The Atlanta metropolitan market, already the ninth most populous in the nation, has become one of the fastest-growing in the country in terms of population growth, spurring a surge in rent prices and multifamily activity.

According to Carl Whitaker, director of research and analysis for RealPage, Georgia as a whole was one of the leading states for population growth from July 2020 to July 2021. Whitaker attributes Atlanta’s high rent growth — 22.7% year over year in 2021 alone, according to a Marcus & Millichap report — to a perfect storm of industry and demographic trends. These include low levels of new apartment construction in recent years, strong demand from a growing population and a base of new renters with higher incomes than the market average.

Starts and completions

The Atlanta metro market saw 7,430 new units completed for the year ending in the first quarter of 2022 — down to nearly half of the unit completions seen in the previous period, with net absorption outpacing completions for four years running, according to Marcus & Millichap. However, with more than 25,000 new units in progress, the metro has one of the most active pipelines in the nation.

“Atlanta was a bit of an anomaly heading into the pandemic as new apartment construction was actually declining,” Whitaker said. 

Downtown and Midtown Atlanta have seen the strongest inventory growth over the last five years at 38% and 27% of total stock, respectively, since the start of 2017, Whitaker said. RentCafe highlighted Midtown last year as one of the most “apartment-crazed” neighborhoods in the nation, second only to downtown Los Angeles, with 5,936 new units completed between 2017 and 2021, or one fifth of the city’s stock total.

Rent trends

Rents in the Atlanta metro rose by 20.2% YOY in the first quarter of 2022, and the current average rent stands at $1,627 per month, according to RealPage data. However, viewing the data broken down by submarket reveals a wide range of delivery numbers, rent growth rates and average rent prices. 

At just under 500,000, residents of the city of Atlanta comprise only 8% of the population of the entire metro area, according to Census data. In a measure of rent growth in urban Atlanta alone, Rent.com found that rents for one-bedroom apartments fell by 7% in 2021 compared to the previous year, down to an average of $1,602. 

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“Atlanta has some solid multifamily tailwinds, including a lot of migration and one of the Sun Belt’s most robust economies."

Carl Whitaker

Director of research and analysis, RealPage

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Among the possible causes for this decline is a larger supply of units in urban Atlanta compared to other markets, according to Brian Carberry, senior managing editor of Apartment Guide and Rent.com. 

“There are a lot of available units by comparison to some [other cities],” Carberry said. “So the competition isn't as fierce…and renters have a little bit more leeway in terms of being able to negotiate and getting certain deals.”

Top multifamily players

As of April, the most active multifamily developer in Atlanta this year is Fort Washington, Pennsylvania-based Toll Brothers, with a total of 625 new apartments started in the metro area since January 2022, according to RealPage data.

Greystar Real Estate Partners is the largest apartment manager in the Atlanta market, with 24,211 units under management across 81 properties, according to the Atlanta Business Chronicle’s annual list of apartment managers. First Communities Management is second with 19,000 units, and Cushman and Wakefield is third with 16,695 units.

Jobs and migration

In the Atlanta metro, job growth and in-migration have gone hand in hand. While Whitaker notes that its growth lagged slightly behind markets like Phoenix and Dallas, Atlanta had regained all of the jobs lost since the start of the COVID-19 pandemic by the end of 2021, and stands at an unemployment rate of 3.2%, just above the record of 2.8% set in December.

Recent corporate expansions and investment in metro Atlanta – including EV manufacturer Rivian, Intuitive and Visa – have drawn a large number of high-paying jobs to the area, according to Marcus & Millichap. This in turn has expanded Atlanta’s labor force, as the already-low unemployment rate indicates that employers will recruit from outside the area. The trend is expected to fuel demand for Class A units and ongoing high rent growth. 

Marcus & Millichap anticipates the creation of 75,000 new jobs across the entire Atlanta metro in 2022, driven by ongoing in-migration and outside recruitment. On the rental side, the report predicts a 9.8% increase in effective rent across the entire year, raising the average effective rent to a record $1,754 per month. Even higher rent growth, potentially above 10% for the year, is anticipated in its suburban and exurban markets.

“Atlanta has some solid multifamily tailwinds, including a lot of migration and one of the Sun Belt’s most robust economies,” said Whitaker. “There’s a lot of room for additional development, [particularly in] some of the market’s suburban areas that have seen a lot of population growth in recent years. That seems to be an opportunity going forward."

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