Trying to tabulate the number of intown apartment developments currently planned, under construction or recently opened is a fool's errand. There's that many, from the core of Buckhead to the East Atlanta Village. (Our rough count is more than 20 projects, each with hundreds of units). As rents climb and vacancy rates don't, more than 4,000 rental units have recently hit the intown market or are in the pipeline — some 3,000 of those in the hot Midtown market alone. Ideally, these units will fill up and imbue the city with a more cohesive and vibrant urban feel. Ideally, rents will stay reasonable and attract civic-minded, law-abiding spendthrifts who support local businesses. As early as last summer, we started hearing grumbles that those idyllic scenarios might not come to pass. This prompts the question: Will the saturation of rental properties become a glut, followed by a bust in the mode of the Atlanta condo market circa-2008?
As the AJC reports, developers are favoring apartments as Atlanta continues to struggle with a glut of unsold foreclosures and high vacancy rates in the office sector. "The developers are eager to capitalize on rising rents, high occupancy rates and the growing gravitational pull of Atlanta's urban core," the newspaper reports. "But the push could leave Atlanta with a glut of apartments and drive down other real estate prices." The apartment craze is a national trend at the moment. Some believe Atlanta's frenzied apartment development has yet to peak, because the city got a later start than metro areas such as Dallas, Charlotte and Washington, a panel concluded in September. The panel found that "Class A" apartment projects are not tapped out in Atlanta, unlike other cities where the choice developments are exhausted and developers are considering lower projects "downstream."
While metro Atlanta's unemployment rate continues to improve, some developers have opined that only substantial job growth can sustain the current rate apartments are being built; others feel Atlanta will reach overbuilt status, but the best-positioned properties will continue to perform well. Seeing the cranes and hungry bulldozers across town is refreshing, sure, but we can't help but ponder the long-term cost ?
· Wave of apartment projects raises fears of new bubble [AJC]
· Atlanta Apartment Development Will Remain Strong, Panelists Say [agg.com]
· Move Over Midtown, The Real Apartment Boom's in Buckhead [Curbed Atlanta]
· Is Atlanta Headed for Apartment Overload? [Curbed Atlanta]