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Investment Trends
Local Apartment Yield Trends • The Downtown/Midtown areas garnered increased buyer
attention during the 12 months ending in September, elevating
Apartment Cap Rate 10-Year Treasury Rate
property values roughly 18 percent. Cap rates in the area average
in the high-5 percent band, slightly below the metro average
12%
of 6.2 percent. Several high-rise and midrise complexes are
9% underway in both locations, potentially providing opportunities
at the top end of the market moving forward.
Rate
6%
• Lower entry costs and cap rates roughly 100 basis points
3% above the metro average are luring buyers to southwestern
suburbs. Most of the complexes changing hands here were
0% Class C assets built before the 1980s. Out-of-state buyers
18* 00 02 04 06 08 10 12 14 16 18*
were particularly active in the area, many attracted to first-year
returns higher than their home markets.
Sales Trends • Many buyers in the $1 million to $10 million price tranche have
Sales Price Growth
been priced out of popular locales and are expanding their
acquisition criteria to suburbs outside the perimeter.
rice per Unit (000s)
$84 24%
$56 16%
Atlanta
3Q18 – 12-MONTH PERIOD
Employment Trends EMPLOYMENT:
Local Apartment Yield Trends
6.0%
Metro United States 2.1%
Apartment Cap Rate 10-Year Treasury Rate
increase in total employment Y-O-Y
Year-over-Year Change
12%
• Roughly57,100 positions were added during 12-month
4.5% period ending in September, after 49,100 jobs were creat-
9%
ed during the prior year. The unemployment rate remains
3.0%
below 4.0 percent, potentially restraining hiring.
Rate
6%
1.5% • Trade sectors led job gains with the creation of 16,700
3%
positions. The education and health services sector fol-
0% lowed with the addition of 13,300 employees.
0%
14 15 16 17 18* 00 02 04 06 08 10 12 14 16 18*
Year-over-Year Growth
13,600 apartments were delivered the24%
$84 previous year.
Units (000s)
12
• $56
More than 18,900 market-rate units 16%
are underway
8 metrowide with delivery dates scheduled through 2021.
Midtown and Buckhead combined will
$28 8%receive 5,800 of
4
these rentals.
0 $0 0%
14 15 16 17 18* 14 15 16 17 18*
8%
Metro United States 70 basis point decrease in vacancy Y-O-Y
7%
• After a 10-basis-point increase the prior year, vacancy fell
Vacancy Rate
* Forecast
Multifamily Research | Market Report
DEMOGRAPHIC HIGHLIGHTS
3Q18 MEDIAN HOUSEHOLD INCOME 3Q18 AFFORDABILITY GAP MULTIFAMILY (5+ Units) PERMITS
*Mortgage payments based on quarterly median home price with a 30-year fixed-rate conventional mortgage, 90% LTV, taxes, insurance and PMI. **2017-2022 Annualized Rate
percent
12% to $107,200 per unit.
Far West Atlanta Suburbs
4.5% 3.0% -110 $959 2.9%
SUBMARKET TRENDS
• Elevated
9% demand for Class B assets boosted average
Johns Creek/Suwanee/
3.0% 3.4% -140 $1,325 0.8% prices by 21 percent during the prior four quarters to
Rate
SALES TRENDS
Buford
$115,000
6% per rental. These buildings changed hands
1.5% with returns in the high-5 percent area.
Northeast Cobb/Woodstock 3.6% -20 $1,230 5.0% 3%
0%
Outlook: Strong property performance continues to
Far East Atlanta Suburbs 3.6% 50 $984 7.2% attract institutional
0% and larger buyers as properties in the
14 15 16 17 18* 00 02 04 06 08 10 12 14 16 18*
$20 million-plus range are highly targeted.
Henry County 3.9% -50 $1,054 4.6%
$112 32%
16
Year-over-Year Growth
12
Far South Atlanta Suburbs 4.1% -70 $1,095 6.8%
$56 16%
8
Far North Atlanta Suburbs 4.1% 0 $1,030 7.2%
4 $28 8%
Overall Metro 4.8% -70 $1,191 6.0%
0 $0 0%
14 15 16 17 18* 14 15 16 17 18*
7%
e
Multifamily Research | Market Report
CAPITAL MARKETS
Fed meeting. After the Federal Reserve lifted overnight rates and
Apartment Mortgage Originations maintained a positive economic outlook, long-term interest rates have
By Lender
pushed higher. The 10-Year Treasury yield has quickly traded toward
100% the 3.25 percent range, which is prompting lenders to pass on the
Percent of Dollar Volume