HISTORICAL APARTMENT OCCUPANCY

US SOUTH ATLANTA US SOUTH ATLANTA

MARKET REPORTATLANTA

www.colliers.com/atlanta

MARKET INDICATORS

Q2 2014OUTLOOK

VACANCY

CONCESSIONS

RENTS

TRANSACTIONS

PRICE PER UNIT

CAP RATES

Q1 2014 | MULTI-FAMILY

HISTORICAL APARTMENT RENTS

87%88%89%90%91%92%93%94%95%96%

2012

2013

2014

Source: MPF Research $400$500$600$700$800$900$1,000$1,100$1,200

2012

2013

2014

Source: MPF Research

Steady Growth Bodes Well for Atlanta’s FutureThe future is bright for the Atlanta metro area despite lagging behind other Southern cities coming out of the recession. Job creation in the area has been spurred by corporate expansion such as State Farm and athenahealth as well as a significant growth in high-tech employment; Fiserv, an IT provider for financial services, is investing $41 million in a new campus in Alpharetta and expects to add hundreds of jobs throughout the remainder of this decade. According to the Bureau of Labor Statistics, first quarter non-farm employment is up 51,500 jobs (2.2%) year-over-year and up 101,500 jobs (4.4%) in the past 24 months. It is this slow but steady growth that Atlanta hopes to sustain for years to come.

Looking to the multifamily market, Atlanta’s occupancy dropped 50 basis points to finish off the first quarter at 92.5%, mainly due to seasonal occupancy weakness seen during the winter months. Year-over-year the metro’s occupancy increased 100 basis points after a slight dip earlier in 2013. Older properties averaged occupancy rates in the 88% to 89% range, while apartments built in 1980 or newer boasted occupancy rates averaging in the 93% to 94% range.

As occupancy in the Atlanta has continued to increase in recent quarters, apartment owners have begun to aggressively push rents. Effective rents increased by 20 basis points during the first quarter; on an annual basis the metro’s effective rents are up 4.3%, ahead of the US (3.3%) and Southeast regional (2.7%) averages. This marks the 14th consecutive quarter of annual rent growth for the Atlanta MSA. Apartment owners in the northern suburbs are expected to continue aggressively pushing rents while core, infill assets will experience much more modest rent growth due to the influx of new product during the next 12 months.

According to REIS, as of late April, 6,559 market-rate apartments in 23 projects are currently under construction in the metro Atlanta area. Of these 23 projects under construction, 15 projects totaling 4,189 units are slated for completion in 2014. This number is staggering compared to the 381 market-rate units delivered in 2012 and 2,516 market-rate units in 2013, but recent absorption figures have shown that the market can easily bear the new deliveries. Despite the 2,516 market-rate deliveries in 2013, net absorption for the year was 5,954 units. Following this trend of significant demand, the first quarter 2014 saw 215 units delivered to the market and 1,218 absorbed net. Clearly Atlanta is starting to turn the corner in terms of economic recovery and looks to solidify itself as the powerhouse of the South that it once was.

Updated May 2012

0%

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03

2004

2005

2006

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Millions

ATLANTA MULTI-FAMILY | Investment Volume & Cap Rates

Sales Volume AVG Cap Rate Source: Real Capital Analytics

ATLANTA MULTI-FAMILY

Investment for apartment properties in the Atlanta market has increased by 23.9% by 4Q13 from the previous year in total volume. There have been 206 properties sold YE 2013 representing an average of 72,000 per unit. The average cap rate for apartments in the Atlanta market dropped 20 bps from the end of 2012 to 6.9% YE 2013.

UPDATE Recent Transactions in the Market

SALES ACTIVITY

PROPERTY SUBMARKET SALES DATE SALE PRICE # UNITS PRICE/UNIT BUYER

Jasmine At Winters Chapel Northlake 10/03/2013 $33,000,000 592 $55,743 Spire Capital Pty LtdThe Falls At Gwinnett Place NE Atlanta 11/25/2013 $31,981,300 520 $61,503 Spire Capital Pty LtdBexley Apartment NW Atlanta 11/01/2013 $30,600,000 496 $61,694 American Property Holdings CorpPromenade At Berkeley NE Atlanta 12/12/2013 $33,700,000 492 $68,496 Oak Coast PropertiesPinewood Manor South Atlanta 12/04/2013 $9,650,000 460 $20,978 Anthos Properties, LLC

Jasmine At Holcomb Bridge North Fulton 10/25/2013 $26,302,500 437 $60,189 Resource Real Estate OpportuntyMarquis 2200 Northlake 10/17/2013 $51,900,000 399 $130,075 CWS Capital PartnersAlderwood Trails Northlake 11/08/2013 $16,500,000 399 $41,353 Kim Rock Capital, LLCWoodlands Park NW Atlanta 12/17/2013 $7,900,000 386 $20,466 City of MariettaWoodchase NE Atlanta 11/8/2013 $16,575,000 380 $43,618 Mesa Capital Partners, LLC

Source: CoStar

MULTI-FAMILY PIPELINE | Urban Atlanta

# NAME DEVELOPER MARKET # UNITS

1 98 14th Street Arquitectonica Int’l Corp Midtown 1,163

2 Simon Properties Lenox Mall Simon Property Group Buckhead 750

3 Prominence in Buckhead Crocker Partners Buckhead 703

4 JBL Sandy Springs Gateway JLB Partners C. Perimeter 700

5 3449 Lakeside Drive AMLI Residential Props Buckhead 640

6 Parkview on Peachtree Spruce Street Partners Northlake 500

7 250 Piedmont Paces Properties Downtown 453

8 22 14th Street The Related Companies Midtown 400

9 811 Peachtree St Integral Development LLC Downtown 391

10 Grant Street Walton Communities Downtown 386

11 Buckhead Atlanta (u/c) Oliver McMillan Buckhead 370

12 1138 Peachtree St Tivoli Properties Midtown 370

13 SkyHouse Buckhead (u/c) Novare Group Buckhead 364

14 Crescent Terminus (u/c) Crescent Properties Buckhead 355

15 Amli Arts Center AMLI Residential Props Midtown 351

16 60 11th Street Selig Enterprises, Inc. Midtown 350

17 1160 Hammond (u/c) Northwood Ravin C. Perimeter 350

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P. 2 | COLLIERS INTERNATIONAL

MARKET REPORT | Q1 2014 | MULTI-FAMILY | ATLANTA

RON CAMERON WILL MATHEWS

UNITED STATES:

Southeast Multi-FamilyInvestment ServicesPromenade | Suite 8001230 Peachtree Street, NEAtlanta, Georgia, 30309TEL +1 404 888 9000FAX +1 404 870 2845

RESEARCHERS:

AtlantaScott Amoson | Director of ResearchEdward Alexander | Financial AnalystDany Koe | Research AssociatePromenade | Suite 8001230 Peachtree Street, NEAtlanta, Georgia, 30309TEL +1 404 877 9286FAX +1 404 870 2845

482 offices in 62 countries on 6 continentsUnited States: 140Canada: 42Latin America: 20Asia Pacific: 195EMEA: 85

• $2 billion in annual revenue

• Over 1.1 billion square feet under management

• Over 13,500 professionals

This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 480 offices throughout more than 62 countries worldwide.

www.colliers.com/atlanta

Accelerating success.Accelerating success.

TOP EMPLOYERS

COMPANY # EMPLOYEES

Delta Airlines 27,000

Wal-Mart Stores 26,000

AT&T 19,000

Emory University 17,994

Publix Supermarkets 9,453

The Home Depot 9,000

Emory Healthcare 8,648Source: Moody’s Analytics

WORLD CLASS UNIVERSITIES, COLLEGES

UNIVERSITY CITY # STUDENTS

University of Georgia Athens 34,536

Georgia State Atlanta 32,000

Kennesaw State Kennesaw 24,600

Georiga Tech Atlanta 21,475

Georgia Perimeter Decatur 21,123

Emory Atlanta 13,898

University of West GA Carrollton 11,952Source: Atlanta Business Chronicle 2013 Book of Lists

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MARKET REPORT | Q1 2014 | MULTI-FAMILY | ATLANTA