"Area class B and C properties have recorded healthy absorption levels and modest effective rent growth in recent periods, suggesting that capital improvements could capture additional appreciation," says John Leonard, regional manager of Marcus & Millichap's Atlanta office. He notes that asking rents are forecast to climb 2.7% through this year, to $866 per month, while effective rents will rise by a similar amount to $778 per month.

Despite a reduction in development activity, a weaker employment market is moderating Atlanta's apartment operating fundamentals, Marcus & Millichap stated in its latest report. Local employers are projected to shed 30,000 jobs this year, a decrease of 1.2%.

Approximately 3,400 units will come online this year, expanding rental inventory by 1%, according to the report. Vacancy is expected to reach 9.1%, also up a full percentage point from the end of 2007.