Improved Fundamentals Ignite a New

Q3 2013 | MULTI-FAMILY
ATLANTA
MARKET REPORT
Improved Fundamentals Ignite a New Development Cycle

Updated May 2012
MARKET INDICATORS
Q4 2013
OUTLOOK
VACANCY
CONCESSIONS
RENTS
TRANSACTIONS
PRICE PER UNIT
CAP RATES
The Atlanta MSA apartment market continued its stellar performance of the previous quarter with another
strong showing in the 3rd quarter of 2013. According to the Bureau of Labor Statistics, preliminary data
from August 2013 indicated non-farm employment added 57,100 jobs, decreasing the unemployment
rate to 8.6%; this unemployment rate is the lowest for the MSA since 2008. Two sectors indicative of a
strengthening real estate market, construction and professional & business services, have both seen job
increases of 4.8%. According to a report by the Atlanta Business Chronicle, for the construction industry,
“more jobs mean more demand for apartments and single-family homes. For developers, it means more
financing for new projects in Atlanta’s office and retail sectors, as investors and lenders grow more
confident in a sustained recovery”.
Atlanta’s occupancy climbed 50 basis points to finish off the third quarter at 92.7%. Year-over-year the
metro’s occupancy increased 50 basis points after a slight dip in occupancy earlier this year. The occupancy
increase occurred due to strong demand in the market outpacing the relatively few deliveries to the market.
Despite the uptick in occupancy, Atlanta’s rate was significantly lower than the U.S. and South averages of
95.4% and 94.5%, respectively
The 3rd quarter 2013 saw average monthly effective rents increase by 1.8% to $855; the 4th straight
quarter with effective rent growth. Continued rent growth in the area is clearly a positive sign but it has
been rather modest compared to historical and national averages. The relatively weak occupancy figures in
Atlanta have made apartment operators reluctant to push rents more aggressively.
According to REIS, only 381 market-rate units were delivered in 2012 but a new cycle of development has
begun due to improved market fundamentals. Projected figures anticipate 2013 will have seen a total of
3,010 market-rate apartments in 12 developments delivered to the market. There are currently 3,419 units
under construction. REIS forecasts a total of 8,840 units to be introduced to the market during 2014 and
2015. This new supply will likely signal a decrease in occupancy, but until that time, Atlanta’s occupancy
and rent growth are expected to remain strong.
HISTORICAL APARTMENT OCCUPANCY
HISTORICAL APARTMENT RENTS
96%
94%
92%
90%
88%
US
www.colliers.com/atlanta
SOUTH
ATLANTA
2012
US
SOUTH
2013
Source: MPF Research
86%
2011
2013
2011
2012
Source: MPF Research
ATLANTA
$1,200
$1,100
$1,000
$900
$800
$700
$600
$500
$400
FORSYTH CO.
MARKET REPORT | Q3 2013 | MULTI-FAMILY | ATLANTA
ATLANTA MULTI-FAMILY
5,000
Investment
for
apartment
properties in the Atlanta market
has increased by 6% in 3Q13
from the previous quarter.
There have been 123 properties
sold YTD’13 representing more
than 71,000 units. The average
price per unit as of 3Q2013 is
$75,408/unit.
This was an
increase of 3.9% since mid-year
of 2013. The average cap rate for
apartments in the Atlanta H
market
ALL
GW
dropped 72 bps from
INthe
NEend of CO.
2012 to 6.38% YTD 2013. TT
8%
Cumming
CHEROKEE CO.
Bufor
AVG Cap Rate
N
SALES ACTIVITY
Alpharetta
SALE PRICE
PROPERTY
SUBMARKET
SALES DATE
Camden Vantage
Downtown
9/19/2013
$82,500,000
Mountain Park Estates
Northwest Atlanta
9/25/2013
Source: Real Capital Analytics
CO
.
CO
.
# UNITS
PRICE/UNIT
BUYER
$137,394
Duluth
Invesco Ltd.
$138,889
Fairfield Residential
Cha
t
Camden Property Trust
$49,000,000
592 hoo
$139,358
ch e e
c
a
t
450
$108,889
Arenda Capital Management LLC
Roswell
Midtown
08/09/2013
$48,775,000
355
Post Renaissance
Downtown
10/25/2013
$47,500,000
342
Savannah Midtown Apartments
Downtown
08/09/2013
$45,300,000
322
$140,683
Invesco Ltd.
The Estates at Vining Station
Northwest Atlanta
07/10/2013
$45,000,000
315
$142,857
Invesco Ltd.
Virginia Highlands Apt Homes
Downtown
09/25/2013
$41,000,000
270
$151,852
TA Associates Realty
Ashford Druid Hills
Northlake
09/23/2013
$39,600,000
982
$40,326
The RADCO Companies
Uptown Square
Buckhead
08/06/2013
$39,000,000
363
$107,438
Midtown
08/01/2013
$37,800,000
242
$156,198
6
5 4 7
9
2 14
Buckhead
703
Oliver McMillian
Buckhead
373
3
Buckhead Atlanta (u/c)
Oliver McMillian
Buckhead
370
4
SkyHouse Buckhead
Buckhead
364
5
6
9
10
12
ATLANTA 10 8
P. 2
| COLLIERS INTERNATIONAL
DECATUR
11
16
15
# UNITS
Buckhead Village
8
r
MARKET
2
7
13
John Hancock RE Finance Group
Novare, Baston-Cook
GW
Circle Terminus (u/c) D INN Crescent Resources
EK ET
Post Alexander Phase II (u/c)
AL Post
T Apartment Homes
C
B Atlantic
3380 Peachtree Rd
CO O. Realty Partners
.
100 6th St Apt Tower (u/c)
Novare
Group
Clarkston
Camden Paces (u/c)
Stone
Camden Property
Mountain
Inland RE Corporation
355
Buckhead
340
Buckhead
355
Midtown
320
Buckhead
300
Midtown
268
11
Flats at Ponce City Market (u/c)
Jamestown Group
Downtown
259
12
Gables Emory Point Phase II
Gables Residential
Northlake
13
Walton Westside (u/c)
Walton Communities
Downtown
250
Broadstone Maple Apartments
Alliance Residential Co.
Buckhead
250
Avondale14
Estates 15
University House
Snellville
Buckhead
CO
.
DEKALB CO.
FULTON CO.
1
3
AVR Realty Lawrenceville
DORAVILLE
MULTI-FAMILY PIPELINE | Urban Atlanta
Norcross DEVELOPER
#
NAME
CHAMBLEE 1 Prominence in Buckhead
Crocker Partners
17
316
257
G
W
IN
NE
TT
CO
BB
FU
LT
CO
O
.
N
CO
.
1660 Peachtree Apartments
ICON City Apartments
CO
.
H
YT
O
LT
FO
RS
FU
Sugar Hill
Rive
r
MountainSales Volume
CHEROKEE CO.
Park
UPDATE Recent Transactions in the
Market
Lanier
0%
YTD '13
2008
2007
2006
2005
Woodstock
2004
2003
0
2%
2011
1,000
6%
4% Lake
2010
2,000
FULTON CO.
3,000
2012
4,000
2009FORSYTH CO.
Millions
Canton
ATLANTA MULTI-FAMILY | Investment Volume & Cap Rates
315 W Ponce Apartments (u/c)
Carter
Northlake
235
16
The Somerset
Perennial Properties
Downtown
227
17
@1377
Hines
Northlake
215
Lithonia
Source: CoStar
W
MARKET REPORT | Q3 2013 | MULTI-FAMILY | ATLANTA
TOP EMPLOYERS
WORLD CLASS UNIVERSITIES, COLLEGES
UNIVERSITY
CITY
Delta Airlines
COMPANY
# EMPLOYEES
27,000
University of Georgia
Athens
35,519
Wal-Mart Stores
26,000
Georgia State
Atlanta
32,000
AT&T
19,000
GA Perimeter College
Decatur
24,700
Emory University
17,994
Kennesaw State
Kennesaw
24,600
Georgia Tech
Atlanta
21,557
Atlanta
14,236
Carrollton
11,769
Publix Supermarkets
9,453
The Home Depot
9,000
PICKENS CO. Emory
CHEROKEE CO.
Emory Healthcare
8,648
University of West GA
482 offices in
62 countries on
6 continents
# STUDENTS
United States: 140
Canada: 42
Latin America: 20
Asia Pacific: 195
EMEA: 85
DAWSON CO.
FORSYTH CO.
Source: Moody’s Analytics
Source: Atlanta Business Chronicle 2012 Book of Lists
•$2
Canton
Allatona
Lake
Emerson
Sugar Hill
FO
RS
FU
Mountain
Park
N
Norcross
C
O
BB
FU
LT
C
O
O
.
N
C
O
.
W
I
DE NNE
KA
T
LB T C
CO O.
.
Austell
Clarkston
ch
e
Stone
Mountain
C
O
.
MIDTOWN
DECATUR
DE
ECA
ATUR
Avondale
Estates
Estate
DOWNTOWN
o
W
AL
TO
N
CO
.
att
ho
ac
ATLANTA
e
Snellville
G
W
IN
N
ET
T
r
R
iv
e
PAULDING CO.
DEKALB CO.
C
FULTON CO.
C
NORTHLAKEG
Ch
Hartsfield-Jackson
International Airport
Palmetto
O.
ON C
FULT
CO.
TTE
FAYE
Conyers
Covington
RO
C
NE KDA
L
W
TO E C
O
N
CO .
.
HENRY
FOREST
PARK
SOUTH
ATLANTA
Riverdale
Riverda
Fairburn
FULTON CO.
COWETA CO.
CLAYTON
LLAYT
A ON CO.
Union City
675
CO.
CO.
DE
KAL
RO
CK B CO.
DA
LE
CO
.
DEKALB
Stockbridge
Jonesboro
McDonough
Newnan
Peachtree City
BU
TT
S
CO
.
HENRY CO.
CLAYTON CO.
Fayetteville
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
RESEARCHERS:
Lithonia
EAST
POINT
COLLEGE
PARK HAPEVILLE
WILL MATHEWS
UNITED STATES:
DORAVILLE
BUCKHEAD
WEST
ATLANTA
RON CAMERON
316
Lawrenceville
CHAMBLEE
Douglasville
Duluth
CENTRAL
PERIMETER
SMYRNA
COBB CO.
DOUGLAS CO.
NORTHEAST
ATLANTA
e
hooch e
tac
Roswell
MARIETTA
Powder
Springs
CO
.
CO
.
Cha
t
PAULDING CO.
COBB CO.
Alpharetta
NORTHWEST
ATLANTA
Braselton
H
YT
O
LT
CHEROKEE CO.
Acworth
Buford
HA
GW
INN LL CO
.
ETT
CO
.
NORTH
FULTON
Woodstock
BARTOW CO.
management
•Over 13,500 professionals
Lake
Lanier
FULTON
CO.
FUL
L
FORSYTH
CO.
FOR
R
Cartersville
Rive
r
BARTOW CO.
CHEROKEE CO.
GAINESVILLE
Cumming
CHEROKEE CO.
billion in annual revenue
•Over 1.1 billion square feet under
Atlanta
Scott Amoson | Director of Research
Edward Alexander | Financial Analyst
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
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 480 offices throughout
more than 62 countries worldwide.
Accelerating success.
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