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Q4 Atlanta Multifamily Market Report

Market Overview

Atlanta’s multifamily market saw some relief and improved leasing activity in the middle of 2023. Despite this, adverse macroeconomic conditions and an overhang of new supply remain obstacles for 2024. Leasing activity increased in Q3 2023, and Atlanta starting Q4 2023 with the strongest positive absorption in nearly two years. This growth was primarily seen in the highest-end luxury properties, while lower to middle-income rental properties continued to face a decline in occupancy. Real estate investors focusing on multifamily properties have been quite active in Atlanta, and the market has consistently ranked as one of the leading markets for multifamily investments in the past year.


However, despite this strong investor interest, the total sales volume has dropped considerably due to increasing interest rates, making obtaining loans more challenging. Transaction activity in 2023 was more than 75% less than 2022. Despite decreasing transaction volume, prominent institutional investors remain optimistic about Atlanta’s prospects for long-term population expansion, job market growth, and the resulting demand for multifamily properties.


Job Growth YOY

Atlanta’s job market has made a robust recovery from the pandemic, with 5% more total jobs in the market than there were in February 2020. The office-using sectors, including finance, professional services, and tech, have exhibited the most robust job growth. According to Oxford Economics, Atlanta’s aggregate office-using job sector has grown more than 10% since Q1 2020. However, layoffs by tech giants such as Google and Microsoft have led to increased concerns regarding job growth trajectory throughout the market for the upcoming quarters. However, despite these concerns, Atlanta remains an appealing market for corporate relocations. Well-known companies, including Microsoft, Google, Cisco, Invesco, Mircon, and more, have renewed their leases or opened new offices in the market in the last few years.


Despite having a lower concentration of education and health services employment compared to the national average, the market has seen substantial job growth in the two sectors in recent years. Several healthcare systems are in the process of building new facilities, and the healthcare sector is ready to expand to meet the needs of the increasing population in the metro area.


Atlanta boasts lower living and business costs compared to major East and West Coast metros, positioning it as a competitive destination. This advantage is expected to drive further population growth and job opportunities, sustaining Atlanta’s upward trajectory in economic development.


A decline in consumer spending and an increase in automation has caused a slowdown in industrial-using sectors. However, employment still remains above prepandemic levels. Major firms, including Amazon, Home Depot, HelloFresh, Freshly, etc., have boosted blue-collar job growth in recent years.


Atlanta has also emerged as a major electric vehicle manufacturing hub due to federal investments in the market. A new SK Innovation facility in northeast Atlanta is set to employ thousands of workers and has the potential to serve as one of the world’s largest hubs of electric vehicle battery manufacturing. In east Atlanta, Rivian is set to build a new $5 billion electric vehicle manufacturing plant, employing about 7,500 workers.


A significant factor that continues to attract residents and large corporations to the market is Atlanta’s transportation and logistic hub status, which is bolstered by the prominent Hartsfield-Jackson Atlanta International Airport. Norfolk Southern is an excellent example of the market’s growing attraction. The company relocated its corporate headquarters to Midtown in 2021, contributing to around 850 new jobs with an average salary above $100,000. The airport and generous tax incentives have also helped the region’s growing film and entertainment industry, which is responsible for $3 billion in annual direct spending in the state.


Market Performance

Population Growth

The population of Metro Atlanta has grown by more than 900,000 residents since 2010. This represents one of the largest nominal gains in the country.


Vacancy Rate & Net Absorption

Following six consecutive quarters marked by weak or negative absorption, the demand in the Atlanta multifamily market saw a resurgence starting in spring 2023 and extending through the fall. Nevertheless, persistent supply deliveries and the enduring effects of a slower 2022 have contributed to a continual increase in vacancies. Atlanta’s current vacancy rate stands at 11.9%. This is a notable climb from the nearly 5% experienced just two years ago, which marked a twenty-year low. The imminent completion of a near-record construction pipeline is anticipated to further elevate vacancies in the upcoming quarters. Approximately 31,000 units are currently under construction in Atlanta, constituting a 6.1% expansion of the existing inventory.


Nonetheless, a projected reduction in new construction starts is expected to alleviate supply pressures once the properties currently under construction are completed.


The increase in absorption is highly attributed to higher-end units, while absorption has slowed in Class C and Class B properties. While Class A properties witnessed a net gain of over 10,000 units in the last 12 months, Class C properties experienced a decrease of 2,700 units, while Class B dropped by 2,400 units. This negative absorption in the more affordable segment of the market suggests that the growing cost of living may be constraining household formation, particularly among low- and middle-income demographics.


Rent Growth

Annual rents in Atlanta are experiencing some of the most significant drops in the country. Although absorption increased in the last two quarters, the negative occupancy trends in the previous six quarters, coupled with a substantial number of new developments in progress, are likely to result in more modest, or possibly no, rent increases in the coming quarters. Class A properties have seen rents stall the most and currently down 3.9% year-over-year (YOY). Rents in Class B properties are down 2.2%, while rents in Class C properties remain positive, up by 1.1% YOY.



Construction starts have fallen by about 44% over the past three quarters. Despite this, the current pipeline still remains at near-record levels. Approximately 31,000 units are currently under construction, a 6.1% expansion of inventory. Suburban submarkets have seen an increasing portion of recent construction activity. In particular, Gwinnett County and North Gwinnett have seen a surge in new development projects.


Atlanta’s multifamily market is experiencing a divergence between high-end and lower-end properties, with challenges related to vacancies and declining rents. However, the market’s job market, population growth, and attractive business environment continue to drive investor interest and long-term optimism for the region’s economic development.


To view the Q3 Multifamily Market Report for Atlanta, click here.

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