by Scott Lebenhart
Like many apartment markets across the U.S., metro Atlanta has seen its performance cool somewhat recently in the midst of inflation and overall economic uncertainty. During the fourth quarter of 2022, same-store effective asking rents for new leases in the area increased by 4.1% year-over-year, according to RealPage.
While that’s still a healthy increase, it wasn’t the double-digit annual increases the market has seen in recent years.
Looking ahead, nearly 23,000 new apartment homes are set to be delivered over the course of 2023, according to Real Page. That volume of new supply could also serve to mitigate rent growth and slightly increase vacancy rates.
But don’t let these mild short-term bumps fool you. As an apartment market, metro Atlanta has many things going for it, and those attributes mean this area will be a multifamily winner over the long-term. Below are just some of the reasons building a portfolio in this city and its suburbs makes abundant financial sense.
• People want to live here. With its relatively low cost of living, strong job market, great weather and endless array of cultural attractions and recreational opportunities, Atlanta offers a fantastic quality of life – and people across the country continue to take notice. According to CoStar, metro Atlanta’s population has grown by more than 900,000 residents since 2010, which represents one of the largest increases in the country over that timeframe.
“Atlanta typically ranks as one of the top markets in the country for net domestic migration and population growth, along with fellow major Sun Belt metros such as Dallas-Fort Worth, Houston, and Phoenix,” CoStar says in a recent report on the metro area. “Strong household growth and net migration should continue to drive demand for Atlanta-area apartments.”
• It offers a business-friendly environment. Attracted by its highly educated and skilled workforce and its comparatively low costs, more and more major companies are happy to call the metro area home. Atlanta has a diverse economy featuring the headquarters of more than 30 Fortune 500/1000 companies. There are multiple employment centers throughout the MSA, which give apartment owners and investors the ability to build a diverse portfolio that benefits from different demand drivers.
And with the enormous Hartsfield–Jackson Atlanta International Airport, which is the world’s busiest airport by passenger traffic, as well as its proximity to the Port of Savannah and its numerous interstates, metro Atlanta is the type of transportation and logistics hub that companies find attractive. This is yet one more reason to believe the area will continue to attract new businesses and major employers, which in turn will pave the way for rental-housing demand.
• A haven for young people. Young adults are arguably the backbone of apartment demand. And young adults love Atlanta. According to RealPage, the metro’s population of 20- to 34-year-olds increased by 6.7% from 2016 to 2021; by comparison, that demographic increased by 1.4% nationwide during the same timeframe.
Yardi’s CommercialCafe has named Atlanta the best city for Gen Z’ers. The website writes, “First and foremost, members of Gen Z constituted 9.8% of the city’s population in the period of the study — the fourth-highest share on our list and a figure that is likely to increase given the city’s steady growth.” It goes on to say: “Atlanta is a great candidate for ticking all of Gen Z’s boxes — community, walkability, economic prospects and educational opportunities.”
Metro Atlanta is one of the most dynamic and vibrant areas in the U.S. With all of its many strengths, the metro should remain one of the country’s strongest apartment markets for years to come.