Q2 2011 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
26,717,992
300,000
17%
Vacancy Rate
200,000
16%
YTD Net Absorption
100,000 15% 0 (100,000)
2Q10
3Q10
4Q10
1Q11
2Q11
13%
(300,000)
12% Deliveries
(182,482)
YTD Deliveries
0
Under Construction
0
14%
(200,000)
Absorption
16.1%
Avg. Class A Rate
$19.82
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q2 2011 VACANCY
UPDATE Recent Transactions in the Market
Q3 2011
SALES ACTIVITY
—
PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
55 Allen Plaza
$57,000,000
348,658
$163.48
Teachers Retirment of Ill.
100 Peachtree Street
$27,500,000
622,301
$44.19
America’s Capital Prtnrs.
40 Marietta Street
$6,000,000
123,370
$48.63
Nakash Holdings
9,889
$126.40
MK Marlow Company
400 W. Peachtree St.-Unit 200 $1,250,000
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
•
Downtown office absorption and leasing activity stalled in the second quarter of 2011. The most significant move-in during the three month period was Turner Broadcasting which expanded by 36,236 SF in Centennial Tower. This was a lateral move, however, as the media company moved out of almost the same amount of space at 250 Williams St.; resulting in net absorption being only minimal.
•
Because of subdued market conditions, the modest number of intown transactions occurring in urban Atlanta are in the more desirable submarkets of Midtown and Buckhead, where concessions remain abundant. Despite this, Downtown continues to offer the most affordable rental rates for Class A space in the urban corridor.
•
Not much will change in the second half of 2011 in Downtown. Absorption and leasing will remain tepid.
MARKET REPORT | Q2 2011 | 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
1,253,499 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
79%
95%
88%
82%
89%
203,068 SF
23,545 SF
91,442 SF
102,045 SF
95,177 SF
$29.00-$30.00
$28.00-$30.00
$21.00-$22.00
$26.00
$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 | Q2 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
622,301 SF
460,437 SF
302,951 SF
325,000 SF
553,018 SF
18,845 SF
18,101 SF
14,121 SF
13,816 SF
29,130 SF
48%
80.1%
65.9%
77.9%
74.2%
181,634 SF
18,413 SF
131,396 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 | Q2 2011 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS
512 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: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117 •
$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
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
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Drew Levine
Bob Ward
Michael Lipton
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 512 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
550 PEACTHREE
105,323 SF Sale Pete Shelton
5,700-12,000 SF Sublease Craig Mendel / Michael Lipton
Accelerating success.