3q 2010 | atlanta downtown office market report
DESCRIPTION
Colliers International Office Market Report for Atlanta Downtown SubmarketTRANSCRIPT
NEW SUPPLY, ABSORPTION AND VACANCY RATES
SUBMARKET REPORTATLANTA
www.colliers.com/atlanta
MARKET INDICATORS
Q32010
NEXTQTR
VACANCY —
NET ABSORPTION
CONSTRUCTION — —
RENTAL RATE
Q3 2010 | DOWNTOWN
Dow
nto
wn
TRENDS & HIGHLIGHTS
(200,000)
(150,000)
(100,000)
(50,000)
0
50,000
100,000
150,000
200,000
3Q09 4Q09 1Q10 2Q10 3Q10
12%
13%
14%
15%
16%
17%
Absorption Deliveries Vacancy
Total SF 24,937,459
Vacancy Rate 15.4%
YTD Net Absorption 74,179
YTD Deliveries 0
Under Construction 0
Avg. Class A Rate $19.49Source: CoStar Property
UPDATE Recent Transactions in the Market
SALES ACTIVITY
PROPERTY ADDRESS SALE PRICE SIZE SF PRICE / SF BUYER
120 Ralph McGill Blvd. (Forc.) $2,950,000 23,080 $127.82 Sunrise Bank of Atlanta159 Ralph McGill Blvd. (Forc.) $1,200,000 36,000 $33.33 Georgia Properties LLC353-363 Parkway Dr. $1,000,000 9,000 $111.11 Metro. Atlanta Ob/Gyn139 Ralph McGill Blvd. $850,000 19,500 $43.59 Ralph McGill 139, LLC
LEASING ACTIVITY
TENANT PROPERTY ADDRESS SIZE SF TYPE
InComm 250 Williams St. 186,675 Class A Renewal & Exp.
Carlock Copeland & Stair 191 Peachtree 52,000 Class A Lease
McKinsey & Co. Georgia Pacifi c Center 50,000 Class A Renewal
CredAbility 270 Peachtree 41,772 Class A Lease
• Downtown remains one of most stabilized offi ce markets in Atlanta. Third quarter absorption totaled 49,202 SF, marking the second consecutive quarter of increased occupancy.
• For the year, offi ce leasing in the Downtown offi ce submarket has been steadily consistent. The largest deal this quarter was a renewal and expansion by InComm at 250 Williams Street. The gift and prepaid card distributor will be moving into an additional 90,506 SF early next year.
• On the whole, Downtown has held its own through the current economic landscape. In the past two years, the submarket has essentially broke even with move-ins and move-outs.
• Downtown is garnering a lot of attention as of late with new attractions being suggested for the area.
SKYLINE REVIEW
60
55
50
45
40
35
30
25
20
15
10
5
Space Available Direct Sublet
Flo
ors
BUILDING Bank of America Plaza SunTrust Plaza Georgia-Pacifi cCenter 191 Peachtree Centennial Tower
RBA 1,253,499 SF 1,249,022 SF 1,133,840 SF 1,209,721 SF 638,731 SF
% LEASED 80.6% 92.4% 88.4% 84.8% 89.5%
LARGESTSPACE AVAIL. 203,068 SF 23,545 SF 112,609 SF 102,045 SF 37,600 SF
RENTAL RATEPER SF (Gross) $30.00-$31.00 $26.00-$28.00 $21.00-$22.00 $26.00 $15.00-$22.00
1 2 3 4 5
1 2 34
5
6
7
910
13
45
67
8
9
10
1112
1
2
2
13
14
15163
8
P. 2 | COLLIERS INTERNATIONAL
MARKET REPORT | Q3 2010 | ATLANTA OFFICE | DOWNTOWN
Buildings by Number(see opposite page)
MARTA Rail Line
New Construction
AERIAL LEGEND
100 Peachtree Marquis One North Tower 270 Peachtree 55 Park Place
625,000 SF 460,437 SF 302,951 SF 325,000 SF 553,018 SF
47.7% 67% 65.9% 73.1% 74.2%
122,386 SF 54,287 SF 127,713 SF 41,772 SF 278,716 SF
$17.50-$19.50 $20.50-$21.50 $18.50-$19.50 $18.00-$19.00 $18.50
6 7 8 9 10
Source: CoStar Property
POINTS OF INTEREST
Georgia TechPhilips Arena2 10
Atlanta Civic Center3 11Georgia WorldCongress Center
Georgia Dome1 9 The Varsity
CNN Center4 Sweet AuburnCurb Market12
5 CentennialOlympic Park Georgia State University13
Georgia Aquarium Underground Atlanta6 14
State CapitalWorld of Coke7 15
Turner Field8 The Fox Theater 16
E Q U I T A B L E
CIVIL RIGHTS MUSEUM100,000 SF$125 million projectConstruction pending
NOTABLE PROJECTS
50 ALLEN PLAZA870,914 SFDeveloper: Barry Real EstateProposed
GSU SCIENCE CENTER350,000 SFDelivered March 2010
1
2
3
MARKET REPORT | Q3 2010 | ATLANTA OFFICE | DOWNTOWN
COLLIERS INTERNATIONAL | P. 3
UNITED STATES:
Colliers International1349 West Peachtree StreetSuite 1100Atlanta, Georgia, 30309TEL +1 404 888 9000FAX +1 404 870 2845
COLLIERS INTERNATIONAL
ATLANTA OFFICE SPECIALISTS:
480 offi ces in 61 countries on 6 continentsUnited States: 135Canada: 39Latin America: 17Asia Pacifi c: 194EMEA: 95
• $2 billion in annual revenue
• Over 2 billion square feet under management
• Over 15,000 professionals
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 480 offi ces throughout more than 61 countries worldwide.
www.colliers.com/atlanta
Accelerating success.
IN THE NEWS
• Plenty of land downtown, boosters tell developers: Central Atlanta Progress recently released a map highlighting areas ripe for development in the submarket. The map shows fi ve areas in Downtown with tracts large enough to support transformative development. These fi ve areas include: the area near Five Points MARTA station, the ‘Gulch’ area near the Georgia Dome, the Sweet Auburn district, the Fairlie-Poplar district and the “railroad district” near Castleberry Hill. In all, these areas encompass a total of 467 under utilized acres.
• Grand plans for ‘Gulch’ hub a transit gamble: With plans for a multi-modal transit terminal back on track, the project faces a number of uncertainties. The total cost of such a grandiose project is one; especially when even the best guess could be far off . Funding to build rail systems linking to the hub is another, along with whether or not metro Atlantans will take it upon themselves to adopt alternative transportation. Finally, there is question as to whether or not the hub will create demand for more real estate in the area given the excess of empty and dilapidated buildings. Regardless, enough interest from both local and international development fi rms exists for redeveloping the 16-acres tract.
• Cox Enterprises donates former AJC building to city: The former location of the Atlanta Journal-Constitution is being donated to the city of Atlanta by Cox Enterprises. The AJC relocated from the facility earlier this year to offi ce space in Central Perimeter. The donation includes a nine-story offi ce building, four-story printing press building, warehouse space and surface parking. Mayor Kasim Reed plans to use the facilities for police and fi re training academies, gallery space and for a public auditorium.
Accelerating success.
AT A GLANCE | Streetcar gets funding
COLLIERS INTERNATIONAL | ATLANTA OFFICE | DOWNTOWN LISTINGS
• U.S. Department of Transportation agrees to grant $47 million to the city’s proposed $70 million streetcar project.
• First phase of project will run 2.6 miles from the King Center site to Centennial Olympic Park, featuring a dozen stops and direct connection to MARTA.
• Expected to provide 2,600 trips a weekday in its fi rst year of operation.
• Critics argue the streetcar will do nothing to ease metro Atlanta’s biggest transportation problems.
• Construction begins in 2012 with a completion date targeted for 2013.
135 ANDREW YOUNG
INTL. BLVD.
11,000 SF SaleJodi Selvey /Pete Shelton
Bob Allen Craig Mendel
Neal Baker Scott O’Halloran
Lee Evans Hugh Paff ord
Huston Green Jodi Selvey
Russ Jobson Fred Sheats
Nicole Kamen Pete Shelton
Jeff Kelley Hayes Swann
Brett Kingman Andrew Walker
Michael Lipton Bob Ward
Bob Mathews
MARKET REPORT | Q3 2010 | ATLANTA OFFICE | DOWNTOWN