Atlanta’s prowess within the Sun Belt as the dominant multifamily market did not happen by accident, nor did it occur overnight. Back in the 2000s, Atlanta was still an emerging market that was working to attract new employers while battling a season of oversupply that hampered rent growth across the city’s numerous submarkets.
Now, and since the mid-2010s, Atlanta has defined itself as the premier entry point for investors looking to break into the Sun Belt, and its proven track record ensures it will continue serving as a global magnet for relocation, investment and expansion.
Robert Stickel, Cushman & Wakefield’s Sunbelt Multifamily Advisory Group
Atlanta’s diversified economy has attracted some of the nation’s biggest and best names in just a few years’ time. While Silicon Valley has captured the tech world’s eye for decades, global powerhouses such as Microsoft, Google and Meta (Facebook) have started planting their flags in Atlanta with reported goals of adding tens of thousands of highly paid employees by 2030.
Tech companies are capitalizing on a strategic opportunity in Atlanta to broaden their workforce in a market that boasts a highly educated and diverse population while providing an attractive cost of living. With respect to Atlanta’s employment growth, the presence of Georgia Tech cannot go unmentioned, as the university produces graduating classes that top employers are eager to hire.
Alex Brown, Cushman & Wakefield’s Sunbelt Multifamily Advisory Group
As Atlanta rapidly expands (in population and dollars spent), it is clear the Atlanta BeltLine-anchored submarkets, the Midtown submarket and suburban town center developments will remain at the top of the target list for both investors and residents alike.
The BeltLine is arguably the most impactful urban renewal project in the country. Due to affordability requirements within a half-mile band of the BeltLine, the project has generated substantial investment into submarkets such as West End and Chosewood Park, where the restrictions have less of an impact on overall renters.
Midtown continues to capture the bulk of the tech employment and stands out as Atlanta’s only true grid system and urban walkable center. Newly delivered multifamily developments in Midtown are achieving the city’s highest rents — well over $3.00 price per square foot and nearing $4.00 per square foot.
Lastly, suburban town centers such as The Brunswick in Norcross are appearing across the northern suburbs as developers have instilled new practices for obtaining zoning in affluent municipalities that have historically been resistant to multifamily development.
Due to development resistance in Atlanta’s most desirable northern suburbs, future supply is likely going to be more geographically spread out with a higher percentage of supply being built in areas that have not seen conventional multifamily development in over 15 years.
In the past 18 months, Atlanta has been a top two market in the country in terms of multifamily transaction volume, according to MSCI Real Assets (formerly RCA Capital Analytics), due to its exceptional performance trajectory and high level of liquidity. This is due to investors growing their existing portfolio, as well as a number of new entrants coming into the market from out-of-sector and out-of-region.
One recent trend that has surfaced is ownership consolidation, with large owners acquiring assets in bulk. Additionally, Atlanta has experienced exceptionally high rent growth of 19.5 percent in 2021 and has posted rent growth above the national average in 2022, according to CoStar Group.
As the preferred entry point to the Sun Belt, whether that motivation lies in education, employment or investment, the “City in the Trees” will continue to be a target market for many years to come as investors aggressively seek Atlanta for the liquidity, growth prospects and relatively affordable rents. Multi-sector growth will continue to be a testament to the city’s sustainable and profitable business environment for decades.
— By Robert Stickel, Executive Vice Chairman, and Alex Brown,Executive Director and Managing Director, Cushman & Wakefield’s Sunbelt Multifamily Advisory Group. This article was originally published in the October 2022 issue of Southeast Real Estate Business.