Q2 2012 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 60,000 40,000 20,000 0 (20,000) (40,000) (60,000) (80,000) (100,000) (120,000) (140,000)
18% 17% 16% 2Q11
3Q11
4Q11
1Q12
Total SF
27,806,804
Vacancy Rate
17.2%
YTD Net Absorption
(220,234)
2Q12
15% 14%
YTD Deliveries
0
Under Construction
0
13% 12% Absorption
Deliveries
Avg. Class A Rate
Vacancy
$19.88
Source: CoStar Property, Colliers Research
MARKET INDICATORS Projected
Q2 2012
UPDATE Recent Transactions in the Market
Q3 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
180 Spring St.
$30,000,000
90,688
$331
Govt. Properties Trust
Hurt Plaza
$17,500,000
436,340
$40.11
Boxer Property
100 Auburn Ave.
pending
105,323
pending
pending
Downtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Georgia Chamber of Commerce
270 Peachtree
48,000
Class A Lease
Atlanta Life Financial
191 Peachtree
25,533
Class A Lease
Invest Atlanta
Georgia-Pacific Center
18,701
Class A Lease
Stephen Freeman Law Firm
Harris Tower-P’tree Center
6,919
Class A Sublease
•
Downtown’s office vacancy continued its upwards trend in the second quarter, increasing for the third consecutive period. The submarket saw over 100,000 SF of vacant space added in the past three months. Compared to this time last year, Downtown’s vacancy rate has increased 0.6%.
•
The largest move-out contributing to the negative absorption this quarter was SunTrust Robinson Humphrey out of SunTrust Plaza. The company relocated and expanded their current space in Buckhead.
•
The submarket is still waiting for the economy as a whole to improve. Given that most tenants in Downtown are financial institutions, law firms and other service related companies, it could be a while before solid occupancy gains return. These industries have yet to see sustained job growth.
MARKET REPORT | Q2 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%
91.9%
90.4%
83.8%
78.7%
233,060 SF
25,005 SF
69,910 SF
102,045 SF
60,638 SF
$26.60-$27.60
$32.75-$34.75
$21.00-$22.00
$28.50
$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 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
38.5%
83.1%
64.9%
95.1%
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 | Q2 2012 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS
522 offices in 62 countries on 6 continents
• Three
options for the ‘Gulch’: Three conceptual drawings by Forest City Enterprises, Cousins Properties and The Integral Group have been unveiled that show possible designs for the area known as the ‘Gulch’ in Downtown. All three designs visualize how to turn the sunken tangle of parking spaces, vacant lots and rail lines into a centralized terminal for multi-modal passenger transportation. The public will weigh in on the three proposals over the coming months and a preferred plan, which will likely be a combination of elements from the three designs, could be picked in October. Construction could begin as soon as late 2013. could spark downtown development: The construction of Atlanta’s street car connecting the King Center and Sweet Auburn District to Centennial Olympic Park is spurring developer interest on its path. Central Atlanta Progress is working with a number of developers touring sites along the route for possible mixed-use projects. Investment in the area is seen as a key to Downtown’s revitalization.
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
• Streetcar
• Atlanta
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. UPDATE: Atlanta Life recently signed a full-floor lease at 191 Peachtree where it will move in November of this year.
• 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. 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.
151 SPRING ST.
INTL. TOWER
19,000 SF Sale Jodi Selvey / Michael Lipton
2,284 SF Sublease Craig Mendel / Drew Lavine
Accelerating success.
www.colliers.com/atlanta