Q3 2011 | BUCKHEAD
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
400,000
Vacancy Rate
24%
20,604,921 19%
350,000 22%
Square Feet
300,000 250,000
YTD Net Absorption
628,786
20%
200,000 18%
150,000 100,000
16%
50,000 0
YTD Deliveries
0
Under Construction
0
14% 3Q10
4Q10
Absorption
1Q11
2Q11
Deliveries
Avg. Class A Rate
3Q11
$24.83
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q3 2011
UPDATE Recent Transactions in the Market
Q4 2011
SALES ACTIVITY VACANCY PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
3344 Peachtree Rd.
$167,300,000
483,726
$345.86
Parkway Properties
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
SunTrust Robinson Humphrey
Atlanta Financial Center
229,894
Class A Renewal & Expansion
Morris Manning Martin
Atlanta Financial Center
124,000
Class A Renewal & Expansion
Capgemini
Prominence
24,816
Class A Lease
Prudential
Tower Place 200
16,045
Class A Lease
•
Yet again Buckhead is proving its dominance in the Atlanta office market. The submarket saw its occupancy increase by 352,658 SF in the third quarter. The largest move-ins contributing to this absorption were Windham Brannon taking 35,817 SF at 3630 Peachtree, Novelis moving into its expansion of 25,030 SF at Two Alliance and SecurAmerica occupying 20,838 SF at the Lenox Building.
•
Over 628,000 SF of office space has been filled in Buckhead year-to-date. This is the largest amount of all Atlanta office submarkets; and on the whole, basically accounts for all of the positive office absorption in the Atlanta market in 2011.
•
The office vacancy rate in Buckhead is below 20% for the first time since the end of 2009. Activity in Buckhead’s newest buildings over the past two years have helped lower their delivery impact.
MARKET REPORT | Q3 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
436,275 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
98.5%
61.6%
44%
89.4%
86.4%
12,475 SF
254,810 SF
84,795 SF
14,493 SF
15,775 SF
$32.00-$35.00
$26.50
$32.60-$34.10
$35.00-$38.00
$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 | Q3 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%
82.1%
90.1%
13,974 SF
24,800 SF
200,904 SF
20,838 SF
34,616 SF
$34.03-$35.28
$34.60-$35.85
$32.80
$26.00-$27.00
$25.50
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 | Q3 2011 | ATLANTA OFFICE | BUCKHEAD
IN THE NEWS
512 offices in 61 countries on 6 continents
• Streets
of Buckhead ‘restart’ delayed to next year: OliverMcMillan, the new owner of the former Streets of Buckhead site, has delayed construction of the project’s redo to the end of the first quarter of 2012. Development of the restructured project, now named Buckhead Atlanta, was expected to begin late 2011; however, the developer’s aim to combine the ideas of its own with those of former owner Ben Carter Properties has resulted in some of the delay. Part of the process includes scaling down the luxury aspects from Ben Carter’s plans. OliverMcMillan still plans to keep some parts of Buckhead Atlanta as luxury-oriented, but also wants to bring other elements into the fold in order to drive foot traffic. Fall 2013 is the new targeted opening date for the overhaul. keeps major tenant: The Atlanta Financial Center in Buckhead has kept yet another major tenant. SunTrust Robinson Humphrey decided to renew its 90,000 SF existing lease and also expand by another 140,000 SF making it the largest tenant in the complex; and also the largest lease in the submarket this year. The transaction comes on the heels of Morris Manning & Martin deciding to renew at Atlanta Financial Center following a consideration to move to Midtown’s Campanile building. With both transactions, the Atlanta Financial Center complex is now 80% leased. SunTrust Robinson expects to grow in the near future and needed the expansion space to accommodate the extra workers. The firm expects to occupy the expansion space by the summer of 2012. Its renewed lease term runs for 11 years.
United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
• Complex
AT A GLANCE | Buckhead Atlanta •
New owner Oliver McMillan to 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.
•
Work on the project to resume around the end of first quarter 2012, with a target opening in 2013.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS
•
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• Over 2.2 billion square feet under
management • Over 13,000 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 512 offices throughout more than 61 countries worldwide.
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