SOUTHEAST SNAPSHOT, JANUARY 2005

Atlanta Multifamily Market

Mike Crawford Vice President Brown Realty Advisors

Impacted by the sluggish economy and low interest rates, overall apartment construction in Atlanta has continued to slow. Land prices have remained high, hindering the ability of many to put a project together. As one developer noted, it is not that Atlanta’s apartment community is overbuilt, but it is under demolished.

This very well may be the case as a recent trend of redevelopment has emerged — redeveloping not only existing apartment communities, but also office buildings, shopping centers, industrial buildings and car dealerships. These future projects will include a mix of uses with apartment, office, condo and retail components.

Several new mixed-use redevelopments will incorporate apartment components in the near future. These properties, located throughout the city, include Atlantic Station in Midtown, Edgewood Retail District in Little Five Points/Edgewood, Perimeter Center Place in Dunwoody/Sandy Springs and Lindbergh Plaza in Buckhead.

In Atlanta’s more urban areas, mixed-use redevelopments will offer greater proximity to amenities like retail, restaurants and public transportation. Developers are looking to attract young working professionals who may prefer a more urban living experience. In addition, larger, more spacious clubhouses are being created with higher quality finishes. These areas are meant to provide tenants with a central place to gather and socialize; where they can relax, have a coffee, check e-mail or watch a sporting event with friends.

The Sandy Springs/Dunwoody submarket, with a variety of proposed projects, will continue to transform in 2005. A new Dillard’s department store is under construction at Perimeter Mall and the Park Place specialty retail center is under redevelopment across the street.

Lincoln Property Company, the apartment component developer of Perimeter Place, will construct a six-story apartment community with approximately 325 units. The site, formerly occupied by two BellSouth office buildings, is located at Perimeter Center West and Perimeter Center Parkway. The overall project will eventually include 500,000 square feet of retail space with a SuperTarget and 27-story condominium tower.

Gables Residential, which previously built Meadow Lane and Gables Metropolitan I and II, plans to build Gables Metropolitan III at Ashford-Dunwoody Road and Perimeter Center North. The 400-unit property will be situated on a 10-acre site where an existing 110,000-square-foot office building will be demolished. The first units are expected in November, with construction completed in early 2007.

As of mid-year 2004, Class A rents averaged $960, followed by Class B at $815 and Class C at $725. Rental concessions average approximately one to one-and-a-half months rent on a 12-month lease.

Through mid-year 2004, Atlanta’s vacancy rate decreased to 9.6 percent, down from 10.1 percent at year-end 2003. The majority of the region’s submarkets recorded improvements in vacancy during the past 12 months. Buckhead, Sandy Springs and Midtown continue to post some of the lowest vacancy rates at 6.1, 7 and 7.7 percent, respectively.

— Mike Crawford, vice president, Brown Realty Advisors


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