Atlanta’s robust economy, sustained by a diversified business environment, has hit a COVID-19 roadblock. The multifamily market, which had already registered a slight softening, saw rents slide 0.2 percent, on a trailing three-month basis through June, to $1,292. Meanwhile, the occupancy rate in stabilized properties dropped to 93.5 percent as of May, down 70 basis points from 12 months prior.
Employment growth turned negative for the first time since 2010. All sectors registered year-over-year contractions, with unemployment jumping from 3.2 percent in January to 12.7 percent as of April, before improving to 10.3 percent in May. Between mid-March and mid-July, more than 3 million unemployment claims were filed across the state. The leisure and hospitality sector had shrunk by more than 34 percent as of April, and professional and business services—Atlanta’s second-largest sector—had contracted by 8.8 percent. The latter, however, showed promise, with several tech companies signing large office leases across the metro.
Atlanta marked cycle highs in 2019 for both transaction volume and deliveries. Deals in the first quarter kept pace, but activity slowed significantly starting in April. Developers remained active, with 3,880 apartments delivered through June and an additional 22,593 units underway. Considering the fallout of the health crisis, we expect Atlanta rents to drop 5.9 percent this year.