Thank you for sharing!

Your article was successfully shared with the contacts you provided.

ATLANTA-The local apartment market is expected to see an increased amount of distressed deals in upcoming months, according to Marcus & Millichap’s national multihousing group. Foreclosed product in the market could cause the number of transactions in 2009 to increase year over year, but still remain below the number of deals completed two years ago, says Andrew Mays, director of Marcus & Millichap’s national multihousing group based in Atlanta.

“Distressed deals are definitely increasing in the market,” Mays tells GlobeSt.com. “Moving forward in 2009 and 2010 those transactions will have a larger presence as far as market share goes, and buyers are coming off the sidelines to take a look at the properties.”

The attention distressed and foreclosed deals are expected to get in the upcoming year will have much to do with pricing, according to Mays. Traditional market pricing has dropped only about 10%, but distressed or foreclosed properties have dropped 20% to 30%, he says. Experienced investors will look to acquire underperforming or value-add properties at those prices, according to Marcus & Millichap’s latest apartment research. Increased renter demand in more affluent areas will also draw investors to the market, the brokerage reports.

The recent sale of Glenbrooke Apartments, a 304-unit community in Marietta, is one example of the types of distressed deals that will get done in the upcoming year. The property, located at 750 Franklin Road, was purchased by its previous owner for just under $12 million, including debt. After a failed attempt at a condo conversion, the property’s occupancy plunged from 80% to 20% and suffered from a lack of management, according to Mays. The lender reclaimed the property four months ago and resold it to a new buyer for $7 million. The deal was brokered by Marcus & Millichap’s Dave Wilson. The names of the seller, buyer and lender could not be disclosed.

Overall, the Atlanta apartment market outlook will reflect what’s going on nationally, says Mays. Class A apartment vacancies are expected to hold steady at 7% because of a lack of new construction deliveries, while B and C vacancies may rise to around 12%, according to the report. This year is expected to see around 3,300 unit completions, versus a five-year average of around 4,500 units, with asking rents rising slightly to $869 per month, Marcus & Millichap predicts.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.