Apartment market strong in midstate

lmorris@macon.comOctober 7, 2013 

While the economic recession sent the single-family home market reeling -- and it still struggles to right itself in most areas of the country -- apartments provided a bright spot in the real estate world.

“The apartment market is strong,” said Bob Lewis, owner of Bob Lewis & Associates Inc., a commercial real estate sales and management company in Macon. “It was probably one of the most stable sectors of the real estate market through the recession. ... Occupancy here and in Warner Robins is very strong.”

While Lewis owns some apartment developments, his primary business for many years has been working as a broker helping investors buy or sell apartment communities.

One reason for the apartment market’s strength is that occupancy rates have remained high, especially as people who lost their homes to foreclosure moved into apartments, Lewis said.

“But more important than that, the interest rates for (loans to build) apartments right now are very low,” he said. “I’m seeing a lot of investors from not only out of state and across the United States, but from out of the country. We’ve had them from Australia, Canada, from up and down the West Coast. ... Apartments are just a real solid investment.”

Nationally, the apartment industry contributes $1.1 trillion to the economy and helps 35 million renters live in a home that’s right for them, according to an executive from the National Multi Housing Council in a presentation to Congress in June.

“In an environmentally sound way, we help build vibrant communities by offering housing choice, supporting local small businesses, creating millions of jobs and contributing to the fabric of communities across the country,” Tom Bozzuto, the housing council’s chairman, said in a news release.

It takes at least 300,000 new apartments each year to meet demand, but less than half that number was delivered in 2012, the release said.

Dean Henry, chairman of the National Association of Home Builders’ Multifamily Leadership Board, said the apartment sector overall “has recovered since the downturn, so we have now reached a level of development that is close to equilibrium and can continue at this pace. With that said, there are still certain markets around the country that have room to grow.”

The Middle Georgia market is one that can handle some growth, local developers say. A new apartment complex, with 250 units, is under construction in northwest Bibb County at 5744 Thomaston Road.

“We had a market study done that gave a very positive outlook for the Macon market,” said Jim Daws, president of Sierra Development Group Inc., which is developing the apartment complex with SPP Residential LLC. “The occupancy rates in Macon right now are in the high 90s (percent of occupancy).”

Rental concessions, such as first month free or the waiver of fees, are sometimes offered to attract tenants.

Daws has built more than 6,000 apartment units over the years and has developed several apartment communities in Bibb County, as well as the Lofts at Mercer Village.

Developers of the new apartment complex, which will be called Thomaston Crossing, chose the site for several reasons, including location and visibility, Daws said.

“Bringing a new and improved product to that side of town, we think, will be very successful,” he said.

Some tenants for the new apartments are expected to come from area colleges, since the complex is about six miles from Mercer University’s campus and about two miles from Middle Georgia State College, Daws said.

Also, since the property is about two miles from Interstate 475, it might attract workers from the new Tractor Supply Co. distribution center off Hartley Bridge Road in south Bibb County.

The new apartment complex will include garages and units with one, two and three bedrooms that range from about 820 square feet to about 1,360 square feet. Rents are expected to run from $800 to about $1,100 a month, but that might change, Daws said.

The development’s 6,500-square-foot clubhouse will include a WiFi cafe, a fitness center, pool table and a bar. The clubhouse is set to open in October, and apartment leasing has begun, he said. For more information, go to www.thomastoncrossing.com.

Next to the apartments, a 10-acre parcel will be prepared for a shopping center, which would be developed after Thomaston Crossing is built.

“Our hope is we can get a grocery chain to go out there,” Daws said. “Also, we have three 1-acre parcels,” which might be attractive to restaurants or a drug store.

While owning a home may be the American dream to some, apartment living has its advantages, said Ethel Pritts, a previous homeowner.

Ethel Pritts and her husband, Richard, have lived in a three-bedroom apartment at Lullwater at Bass in north Bibb County ever since Fickling & Co. Inc. built it nine years ago.

After Richard Pritts retired in 1993, the couple sold their home in Ohio and have lived in apartments ever since. They moved to Middle Georgia to be closer to their grandchildren.

“I realized the American dream,” Ethel Pritts said. “I was actually a homeowner long enough to pay mine off.”

The Prittses enjoy several aspects of apartment living.

“We looked around, and when we moved over here, we just liked it so well,” she said. “We’ve got a lot of great people in here that we socialize with and visit with. They keep everything up very nice here. ... We have our luaus and picnics, movies in the park.”

Recently, their daughter, who owns a home, had to replace an air conditioner in the attic that leaked and now has to repair her ceiling and maybe the floor.

“I said, ‘there’s another reason I rent,’ ’’ Pritts said.

The couple’s former home had a pool and yard, “and my husband said he would rather be on the golf course than coming home and mowing the grass,” she said. “There was no one left to use the pool, so we decided it was time to move on.”

Michelle Fisher, director of multifamily with Fickling & Co. Inc. said occupancy at Lullwater “has not dropped below 95 percent during the recession or after the recession. ... New construction has impacted us so that we have to work a little bit harder ... but we haven’t missed a beat.”

When Fisher joined Fickling about two years ago the company managed 2,000 apartment units. Now she oversees 7,000 apartment units for Fickling across the Southeast.

While the single-family home market is gaining ground, apartment living remains attractive for a variety of reasons.

“It’s still difficult for a lot of folks (to buy a home),” he said. “Mortgage rates are super attractive, but it’s very difficult to qualify for average folks. Some people just don’t have a choice except to rent. But some people would prefer to rent. They don’t have to pay property taxes. (There’s) no maintenance. They don’t have to cut the grass.”

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