ATLANTA—Atlanta is a hotbed for industrial developers, but that doesn't mean multifamily is out in the cold. Indeed, multifamily still retains darling status in the southern metropolitan city.

In fact, according to Marcus & Millichap's ApartmentResearch Market Report for the fourth quarter of 2014, Metro Atlanta apartment operations have made “substantial strides” since the downturn. What's more, Atlanta's multifamily market shows no signs of slowing down going into 2015.

That, the firm reports, is partly because employment growth in the region has outpaced the national average for four years in a row. That's good new, but here's even better news for Atlanta multifamily landlords: Employment growth is expected to surpass pre-recession levels in 2014.

“Broad-based job creation is attracting more people to Atlanta, fueling demand for housing,” the report notes. “Over the past year, net migration surged 42% as 32,800 individuals moved to the region.”

Multifamily developers have taken notice and broke ground on a new wave of apartment buildings in 2013 after a three-year slowdown. Nevertheless, this sharp supply increase hasn't hampered the market. M&M reports pent-up demand resulted in vacancy declining to 6% in the third quarter of 2014. That's the lowest rate since 2007. New inventory and tightening vacancy will push up average rents 6.5 percent to $920 per month. Rents rose 4.9% in the year-ago period.

Against that backdrop, M&M predicts new multifamily supply in 2014 will fall slightly below last year's level and is concentrated in highly desirable areas of Buckhead, Midtown and Downtown Atlanta. A bulk of the total, the firm reports, will come online in the fourth quarter, though elevated tenant demand will sustain tight vacancy. All the while, newly-built apartments and strong demand for rentals will put upward pressure on average rents, marking a fifth year of growth.

“Investors are expanding their portfolios in the Atlanta market because of its strong demographics, job creation and steady rent growth,” the report notes. “Consistent improvement in property performance is also limiting the amount of for-sale inventory as current owners collect cash flow. This has created intense competition and an aggressive bidding environment among buyers.”

Across property tiers, M&M says cap rates have compressed 20 to 30 basis points during the past six months. Class A assets in prime locations inside the perimeter garner strong interest from institutions and REITs and command cap rates in the low-4%area.

“Quality inventory in northern suburbs such as Marietta and Alpharetta attract well-capitalized local buyers and coastal investors, particularly from California and Miami,” M&M concludes. “Buyers chasing higher yields may find opportunities south of Interstate 20 in College Park, East Point, and Gresham Park where initial yields can trend up to 12 percent for distressed properties.”

Atlanta's multifamily market has been hopping in the fourth quarter. Association management veteran Jim Fowler has joined the Atlanta Apartment Association as the trade organization's president. Founded in 1975, AAA represents more than 1,450 member companies consisting of 350 companies managing more than 340,000 apartment homes and more than 1,100 businesses that provide products and services to the industry.

WP Carey (WPC) just tag teamed on the acquisition of two multifamily properties in Atlanta. WPC's CPA:18 – Global bought a 97% interest in Dupont Place Apartments in Tucker, GA and Gentry's Walk in Chamblee, GA. CPA:18 partnered with Carroll Organization and Silverpeak Real Estate Partners, which own the remaining interest. The total purchase price was $46 million. And Oak Coast Properties and IMG report they have acquired the Legacy Key Apartments community here for $30 million, including costs, from DRA Advisors LLC.

“We are intimately familiar with the Georgia marketplace and have invested a significant amount of capital into the community,” Norman J. Radow, CEO of RADCO, tells GlobeSt.com. “In particular, Metro-Atlanta has enjoyed an improved job market, with recent employment increases in construction, retail and hospitality. We expect to acquire additional properties in Georgia over the coming months.”