3q 2010 | atlanta midtown office | market report
DESCRIPTION
Colliers International | Atlanta 3Q 2010 report for the Midtown Atlanta office marketTRANSCRIPT
NEW SUPPLY, ABSORPTION AND VACANCY RATES
SUBMARKET REPORTATLANTA
www.colliers.com/atlanta
MARKET INDICATORS
Q32010
NEXTQTR
VACANCY —
NET ABSORPTION
CONSTRUCTION — —
RENTAL RATE
Q3 2010 | MIDTOWN
Mid
tow
n
TRENDS & HIGHLIGHTS
(200,000)
0
200,000
400,000
600,000
800,000
3Q09 4Q09 1Q10 2Q10 3Q1010%
12%
14%
16%
18%
20%
22%
24%
Absorption Deliveries Vacancy
Total SF 19,666,465
Vacancy Rate 21.9%
YTD Net Absorption 118,882
YTD Deliveries 752,710
Under Construction 0
Avg. Class A Rate $23.60Source: CoStar Property
UPDATE Recent Transactions in the Market
SALES ACTIVITY
PROPERTY ADDRESS SALE PRICE SIZE SF PRICE / SF BUYER
271 17th Street $75,000,000 548,039 $136.85 CBRE InvestorsCampanile $36,000,000 446,626 $80.60 Dewberry Capital728-736 W. Peachtree St. $2,299,000 29,400 $78.20 Midtown Opera, LLC977 Ponce de Leon Ave. $1,643,000 15,436 $106.44 Clare Jay LLC
LEASING ACTIVITY
TENANT PROPERTY ADDRESS SIZE SF TYPE
Alston & Bird Law Firm One Atlantic Center 340,000 Class A Renewal & Contraction
Kilpatrick Stockton 1100 Peachtree 206,140 Class A Renewal
Georgia’s Own Credit Union Campanile 102,000 Class A Renewal & Expansion
Purchasing Power Pershing Point Plaza 37,000 Class A Lease
• Midtown posted the second highest amount of positive absorption in third quarter compared to all other submarkets. Occupancy increased by 122,620 SF in the three month period. Most of the occupiers in third quarter were from tenants with spaces between 10,000-20,000 SF.
• The average quoted rate for offi ce space in Midtown increased for the third straight quarter. Though 4.3 million square feet of space is vacant, it appears landlords in the submarket are feeling confi dent enough to hold fi rm on their rental rates and even raise them in some instances.
• Leasing activity in Midtown remains steady and the submarket is expected to help lead the offi ce market recovery next year. Large prospects in the market are keeping Midtown on their short list.
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SKYLINE REVIEW
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Space Available Direct Sublet
Flo
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BUILDING One AtlanticCenter 1180 Peachtree 1075 Peachtree Promenade II 1100 Peachtree
RBA 1,079,312 SF 669,575 SF 752,710 SF 774,344 SF 581,833 SF
% LEASED 87% 93% 24% 54.4% 86.5%
LARGESTSPACE AVAIL. 57,999 SF 15,740 SF 512,918 SF 329,464 SF 56,047 SF
RENTAL RATEPER SF (Gross) $26.70-$32.70 $33.10-$35.10 $34.00-$36.00 $24.00-$26.50 $23.30-$29.30
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P. 2 | COLLIERS INTERNATIONAL
MARKET REPORT | Q3 2010 | ATLANTA OFFICE | MIDTOWN
Buildings by Number(see opposite page)
MARTA Rail Line
New Construction
POINTS OF INTEREST
Colony Square
Federal Reserve
Margaret MitchellHouse & Museum
Technology Square
The Fox Theater
The Varsity
Georgia Tech
Atlantic Station
Center forPuppetry Arts
Woodruff ArtsCenter
Ansley Park
Savannah Collegeof Art & Design
AERIAL LEGEND
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999 Peachtree 271 17th Street The Proscenium Atlantic CenterPlaza Campanile Bldg.
621,908 SF 548,039 SF 533,135 SF 499,601 SF 446,626 SF
79.4% 40.6% 97.9% 77.1% 30.4%
52,965 SF 157,820 SF 25,393 SF 44,912 SF 213,348 SF
$27.00-$29.00 $31.00-$32.00 $28.00-$32.00 $23.00-$30.00 $29.50-$30.50
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Source: CoStar Property
1075 PEACHTREE ST.752,710 SFDelivered 1st Qtr. 2010Developer: Selig/Daniel JV
271 17TH STREET534,120 SFDelivered April 2009Developer: AIG Global/Carter
RECENT DELIVERIES
PLANNED CONSTR.
1400 PEACHTREE400,000-500,00 SF Offi ce TowerMixed-Use DevelopmentDeveloper: Shailendra Group/ Jamestown Properties
METROPOLITAN CENTER570,000 SF Offi ce TowerMixed-Use DevelopmentDeveloper: Daniel Corp/MetLife/ Selig Company
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MARKET REPORT | Q3 2010 | ATLANTA OFFICE | MIDTOWN
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
• Alston & Bird consolidates into One Atlantic Center: Atlanta’s largest law fi rm will not be relocating to a new offi ce development, but will instead be consolidating from its space in Atlantic Center Plaza to One Atlantic Center. Alston & Bird leases about 435,000 SF between both buildings. Due to budget crunching, the law fi rm will downsize to a total of 340,000 SF in One Atlantic Center after its current landlord Hines Properties was able to put together an enticing incentives package to stay put. The lease takes the 1.1 million sq. ft. tower to 87% leased. Occupancy of the expansion space will begin in 2012.
• Jamestown plans $180M investment in City Hall East: Plans for City Hall East call for a complete redevelopment and makeover of the historic building by Jamestown Properties. Investment in the project would be about $180 million, including paying the city of Atlanta $15.5 million for the property. The redevelopment would include a mix of retail, offi ces and residences. Twenty percent of the 1.1 million square feet project would be stores. The Atlanta City Council recently approved sale of the property.
• Regions Bank eyes Midtown regional HQ: Looking to raise its profi le among Atlanta’s many larger banks, Regions Bank is close to leasing about 80,000 SF of offi ce space on four fl oors at Atlantic Center Plaza. The move from its current offi ce in Central Perimeter to Midtown will give the bank an intown presence and allow it to compete head on against it’s bigger rivals. The four fl oors to be occupied will likely come from Alston & Bird law fi rm, which recently decided to consolidate to One Atlantic Center.
Accelerating success.
AT A GLANCE | City Hall East
COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS
400 TRABERT AVE.
3,644 SF Lease; 10,428 SF Sale
Jeff Kelley / Bob Ward /Pete Shelton
THE PROSCENIUM
9,508 SF SubleaseJeff Kelley / Bob Ward /
Pete Shelton
715 PEACHTREE
342,860 SF LeaseScott O’Halloran /
Lee Evans
909 W. PEACHTREE
12,000 SF LeaseRuss Jobson / Bob Allen
1570 NORTHSIDE DR.
4,075 SF SubleaseJodi Selvey
PERSHING PARK
PLAZA
1,790-5,220 SF Lease Lee Evans
• Former Sears, Roebuck & Co. mailing facility and most recently Atlanta City Hall East.
• First opened in 1926.• 2-million square foot complex to be redeveloped
into a mixed-use project containing retail space, including boutique shops and anchor-tenant space up to 150,000 SF for a major retailer. Residences and restaurants are also part of the redevelopment project.
• Jamestown Properties is investing $180 million into the redevelopment, including $15.5 million to the City of Atlanta for the property.
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 | MIDTOWN