3Q 2011 | Atlanta Central Perimeter Office | Market Report

Page 1

Q3 2011 | CENTRAL PERIMETER

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 3Q10

4Q10

1Q11

2Q11

Total SF

29,041,681

Vacancy Rate

3Q11

21.1%

22%

0

Square Feet

20% (50,000) 18% 16%

(100,000)

14% (150,000)

YTD Net Absorption

(282,106)

YTD Deliveries Under Construction

0 616,000

12% 200,000)

10% Absorption

Deliveries

Avg. Class A Rate

$21.85

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q3 2011

UPDATE Recent Transactions in the Market

Q4 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

6255 Barfield Rd.

$3,000,000

54,000

$55.56

GT Software

270 Carpenter Dr.

$2,500,000

97,412

$25.66

Sandy Springs Inv.

Central Perimeter

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

IRS

6655 Peachtree Dunwoody

71,108

Class A Renewal

Internap Network

One Ravinia

61,737

Class A Lease

Ventyx

The Terraces

55,257

Class A Lease

AutoTrader

2002 Summit Blvd.

48,000

Class A Sublease

Vacancies continue to pile up in Central Perimeter. For the fifth consecutive quarter, the submarket lost more tenants than it gained. During this time, office occupancy has decreased by 576,257 SF.

Central Perimeter has had a rough 2011 with companies relocating to neighboring submarkets and tenants downsizing their existing office spaces in the submarket. Class B office product in the submarket has been hit the hardest with year-to-date absorption totaling (304,631) SF. This is an example of a flight to quality by tenants looking to take advantage of market conditions.

Over the past two quarters, leasing activity in the submarket has picked up significantly. Recent announcements by Internap Network, Ventyx and AFC Enterprises will translate into positive space absorption in the coming year. Central Perimeter’s 2011 woes will not carryover into 2012.


MARKET REPORT | Q3 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

84.6%

79.3%

95%

64.7%

86.3%

31,672 SF

76,455 SF

25,461 SF

123,997 SF

23,270 SF

$24.00-$25.00

$24.00-$25.00

$24.60

$22.50-$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

83.1%

75%

75.7%

76.4%

12.1%

24,677 SF

131,509 SF

47,204 SF

24,312 SF

326,699 SF

$26.50

$25.00-$25.50

$20.00-$22.00

$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 | Q3 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 | Q3 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

IN THE NEWS • IT

provider Internap relocates HQ to One Ravinia: Internap Network Services, whose headquarters is currently located Downtown, will relocate into 61,737 SF at One Ravinia. The information technology provider will move approximately 250 Atlanta employees to the new location. The move comes on the heels of Internap’s need to expand its data center in the 250 Williams Street building Downtown. Upon relocation to the One Ravinia building, the company will begin expanding its data center into the space vacated. The move to Central Perimeter is expected to occur Spring 2012. seeks bigger stage in ATL tech sector: Software company Ventyx will be leaving its current location in Marietta, and move to the Central Perimeter submarket. The company leased 55,257 SF in North Terraces and plans to relocate 300 jobs to the building in Spring 2012. Moving to Central Perimeter will put Ventyx closer to a larger amenity base and also provide it with a more prominent position in the city to recruit new talent.

512 offices in 61 countries on 6 continents United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117

• Ventyx

• New

GA 400 interchange opens at Hammond Drive: The new interchange at GA 400 and Hammond Drive was completed in September and is now in use. The half-diamond interchange allows for a southbound exit off of GA 400 and a northbound ramp onto GA 400 from Hammond Dr. The project is expected to relieve traffic and congestion in the area.

• Novare

gives back Perimeter Center Tower: Novare Group recently gave back its 240,000 SF office building at 245 Perimeter Center Pkwy. as a deed in lieu of foreclosure to GE Capital. AT A GLANCE | Hammond Half-Diamond Interchange Opens

$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; completed 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

CENTER POINTE 3,861 SF Sublease Craig Mendel

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.


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