Walkable apartments outperform car-dependent locations in Atlanta

As the dog days of summer approach, Atlanta’s apartment sector continues to bring the heat, leading the real estate recovery. Local and national real estate development firms are scouring the metro region in search of prime sites to attract a growing number of Atlantans looking to rent an apartment. A recent examination of the Atlanta apartment market by Bleakly Advisory Group, a real estate and land use economic consulting firm, confirmed that Atlanta renters appear willing to pay up to 10 percent more in monthly rent for a unit in a walkable urban location.

Increasingly, the most preferred locations for Atlanta apartment dwellers, and thus apartment developers, are intown in spots within walking distance of retail and lifestyle amenities such as grocery stores and parks. These walkable urban locations, which are often also near MARTA rail transit stops, appease a new generation of renter looking for a less auto-dependent lifestyle, with conveniences and social opportunities just outside the front door.

What has this trend meant for the performance of newer apartment projects in Atlanta? Bleakly Advisory Group assessed the monthly rent levels of 23 apartment projects built since 2007 located within one mile or less of a MARTA rail station to determine the impact of a walkable location on rent levels. Although all the assessed projects are near a MARTA station, about half of them are built in areas lacking in convenient pedestrian infrastructure and amenities.  Therefore, Bleakly used this comparable set of projects and, in addition to looking at their monthly rents, divided them based on their walkable attributes using each project’s Walk Score.

Walk Score is a national database of locational information and is increasingly being used by real estate, urban planning, government, public health, and finance analysts as way to differentiate desirable walkable locales. Walk Score measures the walkability of a location on a scale from 0-100 based on walking routes to destinations such as grocery stores, schools, parks, restaurants, and retail.

Inman Park Steel Apartments.

The analysis determined that apartments in locations with a Walk Score of 70-89, making them “very walkable,” with most errands able to be accomplished on foot, achieve 6 percent higher rents on average to those comparable projects in “car dependent” and “somewhat walkable” locations (with Walk Scores of 48-69).  At a finer-grain level, the one bedroom units in the more walkable projects garner a 4 percent premium, and for two bedrooms the premium is 10 percent on a price per square foot basis over the apartments in locations with Walk Scores below 70.

Overall, the 23 projects averaged $1,472 per month in rent, or $1.39 per square foot. The 12 projects in “very walkable” locales averaged $1,578, or $1.43 per square foot.

Bleakly further concludes that direct access to rail transit is a selling feature for apartments in the Atlanta submarkets of Buckhead, Central Perimeter and Midtown. However, the walkable conveniences near apartment projects, such as restaurants, retail and parks, are a more fundamental driver of the current demand. This is evidenced in apartment locations in neighborhoods such as Inman Park, which are outside of a half-mile radius transit shed, yet still perform near the top of the regional market, due largely to the walkable nature of their surroundings.

Article submitted by Geoff Koski, CNUa, Senior Real Estate Consultant at Bleakly Advisory Group.