Q1 2011 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 22%
800,000
20%
Square Feet
1,000,000
600,000
18%
400,000 16% 200,000 14%
0 (200,000)
1Q10
2Q10
3Q10
4Q10
1Q11
(400,000) Deliveries
22,057,656
Vacancy Rate YTD Net Absorption
20.4% (256,835)
YTD Deliveries
0
Under Construction
0
12% 10%
Absorption
Total SF
Avg. Class A Rate
$25.28
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2011
UPDATE Recent Transactions in the Market
Q2 2011
SALES ACTIVITY VACANCY PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
271 17th Street (‘10)
$75,000,000
548,039
$136.85
CBRE Investors
—
Campanile (‘10)
$36,000,000
446,626
$80.60
Dewberry Capital
—
Northside Center
$4,500,000
66,208
$67.98
Leading the Way
728-736 W. Peachtree St.
$2,299,000
29,400
$78.20
Midtown Opera, LLCQ
Midtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
PriceWaterhouseCoopers
1075 Peachtree
142,115
Class A Lease
McGuire Woods
Promenade II
40,000
Class A Lease
American Mgmt. Assoc.
The Proscenium
23,112
Class A Renewal
RR Donnelley & Sons
730 Midtown
23,000
Class B Lease
•
Midtown began the year as the office submarket with the largest occupancy drop in the Atlanta market. The sole reason for this is due to Bank of America vacating its Class B building at 715 Peachtree. The move-out resulted in 330,000 square feet of vacancy added.
•
With modest absorption over the past year, Midtown’s overall vacancy rate has remained relatively flat. The negative absorption this quarter pushed the rate over the 20% mark, however this is only 0.5% higher from this time a year ago.
•
Activity in Midtown, despite the negative quarter, is expected to pick up. The submarket is currently going through a lull and its tenants are playing musical chairs. Once professional service firms begin hiring again, expansions will provide the positive momentum needed to fill vacancies..
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | MIDTOWN
SKYLINE REVIEW Space Available Direct Sublet 50 45 40 35
Floors
30 25 20 15 10 5
BUILDING
One Atlantic Center
1180 Peachtree
1075 Peachtree
Promenade II
1100 Peachtree
RBA
1,079,312 SF
669,575 SF
752,710 SF
774,344 SF
581,833 SF
90.2%
93%
49.7%
65.7%
86.1%
44,403 SF
15,740 SF
319,858 SF
229,564 SF
56,047 SF
$27.70-$32.70
$33.00-$35.00
$34.00-$36.00
$24.00-$26.00
$23.30-$29.30
1
2
3
4
5
% LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
5
2 8 6
5 8
6 9
11
4 1 9
1
3
10
7
10
2
12
3 4 1 2 P. 2
| COLLIERS INTERNATIONAL
7
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | MIDTOWN
RECENT DELIVERIES 3 Source: CoStar Property
1075 PEACHTREE ST. 752,710 SF Delivered 1st Qtr. 2010 Developer: Selig/Daniel JV
PLANNED CONSTR. 1
999 Peachtree
271 17th Street
The Proscenium
Atlantic Center Plaza
Campanile Bldg.
621,908 SF
541,318 SF
533,135 SF
499,601 SF
446,626 SF
83.3%
41.6%
97.5%
78.4%
30.4%
50,935 SF
183,587 SF
7,285 SF
181,189 SF
213,348 SF
$27.00-$29.00
$29.50-$30.50
$28.00-$32.00
$23.00-$30.00
$29.50-$30.50
6
7
8
9
10
AERIAL LEGEND
POINTS OF INTEREST 1 Georgia Tech
7
Colony Square
2
8
Federal Reserve
9
Margaret Mitchell House & Museum
4 of Art & Design
10
Technology Square
5 Ansley Park
11
The Fox Theater
12
The Varsity
1400 PEACHTREE 400,000-500,00 SF Office Tower Mixed-Use Development Developer: Shailendra Group/ Jamestown Properties
2 Buildings by Number (see opposite page)
Atlantic Station Center for
3 Puppetry Arts
MARTA Rail Line Savannah College
New Construction
Woodruff Arts
6 Center
METROPOLITAN CENTER 570,000 SF Office Tower Mixed-Use Development Developer: Daniel Corp/MetLife/ Selig Company COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q1 2011 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS
480 offices in 61 countries on 6 continents
• PricewaterhouseCoopers
sets stage to grow at 1075 Peachtree: The city’s second largest accounting firm recently signed one of the largest office leases to date. PricewaterhouseCoopers will be relocating from its current office at 10 10th Street (Millennium in Midtown) to the new 1075 Peachtree building. The size of the deal is 142,115 SF, encompassing floors 26 through 31 in the tower. In addition to a very attractive incentives package, the accounting firm will also have signage on the building making PricewaterhouseCoopers one of the most visible names in the city. The decision to relocate was also due to the company’s future growth plans and its desire to attract younger workers. With the new deal, 1075 Peachtree is now almost 60% leased. launch new concept for Midtown Mile: Prominent Midtown developers are teaming together to promote a new concept for the stretch of Peachtree in Midtown know as the “Midtown Mile”. Originally, the vision along this path was focused around luxury brands with a total of approximately 1 million square feet of street-level retail. Following the latest downturn in the economy, developers now want to feature more regional and local retailers along this stretch, and want to scale down the amount of street-level retail to 601,000 SF. The Midtown developers promoting this plan include Dewberry Capital, Jamestown Properties, Selig Enterprises, Daniel Corporation and Robin Loudermilk. They hope to attract traditional retailers which want to put new stores in intown locations.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• Developers
AT A GLANCE | City Hall East
•
Former Sears, Roebuck & Co. mailing facility and most recently Atlanta City Hall East.
•
First opened in 1926.
•
2-million square foot complex to be redeveloped into a mixed-use project containing retail space, including boutique shops and anchor-tenant space up to 150,000 SF for a major retailer. Residences and restaurants are also part of the redevelopment project.
•
Jamestown Properties is investing $180 million into the redevelopment, including $15.5 million to the City of Atlanta for the property.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS
THE PROSCENIUM PERSHING PARK PLAZA
1,769 SF Sublease Jeff Kelley / Bob Ward / Pete Shelton
3,430 SF Lease Lee Evans 909 W. PEACHTREE 715 PEACHTREE 328,600 SF Lease Scott O’Halloran / Lee Evans
12,000 SF Lease Russ Jobson / Bob Allen
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 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
Deming Fish
Scott O’Halloran
Huston Green
Hugh Pafford
Tim Hoffman
Jodi Selvey
Russ Jobson
Fred Sheats
Nicole Kamen
Pete Shelton
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Drew Levine
Bob Ward
Michael Lipton
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.
1570 NORTHSIDE DR. 4,075 SF Sublease Jodi Selvey
www.colliers.com/atlanta
•
Accelerating success.