Q3 2010 | BUCKHEAD
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
19,818,757
1,200,000
31%
Vacancy Rate
26%
YTD Net Absorption
266,162
YTD Deliveries
908,852
23.5%
1,000,000 800,000 600,000
21%
400,000 16%
200,000 0 (200,000)
11% 3Q09
4Q09
1Q10
2Q10
(400,000)
6% Absorption
Deliveries
Under Construction
0
3Q10
Avg. Class A Rate
$25.07
Source: CoStar Property
Vacancy
MARKET INDICATORS Q3 2010
NEXT QTR
UPDATE Recent Transactions in the Market SALES ACTIVITY
VACANCY PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
NET ABSORPTION CONSTRUCTION
—
—
NO 2010 ACTIVITY
RENTAL RATE
Buckhead
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Kids II
Terminus 200
102,818
Class A Lease
J. Walter Thompson
3630 Peachtree
48,000
Class A Lease
Ridgeworth Capital
Terminus 200
34,000
Class A Lease
McCann Erickson
Terminus 200
24,190
Class A Lease
•
Buckhead posted its strongest quarter of office absorption in three years this quarter. Total occupancy increased by 267,541 SF over the past three months. The largest move-ins occurred in Two Alliance Center, Prominence and Terminus 200
•
Two headquarter relocations highlighted the submarket’s positive absorption in third quarter. Novelis relocated and expanded from its current Buckhead office to Two Alliance Center, moving into 100,178 SF. Sony Ericsson moved its North American headquarters from the Research Triangle in North Carolina to 48,907 SF at Terminus 200.
•
Buckhead’s newest office towers continue to see the strongest leasing activity in the market.
MARKET REPORT | Q3 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%
76.4%
24.4%
64.5%
88.2%
12,475 SF
64,258 SF
329,955 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 | Q3 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%
65.3%
16%
77.5%
64.5%
13,974 SF
184,886 SF
389,783 SF
32,611 SF
116,100 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 | Q3 2010 | ATLANTA OFFICE | BUCKHEAD
IN THE NEWS
480 offices in 61 countries on 6 continents
• Kids
II moving to Buckhead’s Terminus 200: One of the largest transactions to date was recently signed by Kids II which will be moving from its North Fulton office to Buckhead’s Terminus 200. The baby toy and products maker will move into just over 100,000 SF sometime next year, marking an expansion of their current office space usage at 555 North Point Center East in Alpharetta. Kids II decided to relocate to Buckhead to be closer to the Savannah College of Art & Design which it works closely with on product design. In addition, Terminus 200’s location will provide an expanded streetlevel showroom for the company. The lease raises the percentage leased in the building to 65%. future of CityPlace: CityPlace, once one of the most ambitious projects for Buckhead, was scrapped by The Related Group when a construction loan became unattainable. Subsequently the site was foreclosed upon and picked up by Wells Fargo for 27% less than the loan amount. Cousins Properties, which was going to develop condos for the original project, is now advising the bank and foresees the site as being a multi-family play. The 19 +/- acres at E. Paces Ferry & Roxboro remain undeveloped and far from its original plans of 3,860 residential units, 110,000 SF of retail and 28 town homes.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• The
• JLB
buys Buckhead site for apartment project: JLB Partners has purchased 6.5 acres for $10M at Pharr and Peachtree Roads where it plans to build a 300 apartment unit project beginning next year.
•
$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 24.4% leased.
•
3.9-acre site located on the northwest corner of Peachtree Road and Peachtree-Dunwoody Road which provides unequalled vista views.
•
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
Scott O’Halloran
Lee Evans
Hugh Pafford
Huston Green
Jodi Selvey
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
Fred Sheats
Nicole Kamen
Pete Shelton
•
COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen
Craig Mendel
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Michael Lipton
Bob Ward
Bob Mathews
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.
PEACHTREE PALISADES 1,417 - 47,647 SF Lease Lee Evans / Scott O’Halloran
Accelerating success.
www.colliers.com/atlanta