2Q 2011 | Atlanta Buckhead Office | Market Report

Page 1

Q2 2011 | BUCKHEAD

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

20,611,322

350,000

24%

Vacancy Rate

22%

YTD Net Absorption

20.6%

300,000

Square Feet

250,000 200,000

20%

150,000

340,684

YTD Deliveries

0

Under Construction

0

18%

100,000 50,000

16%

0 (50,000)

2Q10

3Q10

Absorption

4Q10

1Q11

Deliveries

2Q11

14%

Avg. Class A Rate

$25.02

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q2 2011

UPDATE Recent Transactions in the Market

Q3 2011

SALES ACTIVITY VACANCY PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

3344 Peachtree Rd. (‘10)

$167,300,000

482,699

$346.59

Parkway Properties

The Medici

$13,200,000

152,000

$86.84

Piedmont Office Realty

3330 Peachtree Rd.

$5,500,000

62,499

$88

Pope & Land

Buckhead

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Morris Manning Martin

Atlanta Financial Center

124,000

Class A Renewal & Expansion

State Bank

Lenox Building

73,000

Class A Expansion

North Highland Co.

Terminus 200

69,922

Class A Lease

Kaiser Permanente

Piedmont Ctr. 10

23,000

Class A Lease

Buckhead office absorption topped 130,000 square feet for the second straight quarter. For the year, Buckhead has seen the second highest amount of office space absorbed in the Atlanta market.

The continued increase in Buckhead’s office occupancy is due to activity from tenants moving into the newest office towers in the submarket. The leasing activity from a year ago is now paying off in the form of positive absorption.

As a result of Buckhead’s positive activity over the past year, the submarket no longer has the highest vacancy rate in the market. Going forward, this is expected to continue. Tenants such as Greenberg Traurig, The Reznick Group and Windham Brannon are scheduled to move into large blocks of space in the second half of the year.


MARKET REPORT | Q2 2011 | 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

425,000 SF

493,201 SF

609,936 SF

TYPICAL FLOOR SIZE

25,358 SF

24,070 SF

28,877 SF

25,000 SF

21,000 SF

% LEASED

95%

68%

41%

89%

87%

12,475 SF

254,810 SF

86,649 SF

14,493 SF

15,775 SF

$32.00-$35.00

$26.50

$32.70

$32.00-$34.00

$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 | Q2 2011 | 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

100%

91.8%

18.4%

78.1%

79.7%

13,974 SF

24,800 SF

200,904 SF

30,312 SF

70,210 SF

$31.75-$33.00

$31.75-$33.00

$32.50

$26.00-$28.00

$25.25

6

7

8

9

10

AERIAL LEGEND

POINTS OF INTEREST 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

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

Buildings by Number (see opposite page)

Lenox

Proposed Luxury Apartments 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 | Q2 2011 | ATLANTA OFFICE | BUCKHEAD

IN THE NEWS

512 offices in 61 countries on 6 continents

• Morris

Manning & Martin cancels move to Midtown: After a breakdown in negotiations, one of the largest prospects in the market has decided to renew its 114,000 SF at Atlanta Financial Center and expand by another 10,000 SF. Morris, Manning and Martin had previously been mentioned as anchoring John Dewberry’s Campanile office building in Midtown, however as the process of getting a lease signed dragged on, ultimately “the terms significantly and materially changed during the course of finalizing our Campanile negotiations,” as managing partner Louise M. Wells stated to the Atlanta Journal-Constitution. Dewberry states its lender was not approving of the financial concessions package required by the law firm and this killed the deal.

Bank raising its flag in Buckhead: Looking to raise it’s visibility and profile in Buckhead, State Bank will be expanding its space in the Lenox Building to a total of 87,000 SF. The bank will get signage as part of the deal. Currently, the bank’s finance and special asset groups are in 14,000 SF in the building. The expansion will house corporate functions of the bank and allow for future growth.

United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117

• State

• Regent,

Pope & Land team up on new Buckhead project: The partnership of Regent Partners and Pope & Land recently closed on its acquisition of 3330 Peachtree, paying $5.7 million or $88/sq. ft. for the office building. The new owners are looking at two approaches for redevelopment of the building. One includes gutting and renovating the building, inside and out. The more likely scenario involves scrapping the structure all together and redeveloping the parcel into a mixed-use project to include a combination of office, hospitality, retail and restaurant space. Regent and Pope & Land view the new project as getting a head start on the next development cycle and hope to begin construction next spring. AT A GLANCE | Buckhead Atlanta •

COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS

New owner Oliver McMillan to redevelop project formerly known as ‘Streets of Buckhead’ Purchased for $400 million; plans to invest an additional $300 million.

$1.5 billion in annual revenue

• Over 2.2 billion square feet under

management • Over 13,000 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

Urban village concept to include 311,500 SF of retail and restaurants; 51,000 SF of boutique offices; and two 20-story apartment complexes.

Lee Evans

Craig Mendel

Work on the project to resume around the end of 2011, with a target opening in 2013.

Deming Fish

Scott O’Halloran

Huston Green

Hugh Pafford

Tim Hoffman

Jodi Selvey

Russ Jobson

Fred Sheats

Nicole Kamen

Pete Shelton

Jeff Kelley

Hayes Swann

Brett Kingman

Andrew Walker

Drew Levine

Bob Ward

Michael Lipton

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 512 offices throughout more than 61 countries worldwide.

PEACHTREE PALISADES 1,417 - 47,647 SF Lease Lee Evans / Scott O’Halloran

Accelerating success.

www.colliers.com/atlanta


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.