Wednesday, June 8, 2016

Apartments Risky Business, Even in Dunwoody

A developer recently withdrew a zoning change request for land in the Perimeter area.  The developer wanted to put in apartments.

We know that High Street (new project in Dunwoody) is bringing at least 1,500 apartments, and as many condos.  The 3,000 units total will make a huge impact in the area.  Of course you should expect to see the apartments built first, as that's the way 'mixed use' folks roll.  

Take a look here at a story on Bisnow.

Developers tell us all the time how the apartments will be high end and rents will be at the top end.  The latest developer said publicly a 1,000 sq foot unit would rent for $3,000 a month in Perimeter.  That is simply not happening.  Not even Avalon, the best mixed-use in Georgia, gets that rate.

Here are highlight of the Bisnow article:

Rent growth is slowing

"We can't sustain this level of growth"

even in hot submarkets like Midtown or Buckhead, there's little chance every new development will hit the coveted $2.50/SF to $2.75/SF range. Most will be around $2.10/SF.

forget gateway cities. Investors are flocking to small American markets in a chase for better returns