Rising rents in Atlanta's West Midtown spark business closures and relocations

Is the rent too high in Atlanta?

A series of business closures in Atlanta's trendy West Midtown area has led to a series of small business town halls led by Invest Atlanta.

ATLANTA - A series of business closures in Atlanta's trendy West Midtown area has led to a series of small business town halls led by Invest Atlanta. 

Businesses have pointed out a slew of issues, from the lack of quick access to loans for immediate needs, lack of parking, and rising retail rents.

The backstory:

According to CoStar, the average asking retail rent in 2020 was about $18 per square foot. Now, that number has jumped to about $23 per square foot—that's a 28% increase. It adds that while average asking rents in Atlanta are still more affordable than the national average, US rent has only grown by about 16% since 2020.

La Bodega/Buenos Dios Cafe is preparing to set up shop in the southwest Atlanta neighborhood of Sylvan Hills. Rising rents have chased them all over town. They managed to survive the pandemic after leaving downtown for West End. The last straw before heading to Sylvan Hills was a proposed 28% increase in rent, all at once, in addition to a cut of sales.

They purchased the building for their new location with help from a pilot down payment assistance program set up by Invest Atlanta. The economic development authority believes the program could be part of the solution to rising rents by providing help for merchants to buy buildings.

The program worked with $2 million and is trying to raise $3 million to extend the initiative.

What they're saying:

Invest Atlanta CEO Eloisa Klementich believes the down payment assistance pilot program can be an important tool if extended.

"Just like a homeowner would be able to get down payment assistance to buy their home," says Eloisa Klementich, Invest Atlanta CEO. "We'd like to make that permanent because you have a better chance of owning your destiny."

La Bodega, which participated in the pilot program, believes buying its building, which used to belong to a BBQ business, saved their business.

"Oh, my Lord. So excited, no more rent," exclaims co-owner Jeannette Flores-Katz. "Everyone is excited that I'm here."

Additionally, some small business owners are struggling to get access to cash for immediate needs, such as the money needed to ramp up inventory to take advantage and piggyback off of big events in the city.

"What we're thinking is, we need a loan product that is smaller, faster to market, and can really address some of the needs of the now and provide quick cash."

What's next:

Invest Atlanta continues to hold town halls across the city to gather input from small businesses.