Q1 2011 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 300,000
18%
200,000
17%
100,000
16%
0 (100,000)
15% 1Q10
2Q10
3Q10
4Q10
1Q11
14%
(200,000)
13%
(300,000)
12% Absorption
Deliveries
Total SF
26,502,635
Vacancy Rate
16.1%
YTD Net Absorption
(192,509)
YTD Deliveries
0
Under Construction
0
Avg. Class A Rate
$19.80
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2011
UPDATE Recent Transactions in the Market
Q2 2011
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION
—
—
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
55 Allen Plaza
$57,000,000
348,658
$163.48
Teachers Retirment of Ill.
353-363 Parkway Dr. (‘10)
$1,000,000
9,000
$111.11
Metro Atlanta Ob/Gyn
RENTAL RATE
Downtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
McKenna Long & Aldrige
SunTrust Plaza
163,000
Class A Renewal
Turner Broadcasting Co.
Centennial Tower
115,000
Class A Renewal & Exp.
Habitat for Humanity
270 Peachtree
55,264
Class A Renewal & Exp.
CoreNet Global
Georgia-Pacific Center
18,579
Class A Lease
•
The first quarter of 2011 was Downtown’s worst in a year. Over the three month period, occupancy in the submarket dropped by (192,509) SF. Just over half of this amount came from SunTrust’s relocation to Peachtree Center’s Marquis Two tower. The bank vacated 358,155 SF at a nearby Class B office building. The downsizing resulted in over 100,000 SF of vacant space added.
•
The office vacancy rate in Downtown increased 0.7% from last quarter due to the negative absorption. Nevertheless, the rate is still down from this time a year ago; and is expected to continue its downward trend next quarter.
•
Positive absorption should return to Downtown next quarter. Nothing suggests the submarket will experience any further leasing setbacks.
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | DOWNTOWN
SKYLINE REVIEW Space Available Direct Sublet
60 55 50 45 40
Floors
35 30 25 20 15 10 5
BUILDING RBA
Bank of America Plaza
SunTrust Plaza
Georgia-Pacific Center
191 Peachtree
Centennial Tower
1,253,499 SF
1,249,022 SF
1,133,840 SF
1,209,721 SF
638,731 SF
79.7%
95%
90%
81.6%
90.4%
203,068 SF
23,545 SF
91,442 SF
102,045 SF
37,600 SF
$30.00-$31.00
$26.00-$28.00
$21.00-$22.00
$26.00
$17.00-$22.00
1
2
3
4
5
% LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
12 11
8
1 9
2
7
8 4 3 10 9 6 3 5
10
2 7 6
5 1 3
P. 2
| COLLIERS INTERNATIONAL
4
2
1
13 15 14
16
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | DOWNTOWN
NOTABLE PROJECTS Source: CoStar Property
1
E Q U I TA B L E
COLLEGE FOOTBALL HALL OF FAME 50,000 SF Delviering Spring 2013
2
100 Peachtree
Marquis One
North Tower
270 Peachtree
55 Park Place
625,000 SF
460,437 SF
302,951 SF
325,000 SF
553,018 SF
47.7%
72.2%
65.9%
77.9%
74.2%
181,634 SF
36,164 SF
126,213 SF
41,772 SF
278,716 SF
$17.50-$19.50
$20.50-$21.50
$18.50-$19.50
$15.75-$19.00
$18.50
6
7
8
9
10
AERIAL LEGEND
POINTS OF INTEREST 1 Georgia Dome
100,000 SF $125 million project Construction pending
3
9 The Varsity
2 Philips Arena
10 Georgia Tech
World 3 Georgia Congress Center
11 Atlanta Civic Center
4 CNN Center
Sweet Auburn 12 Curb Market
MARTA Rail Line
5 Centennial Olympic Park
13 Georgia State University
New Construction
6 Georgia Aquarium 14 Underground Atlanta
Buildings by Number (see opposite page)
CIVIL RIGHTS MUSEUM
7 World of Coke
15 State Capital
8 The Fox Theater
16 Turner Field
50 ALLEN PLAZA 870,914 SF Developer: Barry Real Estate Proposed
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS
480 offices in 61 countries on 6 continents
• 55
Allen Plaza bought by Lincoln Property for pension fund: The most recent distress sale to hit the Atlanta office market was 55 Allen Plaza being sold on the Fulton County Courthouse steps in April for a 31% discount of it’s original loan amount. The 350,000 sq. ft. Class A tower was part of a larger vision by local developer Hal Barry to transform a section of Downtown into a thriving business center. While some success was gained through the developments of 30 and 55 Allen Plaza, the recent hard times in the economy but a quick stop to momentum. The 55 Allen Plaza building eventually ended up in foreclosure and is now back in the hands of the pension fund which acquired the original debt. Teachers Retirement System of the State of Illinois (on behalf of Lincoln Property Co.) was the only bidder at the courthouse auction and acquired the tower for a substantial discount, paying $57 million for the property.
• Cousins
leads team picked for Gulch: The Georgia Department of Transportation has chosen Cousins Properties to lead the team to build a transit hub at the site of “The Gulch” property adjacent to CNN Center and Philips Arena. The prominent Atlanta developer competed against other local firms including Jacoby Development and H.J. Russell to land the project. Cousins’ team will consist of The Integral Group, Forest City Enterprises, FC Asset Services, Cooper Carry, Urban College, FXFOWLE, KimleyHorn & Associates and Parsons Brinckerhoff. Together, these firms will work to develop the long awaited mixed-use project with a multi-modal terminal as the key piece. As the master developer, Cousins will coordinate all of the stakeholders and property owners involved. The process is likely to span over many years with multiple processes to be completed before development can begin. AT A GLANCE | Streetcar gets funding
•
U.S. Department of Transportation agrees to grant $47 million to the city’s proposed $70 million streetcar project.
•
First phase of project will run 2.6 miles from the King Center site to Centennial Olympic Park, featuring a dozen stops and direct connection to MARTA.
•
•
•
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95 •
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 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
Expected to provide 2,600 trips a weekday in its first year of operation.
Lee Evans
Craig Mendel
Deming Fish
Scott O’Halloran
Critics argue the streetcar will do nothing to ease metro Atlanta’s biggest transportation problems.
Huston Green
Hugh Pafford
Tim Hoffman
Jodi Selvey
Construction begins in 2012 with a completion date targeted for 2013.
Russ Jobson
Fred Sheats
Nicole Kamen
Pete Shelton
COLLIERS INTERNATIONAL | ATLANTA OFFICE | DOWNTOWN LISTINGS
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Drew Levine
Bob Ward
Michael Lipton
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 480 offices throughout more than 61 countries worldwide.
135 ANDREW YOUNG INTL. BLVD. 11,000 SF Sale Jodi Selvey / Pete Shelton
www.colliers.com/atlanta
HERNDON PLAZA 105,323 SF Sale Pete Shelton
Accelerating success.