Investors Circling Atlanta Multifamily, Hoping Distress Pushes Properties To Market

With values down as much as 20%, buyers are getting ready to jump off the sidelines and gobble up Metro Atlanta apartments. 

Transaction volumes have been muted as owners have been unwilling to sell properties with values deflated. That may change later this year amid increasing debt maturities and lenders who are no longer willing to extend loans, instead forcing apartments onto the market to a pool of hungry buyers.

“We wholeheartedly expect transaction velocity to be up this year. People have been holding onto the sidelines for two to three years,” Marcus & Millichap Vice President Peter Standley said. “You’re going to see a lot of investors come off the sidelines.”

Last year, $5.4B worth of apartments sold in Metro Atlanta, up from $4.7B the year before but a far cry from the heyday of 2021 and 2022, when nearly $20B and $14.4B traded hands, respectively, according to CoStar data obtained by Bisnow. Even in 2020, $7.8B of properties were sold despite pandemic restrictions. 

U.S. multifamily values are down by 20% from the peak in 2022 but did climb back up 12% in the past year, according to Green Street’s commercial property price index.

In Atlanta, a greater share of out-of-state investors are shopping for apartments, lured by population growth and a host of newly constructed properties, according to a report by Global Real Estate Advisors. Between 2014 and 2019, 77% of apartment buyers in the metro area were national firms. In 2024, that share rose to 87%.

New entrants to the market include Virginia-based Monday Properties, which teamed with Southern California firm RSN Property Group in November for a $36.8M purchase of Villas at Princeton Lakes. Los Angeles-based Trion Properties spent $34M a month later to buy Fieldstone Glen from Intercapital Group.

Most buildings that have sold have been newer buildings that have avoided distress, which has kept pricing up, experts say. The average price per unit has fluctuated over the past two years, bouncing between $229K per unit in the first quarter of 2023 to $202K in Q4 2024, according to MSCI data.

That has been driven in part by apartment owners with loans underwater refusing to sell into the market, Marcus & Millichap Senior Vice President Scott Spalding said. Lenders have been willing to modify loans to prevent losses and avoid taking back properties they’re ill-equipped to manage on their own. 

That has left a hole in the pipeline of apartments for sale in Metro Atlanta.

“People are waiting until they think prices are falling,” Spalding said. “But sellers aren’t meeting the market because they don’t have a lot of pressure on them.”

But that dynamic is likely to erode in the second half of 2025, brokers predicted. Some lenders have been looking to replace troubled borrowers with more experienced sponsors as a means of avoiding the foreclosure process.

“If you bought a deal between summer of ‘21 and spring of ‘22, and you put floating rate debt on it and maybe you haven’t had the greatest property management team, or operationally you have not maximized rents, that could be a deal that is earmarked for distress,” Cushman & Wakefield Executive Vice Chairman Mike Kemether said. “In 2025, we’re starting to see lenders and servicers take some action.”

Over the past 12 months, developers unleashed 5,200 new units inside the Interstate 285 perimeter as of the third quarter, according to multifamily consulting firm Haddow & Co. Another 7,000 units are under construction

The deluge, plus slowing demand, pushed the vacancy rate up to 12% and rents down 2.8% year-over-year as of the third quarter of last year, according to a Lee & Associates report.

But the pipeline of new apartments is dwindling, giving investors hope that they can fill vacant units as Metro Atlanta’s population grows and the choice of places to live shrinks. Kemether said falling available inventory will especially benefit apartment operators who have a handle on the rampant renter fraud in the area.

With $500M in CMBS loans tied to Atlanta multifamily properties either delinquent or in special servicing, according to Trepp, and another $3.9B of debt on watchlists, local buyers are salivating over the opportunity to buy a property from distressed borrowers or lenders.

“There are a lot of problems. It’s very real. And the question is, how much longer can they hold on?” The Radco Cos. Chief Investment Officer Lisa Hurd said. “I think there’s a real opportunity in some of the hairier deals with a bit of story to them.”