2Q 2012 | Atlanta Central Perimeter Office | Market Report

Page 1

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.


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