Photo: © Kruck20 via
Photo: © Kruck20 via

Augusta Multifamily

May 2, 2023 | Palomar Group

Augusta is the second-largest city in Georgia and is home to several major employers, including the U.S. Army Cyber Center of Excellence, Augusta University, and the Savannah River Site. Augusta’s diversified economy, stable job market, and low cost of living are some of the factors that make it an attractive market for commercial real estate investors. Augusta has a strong rental market, as it has a steady demand for apartments due to its university, military base, and hospital, which attract many students, families, and professionals. Below are key factors driving the Augusta multifamily market:

  1. Strong and Diversified Economy: Augusta has a strong economy that is diversified across various sectors. The city’s top industries include healthcare, manufacturing, and cybersecurity. These industries have contributed significantly to the city’s economic growth.
  2. Rapid Population Growth: Augusta’s population has been growing at a healthy rate in recent years, indicating a thriving economy. Increased population means more demand for goods and services, which can boost economic growth.
  3. Public and Private Investment: The local government and private investors have made significant commitments to improving Augusta’s infrastructure and attracting new businesses to the city. This investment has resulted in increased
    economic activity, job creation, and higher property values.
  4. Low Cost of Living: Augusta’s low cost of living attracts residents and businesses to the city, allowing them to save money and invest in growth opportunities. As such, the city has emerged as an affordable place to live, work, and do business.
  5. Proximity to Major Markets: Augusta benefits from its strategic location, which places it close to major markets like Atlanta, Charleston, Savannah, and Charlotte. This proximity allows businesses in Augusta to access a larger customer base, which can help them grow faster.
Why invest in Multi-Family:
  1. Steady cash flow: Multi-Family properties can generate consistent rental income, which can provide a steady source of cash flow for property owners.
  2. Tax advantages: Investors in Multi-Family properties may be able to take advantage of tax deductions on expenses related to the property, such as maintenance costs, property management fees, and mortgage interest.
  3. Hedge against inflation: Real estate values and rental income typically rise with inflation, which can help investors protect against the erosion of purchasing power that can occur with inflation.
  4. Diversification: Multi-Family income producing real estate investments can provide diversification for investors’ portfolios, which can help lower risk and increase returns.
  5. Appreciation: Property values may appreciate over time, allowing investors to sell their properties for a profit.
Why invest in Commercial Real Estate:
  1. Tangibility: Commercial real estate offers tangible assets, which can provide a sense of security to investors. Investors can feel and see the property and the land, which makes them feel more secure about their investment.
  2. Control: Investors in commercial real estate have more control over their investments than those in the stock market. They can make improvements to the property, increase rents or occupancy, and sell the property when they choose to, rather than being subject to stock market trends or company decisions.
  3. Income generation: Commercial real estate investments can provide stable cash flow and rental income, whereas stocks can be more volatile and unpredictable, and may pay lower dividends.
  4. Diversification: including commercial real estate investments in a portfolio, diversifies the types of investments, thus reducing overall portfolio risk, especially in cases where non-correlated assets are included.
  5. Less volatility: Commercial real estate has historically shown less volatility than stocks, making it a safer investment in times of economic uncertainty.
Although there is stress and concern within the commercial real estate escort relative to the significant increase in interest rates as a result of the Fed’s policies to fight inflations, and the looming $1.5 trillion of debts maturities over the next 3 years, according to Patrick  Carroll, Founder & CEO, there is clearly one real estate segment that is riding out this wave; Multi-Family. In contrast to the general commercial real estate market, multi-family has “strong fundamentals”. Tenants are paying rents and the market is healthy, said Carroll. The current economic environment provides stability and growth in multi-family. As the increase in residential property prices of the recent past, combined with the substantial increase in the cost of debt, multifamily has become the only reasonable, and preferred option for many. Multi-family, at its core, is a necessity based product, providing many with a place to call home.

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