, up 1.3%, from August 2011 to August 2012. The housing market has reached bottom earlier than forecasted; however, new construction and home value appreciation have yet to take hold. This has left many to find renting more favorable and has subsequently resulted in an increase of multifamily projects in Atlanta.
MARKET INDICATORS Q4 2012 OUTLOOK VACANCY CONCESSIONS RENTS TRANSACTIONS PRICE PER UNIT CAP RATES
With the apartment market steadily increasing, the percentage of American homeowners has continued to drop. Alongside Atlanta’s job growth, the Millennials (aka Gen Y) have influenced the demand for multifamily housing in the urban sector. This segment of the population appreciates the benefits offered from renting and is drawn to live in-town where they are in close proximity to shopping, restaurants and entertainment. As a result, intown apartment developments are in high-demand: both for renting and for buying. Investors are looking for an investment vehicle with stability; much like these type of properties provide. The cheap capital provided by Fannie Mae, Freddie Mac and life insurance companies has helped secure would-be investors in choosing multifamily communities as the investment of choice. There are currently 15,319 prospective apartment units in Atlanta’s pipeline, 3,329 units under construction and 388 units being redeveloped. In the third quarter of 2012, Atlanta witnessed 39 apartment sales totaling a little north of $500 million. HISTORICAL APARTMENT OCCUPANCY
HISTORICAL APARTMENT RENTS
96% 94% 92% 90% 88%
US
www.colliers.com/atlanta
SOUTH
ATLANTA
2011
2012
Source: MPF Research
86%
2012
2011
Source: MPF Research
US
SOUTH
ATLANTA
$1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400