Q2 2010 | BUCKHEAD
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
19,728,911
1,200,000
31%
Vacancy Rate
24.7%
26%
YTD Net Absorption
29,488
1,000,000 800,000 600,000
21%
400,000
0 (200,000)
YTD Deliveries
915,626
16%
200,000
11% 2Q09
3Q09
4Q09
1Q10
(400,000)
6% Absorption
Deliveries
Under Construction
0
2Q10
Avg. Class A Rate
$25.67
Source: CoStar Property
Vacancy
MARKET INDICATORS Q2 2010
NEXT QTR
UPDATE Recent Transactions in the Market SALES ACTIVITY
VACANCY PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION RENTAL RATE
—
—
—
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Tower Place 200 (‘09 Forc.)
$32,000,000
259,888
$123.13
CW Capital
3166 Mathieson Dr. (‘09)
$3,350,000
8,500
$394.12
Forum Inv. Properties
38 Old Ivy-3 & 4 (‘09)
$2,058,000
6,256
$328.96
ISP Sports
66 Lenox Pointe (‘09)
$880,000
3,240
$182.07
The Issa Law Firm
Buckhead
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Greenberg Traurig
Terminus 200
110,329
Class A Lease
Novelis
Two Alliance Center
100,200
Class A Lease
Omnicom Group
One Alliance Center
100,000
Class A Renewal
Wells Fargo
Prominence in Buckhead
57,704
Class A Lease
•
Buckhead office absorption is up 32% from this time last year. Second quarter’s positive absorption can be mostly attributed to a number of small occupancies ranging between 7,000 to 13,000 square feet. The larger move-ins for the quarter mostly consisted of relocations within the submarket which in some cases resulted in a net loss of occupied space.
•
Office leasing remains strong in the submarket. Tenants with leases expiring in the next couple of years, and requiring a full floor of office space are looking at Buckhead office towers.
•
Concessions and allowances are averaging a year of free rent and between $60-$80 per square foot on a 10-year deal for Class A office space in the submarket; still among the highest in Atlanta.
MARKET REPORT | Q2 2010 | ATLANTA OFFICE | BUCKHEAD
SKYLINE REVIEW Space Available Direct Sublet 50 45 40
Floors
35 30 25 20 15 10 5
BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
3344 Peachtree
Atlanta Plaza
3630 Peachtree
Two Alliance Center
Tower Place 100
482,699 SF
619,130 SF
436,585 SF
493,201 SF
609,936 SF
93.3%
76.7%
1.8%
61%
87%
12,475 SF
64,258 SF
428,785 SF
102,833 SF
23,135 SF
$32.00-$35.00
$25.00-$26.50
$32.00-$34.00
$32.00-$34.00
$24.50
1
2
3
4
5
3 2
8 4 10
5 5 1 4 9 7 10 6
6 12
P. 2
| COLLIERS INTERNATIONAL
8
3 7
1
2
9 11
MARKET REPORT | Q2 2010 | ATLANTA OFFICE | BUCKHEAD
RECENT DELIVERIES 3 Source: CoStar Property
3630 PEACHTREE 436,585 SF Delivered January 2010 Developer: Pope & Land
4
TWO ALLIANCE CENTER Terminus 100
Terminus 200
Phipps Tower
The Lenox Bldg.
Prominence in Buckhead
581,874 SF
564,850 SF
479,041 SF
348,152 SF
424,309 SF
98%
42.2%
6.3%
81.4%
61.6%
11,842 SF
326,444 SF
442,365 SF
32,611 SF
133,323 SF
$30.50
$31.50-$32.75
$32.50
$26.00-$28.00
$24.50
6
7
8
9
10
AERIAL LEGEND
Buildings by Number (see opposite page)
493,201 SF Delivered September 2009 Developer: Tishman Speyer
7
TERMINUS 200
POINTS OF INTEREST
564,850 SF Delivered September 2009 Developer: Cousins Properties
1 Lenox Mall
7
UGA Terry College of Business Campus
2 Phipps Plaza
8
Ritz Carlton
3 Market Place
9
Intercontinental Hotel
4 Tower Walk
10
Grand Hyatt
5 Buckhead Station
11
JW Marriott
PHIPPS TOWER
Buckhead Village
479,041 SF Delivered March 2010 Developer: Crescent Resources
Lenox
8
MARTA Rail Line New Construction
Atlanta History
6 Center
12
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q2 2010 | ATLANTA OFFICE | BUCKHEAD
IN THE NEWS
480 offices in 61 countries on 6 continents
• Sony
Ericsson relocating Americas HQ to Atlanta: As part of a global restructuring strategy, Sony Ericsson is moving from its current North American headquarters in Research Triangle Park, North Carolina to Terminus 200 in Buckhead. The company will lease two floors totaling 48,907 SF in the recently delivered office tower. The relocation provides Sony Ericsson with $4 million in state incentives, and closer proximity to its biggest customer AT&T Mobility and Hartsfield-Jackson International Airport. The move will bring 180 jobs to Atlanta including top management executives, sales persons and marketing staff. deal for Buckhead tower: One of the largest leases this year was recently signed at Buckhead’s Terminus 200 building. Greenberg Traurig will occupy 110,329 SF in the office tower, moving into the office tower next summer. The agreement took more than a year to be completed due to a restructuring of debt by Cousins Properties. The transaction brings Terminus 200 to almost 50% leased.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• Huge
•A
success story in Buckhead: Prominence in Buckhead, which lost its anchor tenant Marsh & McLennan in the first quarter, is back up to 62% leased thanks to recent lease signings. The building was 35% leased prior to 105,000 SF in lease commitments by Wells Fargo, Railcar Management and JP Morgan. Owners of the building have been credited with pursuing an aggressive strategy to increase occupancy.
•
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 professionals
UNITED STATES: AT A GLANCE | 3630 Peachtree
Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845
•
34-story, 735,296 SF mixed-use tower consisting of 420,201 SF of Class A office, 137 luxury condominium units and 16,384 SF of ground floor retail.
•
Delivered First Quarter 2010.
•
Office building currently 1.8% leased.
•
3.9-acre site located on the northwest corner of Peachtree Road and Peachtree-Dunwoody Road which provides unequalled vista views.
Bob Allen
Bob Mathews
•
Full project, including phase II residential tower, is a collaborative effort from four developers: Pope & Land, Duke Realty, Novare Group and Post Properties.
Neal Baker
Craig Mendel
Convenient and easy walking access to surrounding world-class shopping, fine dining and luxury hotels. Also within a mile of two MARTA rail stations.
Russ Jobson
Jodi Selvey
Nicole Kamen
Fred Sheats
•
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:
Patrick Braswell
Scott O’Halloran
Lee Evans
Hugh Pafford
Jeff Kelley
Pete Shelton
Brett Kingman
Andrew Walker
Michael Lipton
Bob Ward
COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS
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 480 offices throughout more than 61 countries worldwide.
LENOX TOWERS
PEACHTREE PALISADES
NORTH TOWER 343 - 7,356 SF Lease SOUTH TOWER 343 - 17,214 SF Lease Jodi Selvey / Scott O’Halloran
1,417 - 47,647 SF Lease Lee Evans / Scott O’Halloran
www.colliers.com/atlanta
Accelerating success.