Q1 2012 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 50,000
18%
0
17%
(50,000)
1Q11
2Q11
3Q11
4Q11
1Q12
16%
(100,000) 15% (150,000) 14%
(200,000) (250,000)
13%
(300,000)
12% Absorption
Deliveries
Total SF
27,720,826
Vacancy Rate
16.9%
YTD Net Absorption
(87,585)
YTD Deliveries
0
Under Construction
0
Avg. Class A Rate
$19.67
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2012
UPDATE Recent Transactions in the Market
Q2 2012
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
180 Peachtree St. (Office)
$94,750,000
338,000
$280.33
Carter Validus REIT
One Georgia Center
$48,600,000
375,000
$129.60
Govt. Properties Trust
Hurt Plaza
$17,500,000
436,340
$40.11
Boxer Property
44 Broad Street
$3,800,000
128,502
$29.57
Williams-Russell & John.
Downtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Georgia Chamber of Commerce
270 Peachtree
27,848
Class A Lease
Sherry Bryant LLC
139 Ralph McGill Blvd.
20,451
Class C Lease
Lutheran Services of GA
100 Edgewood Ave.
18,268
Class B Lease
GCH Technology Group
270 Peachtree
8,218
Class A Lease
•
Office occupancy in Downtown decreased for the sixth time in seven quarters. Over this stretch of time the submarket’s vacancy rate has increased by almost 2%; which amounts to 520,000 square feet of vacant space added.
•
Downtown continues to lag when compared to Atlanta’s other office submarkets. Significant leasing transactions have been few and far between in the CBD. The inactivity is a product of the sluggish recovery. Also, the submarket continues to lose out to neighboring submarkets such as Midtown and Buckhead because companies want to locate in areas where they can recruit young talent.
•
Not much is expected to change for the submarket through the end of this year. Leasing will likely remain weak at least until the overall office market in Atlanta has fully recovered.
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | DOWNTOWN
SKYLINE REVIEW Space Available Direct Sublet
60 55 50 45 40
Floors
35 30 25 20 15 10 5
Bank of America Plaza
SunTrust Plaza
Georgia-Pacific Center
191 Peachtree
Centennial Tower
1,287,997 SF
1,249,022 SF
1,133,840 SF
1,209,721 SF
638,731 SF
TYPICAL FLOOR SIZE
22,791 SF
25,000 SF
20,000 SF
24,220 SF
18,105 SF
% LEASED
62.3%
94.6%
88.4%
83.8%
78.9%
233,060 SF
25,005 SF
91,067 SF
102,045 SF
60,638 SF
$26.60-$27.60
$32.75-$34.75
$21.00-$22.00
$28.00
$17.00-$22.00
1
2
3
4
5
BUILDING RBA
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 2012 | 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 Delivering Spring 2013
2
100 Peachtree
Marquis One
North Tower
270 Peachtree
55 Park Place
622,301 SF
460,437 SF
302,951 SF
325,000 SF
553,018 SF
19,600 SF
18,101 SF
14,121 SF
13,816 SF
29,130 SF
35.3%
83.1%
64.9%
95.7%
74.2%
193,550 SF
18,413 SF
62,470 SF
27,848 SF
278,716 SF
$17.50-$20.50
$20.50-$21.50
$18.50-$19.50
$18.00-$19.00
$18.00
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 Proposed Land acquired Spring 2012 New Owner: Regent Partners
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS • Downtown
522 offices in 62 countries on 6 continents
• Atlanta
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
project nixed: A leasing transaction announced at the end of 2011 which would have consolidated 500 Georgia Department of Labor employees to the vacant 250 Piedmont office tower has fallen through according to a recent news article. The lease would have been Downtown’s largest in some time. Governor Deal’s proposal to streamline several state agencies is said to be a reason for the lease not getting completed. For now the 362,300 SF office tower remains vacant. Life selling downtown headquarters to Georgia State: Atlanta Life Financial Group is set to sell its longtime downtown headquarters to Georgia State in the next few weeks. The 105,323 SF office building located at 100 Auburn Ave. has been owned by Atlanta Life since 1980. Georgia State plans to acquire the building as part of its ongoing campus expansion. The building is envisioned to become the new of home of GSU’s Honors College. Once the sale is complete, Atlanta Life will move to another location within the submarket; leasing rather than owning its new office.
• Regent
Partners buys 50 Allen Plaza: Regent Partners recently purchased the land site for 50 Allen Plaza paying $4.5 million for the 1.23-acre parcel. The site was part of Barry Development’s nine block Allen Plaza project, but fell into foreclosure following the economic downturn. Regent is in a joint venture with Worthington Hyde Partners to develop the site but has no immediate plans to do so.
• Cousins
remakes ACS building as data center: Cousins Properties is doubling its data center footprint at the American Cancer Society building. The company plans to invest at least $200 million to convert 170,000 SF of office space into data center space. This will result in almost a third of the 1-million square foot building being equipped to handle data center users. Cousins’ strategy is to take advantage of demand in the Atlanta market for this type of space. The building’s 100,000 SF floor plates and 27 fiber network providers make it an attractive option for data users. AT A GLANCE | Bank of America Plaza Forecloses
•
•
•
•
•
1.3 million square foot Class A office tower foreclosed February 2012; tallest building in the U.S. to be foreclosed on since the financial markets froze in 2007.
•
$1.8 billion in annual revenue
• Over 2.5 billion square feet under
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
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen
Bob Mathews
Title secured by credit bid of $235 million by LNR Partners on behalf of the debt holder JP Morgan Chase.
Jill Bomar
Craig Mendel
Lee Evans
Scott O’Halloran
Deming Fish
Hugh Pafford
Property auctioned at a 46% discount of what former owner BentleyForbes Group paid in ‘06.
Huston Green
Jodi Selvey
Tim Huffman
Fred Sheats
Repositioning of the 1,023-foot skyscraper will likely begin second quarter 2012.
Russ Jobson
Pete Shelton
Jeff Kelley
Hayes Swann
The office building is currently 62.8% leased.
Drew Lavine
Will Tyler
Michael Lipton
Andrew Walker
Nicole Littleton
Bob Ward
COLLIERS INTERNATIONAL | ATLANTA OFFICE | DOWNTOWN LISTINGS 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.
HERNDON PLAZA
151 SPRING ST.
105,323 SF Sale Pete Shelton
19,000 SF Sale Jodi Selvey / Michael Lipton
Accelerating success.
www.colliers.com/atlanta