According to real estate firm CBRE, rentals throughout Cobb have increased in the last 12 months. A recent CBRE Econometric Advisors Market Report showed that during the last year, rentals increased nearly 10 percent in Vinings, 4 percent in east Cobb, 3 percent in Smyrna, and 1.4 percent in west Cobb.
CBRE expects this trend to continue in Cobb County for the foreseeable future.
Shea Campbell, an associate with CBRE’s Southeast Multi Housing Group, said the increase is attributable to several factors, including limited new construction in multifamily and single-family housing, stringent mortgage requirements for home ownership and an aging demographic that seeks mobility over being locked into home ownership.
“Value-added apartments in Cobb continue to be in high demand,” Campbell said. “In addition, investors recognize that construction of new apartments will be limited going forward, making the existing apartment stock more valuable.”
Campbell said annual apartment starts for metro Atlanta are projected in the 3,000-unit range for 2012, down from almost 12,000 units at the peak.
“Older apartment communities, especially those located in high demand areas of Cobb County, provide opportunities for new ownership to increase rents through interior/exterior rehabilitation,” he added.
According to Jones Lang LaSalle Americas, there are more than 65,000 apartment units in Cobb County. While rents depend on location, property age, and other features, a typical Class A apartment rentals for $900 to $1,200-plus per month on average, Jones Lang LaSalle reports. Class A typically has amenities such as garages, in-unit washer/dryers, pools and gyms.
“The biggest rent increases over the past year in Cobb and metro Atlanta overall have come in these Class A spaces,” said Derrick Bloom, managing director of multi-family investment sales at Jones Lang LaSalle. “Over the last 18 months it has not been uncommon to see 10-plus percent rent growth.”
Today’s apartment renter in Cobb is likely single and employed along the Interstate 75 corridor or in the Galleria area.
“The ability to utilize I-75 and I-285 from Cobb positions renters to access several of Atlanta’s leading job centers,” Bloom said. “In addition, for as many people who have lost money on home ownership, there is a greater desire to rent and avoid that in the near short term.”
Keith A. Davidson is a partner and chief financial officer of Walton Communities, a Marietta company that develops and manages apartment communities across Atlanta.
“Renting versus owning is still pretty close in net cost, and there is no risk of market fluctuation,” he said. Rents at Walton’s Class A units in Cobb range from $900 to $1,500 per month.
“This range is doing especially well right now,” Davidson said. “Occupancy is up. Apartments offer access to the most vibrant communities without the risk of losing money through market fluctuations.”
Davidson doesn’t think falling mortgage rates will alter the market for renters.
“People looking for apartments in lieu of a single-family home are not inspired to buy because of market risks or lower rates,” he said.
Michael J. Pallerino has reported on business news for magazines and newspapers in the Atlanta area for more than 20 years.