Q1 2012 | BUCKHEAD
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 22%
350,000
21%
300,000
20%
Square Feet
400,000
250,000
19%
200,000
18%
150,000
17%
100,000
16%
50,000
15%
0
14% 1Q11
2Q11 Absorption
3Q11
4Q11
Deliveries
Total SF
20,551,189
Vacancy Rate
18.3%
YTD Net Absorption YTD Deliveries
0
Under Construction
0
Avg. Class A Rate
1Q12
104,345
$24.66
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2012
UPDATE Recent Transactions in the Market
Q2 2012
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
3399 Peachtree
$59,300,000
348,152
$170.33
Parmenter Realty
—
3314 Peachtree Rd./Land
$9,000,000
9,187
$979.65
Kurkin Forehand Brandes
—
3330 Peachtree Rd.
$5,500,000
62,499
$88
Pope & Land
Buckhead
LEASING ACTIVITY
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TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
AmWINS Colemont
3630 Peachtree
28,259
Class A Lease
Citigroup
The Pinnacle
27,126
Class A Lease
Asurion
Piedmont Center 6
20,000
Class A Lease
Stephens Inc.
3344 Peachtree
12,475
Class A Lease
•
Buckhead ended the first quarter of 2012 with just over 104,000 SF absorbed. Move-in activity was somewhat quiet with Kids II accounting for almost all of the space filled in the quarter at 102,818 SF.
•
The office vacancy rate in Buckhead has seen the largest drop of any other submarkets compared to this time last year. Over this period, Buckhead’s vacancy rate dropped 3.3%.
•
Buckhead’s office leasing activity remained steady in first quarter; however, the submarket saw less activity than other areas such as Central Perimeter, North Fulton and Northwest Atlanta. This could be due to the number of more affordable space options available in these other areas.
•
Buckhead is the most prominent submarket where previously signed transactions, some dating over a year ago, are now taking occupancy. Kids II was an example of this. The submarket’s absorption levels will be boosted by this move-in activity over the next six months.
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | BUCKHEAD
SKYLINE REVIEW Space Available Direct Sublet 50 45 40
Floors
35 30 25 20 15 10 5
BUILDING
3344 Peachtree
Atlanta Plaza
3630 Peachtree
Two Alliance Center
Tower Place 100
RBA
483,726 SF
650,827 SF
436,309 SF
493,201 SF
609,936 SF
TYPICAL FLOOR SIZE
25,358 SF
24,070 SF
28,259 SF
25,000 SF
21,000 SF
% LEASED
97.6%
67.3%
59.2%
92%
82.2%
13,405 SF
194,398 SF
84,777 SF
24,736 SF
20,610 SF
$34.00-$35.00
$26.50
$33.00-$34.50
$32.22-$35.22
$23.50-$24.50
1
2
3
4
5
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
3 2
8 4 10
5
8
3 7 5
5 1 4 2 9 7 10 6 6 3
12
4 1 P. 2
| COLLIERS INTERNATIONAL
1
2
9 11
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | BUCKHEAD
ACTIVE PROJECTS 1 Source: CoStar Property
BUCKHEAD ATLANTA $700M Mixed-Use Project 51,000 SF Boutique Office 311,500 SF Retail 370 Luxury Apartment Units Delivering 2013 Developer: Oliver McMillan
2
Terminus 100
Terminus 200
Phipps Tower
The Lenox Bldg.
Prominence in Buckhead
581,874 SF
564,850 SF
472,267 SF
348,152 SF
424,309 SF
23,529 SF
24,400 SF
25,000 SF
18,154 SF
22,332 SF
98.6%
90.2%
18.4%
82.3%
93.6%
13,974 SF
24,800 SF
200,904 SF
31,334 SF
10,423 SF
$34.03-$35.28
$31.75-$33.00
$34.00
$26.00-$28.00
$27.00
6
7
8
9
10
AERIAL LEGEND
POINTS OF INTEREST 1 Lenox Mall
7
UGA Terry College of Business Campus
3330 PEACHTREE Mixed-Use Project 100,000-200,000 SF Office Hotel/Restaurant/Multi-Family Developers: Regent Partners/ Pope & Land
3 PRESERVE PROP. SITE Proposed Luxury Apartments 2.5-acres Up to 250 units Developer: Preserve Properties
4 JLB PARTNERS SITE
2 Phipps Plaza Buildings by Number (see opposite page)
8
Ritz Carlton
3 Market Place
9
Intercontinental Hotel
4 Tower Walk
10
Grand Hyatt
Lenox
Proposed Luxury Apartments 373 units 6.5-acres Approximately $60M Project Developer: JLB Partners LP
MARTA Rail Line New Construction
5 CITYPLACE
5 Buckhead Station Atlanta History
6 Center
11
JW Marriott
12
Buckhead Village
Proposed Condo Development 16-acre Tract Foreclosed by Wells Fargo 2009 Currently For Sale
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | BUCKHEAD
IN THE NEWS
522 offices in 62 countries on 6 continents
• Long-awaited
Buckhead interchange revamp starts: The interchange of Georgia 400 and I-85 is being reconstructed to allow southbound motorists to access each thoroughfare directly without using arterial roads. For over 20 years, southbound motorists have had to exit GA 400 and/or I-85, then access arterial roads such as Sidney Marcus Blvd., Buford Hwy. and Lenox Rd. to gain access to I-85 and GA 400 northbound, respectively. The new interchange will relieve congestion on the arterial roads and keep traffic moving more freely. The GDOT hopes to have the project completed be the end of 2013. Atlanta expected to boost area retail: The new Buckhead Atlanta development is scheduled to begin reconstruction in the next couple of months. Once underway, the area south of Piedmont Road will begin carving out the landscape for a new retail destination in Buckhead. Despite the increased competition for customers, other retail landlords in the area believe the new project will have a positive affect on their existing properties, and solidify Buckhead as Atlanta’s premier retail destination. Once completed, Buckhead Atlanta will be the start of a retail corridor along Peachtree Road, extending all the way to Phipps Plaza and Selig Properties’ Buckhead Triangle.
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
• Buckhead
• Lenders
take back two Buckhead office buildings: Following failed negotiations to restructure debt, two office buildings with different owners were recently foreclosed upon. Securities Centre, which was purchased back in 2006 was foreclosed in November 2011 by Bank of America; and Resurgens Plaza, also purchased in 2006, went back to its lender CWCapital in December 2011.
AT A GLANCE | Buckhead Atlanta •
New owner Oliver McMillan will redevelop project formerly known as ‘Streets of Buckhead’
•
Purchased for $400 million; plans to invest an additional $300 million.
•
Urban village concept to include 311,500 SF of retail and restaurants; 51,000 SF of boutique offices; and two 20-story apartment complexes.
•
COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS
Work on the project to resume around the spring of 2012, with a target opening in 2014.
•
$1.8 billion in annual revenue
• Over 2.5 billion square feet under
management • Over 12,000 professionals
UNITED STATES: Colliers International Two Midtown Plaza | Suite 1100 1349 West Peachtree Street, NE Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen
Bob Mathews
Jill Bomar
Craig Mendel
Lee Evans
Scott O’Halloran
Deming Fish
Hugh Pafford
Huston Green
Jodi Selvey
Tim Huffman
Fred Sheats
Russ Jobson
Pete Shelton
Jeff Kelley
Hayes Swann
Drew Lavine
Will Tyler
Michael Lipton
Andrew Walker
Nicole Littleton
Bob Ward
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 firm of Colliers International Property Consultants, an affiliation of independent companies with over 520 offices throughout 62 countries worldwide.
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