Commercial Property Information

Market Review The Atlanta apartment market consists of 409,034 units in eighteen geographic concentrations varying in size from the 37,788 unit North DeKalb submarket into the South DeKalb submarket, which accounts for 4,845 units. In the ten-year Commercial Property Information period beginning with Q2 2009, the Midtown submarket has experienced the greatest introduction of new stock, 14,206 units, amounting to 23.4percent of new market rate rentals inserted to the market.

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Mean unit costs in the metro are as follows: one bedrooms $ 1,109 studios $998, two bedrooms $ 1,268, and three bedrooms $ 1,456. Since the beginning of Q2 2009, the subway as a whole has recorded an annual average growth of 3.7%. Effective rents, that exclude the value of concessions provided to potential tenants, also progressed by 0.6% during the first quarter. The rates of change show that landlords have succeeded while keeping a connection between efficient and requesting rent values in raising rents. Throughout the previous four quarters, optimistic movement in asking lease was recorded in all half of the metro’s submarkets. Competitive Inventory, Household Formations, AbsorptionNet new first quarter household formations from the Atlanta metropolitan area were 9,850. Typically, a part of the recently gainedhouseholds become renters in market flat units; therefore, it’s prudent to think about longer-term demographic and economic functionality as an effect upon the present requirement for apartment units. Since the beginning of Q2 2009, family formations in Atlanta have dropped 1.3percent per year, representing the average annual addition of 27,100 families. On the last four quarters, market absorption totaled 8,176 units, 10.4% higher than the average yearly absorption rate of 7,404 units listed since the beginning of Q2 2009. From an historical perspective, the initial quarter vacancy rate is 1.9 percentage points lower compared to 6.8% average recorded since the start of Q2 2009.

OutlookBetween now and year’s end, 7,782 units of competitive flat stock will be introduced to the subway, and Reis quotes that net complete absorption will be positive 6,166 units. As a result, the vacancy rate will float up by 0.3 percentage points to 5.2%. Building activity is expected to continue during each the following two years, during which a total of 9,497 units is projected to be introduced to the market. Net new household formations at the metro level during 2020 and 2021 are anticipated to average 2.0% annually, enough to ease an absorption rate averaging 3,820 units each year. Since this amount doesn’t exceed the forecasted new structure, the market vacancy rate will rise by 30 basis points to finish 2021 in 5.5%. Between today and year-end 2019 asking rents are expected to climb 4.2% to a level of 1,278, while successful rents will grow by 4.3percent to $1,200. On an annualized basis, asking and effective rents are projected to advance at a rate of 3.1percent annually end 2021, reaching average prices of $1,359 and $1,275 per unit, respectively.

Reis provides real estate data services and analytical instruments to property professionals through its Reis Services subsidiary. Reis Services, such as its predecessors, was set in 1980. The database includes information on warehouse/distribution, office, retail, flat, flex/research & improvement, self storage, seniors housing properties and affordable housing, and can be used by real estate investors, creditors and other professionals to make educated financing, selling and buying decisions. Additionally, Reis data is used by equity and debt investors to evaluate, measure and manage the risks of default and loss associated with portfolios, properties, individual mortgages and real estate. Reis provides its information services to many of the nation’s leading lending institutions, equity investors, agents and appraisers.