Q3 2011 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 100,000
17%
Square Feet
50,000
16%
0 (50,000)
3Q10
4Q10
1Q11
2Q11
3Q11
(100,000)
Absorption
Deliveries
Vacancy Rate
16%
YTD Net Absorption
(160,271)
YTD Deliveries
0
13%
Under Construction
0
12%
Avg. Class A Rate
(150,000)
(250,000)
27,105,294
15% 14%
(200,000)
Total SF
$19.44
Vacancy
Source: CoStar Property, Colliers Research
MARKET INDICATORS Projected
Q3 2011
UPDATE Recent Transactions in the Market
Q3 2011
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
55 Allen Plaza
$57,000,000
348,658
$163.48
Teachers Retirement of Ill.
—
One Georgia Center
$48,600,000
375,000
$129.60
Govt. Properties Trust
—
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
Downtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Internap
250 Williams Street
31,000
Class A Expansion
SunTrust Banks
SunTrust Tower
23,545
Class A Expansion
Cardlytics
112 Krog St.
16,475
Class C Lease
Emory Healthcare
P’tree Center-North Tower
16,085
Class A Lease
•
Third quarter absorption in the Downtown submarket was the fourth highest in Atlanta’s office market. A handful of small move-ins were the contributing factor to the increase in occupancy.
•
As expected, demand in the submarket remains tepid. Not much leasing activity is occurring in Downtown office buildings. For the year, renewals have been the bulk of the transactions that have taken place.
•
Bank of America’s downsizing at Bank of America Plaza will affect fourth quarter occupancy figures Downtown. The submarket will finish the year with an increase in its overall vacancy from 2010.
•
Downtown Class A buildings still boast the most affordable rental rates in the metro area.
MARKET REPORT | Q3 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
1,287,997 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
62.8%
98%
88%
81.5%
89.4%
203,068 SF
23,545 SF
91,442 SF
102,045 SF
95,177 SF
$28.25-$29.25
$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 | Q3 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 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
18,845 SF
18,101 SF
14,121 SF
13,816 SF
29,130 SF
48%
80.1%
75.3%
83.1%
74.2%
181,634 SF
18,413 SF
84,795 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 | Q3 2011 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS
512 offices in 61 countries on 6 continents
• ‘Times
Square South’ proposed: Seven Oaks and Legacy Property Group have teamed up for a proposed office tower in Downtown, which would be the first to be built since Barry Real Estate’s 55 Allen Plaza if it were to go under construction. The office building, known as 285 Marietta, would be 350,000 SF and located on the same block as the Embassy Suites Hotel which fronts Centennial Olympic Park. It would feature a video wall to invoke the feel of a “Times Square” setting. Though current market conditions do not warrant new development, the developers are looking to attract companies with a younger workforce which tend to be creative and high-tech. Their hope is to land a requirement such as a Turner Broadcasting expansion and have that company lease the majority of the new building. This would be the only way the development would be kicked off given the slow recovery and lack of job growth in Atlanta’s office market.
• BentleyForbes
seeking Bank of America Plaza partners: BentleyForbes is looking for equity partners to help with its beleaguered loan on Bank of America Plaza. Earlier this year, the lender on the mortgage transferred the debt of $363 million to special servicing. According to popular rating agencies, the loan faces imminent default. Invesco has been mentioned as a possible partner to help with the restructuring of the debt; however, this is only speculation. Nevertheless, BentleyForbes will need to find an investor soon as Bank of America downsizes from its original lease in the building, thus reducing a significant amount of cash flow to the owners. It could also just walk away from the loan and turn it over to the lender. If it does so, BentleyForbes still owes a significant amount of tax on the debt forgiveness. 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.