Despite Improving Fundamentals, Atlanta Apartment Owners 'Still In Survival Mode'

Atlanta apartment vacancy rates ticked downward last year and rents stayed steady as developers slowed their pace enough to burn off some of a yearslong supply glut. Early projections show rising renter and investor interest in the area’s multifamily properties this year.

But panelists at Bisnow’s multifamily summit last week apparently haven’t gotten the memo that things are supposed to be looking up.

In the traditional metaphor of the real estate cycle as a baseball game, Kenco Capital President Doug Linneman said the industry is still in “really early spring training” waiting for the game to even begin.

“We were all told to survive until ‘25. I always kind of wondered what that meant. What would happen next?” Linneman said. “We’re certainly still in survival mode.”

Market fundamentals have turned a corner in Metro Atlanta. Vacancy fell from 11.9% to 11.1% year-over-year by the fourth quarter of 2025, according to Lee & Associates. Asking rents trended upward during that period, from $1,620 per unit to $1,631 per unit as the incoming supply of new apartments fell from more than 22,000 to 16,800.

But several multifamily experts said hopes that the apartment market would be on a full rebound this year were likely overstated as the market continues to work through the glut of new supply over the past two years.

A recent spate of layoffs, President Donald Trump’s immigration crackdown and dropping consumer confidence could further stall recovery.

“I think [rising layoffs] could be a considerable factor in how quickly we can recover and start raising our rent,” Willow Bridge Property Co. Regional Vice President Maria Doré said.

And for investors who bought apartments during the historic low-interest-rate environment earlier this decade, fundamentals may not be improving fast enough to offset financial struggles with underwater loans.

“The market needs to meet the math,” Linneman said. 

That's going to be painful for borrowers. 

“They’re going to feel like Jack Hughes taking a hockey stick to the teeth,” Linneman said.

He said his firm is one of many on the sidelines until the loan workouts, short sales and foreclosures work their way through the system.

Apartment foreclosures are on the rise in Metro Atlanta.

“Even if the absorption might be getting better and things are turning the corner, when it comes down to it, there are a lot of people that are overlevered,” said Derrick Barker, CEO of commercial real estate lender Nectar. “There are a lot of just overlevered balance sheets, and some of those are going to be worked out, not through rents going up but through just taking losses and moving on.”

A gulf between what sellers were seeking for their assets and the discount many investors expected led to a lot of sales falling apart in 2025, Atlantic Pacific Real Estate Group President Brett Duke said. 

Lance Growth, the CEO of 1031 exchange platform Growth 1031, said that gulf remains this year.

“There's an unhealthy tension between buyers and sellers. It's not getting better,” Growth said.

“Everybody's kind of on edge right now,” he added.

But panelists said there are green shoots. 

The beginning of rent growth could help lenders have more confidence in underwriting, Duke said.

And the high cost of owning a home and economic uncertainty are likely to keep households renting longer — and less likely to move from one apartment to another chasing deals. The portion of renters in the U.S. renewing leases climbed to a three-year high in 2025, with 60% of Class-C renters opting to stay put, according to Marcus & Millichap’s 2026 investor outlook.  

“With renewals serving as the primary driver of rent growth last year, property owners are likely to intensify their retention efforts in 2026. This will prove especially important for renters who entered leases recently with elevated concessions,” the report says. “As these terms end, some renters may need to relocate, adding pressure to both recent builds and competing properties.”

Cortland President Juan Bueno said he is seeing concessions burn off, which is helping rental rates at the firm’s properties. The next question is if those residents remain without the perks.

North American investors have placed a bull’s-eye on Metro Atlanta this year, especially for acquiring apartments, according to a January CBRE investor sentiment survey. And executives with publicly traded REITs have been rosy about Metro Atlanta on recent earnings calls, Woodfield Development partner Patrick Kassin said.

Kassin said Atlanta landlords are starting to wrap their hands around high levels of fraud and bad debt and are poised to kick off a new cycle.

“[Atlanta] is a market that most of our peers see kind of leading the way out of the market for the Southeast,” he said.