Q4 2011 | CENTRAL PERIMETER
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Square Feet
4Q10
1Q11
2Q11
3Q11
29,070,889
Vacancy Rate
4Q11
100,000
22%
50,000
20%
0
Total SF
18%
(50,000) 16%
21.3%
YTD Net Absorption
(232,635)
YTD Deliveries
0
(100,000) 14%
(150,000) (200,000)
12%
(250,000)
10% Absorption
Deliveries
Under Construction Avg. Class A Rate
616,000 $21.72
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q4 2011 VACANCY
UPDATE Recent Transactions in the Market
Q1 2012
SALES ACTIVITY
—
PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
1200 Ashwood Pkwy.
$9,800,000
183,619
$53.37
Atlanta Property Group
56 Perimeter Center East
$9,425,000
94,575
$99.66
The Simpson Org.
600 Morgan Falls Rd.
$6,000,000
106,678
$56.24
Resource Real Estate
4500 N Shallowford Rd.
$5,210,000
20,366
$255.82
Universal Health Serv.
Central Perimeter
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
City of Sandy Springs PD
Morgan Falls OP-Bldg. 300
26,081
Class B Lease
AJC International
400 Northpark
24,632
Class A Renewal
WellCare Health Plans
211 Perimeter Center Pky.
23,100
Class A Renewal
Morrison Hershfield Corp.
66 Perimeter Ctr. E
20,929
Class A Renewal
•
Following five consecutive quarters of negative absorption, Central Perimeter saw its office occupancy increase in the fourth quarter; though only by a moderate amount.
•
Central Perimeter was affected most by the flight to quality trend by tenants. Class B office product in the submarket finished the year with negative absorption totaling (216,728) SF. The phased out occupancies of AutoTrader at Peachtree Dunwoody Pavilion and Cotton States’s relocation to Class A property in North Fulton were the largest tenants of Class B properties vacating in 2011.
•
Despite the rough year, Central Perimeter’s activity is expected to show improvement going forward. Leasing picked up in the second half of 2011 and this will translate into positive absorption in 2012. In addition, a number of large prospects are currently scouting the submarket for office requirements.
MARKET REPORT | Q4 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
85.4%
82.3%
94.7%
63.6%
89.3%
31,672 SF
76,455 SF
25,461 SF
123,997 SF
22,997 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
82.8%
85.7%
79.2%
79.7%
12.1%
24,677 SF
79,018 SF
47,204 SF
24,312 SF
440,194 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 | Q4 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 | Q4 2011 | ATLANTA OFFICE | CENTRAL PERIMETER
IN THE NEWS • Wendy’s
closing support center in Atlanta: Following a move of its HQ back to Ohio, Wendy’s Co. will completely close its restaurant support center at 1155 Perimeter Center West by the end of 2012. Initially the company was to maintain some of its office space in the building, however, more lucrative incentives from Ohio resulted in Wendy’s deciding to close the Atlanta support office altogether. Wendy’s previously occupied space with Arby’s when the two were jointly owned. Arby’s was sold earlier this year to Roark Capital Group. Wendy’s will vacate approximately 68,000 SF with the move. 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.
512 offices in 61 countries on 6 continents United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
• IT
• Ventyx
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.
AT A GLANCE | Hammond Half-Diamond Interchange Opens •
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.
•
Hammond Drive bridge will be replaced and raised higher to make room for future expansion of GA 400 lanes.
•
Project cost an estimated $18 million to complete; completed Fall 2011.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | CENTRAL PERIMETER LISTINGS
219 PERIMETER CTR. 4,942-21,947 SF Sublease Bob Mathews / Fred Sheats 185 ALLEN RD. 4,109 SF Andrew Walker 121 PERIMETER CTR. 1,772-16,822 SF Sublease Craig Mendel
www.colliers.com/atlanta
CENTER POINTE 3,861 SF; 1,500-9,700 SF Sublease Craig Mendel 6160 PEACHTREE DUNWOODY - B 2,217 SF Sublease Fred Sheats
•
$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
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen
Bob Mathews
Lee Evans
Craig Mendel
Deming Fish
Scott O’Halloran
Huston Green
Hugh Pafford
Tim Huffman
Jodi Selvey
Russ Jobson
Fred Sheats
Jeff Kelley
Pete Shelton
Drew Lavine
Hayes Swann
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 512 offices throughout more than 61 countries worldwide.
5620 GLENRIDGE 84,500 SF Lease/Sale Hugh Pafford
Accelerating success.