Consider this: Since Atlanta came crawling out of the recession in 2012, the Midtown submarket has packed on roughly 5,000 multifamily units (opened or under construction now), with another 4,000 proposed, for a possible grand tally of 20,000 apartment and condo options, according to the Midtown Alliance. That sort of bulk product leads one of Atlanta's preeminent apartment developers to foresee cheaper rents ahead — and the possible rebirth of condo towers. AMLI chairman Philip Tague, speaking at Bisnow's recent 3rd Annual Future of Midtown summit, said skyrocketing rents could be a thing of the past, and that the oncoming wave of Midtown apartments will fuel "weakness" when it comes to rental rates. Quoth the chairman: "There has been a lot of demand for what has been built so far, but this is a lot of units for this market to absorb."
Tague, of course, has a dog in the fight, and it'd be in his best interest to spook other developers from AMLI's Midtown turf. (The company is planning to develop the former Trump Towers site between Spring and West Peachtree streets, in addition to a huge apartment project near Lenox Square). However, Tague did say AMLI has introduced product into overbuilt markets before "and come out fine." In fact, according to Bisnow, AMLI is still scouting for sites from Westside, to Buckhead, to Decatur.
Contrasting Tague's opinion was Walker & Dunlop's Kris Mikkelsen, who pointed to the staggered nature of Midtown's apartment waves as a reason not to be overly concerned. In his view, Midtown should have no problem absorbing the projected 2,000 apartments per year between 2016 and 2017.
An interesting side-effect of castrated rents, in Tague's view, could be the reintroduction of new condos en masse. If rents begin to moderate, he expects to see condo conversions and possible new condo projects ramp up.
· AMLI: MIDTOWN MULTIFAMILY RENTS TO SOFTEN SOON [Bisnow]
· Forty Projects Leave Few Blocks Untouched in Midtown [Curbed]