The Atlanta real estate market is composed of a variety of submarkets, each with its own perks and drawbacks for investors. We have looked at the market over the past few years and determined which of these submarkets are the best investment for home buyers.
Central Perimeter
In 2013, there was a net absorption of more than 600,000 square feet of rentable space in the Central Perimeter area. It has been the top submarket in rentable space for several years in a row. There is no question that the area is the biggest office submarket in Atlanta’s metro area.
The main issue that we’ve seen with the Central Perimeter area is that there is not really any new construction going on. We believe that prices are going to spike in this area because the real estate supply will dry up without new developments. This can be fantastic for owners and investors, but it will eventually cause slow growth in the area.
Buckhead
Everybody who is anybody seems to be investing in Buckhead these days. Even pop idol Justin Bieber was rumored to be trying to purchase property in the area! There are new retail complexes being completed, and the excess space built during the housing bust is being absorbed. There is still demand even with all of that space being occupied.
Our concern with Buckhead is that traffic levels are already atrociously high. Eventually, we believe that consumers and businesses alike will get fed up with the traffic and demand for space will level off. We have not seen signs that this is imminent, though, so we believe Buckhead is still an excellent investment.
Midtown
Young tech professionals graduate from Georgia Tech and head straight for Midtown. The district is building itself up to this demographic and encouraging an identity as a district that is focused on innovation, even encouraging comparisons to San Francisco and other West Coast cities. Investors are hoping that Google Fiber will be integrated into this district within the next few years, which will cement its popularity with Atlanta’s tech-savvy young property renters and buyers.
There is no way to avoid mentioning it: There is a distinct land shortage in the Midtown district. Parking is also scarce, which makes life difficult for young professionals who must commute to Buckhead or the Perimeter. While MARTA is certainly an option for residents, most Atlantans feel very dependent on their cars to get around. Investors should also be aware that there was a low office absorption rate in 2013.
