A booming job market coupled with shrinking vacancies has Atlanta landlords seeing big boosts in apartment rental rates. That has investors hungry for multifamily here. We spoke with Marcus & Millichap's Paul Vetter and Mike Fasano, who say average rents will rise 3% by the end of 2013 to $860/month. They already have climbed 3.4% during the past year to $840/month now. (It's a small price to pay to avoid sleeping on your parent's couch.) And this despite an influx of new inventory coming to market.
It's these fundamentals that have been attracting capital into Atlanta for the past year, including agency and life companies. "I think it's all about yield," Mike says. Already core urban Class-A product has seen huge price increases, now around a 5% cap, Paul says. But even Class-B and C apartments have been gaining pricing ground. For instance, a portfolio of nine apartments complexes on Buford Highway we reported here (including Cross Keys Cabana above) was acquired by the seller last year for $37M (it went for $50M), Paul says. "Atlanta is back on a lot of people's radar." (We're back in the spotlight, everybody. Nobody do anything embarrassing.)
Paul sent us this pic; he's second from right, with Wilkinson Real Estate's George Waymire (who sold the aforementioned Buford Highway portfolio), Marcus & Millichap's John McCalla and Deloitte & Touche's Richard Harvey at Mount Shasta in California. The crew raised $10k for LUKE Project Summer Camp and scaled the 14,000-foot mountain this past Saturday. This isn't the first time, either. With George leading the pack, Paul says they've climbed Mount Ranier, Mount Adams, and Gilbert Peak.