Westmount Realty Capital on Atlanta’s Strong Position

Managing Director Curtis Walker is confident in the metro's long-term growth. Here's why.

Curtis Walker, Managing Director of Multifamily Acquisitions, Westmount Realty Capital.

Curtis Walker, Managing Director of Multifamily Acquisitions, Westmount Realty Capital. Image courtesy of Westmount

Atlanta had a strong year for multifamily investment. According to Yardi Matrix data, the metro recorded a total of $14.4 billion in sales in 2021, more than the previous two years combined. At the same time, demographic growth remained on an upward trajectory, with new large commitments from the likes of Microsoft and others, ensuring that demand will endure going forward.

To learn more about the growing potential of Atlanta’s multifamily market, Multi-Housing News reached out to Curtis Walker, managing director for multifamily acquisitions at Westmount Realty Capital. The company has had a presence in Atlanta for some time but made its multifamily debut last year. Walker joined Westmount in 2020, having more than three decades of real estate experience.

What made you invest in multifamily in Atlanta?

Walker: The first multifamily property Westmount purchased is in the Perimeter submarket of Atlanta, surrounded by companies expanding, like State Farm and Mercedes Benz.

Since our initial investment, the Atlanta multifamily supply has been stable and well absorbed from the continued migration from other parts of the country and internal growth. Atlanta’s population growth is projected to be fourth in the country over the next four years. Also, Atlanta’s airport, low tax environment and universities are the biggest drivers for company relocations and growth in the region. These drivers are a major part of why the Atlanta market ended up No. 1 based on sales.

From your perspective, how did the Atlanta multifamily market perform in the past couple of years? How have tenants’ needs changed in the wake of the global health crisis?

Walker: In 2021, the Atlanta multifamily market had a record year. The investment market has been on fire because of investors returning after 2020 and all the lockdowns.

The pandemic gave residents new insights into their homes and activities based on lifestyle changes. We saw the need for larger spaces because of home offices. Residents started using amenities more, but only after they were closed for safety. Going forward, homes will include larger spaces for home offices, so residents don’t have to sacrifice bedroom space. Also important, properties will include office or business centers and common areas for residents to work from.


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What areas of metro Atlanta stand out to you the most in terms of investment potential?

Walker: Atlanta is at an interesting point in time today—we’ve seen strong growth in less active areas in the metro as a result of new businesses and employees moving to those areas. New employment bases are developing in several parts of the standard metropolitan area. The northeast area has SK Innovation’s new $2.5 billion electric car battery plant and, Rivian’s new $5 billion electric truck plant East of Atlanta, on Interstate 20. As the suburbs grow with new employers, supply will continue to be constrained with land use and infrastructure issues.

The in-town neighborhoods of Buckhead and Midtown have absorbed the excess supply from two years ago. At the same time, employment is still expanding because of the educational and financial bases. The challenge is that rents in the infill in-town neighborhoods could present affordability issues sooner than the suburban submarkets. For the near term, we are more focused on the suburbs but continue to evaluate the entire market.

How does multifamily investment in Atlanta compare to other Sun Belt cities, in your experience? 

Walker: The current market around the southeast has caused not only Atlanta but also the secondary markets to accelerate historical growth. The investment returns in multifamily have narrowed between the large markets and the secondary ones. One reason we like investing in Atlanta is because of its diversified employment base and the liquidity this a market this size provides.

What about construction? A recent Yardi Matrix report showed that supply had somewhat fallen behind demand during the summer months of 2021. What do you foresee as unique challenges in meeting multifamily demand going forward?

Walker: Multifamily has the same challenges as single family. The first challenge is land availability as multifamily is still not a preferred use in most communities. Not that Atlanta is out of land, but there are virtually no zoned sites and zoning takes longer and is constrained in many areas due to the various stakeholders. Secondly, the cost projections for development are very challenging and affecting delays in debt and equity financing. Lastly, once approved and financed, scheduling can be a challenge with general contractors and labor to complete the project on time.

Atlanta. Image by Kyle Sudu via Unsplash

The metro’s unemployment rate is now below pre-pandemic levels. In December, the figure was 2.3 percent, according to preliminary BLS data. Are there any economic sectors that have the potential to change the multifamily business landscape in the metro?

Walker: The businesses and industries migrating to the area today have the potential to change the multifamily business landscape in Atlanta. Microsoft has committed to its new campus in town and is a major driver and confirmation of tech being a larger player going forward in Atlanta. The tech industry moving to Atlanta is the result of the private and public focus on technology and the universities led by Georgia Tech. The other industry marking Atlanta as a national player is in electric technology for batteries and auto manufacturing.

Could you share with us what plans you have for Atlanta’s multifamily market in 2022?  

Walker: In 2022, Westmount plans to continue competing in a very competitive market to expand our base here in Atlanta. We work to find opportunities that may require more work or a deeper understanding of a submarket to create value for us and Westmount’s partners. We will also work on the growth corridors with the surrounding edge cities to build our base in Atlanta’s multifamily market.

Where would you say that the metro’s multifamily market is headed this year, and what issues do you foresee rising?  

Walker: For 2022, the market will resemble 2021 with continued rent growth, which should level off later in the year. Higher rents will be driven by the number of properties increasing prices because of property renovations and the continued lack of multifamily supply. Developers are very active but cannot bring supply in quickly enough to create excess supply. As the market normalizes later this year, the issue facing most cities is affordability and how it will be affected and addressed by communities. Lastly, as debt rates move, the a risk activity will slow as the market adjusts.