Mid-America Apartment Communities, the largest apartment owner in the United States, is teaming up with Crescent Communities to develop a new multifamily property in Atlanta’s hot West Midtown market.
Crescent Communities, which is based in Charlotte, North Carolina, said it and financial partner MAA have acquired land at 1330 Fairmount Ave. and plan to start construction this month on Novel West Midtown, a 340-unit apartment complex. In an April 29 filing with the Securities and Exchange Commission, MAA said the parcel is 11 acres. The price paid for the land was $7.5 million.
Crescent Communities said the development would include units designated for affordable housing but did not give a number.
West Midtown “continues to be one of the most sought-after destinations to live, work, and play,” said Kyle Brock, a managing director at Crescent Communities, in a press release.
For MAA, Novel West Midtown presents an opportunity to partner with Crescent Communities and “expand our Atlanta presence in the dynamic and growing submarket of West Midtown,” said Brad Hill, the real estate investment trust’s executive vice president of multifamily investing.
Multifamily developers have converged on West Midtown as residents flocked to the area, drawn by the neighborhood’s restaurants, hip shops and proximity to employment hubs. However, with some 2,100 units having been completed in West Midtown in the past 12 months, vacancies in the market are elevated, according to a report from David Kahn, CoStar director of market analytics in Atlanta, and analyst Trenton Turner.
“New supply and the economic effects of the coronavirus pandemic caused rent growth to slow considerably in 2020,” Kahn and Turner wrote in their report. “However, after falling in the months following the onset of the pandemic, rents are back on the rise.”
Furthermore, groundbreakings have cooled over the past several quarters, and with only about 600 units under construction, rent growth may continue to improve over the next few quarters as the local economy recovers from the effects of the pandemic.
With 100,490 units, Germantown, Tennessee-based MAA is the largest apartment owner in the United States, according to the 2021 National Multifamily Housing Council 50 Largest Apartment Owners ranking. Crescent Communities ranks 15th on NMHC’s list of the 25 largest developers, having started 2,753 units in 2020. While MAA is a long-term owner of its properties, Crescent Communities often sells its apartment complexes once they are completed and produce a stable cash flow.
Crescent Communities and MAA said Novel West Midtown’s units will be housed in a five-story wood frame building. The property will feature green space and nature trails.
Crescent Communities said it would announce additional details at a later date. The complex’s first units are expected to be completed in mid-2023.