Multifamily investors increasingly view Atlanta as a tier-one market.
Speakers on a panel at France Media’s InterFace Multifamily Southeast conference, held in Atlanta on Dec. 2, point to several reasons why the region is the right place, right now, to build, buy and sell all manner of apartment assets.
“In Atlanta, you’ve got an incredible diversity and strength of employers,” said Chad DeFoor, senior director of multifamily sales for Franklin Street.
DeFoor was joined by Bianca Tabourn, managing director with Stockbridge; Steve Baile, chief development and operating officer with Selig Enterprises; Patrick Chesser, managing director of Mill Creek Residential Trust; Seth Greenberg, CEO of ECI Group; and panel moderator Jason Nettles, managing director with Northmarq.
The speakers in the session titled, “Atlanta Market Update: An In-Depth Look at Leasing, Investment and Development,” all remarked that job growth and high-profile employers moving into the area are, in part, helping to curry favor among investors.
In the public and private realms, interest is growing in the apartment market in Atlanta and in most other major metros. Tabourn reports Stockbridge is seeing heightened interest from domestic and international groups. “In 2022, we expect to see a continuation of allocation toward the private market, including real estate,” she said.
Baile said the number-one indicator to follow in supply and demand is job growth.
“Atlanta is more than just an opportunity for development,” said Baile. “These [tech] companies move here for a reason.
“Our friends at Google are sitting in Mountain View, California, and it’s not a very diverse culture out there. In Atlanta, you have access to much more diversity available to these employer bases, and I think we’ll be the recipients on the multifamily side of what that job growth does for us.”
Additionally, the competitive nature of the single-family-home-sales market favors renter demand in Atlanta.
“We are seeing a shift, psychologically,” said Tabourn. “When you think about choosing to rent years ago, it was a bit of a stigma. Whereas now we’re seeing so many more renters by choice versus renters by necessity.
“Our portfolio is primarily Class A assets, and we are blown away by average household incomes. We’re talking six figures. We sit back and wonder, why would you choose to rent versus purchasing a home? But it goes back to the inability to purchase a home because of the competitive nature.”
Tabourn reports Stockbridge is projecting steep increases for rent in 2022.
Renter demand isn’t spurred only by white-collar, six-figure job growth. DeFoor, who specializes in the listing and sale of Class B and C assets for private investors, pointed out that jobs in shipping, logistics, industrial and manufacturing are also increasing in the Atlanta area.
“There are some macro changes going on that Atlanta’s a huge beneficiary of,” said DeFoor. “With jobs coming here in droves, people coming here in droves, capital coming here in droves — it’s going to be a great time to witness Atlanta take a step further into the investment world as being a true tier-one investment market.”