Q2 2012 Atlanta, Georgia Apartment Submarket Trends

CRE Resources

View our Atlanta, Georgia Submarket Map

Q2 2012 Atlanta, Georgia Apartment Submarket Trends

Central Area/Midtown

  • The Midtown market has been a hotbed of redevelopment activity. Post-recession demographic shifts and lifestyle preferences, as noted elsewhere in this report, have added to the allure of central area apartment living. Mixed-use projects in these locales have become increasingly popular.
  • Supply and demand. “Apartment building nearly stopped during the recession, but people continued moving into town to follow jobs and entertainment,” The Atlanta Journal-Constitution reported in May. “The number of renters in metro Atlanta has also climbed as fallout from the foreclosure crisis.”
  • The submarket has continued to tighten. Zero market-rate unit deliveries last year were accompanied by 650 units of positive net absorption.
  • Vacancy ended the second quarter at just 5.3%, down 70 basis points year to date, down fully 310 year-over-year. The delivery of 320 units during the first half 2012 (see below) was met by net absorption at 385.
  • Recent rent growth, positive since the second quarter of last year, has accelerated—despite a flat performance during the second quarter of 2012.
  • At $1,109 and $1,016, second quarter asking and effective averages were up 1.2% and 2.0% since year-end.
  • A new “boom.” “The first signs of an intown Atlanta apartment tower boom are starting to emerge,” the Atlanta Business Chronicle observed in July citing new projects by Novare Group and others.
  • Redevelopment in Midtown has been dominated by the Atlantic Station mixed-used development and the $1 billion, multi-phase 12th & Midtown (the latter from Daniel Corporation and Selig Enterprises), which includes the 1010 Midtown development.
  • Reis reports 550 units in two projects under construction in Midtown per the date of this report, 320 of which—in one—will deliver in 2012.
  • Daniel Corporation and partner Northwestern Mutual are co-developing the 330-unit 77 12th Street tower which broke ground at that address in January. An April 2013 finish is expected.
  • In February, Novare Group recently started construction of its 23-story, 320-unit SkyHouse Midtown project at Peachtree and W. 12th. Reis expects completion this December.
  • In addition, Novare, in partnership with Baston-Cook Development Company, has proposed the 23-story mixed-use 100 6th Street redevelopment with “up to 320” units, Atlanta Business Chronicle reported in July. The project is the third high-rise proposed for Midtown in less than a year, this source reported in July. Plans call for completion no later than 2014.
  • Commentary. “Novare…is likely moving so fast because it wants to jump out in front of other developers and lease up its towers while Class A high-rise rents are at least $2 psf, or about $1,600 to $1,700 a month for an 800-to-850-square-foot, one-bedroom unit,” as reported by this source. “That $2 psf number is seen as necessary to support development costs and meet the expected returns of their financial partners.”
  • In addition, Reis reports 2,540 market-rate apartment units in 11 projects in the planning-proposal pipeline per the end of July (up by three projects and about 500 units since the end of April). Construction timelines had not been specified per report date.
  • Included is Jamestown subsidiary Green Street Properties’ planned Ponce City
  • Market mixed-use redevelopment of the old Sears building at 675 Ponce de Leon Avenue in Atlanta’s Fourth Ward. Plans include 200 market-rate apartments.
  • Also in the Fourth Ward, Perennial Properties is planning a new apartment project, the Journal reported in July.
  • Also in the pipeline is North American Properties’ $35 million, 274-unit project at 471 Glen Iris Drive NE (at Rankin Street). The “Gen Y” cohort is the catalyst for the project, the Chronicle reported earlier.
  • Reis has confirmed revised plans by Post Properties Inc. for its 225-unit Post Allen Plaza Apartments at Ivan Allen Plaza. 470 condo units have been proposed.
  • Outlook: A slowdown in absorption over the remainder of the year could result in a balanced market with small increase in the vacancy rate. Favorable rates of rent growth—gains of 3.0% and 4.2% for the asking and effective averages—are forecast for the year.
  • A marked increase in construction deliveries along with additional increases in vacancy are expected for 2013. Rent growth should remain healthy.

Central Area/Buckhead

  • Atlanta’s prime upscale address, Buckhead, aided by both recent shortages of new supply and the revival of demand, continues its decisive recovery.
  • Construction has begun again. 583 units in two market-rate projects were underway per report date. More are planned. None have delivered year to date.
  • By the end of the latest quarter, the vacancy rate had descended to 4.8%, down 10 basis points for the period, down 60 since year-end due in part to a reduction in the inventory count during the first quarter.
  • With no new units delivering through the first half of 2012, same-term net absorption was negative 110 units. The second quarter total alone was plus 19.
  • At $1,202 and $1,070 per month, second quarter asking and effective average rents each were up 0.9% and 1.1% from the quarter before, but were up just 0.3% and 0.8% since year-end as a result of losses during the first quarter.
  • The sole completion of 2011 was last August’s finish of AMLI Residential’s 168-unit AMLI Glenridge Springs at 5620 Glenridge Drive.
  • Two market-rate projects with a combined total of 733 units were underway per the end of July 2012.
  • A January 2013 finish is scheduled for the 373-unit Village at Buckhead project, part of the former Buckhead Atlanta mixed-use development (formerly Streets of Buckhead) at Pharr and Peachtree roads. Construction began in July 2011. OliverMcMillan has taken over the stalled project from developer Ben Carter.
  • The 210-unit 92 West Paces Ferry luxury project broke ground in April at that address. Reis cites an August 2013 completion date. Preserve Properties LLC is the developer.
  • “Demolition work seems to be starting on The Paces Apartments site to make room for 376 luxury apartments as part of Phase one of a new Camden Property Trust complex on East Andrews,” the Buckhead View reported in April. Reis cites a February 2014 completion.
  • Commentary: “The projects seem to reflect increased confidence investors have in luxury apartments and that Buckhead, a magnet for Gen Y workers, stands to become one of the first parts of the city in the post-real estate collapse to see new multifamily development.”
  • Including the above-cited 376-unit project, 1,742 market-rate units in six projects were planned or proposed per report date. Construction schedules have not been specified. Also included are the 370 units planned for the Buckhead Atlanta mixed-use project cited above.
  • Crescent Resources has filed plans for a new luxury apartment project at the Terminus development, the Chronicle reported in July. Reis reports 359 units planned for the Circle Terminus project.
  • Novare Group, active in Midtown, is “said to be looking at sites in Buckhead for another project,” this source reported in July.
  • A 187-unit project is planned for the Village Capital Partners Redevelopment at E. Paces Ferry Road and Buckhead Avenue.
  • Outlook: While strong absorption is not anticipated for 2012 all told, Buckhead should maintain its favorable occupancy profile: vacancy rates under 5.0% are expected for the remainder of the firm’s five-year forecast period. Additional improvement in rent growth is expected following this year’s gains of 1.7% and 2.6%, asking and effective.


  • Roswell-Alpharetta was one of metro Atlanta’s prime areas for apartment development in the 1990s and early 2000s. Growing oversupply followed by economic recession, however, brought activity to a halt. No market-rate apartment projects have completed construction here since 2007.
  • Net absorption for 2011 all told was 227 units. With 193 units delivering (see below), net absorption through the first half of 2012 was 251 units.
  • Vacancy ended the latest quarter at 5.1%, same as the quarter before, down 30 basis points since year-end. Average asking and effective rents for the quarter were $936 and $832, up fully 2.0% and 2.1% for the quarter, up 3.0% and 3.6% year to date.
  • The sole project expected to deliver in 2012, the 193-unit Regency at Johns Creek Walk, finished at 11134 Medlock Bridge Road, Duluth, in June. Construction began in February 2011.
  • A major development. In April, Cincinnati-based North American Properties
  • “received approvals” toward the development of the $600 million Avalon mixed-use development in Alpharetta, the Business Courier (Cincinnati) reported at the time.
  • More. Reis reports a 250-unit luxury apartment component along with 118 townhomes included. Single-family and other forms of development will be added as well, according to the Courier. The “resort-inspired” development is expected to open in October 2013.
  • Including Avalon, Reis reports 2,049 market-rate apartments in the planning pipeline in six projects, up from 1,793 in five about a quarter earlier. The largest is the 875-unit Georgia 400 at McFarland Residential project at McGinnis Ferry and Union Hill roads in Alpharetta.
  • Two phases of the Metlife Alpharetta project with a combined total of 458 units are planned for a site at Lakeview Parkway and Haynes Bridge Road.
  • Outlook: Reis expects vacancy to end 2012 at 4.6% as the year’s 193 units of new supply meet with 361 units of positive net absorption. Hefty gains of 6.3% and 7.4% are projected for the asking and effective average rents for the year. Additional tightening and strong rent growth should follow as well.

Central Perimeter

  • The main interchanges along the Perimeter highway (at I-75, Highway 400 and I-85) have been prime locales for development of both residential and commercial projects over the years. Reis’ North DeKalb and Sandy Springs-Dunwoody submarkets cover these areas.

Central Perimeter/North DeKalb

  • Residential development, much of it high-rise, surged in the North DeKalb submarket in recent years, making this submarket one of Atlanta’s most active for new construction.
  • Developers added 2,706 market-rate apartments over the three-year span ending with 2010, including 1,058 that year. The year 2011 followed with only 353 units, all in a single project. Net absorption for the year was strong at 1,000 units.
  • No units completed construction during the first half of 2012. None will deliver over the remainder of the year.
  • Net absorption over the first half of the year, almost exactly equal by quarter, was 351 units.
  • Vacancy continues to decline. The rate for second quarter was 6.8%, down 50 basis points from a quarter earlier, down 100 since year-end. At $950 and $853 per month, second quarter asking and effective average rents were up 0.9% and 1.1% for the period and were up 1.5% and 2.1% since year-end.
  • Last year’s sole completion, delivering in July, was the 353-unit 2924 Clairmont Apartments at that address. A 362-unit second phase is planned.
  • Construction is increasing. While no projects are scheduled to deliver any time this year, ground was broken last September for The Worthing Companies’ 205-unit Heights at Brookleigh luxury apartment community at Johnson Ferry and Ashford Dunwoody roads in the Brookhaven area, north of Buckhead. The completion date was not specified. The Chronicle cites a $27.5 million development price tag.
  • In addition, groundbreaking is scheduled for August for a 215-unit project from developer Hines at Peachtree Road NE and Dresden Drive.
  • A December start is planned for Wood Partners’ 230-unit Alta Brookhaven at Dresden and Apple Valley Road.
  • All told, 2,652 market-rate apartments in six projects were in the planning-proposal pipeline per the end of July.
  • Of these, the largest is the 785-unit component of the Executive Park Drive mixed-use development planned for N. Druid Hills Road and Executive Park Drive.
  • The 680 units are planned for the Dunwoody Park redevelopment project at Chamblee-Dunwoody and N. Shallowford roads.
  • Outlook: The lack of new product deliveries in 2012 will allow for additional tightening. Net absorption of 738 units during the year all told will drive a decline in the vacancy rate to 5.7%, according to the latest forecast. Gains of 3.7% and 4.9% for the asking and effective average rents are projected for the year. The new construction that begins to arrive on line in 2013 should result in a balance between supply and demand.

Central Perimeter/Sandy Springs-Dunwoody

  • No projects completed construction here since 216 units delivered in September 2010. None were underway per report date.
  • A lack of new market-rate supply in 2011 was accompanied by 355 units of positive net absorption. No units completed construction year-to-date in 2012. None will deliver over the remainder of the year. First half net absorption was negative 25 units.
  • Second quarter vacancy was 4.9%, down 20 basis points from a quarter earlier, up 10 since year-end. At $943 and $850 per month, second quarter asking and effective average rents were up 1.3% and 1.5% for the period and were up 2.2% and 2.7% year-to-date.
  • Reis reports two substantial projects with a combined total of 566 units is planning stages, as follows:
  • 330 units are planned for 84 Perimeter Center East property at 84 Perimeter Center E. and Ashford Dunwoody Road.
  • The 236-unit North Springs project is planned for Peachtree Dunwoody and Crestline Avenue Parkway. Neither had an assigned construction start date.
  • Outlook: With no new supply and net absorption for the year at 91 units, vacancy should slip to 4.4% by year-end. Strong rent growth—respective gains of 4.9% and 5.9% for the asking and effective averages—is forecast for the year. New supply delivering in 2013 should raise the vacancy rate above 5.0%. Absorption should be positive, however.

Suburban Northwest/ Marietta

  • The Marietta submarket in the suburban northwest played host to 2011’s largest market-rate apartment delivery. The 708-unit Rockledge Apartments completed construction that July at Powers Ferry Road and I-85 in northwest Atlanta.
  • At 1,520 units, however, 2011 total net absorption more than doubled the year’s portion of new supply. With no new supply delivering during the first half of 2012, net absorption ran at 175 units.
  • Vacancy ended the quarter at 5.6%, down 20 basis points for the period, down 50 since year-end. Second quarter mean asking and effective rents were $856 and $761, up 1.0% and 1.2% from the quarter before, up 1.9% and 2.6% since year-end.
  • No apartment projects were under construction in this submarket per the date of this report. None are expected to deliver in 2012 or 2013.
  • Two projects with a combined total of 478 market-rate units were proposed per report date.
  • Included is the 238-unit second phase of AMLI Residential’s AMLI at Barrett Lakes at Barrett Lakes Boulevard in Kennesaw.
  • There are 240 units that have been proposed for the Watts Drive mixed-use development, also in Kennesaw.
  • Outlook: With no new supply due on line and net absorption projected at more than 500 units for the year, Reis expects vacancy to end 2012 at 4.6%. Rates in the low 3.0%’s should follow. Gains of 4.0% and 5.4% are projected for the asking and effective rents for the year, with similar increases expected thereafter.

Suburban Northwest/Smyrna

  • No projects completed construction in the Smyrna submarket since 292 market-rate units delivered in 2007.
  • While net absorption ran negative at 181 units all told in 2011, the totals for the last three quarters were positive—and the inventory count fell by 723 units during the year. With no new supply completed, net absorption for first half of 2012 was positive 140 units (all during the first quarter).
  • Second quarter vacancy was 4.7%, unchanged for the period, down 60 points year-to-date. At $829 and $728, the second quarter asking and effective rents were up 0.5% up 0.7% for the period and were up 0.2% and 0.8% since year-end.
  • One project was under construction in this submarket per report date—The Worthing Companies’ $45 million, 304-unit Heights at Stillhouse Ridge at Stillhouse and Akers Mill roads in The Vinings. Completion is scheduled for February 2013. Construction began in August 2011.
  • An October 2012 completion date has been cited for the 188-unit West Village Apartments at Atlanta Road and W. Village Place, Smyrna. Construction started in September of 2011.
  • Without a reported start date, the 2,180-unit Riverview on the Chattahoochee Brownfield project in Mableton is the largest apartment project on Reis’ list of planned projects. Green Street Properties and Jamestown are would-be co-developers. A 240,000- square-foot commercial component would accompany the residences.
  • More. A late 2011 report in the Construction Journal described the project as “delayed.”
  • Outlook: Vacancy in the Smyrna submarket could increase minimally with the new supply. Gains of 1.5% and 2.7% are forecast for the mean asking and effective rents for 2012.