Top 5 Atlanta Submarkets for Construction Activity
- Jul 01, 2020
Development activity in Atlanta has been picking up steam over the past two years, with more than 11,500 units completed in 2019, up 14.4 percent from the previous year, according to Yardi Matrix. This year, pre-pandemic forecasts anticipated that deliveries would further increase, to more than 16,000 apartments.
As of May, a total of 22,466 units were underway in Atlanta, with 14,035 originally scheduled for completion in 2020, based on Yardi Matrix data. While housing demand has bounced back from its mid-April trough, it is still uncertain how many projects scheduled to deliver by year-end will actually come online this year in the metro. Here’s a breakdown of the top Atlanta submarkets leading construction activity as of May.
Construction activity is robust in the Suwanee-Buford submarkets, following two years of rather modest deliveries. Last year, a 240-unit community reached completion, boosting deliveries by more than 80 percent from the previous year. However, at the end of May 2020, developers were working on four projects totaling 1,086 units, more than the total number of apartments that came online over the past five years. What’s more, all four communities are slated for completion as early as next year, marking the highest number of units to be delivered in the submarket in a single year.
Alliance Residential Co. and The Carlyle Group are working on Broadstone Sugar Hill, a 316-unit community in Sugar Hill. Developed with the help of a $36.9 million loan from Cadence Bank, the project is expected to come online in the first quarter of 2021. Once completed, the community will include one- to three-bedroom apartments, as well as a fitness center, community room, clubhouse and swimming pool.
No new projects came online in the submarket in 2019. Prior to that deliveries had declined by two-thirds in 2018 compared to the previous year, dropping to less than 100 units. This paved the way for a boost in development activity, as occupancy continued to improve in pre-COVID-19 quarters. While there were only two projects underway at the end of May, these accounted for 19.7 percent of Decatur’s existing stock. If both projects reach completion according to plan and come online by the end of this year, 2020 will see the highest number of units completed in a single year in Decatur in more than a decade.
Cousins Properties and AMLI Residential are developing the largest multifamily project in the submarket, the 330-unit AMLI Decatur. The property, which is expected to come online in the third quarter, will include studios and one- to three-bedroom units averaging 913 square feet.
3. Grant Park/East Atlanta/Panthersville
Last year, following no significant deliveries in 2018, developers were busy in the submarket. Two communities totaling 550 units came online in 2019, marking the highest level over the past decade. Before the coronavirus crisis, developers were confident that 2020 would continue on an upward trend, as four projects were slated for completion this year encompassing 1,210 apartments, the highest level on record for the submarket. In total, developers were working on five projects totaling more than 1,400 units as of May. That’s equal to 30.5 percent of the multifamily inventory.
Greystar is expanding its Atlanta footprint with the development of Elan Madison Yards, a 495-unit project at 230 Bill Kennedy Way SE. The firm secured a $70.1 million construction loan from Northwestern Mutual Life Insurance Co. The community, which could come online as early as the end of the year, is expected to include one- and two-bedroom units ranging from 557 to 1,567 square feet.
2. Midtown West/Centennial Place
Benefiting from its proximity to downtown and a series of high-profile employers in the area, the submarket’s construction activity has boomed over the past two years. In 2018 and 2019, nine projects totaling more than 2,700 units came online, exceeding combined deliveries in the previous eight years. What’s more, development was going strong before the pandemic, with 3,833 apartments underway, equal to 39.1 percent of the submarket’s existing stock. Five projects encompassing 1,526 apartments were slated for completion by year’s end, but the outbreak is expected to impact deliveries.
The Allen Morris Co. is the developer of the largest project in the submarket—the 409-unit Star Metals Residences. Last month, the firm selected CF Real Estate Services to manage the upcoming nine-story property, which is expected to come online this year and is slated to feature common-area amenities such as a fitness center, swimming pool and clubhouse. Once completed, Star Metals Residences will be one of the submarket’s largest communities.
1. Haynes Manor/Peachtree Hills
Located between interstates 75 and 85, the submarket has seen an uptick in development activity in recent years, with 1,100 units delivered over the past decade. Despite having no completions in 2019, that quantity is still quite high for a submarket its size and represents more than half its existing stock. Demand for new supply is increasing as occupancy has continually risen, prompting developers to zero in on the submarket. At the end of May, 932 units were underway, equal to 42.3 percent of inventory.
Lennar Multifamily Communities is working on Gentry Buckhead Village, a 290-unit project developed with the help of a $58.7 million construction loan from Santander Bank. Depending on the extent of the pandemic’s impact, the community may come online as early as this year and will include studios and one- to three-bedroom units ranging from 531 to 1,506 square feet, along with 6,000 square feet of retail space. At full build-out, Gentry Buckhead Village will be the submarket’s seventh-largest community to date.