Great News – Buying and Selling Commercial Real Estate Can Still Benefit Buyers and Sellers in Today’s Atlanta Covid19 Market

James Kobal – Coldwell Banker Commercial Metro Brokers
(E) James.Kobal@CBCMetroBrokers.com | (M) 678.993.4951

Great News? Atlanta is stronger than ever, a reality is confined to areas experiencing population growth, even though we deal with the accumulating stress of Covid19 and sheltering in place. Here in Atlanta we can do commercial real estate transactions in which both parties simultaneously win.

Great News in Face of Reality –
People still want and can make money from investing in and selling commercial real estate. In Georgia and particularly Atlanta, the opportunities are ripe with growth. Atlanta’s attraction continues to grow as evidenced by a strong job market, and apartment leasing increasing to highest levels since October 2019.

Reality Snapshot – Bad News Now – Great News Future
This morning, I caught up with a property manager of a well-known development in Metro Atlanta. Great news is that none of the tenants have asked for rent relief, and new ones have not postponed moving into the space. Bad news is that there are no pending deals, or at least that ones they can disclose. Such hesitancy in moving into new office mirrors what is happening in the residential condominium market, people are afraid to move into new confined quarters, but will do so once they feel the environment is safe. Although the office market for new leasing activity has slowed, it does not mean buyers can purchase or lease office properties at bargain properties. Demand for office space remains, as New York Magazine reported on July 29th.

Midtown Atlanta Skyline

Winning for Buyers and Sellers – How
1. Reasonable Expectations – Sellers need to understand that we are not pre-Covid19 levels, and thus cannot ask for such prices. Buyers need to understand that, except in distressed situations, sellers do not need to sell.
2. Educating Out-of-Georgia Buyers – Georgia’s economy continues to grow, unlike some other states. Atlanta is the strongest city in the state for corporate relocation and one of top-5 nationally for it. Therefore, low offers will probably be dismissed out of hand.
3. Analyzing the Market Situation – Before putting a property on the market or buying one, thoroughly know what is happening. Ask your commercial realtor to do their homework on comparable and neighboring properties. Contact me, James Kobal at Coldwell Banker Commercial Metro Brokers, James.Kobal@CBCMetrobrokers.com, (M) 678.993.4951.
4. Value for Buyer and Seller – Show the financial benefit for the buyer and seller, and what is the cost of waiting.

Atlanta and all of Georgia Stronger Than Covid – Real Estate, Jobs, Investments

Atlanta and Georgia have been “slobernockered” by Covid, as John Madden would say, but still we are stronger than the disease and the numbers prove it.

Atlanta stands out from the competition about its future, especially as we continue to deal with the nightmare of Covid19, both with residential and commercial real estate market, and continued job and investment growth. Now, updated two days later on August 7th, is great commercial real estate and job news. When it comes to industrial construction, as CoStar reported, Atlanta ranks 2nd. As for jobs, Georgia added 3,629 and $574 million in new investments.

Focusing on residential real estate – Atlanta House numbers -it has been a great recovery from March through July 2020 and solid for a normal situation – The numbers are indisputably strong.

Without Question, the future of Atlanta remains bright. One just has to look at the housing market, specifically houses. The brightness really shines when you look at year-over-year statistics for the number of units sold. Both Buckhead Atlanta and Vinings distinguished their strengths in different ways, price and number of houses sold for consecutive months.

Residential and Commercial Real Estate Working Together – in Vinings

Buckhead Atlanta remains, justifiably, the iconic neighborhood to those outside of Atlanta, and year-over-year justified this view. For the month of July, 2019 to 2020, the number houses sold remained the same at 66. This market’s strength rests in the average increased sales prices for June ($162,172) and July ($208, 341) in the 30327 and 30305 zip codes.

Vinings and Midtown Atlanta further showed how strong the desire is for houses, especially greater personal space with normal social distancing. Leading the biggest gain was Vinings at 80% in June with sales almost doubling from 5 to 9. Better yet are July’s numbers, 100% increase of 7 to 14, and sales days on market dropping 44%. June’s average sales price trailed 2019s by approximately $38,000 and then surpassed last July’s by $90,000.

Midtown’s sales increased in June by 71% from 7 to 12, and 60% in July from 10 to 16. As for increased average sales price, there was a month’s delay in 2020 numbers surpassing 2019s. July 2020 outperformed 2019 by $131,673. Days on market remained relatively consistent with Buckhead Atlanta’s numbers.

When it comes to condominium and town home sales, 2020 numbers lag behind 2019s. This should be expected. The need for social distance and desire to have personal outdoor space, as a result of the quarantine, have not bode well for these sales. When will the trend reverse itself? I guess when people feel comfortable or are allowed to go back into an office, and other public spaces at pre-virus levels.