Q4 2010 | BUCKHEAD
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Total SF
1,000,000
31%
Vacancy Rate
800,000
26%
YTD Net Absorption
324,583
YTD Deliveries
908,852
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES
600,000 21% 400,000
19,696,470 23.5%
16% 200,000 11%
0 (200,000)
4Q09
1Q10
Absorption
2Q10
3Q10
Deliveries
4Q10
6%
Under Construction Avg. Class A Rate
0 $24.96
Source: CoStar Property
Vacancy
MARKET INDICATORS Q4 2010 VACANCY
NEXT QTR
UPDATE Recent Transactions in the Market SALES ACTIVITY
—
NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
3344 Peachtree Rd.
$167,300,000
482,699
$346.59
Parkway Properties
— —
Buckhead
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Reznick Group
Two Alliance Center
77,049
Class A Lease
Towers Watson
One Alliance Center
76,500
Class A Renewal
Securities Exchange Comm.
Atlanta Plaza One
58,650
Class A Lease
North American Electric Co.
Atlanta Fin. Ctr.-North
39,510
Class A Lease
•
Buckhead was the highlight of 2010. The submarket led all other office markets in absorption for the year and was second only to Central Perimeter in total leasing activity. It also led the Atlanta market in office space delivered with 908,852 SF in the year.
•
The submarket’s vacancy rate remains the highest in Atlanta at 23.5% overall (25.8% for Class A); however, since the delivery of 3630 Peachtree and Phipps Tower in the first quarter, office vacancy has decreased 1.9%. This downward trend is expected to continue.
•
Incentive packages in Buckhead were the most aggressive in 2010. Now that leasing activity has caught hold and larger spaces are becoming scarce, landlords are beginning to tighten their offerings.
MARKET REPORT | Q4 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%
83.7%
25.1%
80.2%
87.9%
12,475 SF
57,152 SF
327,044 SF
97,854 SF
23,135 SF
$32.00-$35.00
$26.50
$32.00-$34.00
$32.00-$34.00
$23.50-$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 | Q4 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
472,267 SF
348,152 SF
424,309 SF
100%
68%
18.4%
74.9%
74.9%
13,974 SF
97,225 SF
378,581 SF
32,611 SF
93,495 SF
$31.75-$33.00
$31.75-$33.00
$34.50
$26.00-$28.00
$23.45
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 | Q4 2010 | ATLANTA OFFICE | BUCKHEAD
IN THE NEWS
480 offices in 61 countries on 6 continents
• Buckhead’s
tallest building sells for $167M: The largest transaction to occur in Atlanta since 2008 was recently completed in Buckhead. The 3344 Peachtree building; a mixed-use tower containing both office, retail and multi-family components, sold to Parkway Properties in January. Only the office and retail components which total almost 483,000 SF were part of the $167.3 million sales price. The transaction sets the bar in terms of the amount required to purchase a Class A, well located, well leased office tower with numerous amenities. developer takes over Streets of Buckhead/Streets of Buckhead development in limbo: A San Diego developer will now take over development of Buckhead’s most ambitious, yet troubled project over the past few years. Brought in by financial backers, OliverMcMillan will take control from Atlanta developer Ben Carter to finish the stalled development. New plans for the 8-acres have not been released, though insiders expect Ben Carter’s vision of a “Rodeo Drive of the South” to be somewhat incorporated into them; however, a retooling is also expected to occur.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• California
• Buckhead
luring tenants from other markets: Positive absorption and strong leasing activity in Buckhead can be attributed to the submarket’s ability to attract companies from outside the submarket. High-quality office space at an affordable price, along with enticing incentive packages have been the catalysts to companies relocating their metro Atlanta offices to Buckhead.
AT A GLANCE | 3344 Peachtree •
50-story, mixed-use tower consisting of 482,699 SF of Class A office and retail, with 82 high-end condos atop.
•
Delivered Second Quarter 2008.
•
Office building currently 93.3% leased.
•
Sold for $167.3 million in January 2011 (office and retail portion only)
•
•
•
Purchased by Parkway Properties, a real estate investment firm located in Jackson, Mississippi. Seller was Regent Partners which developed the property.
•
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 professionals
UNITED STATES: Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen
Craig Mendel
Lee Evans
Scott O’Halloran
Highest price paid for an Atlanta office tower since 2008. Highest price ever paid for a Buckhead office building.
Deming Fish
Hugh Pafford
Huston Green
Jodi Selvey
Russ Jobson
Fred Sheats
Largest tenants in building include: Jones Lang LaSalle; Weinberg, Wheeler, Hudgins, Gunn & Dial; Littler Mendelson PC; Hodges Ward Elliot and Fifth Third Bank.
Nicole Kamen
Pete Shelton
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Michael Lipton
Bob Ward
Bob Mathews 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.
PEACHTREE PALISADES 1,417 - 47,647 SF Lease Lee Evans / Scott O’Halloran
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