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
MARKET REPORT | Q3 2012 | MULTI-FAMILY | ATLANTA ATLANTA MULTI-FAMILY
Millions
ATLANTA MULTI-FAMILY | Investment Volume & Cap Rates
5,000
8%
4,000
6%
3,000
Investment for apartment properties in the Atlanta market is set to increase for a third straight year. In the past twelve months, there have been 134 properties sold representing a total of 38,452 units. The average price per unit as of the end of the third quarter is $75,270/unit. This is the fifth consecutive quarterly increase for this figure. The average cap rate for apartments in the Atlanta market increased from the previous quarter as well and now sits at 6.69%.
4%
2,000
AVG Cap Rate
YTD '12
2010
2009
2007
2006
2004
Sales Volume
2011
0% 2008
0 2005
2% 2003
1,000
Source: Real Capital Analytics
UPDATE Recent Transactions in the Market SALES ACTIVITY PROPERTY
SUBMARKET
SALES DATE
SALE PRICE
PRICE/UNIT
BUYER
Buckhead
7/24/2012
$64,250,000
349
$184,097
Mid-America Apartment Comm.
Stoneleigh @ Deerfield
North Fulton
8/29/2012
$43,500,000
370
$117,568
Heitman LLC
Stonewood @ Vinings
Cumberland/Vinings
9/4/2012
$42,250,000
310
$136,290
Fairfield Residential
Vinings @ River Pkwy.
Cumberland/Vinings
8/20/2012
$37,250,000
427
$87,237
Investors Realty Group
Asbury Park
Airport/N Clayton
8/3/2012
$33,600,000
269
$124,907
Bell Partners
Waterstone Apartments
Gwinnett County
10/18/2012
$33,500,000
296
$113,176
Westdale Real Estate Investment
10 Perimeter Park
Central Perimeter
9/13/2012
$26,400,000
230
$114,783
Arenda Capital Management
Camden Creekstone
Central Perimeter
7/12/2012
$25,270,000
223
$113,318
Camden Property Trust
Amber Chase
Henry County
9/6/2012
$22,400,000
352
$63,636
Strand Properties Corporation
Roswell Creek
North Fulton
9/27/2012
$22,400,000
498
$44,980
Asset Preservation Inc.
C FU LT O
Allure at Brookwood
98
MULTI-FAMILY PIPELINE | Urban Atlanta
DORAVILLE Norcr
CHAMBLEE DEKALB CO. FULTON CO.
SMYRNA
2 3 511 4
G
7
DE
ch e
R iv
e
Clarkston
h
# UNITS
e
r
14 10 DECATUR ATLANTA121316 Avondale Estates
oo
EAST POINT COLLEGE PARK HAPEVILLE
DEKALB
Hartsfield-Jackson International Airport
P. 2
CL
nion City
675
FOREST PARK
| COLLIERS INTERNATIONAL
HENRY
CO. CO.
M
DEVELOPER
MARKET
Ponce Park (u/c)
Jamestown Properties
Midtown
625
Camden Paces
Camden Properties
Buckhead
375
3
Village @ Buckhead (u/c)
JLB Partners
Buckhead
375
4
Buckhead Atlanta (u/c)
Oliver McMillan
Buckhead
370
5
Circle Terminus
Crescent Resources
Buckhead
360
6
AMLI at Ponce Park
AMLI Residential
Midtown
353
7
Fairfield Clairmont II
TriBridge Residential
North DeKalb
353
8
Perimeter Town Center
Northwood Ravin
Central Perimeter
345
9
1155 Hammond Drive
Pollack Shores
Central Perimeter
340
10
77 12th Street (u/c)
Daniel Corporation
Midtown
330
11
Phipps-unnamed
Columbus Realty
Buckhead
320
12
SkyHouse (u/c)
Novare & Batson Cook
Midtown
320
13
100 6th Street
Novare & Batson Cook
Midtown
320
14
903 Huff Road
Worthing Southeast
Midtown
312
#
NAME
1 2
# UNITS
Source: Pierce-Eislen, Dale Henson Associates
MARKET REPORT | Q3 2012 | MULTI-FAMILY | ATLANTA
TOP EMPLOYERS
WORLD CLASS UNIVERSITIES, COLLEGES
COMPANY
# EMPLOYEES
UNIVERSITY
CITY
27,000
University of Georgia
Athens
34,816
Wal-Mart Stores
26,000
Georgia State
Atlanta
32,000
AT&T
19,000
GA Perimeter College
Decatur
26,000
Emory University
17,994
Kennesaw State
Kennesaw
24,100
Delta Airlines
Publix Supermarkets
9,453
Georgia Tech
Atlanta
20,941
The Home Depot
9,000
Emory
Atlanta
13,893
8,648
University of West GA
Carrollton
11,644
Emory Healthcare
FULTON CO.
Allatona Lake
Emerson
•
• Over 2.5 billion square feet under
Buford
HA GW INN LL CO . ETT CO .
management
Sugar Hill
Rive r
FO RS FU
Mountain Park
B
• Over 12,000 professionals
H YT O LT
CHEROKEE CO.
Acworth
$1.8 billion in annual revenue
Lanier
Woodstock BARTOW CO.
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
Source: Atlanta Business Chronicle 2011 Book of Lists FORSYTH CO
BAR
CHER
Source: Moody’s Analytics
522 offices in 62 countries on 6 continents
# STUDENTS
N
Alpharetta
CO . CO .
Cha t
PAULDING CO. COBB CO.
e hooch e tac
Roswell
Duluth
316
CO BB FU LT CO O . N CO .
MARIETTA s Hiram
DORAVILLE
DEKALB CO. FULTON CO.
SMYRNA
Austell Clarkston
ch e
Douglasville
DECATUR Avondale Estates
o
W AL TO N
CO .
att
ho ac
ATLANTA
e
Stone Mountain CO .
R iv
r
Snellville
G W IN NE TT
e
DOUGLAS CO.
Ch
DEKALB
Hartsfield-Jackson International Airport
Fairburn
FULTON CO.
Palmetto
HENRY
CO. CO.
Conyers
FOREST PARK Riverdale
RESEARCHERS: Atlanta Scott Amoson | Director of Research Dany Koe | Research Associate Two Midtown Plaza | Suite 1100 1349 West Peachtree Street, NE Atlanta, Georgia, 30309 TEL +1 404 877 9286 FAX +1 404 870 2845
Stockbridge
O. ON C FULT CO. TTE FAYE
Jonesboro
COWETA CO.
McDonough BU TT S
CO .
HENRY CO. CLAYTON CO.
Fayetteville
Newnan Peachtree City
Southeast Multi-Family Investment Services Two Midtown Plaza | Suite 1100 1349 West Peachtree Street, NE Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845
Covington RO C NE KDA WT LE ON CO CO . .
CLAYTON CO.
Union City
675
DE KAL RO BC CK O. DA LE CO .
Lithonia EAST POINT COLLEGE PARK HAPEVILLE
WILL MATHEWS
UNITED STATES:
GW I DE NNE KA TT LB C CO O. .
COBB CO.
Lithia Springs
RON CAMERON
Norcross
CHAMBLEE
Powder Springs
PAULDING CO.
Lawrenceville
This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 520 offices throughout more than 62 countries worldwide.
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