Related Development Forging Ahead On Two Atlanta Projects
The mixed-use division of development powerhouse The Related Group is determined to push forth on not one, but two apartment projects in Atlanta's core this year.
Related Development has already broken ground on Apogee Midtown and plans to do so soon on Apogee Buckhead, adding more than 350 units to each submarket when more than 11,000 new apartment units are underway within the city.
That's because, with Atlanta's job growth and current apartment fundamentals, Related Development CEO Steve Patterson (on left) said he's confident demand will be there once both projects deliver.
"Apartment vacancies are the lowest they've been in 20 years, and we're worried about the market falling apart on us?” Patterson said. "That's nonsense."
Already, Related has broken ground on Apogee Midtown, a 39-story, 390-unit apartment project (above) connected to a 77k SF Whole Foods Market on 14th Street in the heart of Midtown that is slated to open late next year. Patterson said Related is expecting some $2.50/SF in rents.
The other project is Apogee Buckhead (below), a 35-story, 362-unit apartment tower at 3372 Peachtree Road in the heart of Buckhead, which will look to achieve rents at $2.60/SF. Units in Buckhead — a neighborhood on which Bisnow will host an event next month — will be slightly smaller than in Midtown, which will attract what Patterson said are more affluent and older renters.
"Right now, I think in Buckhead, there's probably 3,500 to 3,600 units under construction, and Midtown it's pretty close," Patterson said. "But we think that demand is pretty deep there, particularly for the larger units in Buckhead. This is a market that grows [by] 60,000 to 80,000 jobs a year.”
According to Atlanta-based Haddow & Co, which tracks Class-A apartment performance within the Interstate 285 ring, the stock of more than 32,400 units tallied a 97.5% occupancy rate and more than $1,700/month average rents as of Q3 2016. But on its heels are another 11,400 units underway, with 10,000 more units planned.
While there's no definitive plans for concessions, Patterson said Related has added wiggle room in its pro forma for the two Atlanta properties to offer them if needed.
Patterson said Related is eyeing more locations in Atlanta and beyond, despite the plethora of new product potentially hitting the market in the next 24 months.
"There are markets out there other than Atlanta which are overbuilt today or about to be," Patterson said, "but they're not markets we're active in right now."