Properties

Core Markets Series: Atlanta

At MLG, we pursue direct and joint venture acquisitions throughout the Southeast region, focusing our efforts in Georgia, Tennessee, and Alabama. The Southeastern states are some of the fastest growing in the country, as the region has outpaced the United States in population growth by roughly 40% the past 50 years.1 One of our primary target markets within this region is the Atlanta Metropolitan Statistical Area (MSA). Atlanta is an attractive market, boasting a strong job market, access to quality higher education, major employers, and continued growth over the last two decades. Our portfolio currently consists of investments in 5 properties across the Atlanta MSA.

There are 4 main reasons why we like the Southeast region and specifically the Atlanta MSA:

  1. High population concentration and continued projected population growth
  2. Stability of the labor market and low unemployment
  3. Strong economy and job growth
  4. Access to a more liquid investment

High Population Concentration and Continued Projected Growth

Atlanta is ranked the 8th largest MSA in the United States and currently has a population of over 6.1 million people.2 This accounts for more than half of the state of Georgia’s residents. From 2015 to 2020, the Atlanta MSA ranked 3rd in net population change across the entire USA, trailing only Dallas-Fort Worth and Houston.3 Over the next three decades, the population of Atlanta is projected to increase by more than 50% driving demand for multifamily housing now and well into the future.3

Labor Market Stability

As of February 2023, Atlanta’s unemployment rate is 3.7%.5 With the state’s pro-business focus, there has been an influx of companies re-locating or opening regional headquarters in this area. Currently, there are sixteen Fortune 500 companies headquartered in Atlanta, led by The Home Depot, United Parcel Service (UPS), and The Coca-Cola Company.6

Atlanta is also becoming a leading destination for other industries, including tech, fintech (financial technology) and film. Tech jobs have grown by 20% more than the national average, boosting the state’s economy by $113 billion.7 Atlanta has become a FinTech hub with an estimated 70% of all payment transactions on a global scale passing through companies headquartered in metro Atlanta.8 There are over 100 fintech firms headquartered in the area including Fiserv, Equifax and NCR, which employ over 42,000 people.12

Due to production incentives packaged in the form of tax credits, the entertainment industry has also grown significantly. In 2022, for example, film and TV productions spent $4.4 billion across the state of Georgia resulting in 412 film productions, which was a record for the state. The growth of Georgia’s production in the film industry has coincided with massive investment into studios and production infrastructure.13 The growth of the film industry has resulted in a number of new job opportunities ranging from accountants, to engineers, to graphic designers,  resulting in a very wide and robust array of career opportunities.

The strong job market is a direct contributor to the population growth in MSA. Due to this growth we’ve noticed that there has been a consistent increase in buyer demand of national real estate investment firms over the last decade, a trend that we believe will continue long-term. 

Strong Economy

Due to the increase in e-commerce sales following the COVID-19 shutdowns, Georgia’s ports and Atlanta’s logistics industry have thrived.  Atlanta is one of the top distribution markets in the nation seeing demand for warehousing and distribution center space outpace supply.9 The Port of Savannah, which is a four hour drive from Atlanta, is home to the largest single-terminal container facility of its kind in North America and is the fourth busiest port in the United States.10 Atlanta’s logistics and supply chain industry also benefit from being home to the world’s busiest airport, the Hartsfield-Jackson Atlanta International Airport11

At the household level, the Atlanta MSA boasts strong rent to income ratios which indicates that many renters choose to rent by choice in the market. This, paired with strong median income growth over the past decade provides a ripe opportunity for value-add real estate investing.

A Liquid Market

Atlanta has been known in recent years as one of the nation’s largest and fastest growing MSAs, comparable to the growth seen in the Dallas-Fort Worth MSA. Large markets such as these are more resistant to the ebbs and flows seen in real estate transaction volume caused by economic cycles. High transaction volume ultimately leads to a larger buyer pool and allows for a more confident exit strategy for real estate investors whose goal is to exit an investment after a specific hold period.

A market like Atlanta caters specifically well to our value-add investment strategy because of the sheer number of opportunities in the marketplace. Value-add projects must fit a very specific set of criteria for MLG to invest in and these types of opportunities are generally few and far between in many other markets. Atlanta, on the other hand, boasts unique investment opportunities in multiple asset types and classes.  

Conclusion

As it compares to other major metropolitan areas throughout the US, we believe that Atlanta has the most staying power and is one of the top MSAs in the country to acquire real estate assets in. From a strong job market to the availability of quality product, and the access to one of the world’s busiest airports, Atlanta boasts a great balance of growth and stability that make it a prime market for our acquisition strategy.

1 HKS – U.S. Southeast’s Growing Economy Spurs New Design and Development Trends

2 Statista – Population of the largest metropolitan areas in the U.S. as of 2021

3 JLL – Why Atlanta (2021)

4 Atlanta Regional Commission – Population & Employment Forecasts

5 Y Charts – Atlanta, GA Unemployment Rate

6 Know Atlanta – Atlanta’s Fortune 500 and 1000 Companies

7 ChooseATL

8 Forbes – Atlanta Boldly Claims Global FinTech Lead Status

9 The Business Journals – How Atlanta helped propel the Port of Savannah to record growth

10 Savannah Economic Development Authority – Infrastructure

11 OAG – Which is the Busiest Airport in the World?

12 FinTech Atlanta – FinTech in Georgia

13 Forbes – Georgia Film And TV Productions Spent $4.4 Billion In The 2022 Tax Season Helping Jump Start New Opportunities

14 Matthews Real Estate Investment Services – Atlanta, GA Multifamily Market Report Q2 2022

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