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Q3 2012 | MULTI-FAMILY

ATLANTA

MARKET REPORT

Apartment Market Fundamentals on the Rise in Atlanta



Atlanta is ranked among the best in the nation for the lowest cost of doing business and holds the eighth position for the largest economy in America. Anchored by the world’s busiest airport, Hartsfield-Jackson, Atlanta remains to be a desirable location for business and is currently home to the headquarters of 14 Fortune 500 companies and 32 Fortune 1000 companies. Atlanta’s diverse economy and top-ranked workforce training program make it an ideal place for many college graduates and businesses alike.

Updated May 2012

Metro Atlanta’s unemployment rate has decreased to 8.9% from 9.2% in July 2012; but is still above the US average at 8.2%. Atlanta’s workforce has increased by 29,400 workers, up 1.3%, from August 2011 to August 2012. The housing market has reached bottom earlier than forecasted; however, new construction and home value appreciation have yet to take hold. This has left many to find renting more favorable and has subsequently resulted in an increase of multifamily projects in Atlanta.

MARKET INDICATORS Q4 2012 OUTLOOK VACANCY CONCESSIONS RENTS TRANSACTIONS PRICE PER UNIT CAP RATES

With the apartment market steadily increasing, the percentage of American homeowners has continued to drop. Alongside Atlanta’s job growth, the Millennials (aka Gen Y) have influenced the demand for multifamily housing in the urban sector. This segment of the population appreciates the benefits offered from renting and is drawn to live in-town where they are in close proximity to shopping, restaurants and entertainment. As a result, intown apartment developments are in high-demand: both for renting and for buying. Investors are looking for an investment vehicle with stability; much like these type of properties provide. The cheap capital provided by Fannie Mae, Freddie Mac and life insurance companies has helped secure would-be investors in choosing multifamily communities as the investment of choice. There are currently 15,319 prospective apartment units in Atlanta’s pipeline, 3,329 units under construction and 388 units being redeveloped. In the third quarter of 2012, Atlanta witnessed 39 apartment sales totaling a little north of $500 million. HISTORICAL APARTMENT OCCUPANCY

HISTORICAL APARTMENT RENTS

96% 94% 92% 90% 88%

US

www.colliers.com/atlanta

SOUTH

ATLANTA

2011

2012

Source: MPF Research

86%

2012

2011

Source: MPF Research

US

SOUTH

ATLANTA

$1,200 $1,100 $1,000 $900 $800 $700 $600 $500 $400


MARKET REPORT | Q3 2012 | MULTI-FAMILY | ATLANTA ATLANTA MULTI-FAMILY

Millions

ATLANTA MULTI-FAMILY | Investment Volume & Cap Rates

5,000

8%

4,000

6%

3,000

Investment for apartment properties in the Atlanta market is set to increase for a third straight year. In the past twelve months, there have been 134 properties sold representing a total of 38,452 units. The average price per unit as of the end of the third quarter is $75,270/unit. This is the fifth consecutive quarterly increase for this figure. The average cap rate for apartments in the Atlanta market increased from the previous quarter as well and now sits at 6.69%.

4%

2,000

AVG Cap Rate

YTD '12

2010

2009

2007

2006

2004

Sales Volume

2011

0% 2008

0 2005

2% 2003

1,000

Source: Real Capital Analytics

UPDATE Recent Transactions in the Market SALES ACTIVITY PROPERTY

SUBMARKET

SALES DATE

SALE PRICE

PRICE/UNIT

BUYER

Buckhead

7/24/2012

$64,250,000

349

$184,097

Mid-America Apartment Comm.

Stoneleigh @ Deerfield

North Fulton

8/29/2012

$43,500,000

370

$117,568

Heitman LLC

Stonewood @ Vinings

Cumberland/Vinings

9/4/2012

$42,250,000

310

$136,290

Fairfield Residential

Vinings @ River Pkwy.

Cumberland/Vinings

8/20/2012

$37,250,000

427

$87,237

Investors Realty Group

Asbury Park

Airport/N Clayton

8/3/2012

$33,600,000

269

$124,907

Bell Partners

Waterstone Apartments

Gwinnett County

10/18/2012

$33,500,000

296

$113,176

Westdale Real Estate Investment

10 Perimeter Park

Central Perimeter

9/13/2012

$26,400,000

230

$114,783

Arenda Capital Management

Camden Creekstone

Central Perimeter

7/12/2012

$25,270,000

223

$113,318

Camden Property Trust

Amber Chase

Henry County

9/6/2012

$22,400,000

352

$63,636

Strand Properties Corporation

Roswell Creek

North Fulton

9/27/2012

$22,400,000

498

$44,980

Asset Preservation Inc.

C FU LT O

Allure at Brookwood

98

MULTI-FAMILY PIPELINE | Urban Atlanta

DORAVILLE Norcr

CHAMBLEE DEKALB CO. FULTON CO.

SMYRNA

2 3 511 4

G

7

DE

ch e

R iv

e

Clarkston

h

# UNITS

e

r

14 10 DECATUR ATLANTA121316 Avondale Estates

oo

EAST POINT COLLEGE PARK HAPEVILLE

DEKALB

Hartsfield-Jackson International Airport

P. 2

CL

nion City

675

FOREST PARK

| COLLIERS INTERNATIONAL

HENRY

CO. CO.

M

DEVELOPER

MARKET

Ponce Park (u/c)

Jamestown Properties

Midtown

625

Camden Paces

Camden Properties

Buckhead

375

3

Village @ Buckhead (u/c)

JLB Partners

Buckhead

375

4

Buckhead Atlanta (u/c)

Oliver McMillan

Buckhead

370

5

Circle Terminus

Crescent Resources

Buckhead

360

6

AMLI at Ponce Park

AMLI Residential

Midtown

353

7

Fairfield Clairmont II

TriBridge Residential

North DeKalb

353

8

Perimeter Town Center

Northwood Ravin

Central Perimeter

345

9

1155 Hammond Drive

Pollack Shores

Central Perimeter

340

10

77 12th Street (u/c)

Daniel Corporation

Midtown

330

11

Phipps-unnamed

Columbus Realty

Buckhead

320

12

SkyHouse (u/c)

Novare & Batson Cook

Midtown

320

13

100 6th Street

Novare & Batson Cook

Midtown

320

14

903 Huff Road

Worthing Southeast

Midtown

312

#

NAME

1 2

# UNITS

Source: Pierce-Eislen, Dale Henson Associates


MARKET REPORT | Q3 2012 | MULTI-FAMILY | ATLANTA

TOP EMPLOYERS

WORLD CLASS UNIVERSITIES, COLLEGES

COMPANY

# EMPLOYEES

UNIVERSITY

CITY

27,000

University of Georgia

Athens

34,816

Wal-Mart Stores

26,000

Georgia State

Atlanta

32,000

AT&T

19,000

GA Perimeter College

Decatur

26,000

Emory University

17,994

Kennesaw State

Kennesaw

24,100

Delta Airlines

Publix Supermarkets

9,453

Georgia Tech

Atlanta

20,941

The Home Depot

9,000

Emory

Atlanta

13,893

8,648

University of West GA

Carrollton

11,644

Emory Healthcare

FULTON CO.

Allatona Lake

Emerson

• Over 2.5 billion square feet under

Buford

HA GW INN LL CO . ETT CO .

management

Sugar Hill

Rive r

FO RS FU

Mountain Park

B

• Over 12,000 professionals

H YT O LT

CHEROKEE CO.

Acworth

$1.8 billion in annual revenue

Lanier

Woodstock BARTOW CO.

United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118

Source: Atlanta Business Chronicle 2011 Book of Lists FORSYTH CO

BAR

CHER

Source: Moody’s Analytics

522 offices in 62 countries on 6 continents

# STUDENTS

N

Alpharetta

CO . CO .

Cha t

PAULDING CO. COBB CO.

e hooch e tac

Roswell

Duluth

316

CO BB FU LT CO O . N CO .

MARIETTA s Hiram

DORAVILLE

DEKALB CO. FULTON CO.

SMYRNA

Austell Clarkston

ch e

Douglasville

DECATUR Avondale Estates

o

W AL TO N

CO .

att

ho ac

ATLANTA

e

Stone Mountain CO .

R iv

r

Snellville

G W IN NE TT

e

DOUGLAS CO.

Ch

DEKALB

Hartsfield-Jackson International Airport

Fairburn

FULTON CO.

Palmetto

HENRY

CO. CO.

Conyers

FOREST PARK Riverdale

RESEARCHERS: Atlanta Scott Amoson | Director of Research Dany Koe | Research Associate Two Midtown Plaza | Suite 1100 1349 West Peachtree Street, NE Atlanta, Georgia, 30309 TEL +1 404 877 9286 FAX +1 404 870 2845

Stockbridge

O. ON C FULT CO. TTE FAYE

Jonesboro

COWETA CO.

McDonough BU TT S

CO .

HENRY CO. CLAYTON CO.

Fayetteville

Newnan Peachtree City

Southeast Multi-Family Investment Services Two Midtown Plaza | Suite 1100 1349 West Peachtree Street, NE Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845

Covington RO C NE KDA WT LE ON CO CO . .

CLAYTON CO.

Union City

675

DE KAL RO BC CK O. DA LE CO .

Lithonia EAST POINT COLLEGE PARK HAPEVILLE

WILL MATHEWS

UNITED STATES:

GW I DE NNE KA TT LB C CO O. .

COBB CO.

Lithia Springs

RON CAMERON

Norcross

CHAMBLEE

Powder Springs

PAULDING CO.

Lawrenceville

This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 520 offices throughout more than 62 countries worldwide.

Accelerating success.

www.colliers.com/atlanta

3Q 2012 | Atlanta Multifamily Market Report  

Market report for maultifamily real estate in Metro Atlanta

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