Imperium Development Advances with New Apartment Project in Suburban Atlanta Amidst National Construction Slowdown
An Atlanta-area developer is pressing forward on a new apartment building deep in the Atlanta suburbs, even though new apartment construction across the nation is slowing to the lowest level in more than a decade. Greg Power and Mike Handza, managing principals of Alpharetta, Georgia-based Imperium Development, plan to open the 212-unit property in Suwanee, about 32 miles north of Atlanta, two years from now — hoping they catch an anticipated apartment industry resurgence by 2026.
“We want to be on the leading edge, not the bleeding edge,” Power says. Two years ago, Imperium Development’s project would have been just another among a dizzying number of developments that pushed apartment construction to historically high levels. Now it is among a relatively small cadre of developers nationwide that have launched apartment projects this year.
The Federal Reserve started aggressively raising interest rates beginning in March 2022, with the goal of quelling inflation. Developers slammed on the brakes, and apartment construction starts began slowing even as the number of new units soared with in-construction projects coming on line. The results are dramatic: In the first six months of 2022, construction was started on roughly 400,000 new apartment units. In the first half of 2024, that number was only about 103,000 — the lowest level in more than a decade, according to real estate firm Cushman & Wakefield.
Across the nation, developers starting this year are typically deep in the suburbs or tertiary markets. Two years ago, urban areas dominated much of the construction. Cushman’s data covers investment grade projects, which have 50 or more units. Census data includes developments of five units and up, and its figures show 165,000 starts through the first half of 2024. Parsing the data, Jay Parsons, investment strategy and research chief for Frisco, Texas-based Madera Residential, said the gap between units finishing up and new ones starting has reached a 50-year high. The gap is the “second largest on record since the Census began tracking multifamily in the 1960s,” Parsons said on LinkedIn.
Large publicly traded real estate investment trusts pulled back in the front half of this year, but they are looking at starting later this year. Camden Realty Trust said during recent earnings calls that it has $300 million set to go later this year if conditions look good. “We have a decent pipeline that we can start,” Camden CEO Ric Campo said in May. He added that Campden could pivot if demand for apartments continues to fill the new units it is finishing now.
Carl Whitaker, chief economist for data and software firm RealPage, says some 680,000 new apartment units will come online this year as all the 2022-era starts come to fruition. “Then another 460,000 [will deliver] in 2025 before plummeting to 230,000 in 2026.” Most of those are in the Southeast because of a construction boom that followed a heavy migration from Northern states. Florida led the way. Whitaker said construction delays could push project completion scheduled for next year into 2026.
Still, those who can get financing are making it work. “And that's relatively rare in comparison to the past few years,” Whitaker says. Developers are loath to say that they are trying to time the market, because other factors can affect projects’ success. The economy, for example, could fall into a recession by the time the apartments are done. The timing has more to do with how long it takes to get a project out of the ground — which is upwards of 18 months, typically. Design is part of that, but negotiating zoning changes on properties takes the most time. “Entitled sites don’t come along anymore,” said Ken Outcalt, president of development at Cleveland-based NRP Group, which has broken ground on 10 market-rate projects this year. “We’re always working on entitlements somewhere.”
And sometimes, that process takes much longer than average. NRP Group spent five years trying to get the necessary entitlements in Westchester County, New York, which means the company started on it before the COVID pandemic. NRP broke ground in June on their 200-unit project in Harrison, about 25 miles from Manhattan near the border with Connecticut. Most of its other projects are in the South, where the development timeline is shorter. “We feel good about anything we deliver in 2026,” Outcalt said.
Meanwhile, Brentwood, Tennessee-based Bristol Development launched construction in April on 293 luxury units in Columbia, Tennessee, with a target opening of 2027. Columbia is 45 miles south of booming Nashville and about 30 miles from Franklin — a large job center in the Nashville MSA. Columbia is the county seat of Maury County, which also has a General Motors plant that has been expanded to build electric vehicles and the batteries for them. “A good location and good real estate will win where there’s strong growth,” said Sam Yeager, founding principal with Bristol. Yeager said they, too, are angling to catch the front wave of an upswing.
A good location and good real estate are major reasons why Imperium Development launched its Suwanee project: It is next to an interchange that’s being built on Interstate 85, a main artery into Atlanta. Suwanee also is familiar territory for Powers and Handza. They developed 473 apartments near Suwanee’s tower center when they were with Terwilliger Pappas. The banking relationship they established through their previous deals made it easier to get the new one done. “It’s good to get one done in tough times,” Power says.
