Q2 2010 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 150,000 100,000
Vacancy Rate
16%
YTD Net Absorption
15%
(50,000)
2Q09
3Q09
4Q09
1Q10
2Q10
13%
(200,000)
12% Absorption
Deliveries
15.8% (40,368)
YTD Deliveries
0
Under Construction
0
14%
(100,000) (150,000)
25,168,828
17%
50,000 0
Total SF
Avg. Class A Rate
$19.52
Source: CoStar Property
Vacancy
MARKET INDICATORS Q2 2010
NEXT QTR
UPDATE Recent Transactions in the Market SALES ACTIVITY
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VACANCY NET ABSORPTION CONSTRUCTION
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RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
75/95 Poplar St. (‘09)
$3,250,000
65,424
$49.68
GA Board of Regents
120 Ralph McGill Blvd. (Forc.)
$2,950,000
23,080
$127.82
Sunrise Bank of Atlanta
159 Ralph McGill Blvd. (Forc.)
$1,200,000
36,000
$33.33
Georgia Properties LLC
139 Ralph McGill Blvd.
$850,000
19,500
$43.59
Ralph McGill 139, LLC
Downtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Hawkins Parnell Thackston Young
SunTrust Plaza
71,000
Class A Renewal
Newcomb & Boyd
SunTrust Plaza
42,000
Class A Renewal
Trend Influence
SunTrust Plaza
30,500
Class A Renewal
Colo at 55
34 Peachtree St.
12,315
Class B Lease
•
Move-in activity at 191 Peachtree and the Nuclear Regulatory Commission officially moving into its space at the Marquis One tower at Peachtree Center helped push second quarter absorption levels to 88,179 SF Downtown.
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Office leasing over the past three months has been modest at best for the submarket. The vacancy rate for Downtown office is not likely to fluctuate too much for the remainder of the year.
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The average rental rate for office space Downtown dropped yet again in second quarter to $18.51/SF; down 7% from this time last year. The Class A average is down 5.4% from mid-year 2009.
•
Downtown could have the highest concentration of new development activity once it returns to Atlanta.
MARKET REPORT | Q2 2010 | ATLANTA OFFICE | DOWNTOWN
SKYLINE REVIEW Space Available Direct Sublet
60 55 50 45 40
Floors
35 30 25 20 15 10 5
BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
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
80.6%
92.4%
88.6%
80.8%
90.3%
244,493 SF
23,545 SF
112,609 SF
102,045 SF
37,600 SF
$31.50
$26.00-$28.00
$21.50-$23.50
$26.00
$15.00-$22.00
1
2
3
4
5
12 11
8
1 9
2
7
8 4 3 10 9 6 3 5
10
2 7 6
5 4
3 P. 2
| COLLIERS INTERNATIONAL
2
1
1
13
15 14
16
MARKET REPORT | Q2 2010 | ATLANTA OFFICE | DOWNTOWN
NOTABLE PROJECTS Source: CoStar Property
1
E Q U I TA B L E
GSU SCIENCE CENTER 350,000 SF Delivered March 2010
2
100 Peachtree
Marquis One
North Tower
270 Peachtree
55 Park Place
625,000 SF
475,211 SF
302,933 SF
325,000 SF
553,468 SF
47.7%
68%
65.8%
59.3%
74.3%
122,386 SF
54,287 SF
127,092 SF
97,468 SF
278,716 SF
$17.50-$19.50
$20.50-$21.50
$18.50-$19.50
$18.00-$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 | Q2 2010 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS
480 offices in 61 countries on 6 continents
• GSU
business school plans new building: Backing away from plans to purchase an existing office building Downtown and redeveloping it, Georgia State University’s business school is now planning to have it’s own building constructed for expansion of the school. Details of the project are limited, however, the Atlanta Business Chronicle reports six sites are being considered for the new building. It is likely the chosen location will be close to GSU’s current business school on Broad Street. The university has hired an international architecture firm as the master planner for the project. Construction could begin by 2015, subject to funding, and is expected to occur in phases. Increased business school enrollment is driving the need for the expansion. gets moving: Plans for a multimodal transit terminal Downtown are back on track as transportation planners have decided to tackle the $320 million project by pursuing a master developer. The 16-acre parcel known as “The Gulch” will be the site for the development. The facility will house 400 buses, eight MARTA tracks and inter-city and commuter rail lines for metro Atlanta residents. Commercial development above the terminal would include office, retail and multi-family buildings. The project as a whole is being touted as one of Downtown’s most ambitious redevelopments. The process of deciding on the master developer begins this September when requests for qualifications are due. The DOT then plans to select the winning bidder by May 2011. The first phase of the project would then likely begin late 2011 or early 2012.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• Multimodal
AT A GLANCE | GSU Petit Science Center
•
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 professionals
UNITED STATES:
•
Part of Georgia State University’s science park at Decatur Street and Piedmont Avenue.
Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845
•
$150 million, 350,000 SF research and teaching facility for 6,000 GSU students majoring in science.
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:
•
•
•
Anticipated to generate over $800 million in economic development, including new jobs and research. The university plans to partner with donors in the private sector to add a business incubator and a center for advanced collaboration. Opened March 2010
Bob Allen
Bob Mathews
Neal Baker
Craig Mendel
Patrick Braswell
Scott O’Halloran
Lee Evans
Hugh Pafford
Russ Jobson
Jodi Selvey
Nicole Kamen
Fred Sheats
Jeff Kelley
Pete Shelton
Brett Kingman
Andrew Walker
Michael Lipton
Bob Ward
COLLIERS INTERNATIONAL | ATLANTA OFFICE | DOWNTOWN LISTINGS
135 ANDREW YOUNG INTL. BLVD. 11,000 SF Sale Jodi Selvey / Pete Shelton
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.
Accelerating success.
www.colliers.com/atlanta