For every real estate professional that is convinced that Atlanta has gotten ahead of itself in regards to multi-family construction, there’s one that’s equally convinced we have the stats to support such tremendous growth and development. We saw a ton of condo units go up in the early 2000s, but saw this market die down when the recession hit. Since the economy has begun its sluggish recovery, we’ve seen developers switch their focus to apartment units in order to accommodate both those who no longer have the credit to purchase homes as well as the young professionals who enjoy urban living and want to live close to where they work.
Those who believe that the apartment development is consistent with demand have plenty of stats to back it up. Occupancy rates during the most recent quarter were above 97%, a sign of an extremely healthy market. Rents have continued to increase at a very impressive rate (7% since this time last year), and rents in Brookhaven are some of the highest in the city.
Even the new developments are leasing up fast and achieving their desired rents. Both of the new apartment towers in Buckhead, Elle of Buckhead and 92 West Paces, are demanding more than $1.60 per square foot. The two new apartment towers in Midtown are performing even better; SkyHouse Midtown and 7712th Street are both demanding rents of more than $2.00 per square foot.
So when will this end? Well, probably not anytime soon. Atlanta currently has 6,479 apartment units under construction and another 6,984 units that are going to break ground soon. Over the next twelve months, Atlanta is expected to add 4,634 apartment units, increasing the supply of Class A apartments by 22%. Almost half of the under-construction and proposed units are in Buckhead/Brookhaven.
In summary, there is no reason for us to get ahead of ourselves and start worrying about the “apartment boom” – not yet, at least. Occupancy rates are high, rents are still on the rise, and the local economy is still adding jobs. The apartment towers that have recently delivered have all been quite successful in achieving their goal rents and occupancies. As time progresses, expect this “boom” to soften and for site selection to become the most critical factor in the development of new apartment units.Share