While Atlanta’s apartment occupancy trailed the U.S. average significantly at the beginning of the current cycle, large gains in recent years have helped close the performance gap.
Occupancy in Atlanta was at 95.4% in 3rd quarter. This rate was 40 basis points (bps) ahead of the year-ago reading and well ahead of the market’s five-year norm. Occupancy has now hovered above the 95% mark for four consecutive quarters.
While occupancy in Atlanta remains below the national average (96.1%), it’s not as far off as it used to be. During the first four years of the current economic cycle, which started in early 2010, Atlanta’s occupancy showing trailed the U.S. norm by an average of 310 bps. The gap started closing significantly in 2014 and the average difference has been running closer to 100 bps since 2016.
Occupancy by product class is tightly clustered in Atlanta, with Class C units leading the charge at a rate of 95.7%. Healthy occupancy in the Class C stock, specifically, is significant. Like most Sun Belt markets, Atlanta’s apartment base consists of a large slice of product built in the 1980s, when construction deals were rampant. While this product had been chronically underserved, recent rent growth has left some renters priced out of more expensive product and left only with options in this plentiful sample of lower-end Class C stock.
For more on the apartment sector in greater Atlanta, watch the recent RealPage Asset Optimization webcast, Up Close and Local: Atlanta Market Update.