Q2 2011 | CENTRAL PERIMETER
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 100,000
22%
50,000
20%
0
18%
(50,000)
2Q10
3Q10
4Q10
1Q11
2Q11
16%
(100,000)
14%
(150,000)
12%
(200,000)
10% Absorption
Deliveries
Total SF
29,015,440
Vacancy Rate
20.8%
YTD Net Absorption
(186,472)
YTD Deliveries Under Construction Avg. Class A Rate
0 600,000 $22.05
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q2 2011
UPDATE Recent Transactions in the Market
Q3 2011
SALES ACTIVITY
—
VACANCY NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
2 Ravinia
$40,419,000
437,826
$92.32
Parkway Properties
1455 Lincoln Pkwy.
$13,260,000
182,000
$72.86
Jackson Oats Shaw
4800 Ashford Dunwoody
$3,400,000
44,992
$75.57
4800 Ashford Dunw. LLC
8800 Roswell Rd. - Bldg. A
$2,100,000
26,932
$77.97
Resource Real Estate
Central Perimeter
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Newell Rubbermaid
One Glenlake
107,000
Class A Expansion
AFC Enterprises
North Terraces
55,000
Class A Lease
The Coalition America
Concourse II
48,000
Class A Renewal
Discrete Wireless
1200 Lake Hearn Dr.
20,108
Class B Lease
•
For the fourth consecutive quarter, the Central Perimeter submarket posted negative absorption. Office occupancy dropped by 132,007 SF in the second quarter. The largest move-out was Cotton States which vacated 104,936 SF at 244 Perimeter Center, relocating to North Fulton.
•
With yet another quarterly increase in vacant space, the submarket now has the highest vacancy rate among Atlanta’s other major office submarkets. Given current conditions, this is not expected to change by the end of the year.
•
Central Perimeter is most affected by the cautious approach taken by corporate America regarding company office space expansion. Although overall office leasing remains tepid, the submarket did see an uptick in activity in second quarter.
MARKET REPORT | Q2 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
SKYLINE REVIEW Space Available Direct Sublet 35
Source: CoStar Property
30
Floors
25 20 15 10 5
BUILDING
Concourse VI
Concourse V
Three Ravinia
Glenridge Highlands II
7000 Central Park
RBA
697,400 SF
687,107 SF
813,145 SF
415,000 SF
415,324 SF
TYPICAL FLOOR SIZE
27,000 SF
26,719 SF
25,827 SF
20,750 SF
28,000 SF
% LEASED
79%
82%
95%
55%
85%
48,868 SF
76,491 SF
25,461 SF
173,851 SF
16,362 SF
$24.00-$25.00
$24.00-$25.00
$24.60
$24.50
$23.50
1
2
3
4
5
2002 Summit Blvd.
400 Northpark
One Ravinia
Two Ravinia
64 Perimeter Ctr. E
RBA
390,139 SF
586,256 SF
386,239 SF
437,826 SF
381,432 SF
TYPICAL FLOOR SIZE
24,000 SF
24,000 SF
23,500 SF
23,400 SF
24,833 SF
% LEASED
81%
75%
66%
78.5%
10.6%
48,000 SF
131,509 SF
47,204 SF
24,312 SF
363,630 SF
$26.50
$25.00-$25.50
$20.00-$22.00
$21.50-$23.50
$20.00-$21.00
6
7
8
9
10
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
35 30
Floors
25 20 15 10 5
BUILDING
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
P. 2
| COLLIERS INTERNATIONAL
MARKET REPORT | Q2 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
7 2 4
5
5
1
8 9 3
10
1 1 2 6 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 | Q2 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
IN THE NEWS • More
512 offices in 61 countries on 6 continents
• Wendy’s
United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
space for Newell Rubbermaid: Newell Rubbermaid is expanding its office usage in Central Perimeter. The consumer products giant will lease 107,000 SF in One Glenlake which is directly adjacent to its global headquarters at 10 Glenlake North. The expansion is needed for Newell Rubbermaid’s growth in research and development and marketing. Currently the company is hiring 65 employees for these departments. The additional space will be used for these positions. to move corporate HQ from Atlanta: Wendy’s Co. will no longer call Atlanta its home. The company has decided to leave Central Perimeter and relocate its corporate headquarters to Dublin, Ohio. This comes after Wendy’s Co.’s sale of Arby’s to Roark Capital Group. It is unclear yet how much office space may come back on the market from the move, but Wendy’s plans to keep some of its operations in Atlanta; including 200 employees in IT, accounting, tax and international operations. Around 35 to 45 Atlanta positions will be eliminated from the move. The City of Dublin and State of Ohio were very aggressive in getting Wendy’s to relocate.
• AFC
will relocate to Terraces: AFC Enterprises, parent company of Popeye’s restaurants, will be relocating and expanding its office space in Central Perimeter. The company currently has roughly 34,000 SF at Glenridge Highlands One. AFC will lease 55,000 SF at The Terraces North in what will be an expansion to accommodate the company’s growth. The move is expected to take place in the fourth quarter of this year. AT A GLANCE | Hammond Half-Diamond Interchange
•
$1.5 billion in annual revenue
• Over 2.2 billion square feet under
management • Over 13,000 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 512 offices throughout more than 61 countries worldwide.
5620 GLENRIDGE 84,500 SF Lease/Sale Hugh Pafford
Accelerating success.