Q1 2011 | CENTRAL PERIMETER
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 200,000
22% 20%
Square Feet
100,000
Total SF
29,023,718
Vacancy Rate
20%
YTD Net Absorption
(148,762)
18% 0
16% 1Q10
2Q10
3Q10
4Q10
1Q11
14%
(100,000)
YTD Deliveries Under Construction
0 300,000
12% (200,000)
10% Absorption
Deliveries
Avg. Class A Rate
$22.05
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2011
UPDATE Recent Transactions in the Market
Q2 2011
SALES ACTIVITY
—
VACANCY NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
600 Morgan Falls Rd.
$5,000,000
106,678
$46.87
Parkway Properties
5424 Glenridge Dr.
$4,250,000
15,000
$283.33
Shoffland Holdings LLC
4800 Ashford Dunwoody
$3,400,000
44,992
$75.57
4800 Ashford Dunw. LLC
8215 Roswell Rd.-Bldg 300
$720,000
10,000
$72
Anthente Ind. Holdings
Central Perimeter
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Zurich North America
1001 Perimeter Summit
112,316
Class A Lease
EchoStar Corp.
211 Perimeter Center Pky.
49,978
Class A Renewal
Mary Hall Freedom House
200 Hannover Park Rd.
19,300
Class C Renewal
Skylight Financial
1455 Lincoln Pkwy.
17,203
Class A Renewal
•
The Central Perimeter submarket experienced a rough start to the year in terms of office absorption. Occupancy dropped by almost 150,000 SF in the first quarter thanks to tenant consolidations to neighboring submarkets.
•
The submarket has the highest concentration of vacant space in the Atlanta office market. Since this time last year, the overall vacancy rate has increased by 1.3%. This is the largest increase of any other office submarket during this period.
•
With office demand tepid in Atlanta, Central Perimeter continues to struggle finding tenants to fill existing vacancies. The submarket is known to attract Fortune 500 companies. The problem is these companies remain cautious on expansion plans.
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
SKYLINE REVIEW Space Available Direct Sublet 35
Source: CoStar Property
30
Floors
25 20 15 10 5
BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
Concourse VI
Concourse V
Three Ravinia
Glenridge Highlands II
2002 Summit Blvd.
697,400 SF
687,107 SF
813,145 SF
415,000 SF
390,139 SF
83.4%
94.9%
89.4%
52.9%
81.5%
48,868 SF
76,491 SF
51,205 SF
184,543 SF
48,000 SF
$24.00-$25.00
$24.0-$25.00
$24.00
$22.50-$26.50
$26.50
1
2
3
4
5
7000 Central Park
400 Northpark
One Ravinia
Two Ravinia
64 Perimeter Ctr. E
415,324 SF
586,256 SF
386,239 SF
437,826 SF
381,432 SF
86.3%
74.9%
65.8%
84.1%
10.6%
16,362 SF
131,509 SF
47,204 SF
24,312 SF
363,630 SF
$23.50
$25.00-$25.50
$20.00-$22.00
$21.50-$23.50
$20.00-$21.00
6
7
8
9
10
35 30
Floors
25 20 15 10 5
BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
P. 2
| COLLIERS INTERNATIONAL
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
7 2 4
5
6
1
8 9 3
10
1 1 2 5 3
2
3
4
4 6
PLANNED CONSTRUCTION
AERIAL LEGEND
1
3
Buildings by Number (see opposite page) MARTA Rail Line New Construction
POINTS OF INTEREST
4004 PERIMETER SUMMIT
600,000 SF Planning Stage Developer: Barry Real Estate
400,000 SF Planning Stage Developer: Hines Properties
2
1 Perimeter Mall
4 Scottish Rite
2 Northside Hospital
5 Perimeter Place
St. Joseph’s 3 Hospital
240 PERIMETER CTR. PKWY.
6 Marist High School
4
ABERNATHY 400
TWO NORTH PLACE
350,000 SF Planning Stage Delivering TBD Developer: Ackerman/Russell
230,000 SF Planning Stage Delivering TBD Developer: Crocker Partners COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
IN THE NEWS
480 offices in 61 countries on 6 continents
•A
deal for 31-story Three Ravinia tower stalls: Early lease termination rights for its largest tenant put the sale of Three Ravinia on hold. The 31-story, 813,000 SF tower is Central Perimeter’s largest and has been on the market for over a year. The owner of the building, Colonial Properties Trust, was recently in discussions with Crocker Partners to sell the building; however, concerns arose as to the future intentions of the building’s largest tenant, InterContinental Hotels Group. InterContinental has early termination rights on its current lease at Three Ravinia. The company is looking to expand its Atlanta presence and such a prospect in the market is a gold mine for other building owners who are willing to offer extremely aggressive incentive packages for such a creditworthy tenant. The uncertainty of what the company will do with its current space at Three Ravinia is hampering the owner’s ability to sell the building, as seen by Crocker Partners deciding to opt out of the investment.
• Developers
plans new hotel in Perimeter Summit: Legacy Property Group and Seven Oaks Company are planning a 160-room boutique hotel at Perimeter Summit which will be the first hotel built in several years in the submarket. The targeted date of completion for the new hotel is the summer of 2013.
• Zurich
American chooses Perimeter Summit: Zurich American Insurance Co. signed a lease for 112,316 SF at 1001 Perimeter Summit, moving from space at 3003 Perimeter Summit close by. The move is an expansion of the company’s current office footprint in Atlanta and part of a regional consolidation which could bring up to 150 new jobs to the submarket. AT A GLANCE | Hammond Half-Diamond Interchange
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95 •
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 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
•
Half-diamond interchange: Northbound entrance to GA 400 from Hammond Drive, Southbound exit from GA 400 to Hammond Drive.
•
Expected to relieve congestion at GA 400 and I-285.
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:
•
Hammond Drive bridge will be replaced and raised higher to make room for future expansion of GA 400 lanes.
Bob Allen
Bob Mathews
Lee Evans
Craig Mendel
Project will cost an estimated $18 million to complete; completion date scheduled for Fall 2011.
•
COLLIERS INTERNATIONAL | ATLANTA OFFICE | CENTRAL PERIMETER LISTINGS
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
219 PERIMETER CTR. 4,942-21,947 SF Sublease Bob Mathews / Fred Sheats
1455 LINCOLN PKWY. 4,392 SF Sublease Brett Kingman / Russ Jobson 5883 GLENRIDGE
8215 ROSWELL RD. Bldgs. 600, 1000 10,000-15,000 SF Sale Hugh Pafford / Jodi Selvey
www.colliers.com/atlanta
16,104 SF Sublease Fred Sheats
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.
5620 GLENRIDGE 84,500 SF Lease/Sale Hugh Pafford
Accelerating success.