SOUTHEAST SNAPSHOT, JANUARY 2007

Atlanta Multifamily Market

The biggest trend in the Atlanta multifamily market, as a result of higher construction costs, is developers creating more options for empty nesters and move-up buyers looking for luxury service amenities that save time and makes lives easier. These range from car washing, concierge and dog walking services to one development — the W Hotel and Residences at Allen Plaza downtown — that even features a helipad on the roof. The buyers in these properties tend to be starved for time and any service that allows them to do things faster or more efficiently is a luxury.

There’s a trend toward high-end properties offering luxury hotel-like services to residents, which is also evidenced at the Stanbury Residences in Alpharetta, Georgia. Buyers are typically professionals and retirees with multiple homes who want to maintain a residence outside the city and still enjoy a lifestyle where they can have it all.

In Midtown, Aqua has been tremendously successful and is almost sold out despite being 1 year away from completion. The project brings the style and amenities of Miami’s South Beach to Atlanta and includes extraordinary details like semi-private elevator halls for the residences.

Onyx and Luxe, both planned near Piedmont Park, combine outstanding design with luxury living. But one of the biggest amenities offered by these developments is their proximity to Atlanta’s premier outdoor public space, which is alive year-round with festivals, concerts, everyday joggers, bikers and people out walking their dogs.

The condominiums of 10 Terminus Place will be at the center of a 16-acre mixed-use development now being constructed in the heart of Buckhead. The Terminus project combines homes with offices, restaurants and retail space at the corner of Peachtree and Piedmont. Homes here will offer “attainable luxury” with high-end finishes selling at affordable prices.

Midtown has seen the highest level of growth in new condominium projects in recent years. This area represents one of the few in Atlanta where residents can experience a truly urban lifestyle, living within walking distance of shopping, dining and public transportation. Donald Trump also has announced plans to build his first project in Atlanta, which will be a condominium tower in Midtown.

Midtown continues to be center of new condo construction in Atlanta. A number of new mixed-use developments planned with street-level shopping along Peachtree will position the area as the new retail Mecca of the city, making the urban lifestyle in Midtown even more dynamic and appealing. The area currently has 140,000 square feet of retail space, and that has the potential to increase by up to another 250,000 square feet, according to the Midtown Alliance.

Atlantic Station — the massive new mixed-use development just west of Midtown featuring shopping, restaurants and a movie theater — will be more and more of a draw to the Midtown area as construction in that development continues.

Buckhead is also home to a number of new high-rise, luxury condominium projects. New residents are attracted to the area because of the variety of shopping, dining and entertainment options nearby, as well as the desire to live closer to work. The Related Group, based in South Florida and the nation’s leading developer of luxury condominiums, recently entered the Atlanta market with plans to develop the 3,800-unit City Place project on East Paces Ferry Road near Lenox Square mall in Buckhead. This submarket will continue to be an area to watch as a number of new high-rise condominium buildings are finished and the planned Peachtree Boulevard project gets underway.

As construction costs have increased, the target buyers in a high-rise, new construction development are retirees or move-up buyers who can afford a pricier condominium. As a result, new homes now under construction are designed with high-end finishes that appeal to these buyers.

The price per square foot for new construction condominiums also is rising. Prices that were on the high-end of the spectrum a few years ago — $300 to $500 per square foot — are considered to be the norm today. And those prices will seem like a bargain a few years from now. But for now, first-time buyers largely have been priced out of new construction and will be turning to the re-sale market.

In the past year, Atlanta has been immune to many of the trends affecting real estate nationwide – specifically, the growing hesitancy in the marketplace and worries about a home price bubble about to burst. But now with all the media attention, this has become a part of the Atlanta psyche as well, even though Atlanta could not be described as a bubble market.

Despite the perception by some that Atlanta is headed into a downturn, there are some key factors that separate it from other markets like South Florida and Southern California. Atlanta has not been a bubble market because it has not had the double digit, huge appreciation that other markets had and therefore the corrections are milder. But because of national press coverage about depreciation in other markets, the wait and see attitude impacting other regions has come to Atlanta.

— David Tufts is the president/founder of Coldwell Banker The Condo Store in Atlanta.

©2007 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.