Some of the main players in Atlanta's multifamily building bonanza are beginning to wonder if the cost of renting in Midtown will make living there tough for Millennials, their most coveted demographic. Those concerns emerged this week during a summit organized by Bisnow Atlanta, where the magic number — $2 per square foot rents — was bandied about as possibly being a bad thing. The panel consisted of reps from companies that Atlanta high-rise real estate watchers should recognize, including AMLI Residential, North American Properties, Daniel Corp, AGH and Integral, among others. All seemed to concur that construction costs have ballooned since 2010, which has contributed to rent inflation. Novare's Jim Borders said $2-per-square-foot rents aren't the most affordable product, even for recent graduates who have top-paying jobs, and "if that young person can't afford to live in Midtown, that's a problem," he said, according to Bisnow. Nonetheless, the apartment train keeps rolling. And the majority of about 500 voters in a Curbed poll this week felt that Atlanta's multifamily market is not yet overbuilt and could use more quality apartments. Maybe voters are thinking an abundance of supply will drive down rents.
Contrary to what most people think, Bisnow reports that not all apartments being built today will lend themselves to conversion to condos eventually, which could prompt the announcement soon of a significant condo project, experts said.
One AMLI official said Atlanta is the last of nine markets the company is involved in to see the condo product reemerge. He adds: "There is demand from a large number of affluent young people." In addition to projects in Old Fourth Ward and Buckhead, AMLI is planning a 28-story tower (picture here) with 350 apartments on the site where Donald Trump's condo dream faltered. Of course, it's much too early to say what rents there will be.
· KROGER COMING TO FORT GILLEM (Plus Midtown apartment news) [Bisnow]
· Vote Now: Is Hotlanta's Apartment Market Overheated? [Curbed Atlanta]
[AMLI rendering via Bisnow Atlanta.]