Marcus & Millichap

Atlanta Multifamily Market Report

Atlanta Metro Area, Fourth Quarter 2017

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Rents Surge to New Highs; Apartment Construction Proliferates

Rising deliveries weigh on rental vacancy. A flood of new apartments outpaced net absorption during the last four quarters, placing upward pressure on vacancy. Roughly 5,500 apartments are slated for completion in the fourth quarter of 2017, lifting annual deliveries above record levels last seen in 2000. The new stock will primarily consist of garden and mid-rise complexes spread throughout the metro and several high-rise buildings will be completed in Midtown, bringing thousands of new units. While the influx of rentals will increase vacancy as space begins to lease, rent growth remains robust, setting a record high this year.

Job growth boosts rental demand. While this year will mark the peak of construction this cycle, development is expected to remain elevated through 2018. Healthy demographics in Atlanta will bode well for leasing activity as demand catches up with supply. Many corporations continue to move to and expand in the Atlanta metro, bringing higher-paying jobs. Rising incomes will benefit Class A apartment space where vacancy has remained elevated amid increased supply. Young professionals seeking a wide range of amenities with access to nearby shopping and entertainment may be willing to pay higher rents as high costs make homeownership out of reach in popular areas.

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