Atlanta apartment prices soaring past peak

Posted on August 6, 2013

It’s becoming an understatement to say metro Atlanta apartment values are recovering.

And the recovery is not limited to one submarket. Take for example three recent multifamily transactions.

In Forsyth County, Texas-based Milestone Management bought the 346-unit Preston Pointe at Windermere for $46 million, according to research firm Databank Inc.

The more than 10-year-old project had sold in 2007 for $36 million.

Along the Atlanta Perimeter, AIG Global and Lincoln Property Co. bought Dunwoody Station for $73 million, Databank said. Dunwoody Station, a 530-unit project developed more than 20 years ago, last sold in 2009 — for just $47 million.

In Buckhead, Canadian investor Venterra Realty paid $50 million for the 324-unit Tuscany at Lindbergh. That’s within about $1 million of where the project’s value stood seven years ago. Interestingly, Tuscany at Lindberg was previously owned by Equity Residential. The company ranked as metro Atlanta’s sixth largest apartment owner until last year, when it announced it was pulling out of Atlanta and other non-core markets.

The sales come as apartment developers continue putting more Atlanta projects into their pipeline, especially along the Ga. 400 corridor, Midtown and hip intown neighborhoods such as Old Fourth Ward. In Buckhead and Brookhaven and in parts of Midtown, where some developers have already delivered their units to the market, they might are probably eyeing the chance to sell their apartment projects at near record prices.

For the newest properties, or even older ones in well-connected job centers such as Central Perimeter, apartment prices are either back to the peak of the mid-to-late 2000s, or exceeding it, said Chris Spain, an executive director with Cushman & Wakefield’s multifamily practice. That’s because rents — which at the depth of the downturn might have been off by 25 percent — have climbed all the way back.

“In many cases we have even bypassed peak rents of ‘07,” Spain said.

Not all investors are convinced such rapid rent growth is sustainable, especially as more apartment units are finished and put on the market for rent. But, for now at least one Atlanta real estate sector is seeing prices climb back to the peak — and, more often, recently, blow right past it.