Atlanta Multifamily Report

ATLANTA MULTIFAMILY REPORT

DOWNLOAD FULL REPORT

2024 | MID-YEAR

Annual Rent Change

Annual Inventory CHANGE

Deliveries & Absorption

Employment

Rent & Occupancy

Sales

Jobs Added / Lost*

LAST 12 MONTHS 42,000

1.4% YOY

Unemployment*

June 2024 3.4%

20 BPS YOY

Businesses in Metro Atlanta added 42,000 net jobs since the halfway point of 2023. The most notable gains were in the private education and healthcare sector. Children’s Healthcare of Atlanta (CHOA) broke ground on its Arthur M. Blank Hospital in 2020 and is on track for completion by fall 2024. The new $1.5 billion campus includes 446 hospital beds, several hospital towers, 20 acres of greenspace, and will create 1,000 new jobs. CHOA is the tenth largest employer in Atlanta, with 9,960 employees metrowide. After opening its new hospital in 2020, Piedmont Healthcare announced in May that it would be investing an additional $212 million for a new tower at Piedmont Henry Hospital. Upon expected completion in 2026, the five-story patient tower will include 96 new patient rooms, operating rooms, and a new kitchen and cafeteria. The medical system currently employs just below 30,000 workers in Metro Atlanta. Other sectors with notable development activity include the manufacturing industry, which expanded by 1,800 net new jobs annually. PepsiCo Beverages North America announced a $260 million investment to expand its existing manufacturing facility in nearby Stone Mountain, which is expected to add more than 130 new jobs by year’s end. The expansion will incorporate numerous technological tools to increase productivity within the plant and are expected to quintuple the facilities’ production by 2025.

EMPLOYMENT

PepsiCo $260 million manufacturing expansion in DeKalb County

Children's Healthcare of Atlanta's new campus will open fall 2024

Piedmont Henry Hospital breaks ground after $212 million investment

EMPLOYMENT TRENDS

IN THE NEWS

Greater Atlanta consistently ranks among the top Sun Belt destinations for in-migration, which heightened coming out of the pandemic. From 2021 to 2023, more than 60,300 people moved to the metro each year than left to fuel household formation. This demographic trend continued in the first half of this year as net migration totaled 21,900 people. New and current residents were faced with a competitive homeownership environment. Monthly active listings in the first half of the year, were approximately two-thirds the level in the low-interest setting prior to 2020. As a result, many households turned to apartments as net absorption totaled 10,180 units year to date. Move-ins reached the highest total for the first half of a year in more than 25 years. Also facilitating leasing activity has been a strategic construction pipeline. While developers have a heavy focus on suburban areas of Atlanta, the Midtown Atlanta submarket led the metro for additions in the first half of the year. The submarket benefits from Midtown Station, which easily connects residents to the 45 surrounding neighborhoods. Apartment development will be robust in the area in the near term as the Midtown Atlanta pipeline leads all other submarkets at midyear. More housing will be vital in the submarket and throughout Greater Atlanta as hiring and net in-migration are projected to remain persistent in the second half of 2024. Leasing activity is forecast to accelerate as a result.

Deliveries & Absorption

Part of the appeal of the Atlanta multifamily market to renters is its affordability. Atlanta monthly effective rent averaged $1,622 in the second quarter of 2024, approximately an 11% discount to the U.S. average and lower than other large metros in the Southeast that included Charleston, Orlando, and Miami. The Atlanta apartment market also provides a more attractive option to residents over homeownership. Renting was approximately 36% less than the median mortgage payment in the Atlanta metropolitan area in the second quarter of 2024. This imbalance also applies to Class A apartment communities. At an average of $2,021 per month in the second quarter of 2024, average Class A effective rent was more than $500 under the median monthly mortgage payment. The health of the Atlanta apartment market was also reflected in occupancy. At an average of 92.2% in the second quarter of 2024, the latest occupancy rate was near the cycle average of 93.0% in the decade leading up to 2020. Renters are showing a preference for amenity rich, top-tier communities. Class A apartment operators recorded the highest occupancy among all classes, at 92.8% in the second quarter of 2024. A feature of this cohort is the renter-by-choice. The average annual income recorded for renters who signed new leases in the second quarter of 2024 was more than $135,700, well above the estimated $115,400 income need to buy a home in Atlanta.

RENT & OCCUPANCY

2024 Year to Date*

VOLUME

$1.4B

CAP RATE (AVG)

5.4%

Price Per Unit (AVG)

$234,033

TRANSACTIONS

WHAT’S TRADING?*

BUILDINGS (AVG)

ACRES (AVG)

16.88

YEAR BUILT (AVG)

2000s

UNITS (AVG)

303

Sources: MSCI Real Capital Analytics; CoStar Group; Berkadia Research

SALES

2024 YEAR TO DATE

DELIVERIES 12,445 UNITS

2024 TOTAL*

ABSORPTION 10,180 UNITS

DELIVERIES 25,761 UNITS

ABSORPTION 26,922 UNITS

Effective rent

Q2 2024 $1,622

-4.2% YOY

OCCUPANCY

Q2 2024 92.2%

-90 BPS YOY

*$20m+

SELLER

Lennar Corp. Camden Property Trust New York Life The Connor GroupCortland

Miami, FLHouston, TXNew York, NYMiamisburg, OHAtlanta, GA

LOCATION

Buyer

KKR Pacific Urban InvestorsWeinstein PropertiesHilltop ResidentialGreystar

New York, NYSan Francisco, CAGlen Allen, VAHouston, TXCharleston, SC

Location

Top Buyers*

Top Sellers*

*Projected

Source: RealPage

Y-o-Y Effective Rent Change

( 9. 6%) - ( 5. 6%)

( 5. 5%) - ( 4. 3%)

( 4. 2 %) - ( 3. 4%)

( 3. 3%) - 0 . 0 %

0 . 1 % - 3. 3%

1. Alpharetta / Cumming 2. Briarcliff 3. Buckhead 4. Camblee / Brookhaven 5. Clarkson / Tucker 6. Clayton County 7. Decatur 8. Doraville 9. Downtown Atlanta 10. Duluth 11. Dunwoody 12. Far East Atlanta Suburbs 13. Far North Atlanta Suburbs 14. Far South Atlanta Suburbs 15. Far West Atlanta Suburbs 16. Henry County 17. Johns Creek / Suwanee / Buford 18. Kennesaw / Acworth 19. Midtown Atlanta 20. Norcross 21. Northeast Atlanta 22. Northeast Cobb / Woodstock 23. Northeast Gwinnett County 24. Roswell 25. Sandy Springs 26 Smyrna 27. South Atlanta 28. South Cobb County / Douglasville 29. South DeKalb County 30. South Fulton County 31. Southeast Atlanta 32. Southeast DeKlab County 33. Southeast Gwinnett County 34. Southeast Marietta 35. Southwest Atlanta 36. Stone Mountain 37. Vinings 38. West Atlanta 39. West Marietta

SUBMARKET BOUNDARIES

Approximately 32% of units in the metro are offering concessions with the hope of attracting an increased number of prospective renters after rents declined year over year in all but one submarket of Atlanta. While concessions averaged 4.8% of asking rent in the second quarter, operators continue to observe the shift in supply and demand throughout the metro. The only submarket to undergo year-over-year rent increases was the Far South Atlanta Suburbs, which includes cities such as Fayetteville, Newman, and Zebulon. At the end of the second quarter, rent in the submarket reached $1,669 per month on average, which is 2.9% above the metro’s average rent. Submarket occupancy rates remain 150 basis points above the market average. When paired with a negligent number of new units in the development pipeline compared to other rural submarkets as well as elevated renter demand, these factors are attributed to the continued rent growth.

SUBMARKET MID-YEAR 2024 ANNUAL RENT Change

Annual Inventory Change

0.0% - 0.3%

0.4% - 2.1%

2.2% - 4.1%

4.2% - 7.3%

7.4% - 13.6%

13.7% - 18.5%

1. Alpharetta / Cumming 2. Briarcliff 3. Buckhead 4.Chamblee / Brookhaven 5. Clarkson / Tucker 6. Clayton County 7. Decatur 8. Doraville 9. Downtown Atlanta 10. Duluth 11. Dunwoody 12. Far East Atlanta Suburbs 13. Far North Atlanta Suburbs 14. Far South Atlanta Suburbs 15. Far West Atlanta Suburbs 16. Henry County 17. Johns Creek / Suwanee / Buford 18. Kennesaw / Acworth 19. Midtown Atlanta 20. Norcross 21. Northeast Atlanta 22. Northeast Cobb / Woodstock 23. Northeast Gwinnett County 24. Roswell 25. Sandy Springs 26 Smyrna 27. South Atlanta 28. South Cobb County / Douglasville 29. South DeKalb County 30. South Fulton County 31. Southeast Atlanta 32. Southeast DeKalb County 33. Southeast Gwinnett County 34. Southeast Marietta 35. Southwest Atlanta 36. Stone Mountain 37. Vinings 38. West Atlanta 39. West Marietta

SUBMARKET BOUNDARIES

The only notable apartment supply expansion in Metro Atlanta’s core at the halfway point of 2024 was within the Midtown Atlanta submarket, with the rest of the new supply being built in more suburban areas. The BeltLine, Atlanta’s 22-mile multi-use trail and light rail system, connects Midtown with many surrounding areas, and has become an entertainment hub featuring a thriving nightlife scene as well as the Krog Street Market and the Ponce City Market. Increased development activity in Midtown Atlanta led the submarket to have the largest inventory expansion among all submarkets in the first two quarters of the year, adding 1,089 new units to its existing supply. The submarket’s prime location to all that Atlanta has to offer is a major selling point for renters, as it currently has the most available inventory in the metro, reaching 28,062 existing units at the end of the second quarter.

SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change

SUBMARKET MID-YEAR 2024 ANNUAL RENT Change

QUICK ACCESS MENU

National & Institutional Markets

San Francisco-Oakland

San Jose

Atlanta

Orlando

Austin

Dallas-Fort Worth

Las Vegas

Phoenix

Salt Lake City

Washington, D.C.

Philadelphia

South Florida

Seattle-Tacoma

San Diego

Los Angeles

Orange County

Houston

Chicago

Boston

National Market Report

Atlanta

Austin

Boston

Chicago

Dallas-Fort Worth

Houston

Washington, D.C.

Phoenix

South Florida

Los Angeles

Orange County

Orlando

Philadelphia

San Diego

San Francisco-Oakland

San Jose

Seattle-Tacoma

Las Vegas

Salt Lake City

QUICK ACCESS MARKET MENU

© 2024 Berkadia Real Estate Advisors LLC Berkadia® is a trademark of Berkadia Proprietary Holding LLC Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. This website is not intended to solicit commercial mortgage loan brokerage business in Nevada. Investment sales and realestate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. For state licensing details for the above entities, visit: www.berkadia.com/legal/licensing.aspx The information contained in this flyer has been obtained from sources we believe to be reliable; however, we have not conducted any investigation regarding these matters and make no warranty or representation whatsoever regarding the accuracy or completeness of the information provided. While we do not doubt its accuracy, we have not verified it and neither we, nor the Owner, make any guarantee, warranty or representation of any kind or nature about it. It is your responsibility to independently confirm its accuracy and completeness. Any projections, opinions, assumptions or estimates used are for example and do not necessarily represent past, current or future performance of the property. You and your advisors should conduct a careful and independent investigation of the property to determine to your satisfaction the suitability of the property and the quality of itstenancy for your records.

EMPLOYMENT

DELIVERIES & ABSORPTION

ANNUAL INVENTORY CHANGE

RENT & OCCUPANCY

SALES

QUICK ACCESS MARKET MENU

QUICK ACCESS MENU

National & Institutional Markets

San Francisco-Oakland

San Jose

Austin

Dallas-Fort Worth

Las Vegas

Phoenix

Salt Lake City

Washington, D.C.

Philadelphia

Seattle-Tacoma

San Diego

Los Angeles

Orange County

Houston

Chicago

Boston

National Market Report

Atlanta

Austin

Boston

Chicago

Dallas-Fort Worth

Houston

Washington, D.C.

Phoenix

South Florida

Los Angeles

Orange County

Orlando

Philadelphia

San Diego

San Francisco-Oakland

San Jose

Seattle-Tacoma

Las Vegas

Salt Lake City

Atlanta

Orlando

South Florida

Under Construction/Lease-Up

Lease-Up

Under Construction / Lease-Up

Lease-Up

Deliveries

Absorption

Effective Rent Change

Source: RealPage

Southeast AtlantaSoutheast DeKalb CountySoutheast Gwinnett CountySoutheast MariettaSouthwest AtlantaStone MountainViningsWest AtlantaWest Marietta

90.7%89.4%93.2%92.3%88.1%89.0%92.8%91.7%92.0%

-140-30-140-50-360-340-80-70-120

$1,609$1,373$1,574$1,518$1,352$1,267$1,755$1,754$1,372

-6.4%-4.4%-2.4%-2.6%-5.3%-5.9%-5.6%-6.2%-6.2%

Source: RealPage

National Effective Rent

Atlanta vs. National Effective Rent & Occupancy

Atlanta Occupancy

SUBMARKET PERFORMANCE

Source: Moody’s Analytics

Source: RealPage

Northeast AtlantaNortheast Cobb/WoodstockNortheast Gwinnett CountyRoswellSandy SpringsSmyrnaSouth AtlantaSouth Cobb County/DouglasvilleSouth DeKalb CountySouth Fulton County

90.6%93.1%93.4%93.0%92.1%93.0%91.9%91.7%89.3%89.3%

-16080-2090-40-50-70-100-210-190

$1,729$1,650$1,661$1,692$1,667$1,594$1,280$1,450$1,265$1,261

-7.0%-2.3%-3.9%-2.7%-5.6%-4.0%-0.2%-2.4%-3.4%-4.4%

DunwoodyFar East Atlanta SuburbsFar North Atlanta SuburbsFar South Atlanta SuburbsFar West Atlanta SuburbsHenry CountyJohns Creek/Suwanee/BufordKennesaw/AcworthMidtown AtlantaNorcross

93.4%90.8%93.8%93.7%92.3%90.6%94.0%94.3%92.2%92.2%

80-35080-3030-1304040-70-230

$1,745$1,449$1,596$1,669$1,495$1,531$1,769$1,655$1,985$1,449

-3.1%-3.0%-2.4%3.3%-3.6%-4.6%-3.8%-0.2%-6.9%-4.3%

Alpharetta/CummingBriarcliffBuckheadChamblee/BrookhavenClarkston/TuckerClayton CountyDecaturDoravilleDowntown AtlantaDuluth

93.6%92.5%92.5%93.6%92.9%91.3%92.0%91.4%90.5%93.5%

-20-150-50-50-170-80-100-250-2700

$1,894$1,601$1,972$1,729$1,441$1,259$1,759$1,488$1,789$1,617

-4.0%-5.0%-5.6%-2.8%-1.1%-5.6%-4.6%-2.5%-9.6%-3.8%

Q2 2024 Occupancy

YOY (BPS)

Q2 2024 Effective Rent

YOY

1/4

2/4

3/4

4/4

ANNUAL INVENTORY CHANGE

DELIVERIES & ABSORPTION

EMPLOYMENT

ANNUAL RENT CHANGE

SALES

RENT & OCCUPANCY

SUBMARKET MID-YEAR 2024 ANNUAL RENT Change

SUBMARKET MID-YEAR 2024 ANNUAL Inventory Change

Deliveries & Absorption

Market Pipeline

Top submarket pipelines

Under Construction

DOWNLOAD FULL REPORT

Unemployment Rate

Total Jobs

Atlanta Effective Rent

National Occupancy

Effective rent and occupancy reflect stabilized properties and does not include preleased units or properties in lease-up. A newly constructed property is considered stabilized once it becomes 85% occupied.

*Seasonally Adjusted

QUICK ACCESS MARKET MENU

ATLANTA MULTIFAMILY REPORT

COMING SOON

ANNUAL RENT CHANGE