Q2 2012 | CENTRAL PERIMETER
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 24% 22%
300,000
20%
Square Feet
500,000 400,000
200,000
18%
100,000 16%
0
(100,000)
14%
(200,000)
12%
(300,000)
10% 2Q11
3Q11
Absorption
4Q11
1Q12
Deliveries
Total SF
28,937,727
Vacancy Rate
20.8%
YTD Net Absorption
758,176
YTD Deliveries
316,000
Under Construction
300,000
Avg. Class A Rate
$21.82
2Q12
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q2 2012
UPDATE Recent Transactions in the Market
Q3 2012
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE
—
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Concourse Corporate Ctr.
pending
2,100,000
pending
Regent Partners/GEM
—
1 Ravinia Dr.
$52,750,000
386,603
$136.44
Franklin Street Prop.
—
Ashford Center North
$15,500,000
154,113
$100.58
Parkway Properties
1200 Lake Hearn Dr.
$10,200,000
140,000
$72.86
Perimeter Crossing LLC
Central Perimeter
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
State Farm
64/66 Perimeter Center
434,513
Class A Lease
Old Castle
900 Ashwood
91,595
Class A Lease
Elekta
North Terraces
77,100
Class A Lease
AmeriCold Logistics
10 Glenlake
76,000
Class A Renewal & Expansion
•
For a second straight quarter, Central Perimeter led the Atlanta market in office space absorbed. Occupancy increased by 417,529 SF in second quarter. More than 70% of the square feet absorbed was from Cox Enterprises moving into the first phase of its new office campus.
•
Office leasing in the submarket has been the most active of any submarket in Atlanta. In the past three months alone, over 1 million square feet of leases were signed in Central Perimeter, including State Farm’s lease at 64 & 66 Perimeter Center; the largest transaction to date in Atlanta’s office market.
•
Because of the active leasing environment, a few owners have decided to put their office buildings on the market for sale including Rubenstein with The Terraces and 64 & 66 Perimeter Center, and also TIAA-CREF with Concourse Corporate Center which is currently under contract.
MARKET REPORT | Q2 2012 | 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
83.1%
83.4%
96.1%
66.2%
86.7%
31,672 SF
76,455 SF
25,461 SF
123,997 SF
19,204 SF
$24.50-$25.50
$24.50-$25.50
$24.60
$22.50-$26.50
$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
386,603 SF
437,826 SF
381,432 SF
TYPICAL FLOOR SIZE
24,000 SF
24,000 SF
24,000 SF
23,400 SF
24,833 SF
% LEASED
83.4%
91.4%
85.9%
76.2%
97.7%
24,677 SF
39,901 SF
22,919 SF
24,312 SF
22,736 SF
$26.50
$25.00-$25.50
$21.50-$24.50
$21.50-$22.50
$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 2012 | 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: Rubenstein Partners
400,000 SF Planning Stage Developer: Seven Oaks
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 2012 | ATLANTA OFFICE | CENTRAL PERIMETER
IN THE NEWS • State
Farm adding 500 jobs in Atlanta: State Farm has leased over 430,000 square feet at 64 & 66 Perimeter Center, making it Atlanta’s largest office lease transaction of the year so far. The company plans to operate a customer service center out of the location creating 500 jobs for clerical, technical and management positions. State Farm currently occupies a large office campus in the Johns Creek area of Atlanta. The office in Central Perimeter is an expansion, brought on by an increase in business. deal could restart development: Regent Partners, partnered with GEM Realty Capital out of Chicago, is under contract to buy the 2.1 million square feet Concourse Corporate Center which includes the iconic King and Queen buildings. The estimated price could be as much as $325 million. Along with the office buildings, a number of pad sites are expected to trade hands as well. The original plan for Concourse Corporate Center was to include another high-rise office building; two 30-story multi-family towers; and 70,000 SF of more retail and restaurants. Regent could pursue new development in the complex, most notably apartment projects; however, the focus right now will be on leasing up existing office space and playing the wait-and-see approach as it relates to new construction.
522 offices in 62 countries on 6 continents
• Concourse
• Rubenstein
puts Terraces and 64/66 Perimeter Center on the market: Following successful leasing at both North and South Terraces, and winning the recent State Farm requirement at 64/66 Perimeter Center, Rubenstein Properties has placed both office complexes on the market for sale. The owner hopes to attract value-add investors which have been fairly active in Atlanta over the past two years.
AT A GLANCE | King & Queen Buildings on the Market
www.colliers.com/atlanta
management • Over 12,000 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
•
Built in 1988 and 1991. Together, buildings are currently 83.5% leased.
•
Could fetch up to $245 million for the pair; or around $175 per square foot.
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:
•
Major tenants include CompuCredit, Ericsson, Morgan Stanley and Gifford Hillegass & Ingwersen.
Bob Allen
Bob Mathews
Jill Bomar
Craig Mendel
Lee Evans
Scott O’Halloran
Part of larger 2.1 million-square-foot office park which is also being put on the market for sale.
Deming Fish
Hugh Pafford
Huston Green
Jodi Selvey
Tim Huffman
Fred Sheats
Current owner is TIAA-CREF.
Russ Jobson
Pete Shelton
COLLIERS INTERNATIONAL | ATLANTA OFFICE | CENTRAL PERIMETER LISTINGS
121 PERIMETER CTR. 2,200-14,264 SF Sublease Craig Mendel
$1.8 billion in annual revenue
• Over 2.5 billion square feet under
Iconic Class A office towers totaling 1,384,507 SF.
•
185 ALLEN RD. 4,109 SF Andrew Walker
•
•
•
219 PERIMETER CTR. 4,942-21,947 SF Sublease Bob Mathews / Fred Sheats
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
CENTER POINTE 3,861 SF Sublease Craig Mendel EMBASSY ROW 1,510-75,000 SF Lease Scott O’Halloran/ Lee Evans/ Deming Fish
Jeff Kelley
Hayes Swann
Drew Lavine
Will Tyler
Michael Lipton
Andrew Walker
Nicole Littleton
Bob Ward
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 520 offices throughout 62 countries worldwide.
5620 GLENRIDGE 84,580 SF Lease/Sale Hugh Pafford
Accelerating success.