High supply has led to headaches for many multifamily landlords across the nation, but the pain could be coming to an end soon for those with a presence in Atlanta thanks to a couple of major economic trends.
Rents in the metro area are expected to grow 2.1 percent in 2025 year-over-year to an average of $1,633 per month, according to a report from Marcus & Millichap. That would mark the first year that Atlanta's multifamily sector has seen positive annual growth in that category since 2022. And it's thanks to two big economic projections by Marcus.
One is the young workforce flocking to the city for job opportunities. Only three major U.S. markets saw a bigger surge in adding residents in the 20-34-year-old range than Atlanta during 2024. The trend is poised to continue in 2025 and will get some help from a slowdown in deliveries, as Marcus Projects the category to hit a two-year low.
Those elements "will drive greater downward pressure in vacancy across over a quarter of all submarkets in the metro," Marcus wrote.
"Notably, Midtown and Northeast Gwinnet County will see over a 40 percent decline in deliveries year over year, likely accentuating their already below-market level vacancies. The greater influx of renters will support both new and existing supply, pushing overall vacancy down and ushering in a return to upward rent momentum."
The other is an expected better balance between supply and demand, which is set to lead to investment activity. For the past eight quarters, Atlanta's multifamily segment has seen above-average net absorption, according to Marcus. It expects submarkets with strong fundamentals such as high household incomes and large corporate bases to be among the leaders in investment activity. Namely, Marcus listed Midtown, Buckhead and Sandy Springs as areas that are poised to see "continued activity" thanks to their wealthy population and strong market of college graduates.
Plus, even lower-tier Class C assets in proximity to the central business district are likely to see similar demand as well, as some look for more affordable renter options.
Marcus in 2025 is also forecasting Atlanta to add 42,000 jobs and multifamily vacancy to drop by 10 basis points to 7.6 percent.