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As a third apartment skyscraper rises in Atlanta for Novare Group, will demand follow? Novare wunderkind Jim Borders tells us the Millennials will come. (If that's the goal, just build the tower out of Daft Punk CDs.)
"It's been so long since anybody delivered much
product in Buckhead that we feel great," Jim says regarding the newly announced Skyhouse Buckhead
. In the past 10 years, Buckhead absorbed an average of 1,000 units/year, he says, but the recession put the kibosh on that. "We want to get out of the ground fast and get things leased up."
So far, Jim's projects are working, including at the $2/SF rent goal
for a high-rise apartment. SkyHouse Midtown has leased up, and SkyHouse South is under construction and has begun leasing. The unanswered question
is how deep the pool is for rents hitting levels not achieved in Atlanta, especially since his SkyHouse products target Millennials between 25 and 34
. To that end, SkyHouse units are smaller than other Class-A apartments—keeping rents, even at the Holy Grail of $2/SF, within affordable standards. Is it sustainable? "You don't need extraordinary job growth. Just normal job growth. And I think we'll see that
," Jim says.
Here's the newly completed SkyHouse Midtown. Novare, of course, was one of Atlanta's most prolific condo developers during the early 2000s boom. And like many other developers, some of its condo towers went back to lenders. Jim tells us apartments "ebb and flow" better through economic cycles than condos: "You got a little bit more ability to hang around" and wait for valuations to return. (Listen, we all misjudged some things in that decade. Let he who knew Altavista wouldn't last forever cast the first stone.)