Q2 2012 | BUCKHEAD
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 400,000
22%
350,000
21%
300,000
20%
250,000
19%
200,000
18%
150,000
17%
100,000
16%
50,000
15%
0
14% 2Q11
3Q11
Absorption
4Q11
1Q12
Deliveries
Total SF
20,562,505
Vacancy Rate
16.6%
YTD Net Absorption YTD Deliveries
0
Under Construction
0
Avg. Class A Rate
2Q12
464,566
$26.59
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q2 2012
UPDATE Recent Transactions in the Market
Q3 2012
SALES ACTIVITY VACANCY PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Two Alliance Center
pending
493,201
pending
Highwoods Properties
—
Prominence in Buckhead
pending
424,309
pending
Crocker Partners
—
3399 Peachtree Rd.
$59,300,000
348,152
$170.33
Parmenter Realty
415 E Paces Ferry Rd
$3,500,000
26,570
$131.73
415 E. Paces Ferry LLC
Buckhead
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Sapient
3630 Peachtree
23,000
Class A Lease
Consulate of Japan
Phipps Tower
12,870
Class A Lease
Preparis Inc.
Tower Place 100
12,484
Class A Sublease
Counsel on Call
Lenox Towers
11,600
Class B Lease
•
Buckhead office absorption was second highest in Atlanta in the second quarter of 2012. The largest move-ins for the submarket over the past three months were SunTrust Robinson Humphrey expanding by 135,075 SF in Atlanta Financial Center and Greenberg Traurig which finally made its move into 93,466 SF at Terminus 200.
•
Office vacancy in Buckhead decreased for a sixth straight quarter and is down 7.5% from its peak in 2010. As of the end of second quarter, there were only 11 office properties in the submarket able to accommodate tenants seeking 30,000 square feet or more.
•
Leasing activity in the submarket continues to remain active; however, most of the larger leasing transactions taking place are beginning to shift to other submarkets, most notably Central Perimeter and Midtown which tend to compete most against Buckhead.
MARKET REPORT | Q2 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%
66.7%
66.5%
94%
83.4%
13,405 SF
194,398 SF
75,568 SF
24,736 SF
20,610 SF
$34.00-$35.00
$26.50
$33.00-$34.50
$32.22-$35.22
$24.00-$26.00
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 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%
24.6%
81.1%
90.9%
13,974 SF
24,800 SF
193,228 SF
31,334 SF
11,459 SF
$34.40-$35.65
$33.75-$35.00
$34.00
$26.00-$28.00
$27.50
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 | Q2 2012 | ATLANTA OFFICE | BUCKHEAD
IN THE NEWS
522 offices in 62 countries on 6 continents
• Buckhead
mixed-use project moves forward: Regent Partners and Pope & Land Enterprises have begun the first stages of their Buckhead mixed-use project on Peachtree Street. Plans are to develop a 17,634 SF, two-story building to house a new TD Ameritrade financial services and trading center. The developers also have a second, larger phase project in line that will include a new building consisting of up to 150,000 SF for an unnamed European company’s US headquarters. Retail and either apartments or condos will be a part of the same project. apartments planned by Phipps Plaza: Columbus Realty Partners recently filed plans for a 320unit project in Buckhead, adjacent to Phipps Plaza at Wieuca Road and Park Avenue. The new development will have more than 300,000 square feet that would include several small apartment buildings. The developer is looking to cash in on Buckhead’s location and apartment fundamentals; and attract young employees in the area which prefer to live near entertainment, shopping and restaurants.
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
• New
• 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.
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.
•
•
COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS
Urban village concept to include 346,006 SF of retail and restaurants; 98,360 SF of boutique offices; and two 20-story apartment complexes containing 370 units total. 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
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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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