2q 2012 | northwest atlanta office | market report
DESCRIPTION
Colliers International | Atlanta 2Q 2012 report for Norhwest Atlanta office marketTRANSCRIPT
NEW SUPPLY, ABSORPTION AND VACANCY RATES
SUBMARKET REPORTATLANTA
www.colliers.com/atlanta
MARKET INDICATORS
Q2 2012 | NORTHWEST ATLANTA
Cum
berl
and
TRENDS & HIGHLIGHTS
12%
13%
14%
15%
16%
17%
18%
19%
(250,000)
(200,000)
(150,000)
(100,000)
(50,000)
0
50,000
100,000
150,000
2Q11 3Q11 4Q11 1Q12 2Q12
Absorption Deliveries Vacancy
UPDATE Recent Transactions in the Market
SALES ACTIVITY
PROPERTY ADDRESS SALE PRICE SIZE SF PRICE / SF BUYER
355 Tower Rd. $10,450,000 55,000 $190 Wellstar Health SystemCobb Galleria 75 $9,255,000 113,848 $81.29 Baker Dennard & Goetz280 Interstate North Cir. $8,700,000 124,273 $70.01 Atlanta Property Group358 Roswell St. $2,120,000 30,000 $70.67 Philip Goldstein
LEASING ACTIVITY
TENANT PROPERTY ADDRESS SIZE SF TYPE
First Option Mortgage Platinum Tower 40,127 Class A Lease
PCI Group 1000 Parkwood 22,975 Class A Lease
In Zone Brands Overlook III 17,911 Class A Lease
Timbervest Northcreek OP 200 17,059 Class A Renewal & Expansion
• Second quarter’s occupancy loss in the Cumberland offi ce market was the worst of any other offi ce submarket in Atlanta. Absorption totaled negative (212,176) SF over the past three months. Space consolidations by IBM at 1500 & 1600 Riveredge Pkwy. were the largest move-outs in the submarket. Also, Greenberg Traurig’s move-out at The Forum contributed to the negative result as well.
• The Cumberland area is starting to see a small increase in leasing; however, activity remains lackluster for the most part. The submarket’s largest competitor, Central Perimeter, is seeing a majority of the leasing activity including the larger transactions in the market.
• Cumberland is not likely to see substantial occupancy gains in the second half of 2012 which means the submarket will fi nish the year with more vacant space than it had at the beginning of the year.
Squa
re F
eet
Source: CoStar Property, Colliers Research
Q2 2012Projected
Q3 2012
VACANCY
NET ABSORPTION
CONSTRUCTION — —
RENTAL RATE
Total SF 27,365,385
Vacancy Rate 17.9%
YTD Net Absorption (169,602)
YTD Deliveries 0
Under Construction 0
Avg. Class A Rate $21.68
SKYLINE REVIEW
35
30
25
20
15
10
5
Space Available Direct Sublet
Flo
ors
BUILDING Riverwood 100 Overlook III 200 Galleria 400 Galleria CumberlandCenter II
RBA 502,527 SF 438,709 SF 438,273 SF 440,000 SF 413,247 SF
TYPICALFLOOR SIZE 21,889 SF 26,000 SF 22,000 SF 23,157 SF 24,308 SF
% LEASED 90% 80.2% 82.2% 83.2% 83.8%
LARGESTSPACE AVAIL. 24,931 SF 38,512 SF 23,094 SF 24,586 SF 49,500 SF
RENTAL RATEPER SF (Gross) $24.50 $23.50-$24.00 $22.00 $24.50 $22.50
1 2 3 4 5
BUILDING One Paces West Two Paces West Platinum Tower The Towers at Wildwood Plaza
RBA 274,948 SF 371,523 SF 312,591 SF 706,307 SF
TYPICALFLOOR SIZE 22,000 SF 20,640 SF 21,000 SF 43,362 SF
% LEASED 85.8% 87.3% 93.6% 93.5%
LARGESTSPACE AVAIL. 34,253 SF 16,851 SF 6,935 SF 25,341 SF
RENTAL RATEPER SF (Gross) $21.00-$21.50 $21.00-$22.00 $24.00 $19.75-$24.50
6 7 8 9
Source: CoStar Property
35
30
25
20
15
10
5
Flo
ors
P. 2 | COLLIERS INTERNATIONAL
MARKET REPORT | Q2 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA
AERIAL LEGEND
POINTS OF INTEREST
1
2
3
4
5
6
Cumberland Mall
Galleria Mall
Cobb Energy
Arts Centre
Chattahoochee
Recreation Center
Dobbins Air Base
Vinings Area
PLANNED CONSTRUCTION
Buildings by Numbers (see opposite page)
New Construction
1
2
3
5
6 7
8
9
1
4
1
2 3
4
5
6
4
2
RIVERWOOD PROJECT$300M project530,000 SF Class A offi ce90,000 SF retail400 residential units200 room hotelDeveloper: Seven Oaks Co.
555 GALLERIA250,000-300,000 SFClass A Build-To-SuitConstruction contigent upon leasingDeveloper: Childress Klein
1
2
MARKET REPORT | Q2 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA
COLLIERS INTERNATIONAL | P. 3
COLLIERS INTERNATIONAL
ATLANTA OFFICE SPECIALISTS:
www.colliers.com/atlanta
Accelerating success.
IN THE NEWS
• Marietta getting New York company’s IT operations: Sterling Infosystems is relocating to Cobb County, bringing with it 35 high-paying software jobs. The company is an information technology and engineering business involved with employment screening systems. Positions to be fi lled include software applications developers, network engineers and software project managers. The state and county were chosen for the relocation due to the abundance of talent in the region and the technology ecosystem in Georgia. The move should be completed by the third quarter.
• IBM campus site work started: The corporate campus for IBM off of Northside Parkway will soon be no more as redevelopment for a new North Atlanta High School has begun. The fi rst phase of the project will include an 11-story building which will house 2,350 students. The second phase will include a 105,000 SF auditorium, theater and gym. Expected completion of phase one is the fall of 2013.
• Gentiva expansion smaller than expected: Gentiva Health Services recently signed a renewal & expansion totaling 60,000 square feet at Riverwood 100. The amount of the expansion totals about 7,000 square feet. Back in 2011, the company was reported seeking almost 65,000 square feet for expansion, following an acquisition of Odyssey Healthcare in Dallas, TX and possibly adding 100 jobs. The new lease, however, does not include these additional jobs and for the time being it appears the smaller expansion will suit the company’s short-term needs.
Accelerating success.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTHWEST ATLANTA LISTINGS
GALLERIA 600
14,200 SF SubleasePete Shelton
955 COBB PLACE BLVD.
10,731 SF LeaseAndrew Walker
GALLERIA 75
1,412-3,413 SF LeaseScott O’Halloran / Will Tyler
NEWMARKET BUSINESS PARK
1,060-4,653 SF LeaseLee Evans / Scott O’Halloran
ONE OVERTON PARK
6,673 SF SubleaseAndrew Walker
OVERLOOK III
11,184 SF SubleaseAndrew Walker
10%
11%
12%
13%
14%
15%
16%
17%
18%
(40,000)(20,000)
020,00040,00060,00080,000
100,000120,000140,000
2Q11 3Q11 4Q11 1Q12 2Q12
Absorption Deliveries Vacancy
Total SF 8,657,996
Vacancy Rate 14.6%
YTD Net Absorption 62,550
YTD Deliveries 0
Under Construction 16,650
Avg. RentalRate $15.76
KENNESAW | MARIETTA | CHEROKEE CO. Offi ce Market Stats
Squa
re F
eet
UNITED STATES:
Colliers InternationalTwo Midtown Plaza | Suite 11001349 West Peachtree Street, NEAtlanta, Georgia, 30309TEL +1 404 888 9000FAX +1 404 870 2845
Source: CoStar Property, Colliers Research
This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member fi rm of Colliers International Property Consultants, an affi liation of independent companies with over 520 offi ces throughout 62 countries worldwide.
522 offi ces in 62 countries on 6 continentsUnited States: 147Canada: 37Latin America: 19Asia Pacifi c: 201EMEA: 118
• $1.8 billion in annual revenue
• Over 2.5 billion square feet under management
• Over 12,000 professionals
Bob Allen Bob Mathews
Jill Bomar Craig Mendel
Lee Evans Scott O’Halloran
Deming Fish Hugh Paff ord
Huston Green Jodi Selvey
Tim Huff man Fred Sheats
Russ Jobson Pete Shelton
Jeff Kelley Hayes Swann
Drew Lavine Will Tyler
Michael Lipton Andrew Walker
Nicole Littleton Bob Ward
MARKET REPORT | Q2 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA