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Top Cities for Rental Activity to Watch in 2024
Atlanta emerged as the #1 city for renters to watch in 2024, with the highest rental activity and online engagements.
Jordan B. & Han-Gwon Lung
January 11, 2024
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Good morning. In 2024, Atlanta has emerged as the leading city for rental market activity, attracting significant attention from renters. Meanwhile, Bal Harbour Shops in Miami-Dade County is breaking new ground by integrating affordable housing options into its upscale community.
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Market Snapshot
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RENTAL ACTIVITY
Atlanta is the Top Rental Market to Watch in 2024, and Midwest is the Most Sought-After Region
Downtown Atlanta
According to RentCafe.com's Year-End Market Report, Atlanta emerged as the #1 city for renters to watch in 2024, with the highest rental activity and online engagements. The Midwest region also stood out as the most popular region for renting, with 12 cities making it to the top 30 list.
Taking the lead: Atlanta, GA, is the city to keep your eyes on in 2024. It has become a hotbed for rental activity, topping RentCafe's list due to its significant online engagement. Key factors contributing to its popularity include the transformation of Midtown and the influence of Georgia Tech.
Runner-up: Kansas City, MO, secured the #2 spot in the ranking, maintaining its position as a top preference for renters in 2023. The city's affordable cost of living is 6% lower than the national average, and job opportunities continue to attract apartment hunters. Renters generated 63% more traffic for Kansas City listings on RentCafe.com in 2023 compared to 2022.
Follow the trend: The Midwest leads the pack, boasting 12 cities among the top 30. Cities like Cincinnati, OH, are gaining attention with their revamped riverfront and commitment to sustainability, attracting a significant number of renters. Arlington, VA, stands out due to its prime location, while Orlando, FL, remains a popular choice for its warm weather and entertainment attractions. Minneapolis and Denver are also in the spotlight, drawing renters with their distinctive mix of lifestyle choices and economic prospects.
➥ THE TAKEAWAY
Midwest leads the way: 2024 is shaping up to be an interesting year for the rental market, with a clear shift towards the Midwest. However, the Sun Belt isn’t dead. Atlanta stands as a beacon for renters, with the region's transformational projects, job opportunities, and educational facilities continuing to attract renters.
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✍️ Editor’s Picks
Penthouse to poorhouse: Hudson 888, an NYC mixed-use property owner, files for bankruptcy due to Covid and high rates.
Still not dead: WeWork plans to keep its lease at The Wilson in Bethesda, MD, spanning over 60,067 SF across three floors.
Data decision: VA county officials vote to renegotiate deal with Amazon (AMZN) for a planned data center campus.
Rent racket: Invitation Homes (INVH) settles a price-gouging lawsuit in CA, paying over $2M in penalties, refunds, and credits.
Debt dilemma: Nearly 60% of CMBS and CLO debt in LA and Orange County is in trouble this year.
Fund fights: EB-5 fund sues as developers plan debt-for-equity swap, potentially diluting investor stake in luxury hotel.
🏘️ MULTIFAMILY
Design trends: Amid changing renter preferences and economic challenges, multifamily developers adapt by offering versatile amenities and maintaining aesthetic appeal in new properties.
Multifamily moves: Conserve Holdings ended 2023 with a bang, expanding its portfolio with two prominent acquisitions, all within a month and internal capital.
Breaking ground: Tejon Ranch prepares to start its first residential project, transforming its commerce center into a diverse, master-planned community.
Foreclosure: Special servicer of eight delinquent CMBS loans in NYC moves to foreclose on 28 Bronx properties, encompassing 747 units, as reported by DBRS Morningstar.
📦 INDUSTRIAL
Property sale: Alfredo Site Development sells two warehouse buildings totaling 99,900 sq ft for $18.5 million, averaging $185 per sq ft.
Market imbalance: Despite a record 16.3 million sq ft of new industrial space in Canada, demand still exceeds supply.
Industrial expansion: Proposed 400,000 sq ft industrial space along State Highway 130 in Northeast Austin to boost growing market.
🏪 RETAIL
Retail powerhouse: The Ridge Shopping Center in San Francisco Bay, anchored by Costco, promises major draw with tenants like Nordstrom Rack and Amazon Fresh, already attracting significant foot traffic despite ongoing construction.
Smaller format: Amid e-commerce rise and pandemic disruptions, retailers like Macy's and Nordstrom pivot to small-format stores and curated experiences to re-engage shoppers.
New additions: Nora's mixed development in West Palm Beach expands with Juliana's Pizzeria from Brooklyn, a sports bar, and a juice shop, enhancing the 40-acre site's dining options.
🏢 OFFICE
Telework reduction: The district government limits telework to one day weekly, urging agencies to increase office presence.
Growth pause: Swedish developer Skanska curtails its U.S. growth ambitions due to sluggish office leasing, with plans for cautious future development.
Boston Market: Boston's office market saw weak performance in 4Q23, with its lowest leasing activity and a vacancy rate of 17%, but signs of recovery are emerging.
AFFORDABLE HOUSING
Florida's Fashionable Foray into Affordable Housing
In a chic twist, Miami-Dade's Bal Harbour Shops, synonymous with luxury retail, are diving into the affordable housing pool. Thanks to Florida's Live Local Act, a splash of workforce housing is joining the mix of high-end stores.
Bal Harbour's bold blueprint: Whitman Family Development, the brains behind the Bal Harbour Shops, has unveiled plans for a 20-story luxury hotel and three residential towers, one of which will house about 240 workforce housing units. This move is energized by the Live Local Act, which encourages affordable housing development through tax incentives and relaxed zoning regulations.
Retail riches meet housing hurdles: Home to around 100 luxury retailers, Bal Harbour Shops is a retail heavyweight, pulling in astronomical sales figures. However, previous attempts to expand vertically were met with community pushback. In 2021, a referendum to allow increased height in development was overwhelmingly rejected by voters.
Live Local Act to the rescue: Now, the Whitmans are leveraging the Live Local Act to navigate around these zoning challenges. The goal? To provide homes for those who work within the complex, creating a more integrated community. SOM Architects are on board to ensure that both workforce and market-rate apartments blend seamlessly in appearance, maintaining the area's upscale vibe.
➥ THE TAKEAWAY
Zoom out: Florida's legislature is actively fine-tuning the Live Local Act, introducing bills that aim to balance development expansion with certain limitations. Amidst this legislative evolution, the Whitmans of Bal Harbour Shops are advocating for their right to build upwards, citing the precedent set by neighboring high-rises. However, the Whitmans' past expansion ventures have seen varied success. Nevertheless, Bal Harbour's transition from purely luxury retail to inclusive housing development mirrors a broader shift in urban planning, where luxury and affordability attempt to coexist harmoniously.
CHART OF THE DAY
According to Moody’s, the national apartment vacancy rate has nudged up by 20 basis points to 5.4%, marking a slight increase from last year's figure and edging closer to the pandemic peak of 5.5%. This shift points to a temporary mismatch between supply and demand, putting a squeeze on rent growth. In the last quarter, both asking and effective rents have seen a downward trend. The current asking rent hovers around $1,825, while the effective rent has dipped to $1,732, representing declines of 0.8% and 1.7% compared to last year.
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