• Atlanta

2018 Rally: Class Warfare

By Tyler Averitt, Executive Managing Director and Kristina Garcia, Research Manager

Every shift in the commercial real estate market puts industry participants on edge, not to forget the ramifications of the Great Recession. Although interest rates have been rising, investor caution is taking a firmer hold now than in 2015 when the trend began. This uncertainty compels us to look more closely at what is going on in the market to get a firmer grasp of what assets are actually moving and why. One trend to note is the current flurry of activity in the Class C space. As it turns out, interest in Class C assets is helping to buoy the transaction market in a significant way.

In the twelve-month period ending in third quarter 2018, Class C transactions in the Southeast account for 38% of sales volume compared to 43% Class A product, indicating how active the Class C space is at this stage in the cycle. Further, within the past three years, the average Class C price per unit across the nine-state Southeast region has risen by 27%.

Nationwide, Class C dollar volume (48%) has well exceeded Class A levels (35%) despite the fact that newer properties carry a significantly higher price tag and despite the spate of new Class A supply across the nation. The average U.S. Class A price per unit is greater than $230,000 versus approximately $130,000 among Class C deals as of the third
quarter.

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Tyler Averitt’s responsibilities include spearheading the execution of all of the firm’s brokerage activities in the Atlanta MSA, particularly within the Private Capital product type. Tyler has been directly involved in the sale of over  300 multifamily assets totaling over 60,000 units during his tenure. Due to his impressive results, Tyler was recognized as Real Estate Forum’s Tomorrow’s Leaders in the Southeast in 2014.

 

Kristina Garcia is the lead multifamily research specialist in the U.S., overseeing quarterly multifamily market reports for the Southeast and South Central regions in addition to providing in-depth macro market analysis for brokers and clients that reaches beyond the multifamily space. 

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