Q4 2011 | DOWNTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 50,000
Square Feet
0 4Q10
1Q11
2Q11
3Q11
Total SF
27,278,955
17%
Vacancy Rate
16%
YTD Net Absorption
4Q11
(50,000)
16.6% (331,883)
15% (100,000)
YTD Deliveries
0
Under Construction
0
14% (150,000) (200,000)
13%
(250,000)
12% Absorption
Deliveries
Avg. Class A Rate
$19.53
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q4 2011
UPDATE Recent Transactions in the Market
Q1 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
One Georgia Center
$48,600,000
375,000
$129.60
Govt. Properties Trust
44 Broad Street
$3,800,000
128,502
$29.57
Williams-Russell/Johnson
135 Andrew Young Intl.
$2,250,000
16,000
$140.63
Waffle House
Downtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Grady Health Systems
10 Park Place
37,349
Class C Lease
Resurgens PC
550 Peachtree St.
17,917
Class A Renewal
Emory Healthcare
P’tree Center-North Tower
16,475
Class A Lease
Coxe, Curry & Associates
191 Peachtree
16,035
Class A Lease
•
Downtown finished the year on a down note with 90,427 SF of space added to the submarket in the fourth quarter. The largest move-out in the quarter was Bank of America which downsized by almost half of its original space, vacating 235,849 SF.
•
For the year, Downtown had the highest amount of space given back of any other submarket in the Atlanta office market. Anemic leasing activity, the flight-to-quality trend and overall market conditions were the main culprits to the submarket’s negative absorption in 2011.
•
The office vacancy rate Downtown has yet to hit its peak. The submarket will continue to see rising vacancy at least through the first half of 2012.
•
Downtown will be one of the last major submarkets to see a recovery; possibly not until 2013.
MARKET REPORT | Q4 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%
88.3%
85.2%
87.1%
203,068 SF
25,005 SF
91,442 SF
102,045 SF
95,177 SF
$28.50-$29.50
$32.75-$34.50
$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 | Q4 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
48.8%
83.1%
76.1%
83.1%
74.2%
128,621 SF
18,413 SF
70,605 SF
41,772 SF
278,716 SF
$17.50-$20.50
$20.50-$21.50
$18.50-$19.50
$15.75-$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 Developer: Barry Real Estate Proposed
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q4 2011 | ATLANTA OFFICE | DOWNTOWN
IN THE NEWS • Bank
512 offices in 61 countries on 6 continents
• New
United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
of America Plaza taken back by lender: Bank of America Plaza was recently auctioned on the Fulton County courthouse steps after negotiations to restructure debt on the property fell through. JP Morgan Chase foreclosed on Bentley Forbes which purchased the tower for a record price back in 2006, prior to the financial markets tanking. Title to the 1.3 million square foot Class A office tower was secured by the special servicer LNR Partners on behalf of JP Morgan Chase for a credit bid of $235 million. study predicts transit terminal would create 15,000 jobs: A recent study shows an economic output increase of $5.2 billion by 2040 for Georgia if a multi-modal terminal is completed Downtown. Additionally, nearly 15,700 jobs would be created in the submarket and up to 8.6 million square feet of additional development brought to the area surrounding the new terminal.
• Post
Properties eyeing downtown apartments: As market conditions improve for apartment development, Post Properties is eyeing its three parcels in the Ivan Allen Plaza development for a possible project. Still, the developer says they are early in the process of evaluating plans for the site; possibly being 12 to 18 months before anything is set in motion.
• ‘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.
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. Title secured by credit bid of $235 million by LNR Partners on behalf of the debt holder JP Morgan Chase.
•
$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
Lee Evans
Craig Mendel
Property auctioned at a 46% discount of what former owner BentleyForbes Group paid in ‘06.
Deming Fish
Scott O’Halloran
Huston Green
Hugh Pafford
Repositioning of the 1,023-foot skyscraper will likely begin second quarter 2012.
Tim Huffman
Jodi Selvey
Russ Jobson
Fred Sheats
The office building is currently 62.8% leased.
Jeff Kelley
Pete Shelton
Drew Lavine
Hayes Swann
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 512 offices throughout more than 61 countries worldwide.
HERNDON PLAZA 105,323 SF Sale Pete Shelton
Accelerating success.
www.colliers.com/atlanta