STAR STUDENT The multifamily sector has been the one commercial
real estate market that has truly thrived over the past sev- eral years, as more Americans have opted to rent instead of purchase single-family homes. Metro Atlanta’s apart- ment vacancy rate stood at just 7.8 percent at the end of the second quarter, according to MPF Research. An im- proving job market and the entrance of more members of Generation Y into the workforce should keep demand strong. Because of the sector’s outstanding operating funda-
mentals, new construction is beginning to ramp up, with almost 6,000 new apartment units expected to come on- line in metro Atlanta in 2013, according to Marcus & Millichap. Predictably, investor interest in the sector, both nation-
ally and in Atlanta, has been white hot, but that could begin to cool. Think about Yogi Berra’s line about a popular restaurant: “Nobody goes there anymore — it’s too crowded.” With so many investors chasing apart-
ments and driving up the prices, it’s inevitable that some begin to seek to put their money into higher-yielding as- sets. This doesn’t mean the sector is in trouble — investor interest was just at a pace that couldn’t be sustained.
A LIGHT AT THE END OF THE TUNNEL Suffice to say, Atlanta’s commercial real estate markets
don’t resemble the boom-boom days of 2004, 2005 and 2006, but that’s probably a good thing. Smarting from this latest round of lessons about building too much, bor- rowing too easily and banking on unending increases in valuation, the industry as a whole should continue to grow and improve at a more sustainable pace in the months and years ahead. Meanwhile, commercial brokers should expect a busier
2014. And that’s not blind optimism. SUMMEY ORR IS THE MANAGING PARTNER
OF HARTMAN SIMONS, AN ATLANTA-BASED COMMERCIAL REAL ESTATE LAW FIRM.
30IGEORGIA REALTOR®
NOVEMBER I DECEMBER 2013
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