Q1 2012 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
300,000
Vacancy Rate
Square Feet
200,000 100,000 0 1Q11
2Q11
3Q11
4Q11
1Q12
(100,000)
(200,000) (300,000) Absorption
Deliveries
20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10%
22,225,522 18.4%
YTD Net Absorption
241,527
YTD Deliveries Under Construction
0 450,000
Avg. Class A Rate
$27.00
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2012
UPDATE Recent Transactions in the Market
Q2 2012
SALES ACTIVITY VACANCY PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Promenade II
$137,500,000
774,344
$177.57
Cousins Properties
—
201 17th Street
$48,800,000
349,402
$139.67
CBRE Investors
—
675 Ponce de Leon
$27,000,000
2,000,000
$13.50
Jamestown Properties
728-736 West Peachtree
$4,439,600
25,400
$174.79
SunTrust Banks
Midtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
tvsdesigns
Promenade II
74,854
Class A Renewal & Contraction
IMG Worldwide
1075 Peachtree
42,868
Class A Lease
Norfolk Southern
Promenade II
37,000
Class A Lease
Duane Morris
1075 Peachtree
27,898
Class A Lease
•
Midtown had the second highest amount of office space absorbed in the first quarter. Occupancy increased by 241,527 square feet during the period. The largest move-ins contributing to this increase were mostly full floor transactions; examples being Ogilvy & Mather at 217 17th Street, Gensler at 999 Peachtree and Routematch at One Atlantic Center.
•
Leasing activity in Midtown has been fairly consistent and steady over the past year. Since the first quarter of 2012, the overall office vacancy rate in the submarket has dropped one percent.
•
The average rental rate for office space in Midtown is the highest in the Atlanta market at $24.52/sf. Still, despite the positive conditions, rents have yet to show any signs of trending upwards.
•
Looking ahead, Midtown is expected to be one of the stronger office submarkets in Atlanta in 2012.
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | MIDTOWN
SKYLINE REVIEW Space Available Direct Sublet 50 45 40
Floors
35 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
TYPICAL FLOOR SIZE
23,500 SF
22,130 SF
26,360 SF
24,372 SF
22,269 SF
% LEASED
90.7%
93.9%
58.9%
71.4%
85.9%
66,748 SF
15,740 SF
249,950 SF
95,797 SF
46,162 SF
$27.50-$33.00
$33.25-$35.25
$36.00-$38.00
$26.00
$27.68-$32.93
1
2
3
4
5
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
7 5
10
2 8 6 3
3 5 2
4
8
6 9 11
1 4
9
1
10 12
3 4 1 2 P. 2
7
| COLLIERS INTERNATIONAL
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | MIDTOWN
ACTIVE PROJECTS Source: CoStar Property
1 SKY HOUSE 320 Multi-Family Units 8,400 SF Retail Under Construction Developer: Novare Group
2 77 12TH STREET 314 Apartment Units Under Construction Developers: Daniel Corporation/ Selig Enterprises
3 1400 PEACHTREE
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
22,995 SF
26,300 SF
25,000 SF
20,816 SF
23,382 SF
89.1%
65.6%
100%
84.1%
52%
23,170 SF
105,534 SF
20,480 SF
181,189 SF
203,357 SF
$27.00-$29.00
$29.50-$30.50
$28.00-$32.00
$23.00-$26.00
$28.65-$30.65
6
7
8
9
10
AERIAL LEGEND
Buildings by Number (see opposite page)
POINTS OF INTEREST 1 Georgia Tech
7
Colony Square
2 Atlantic Station
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
Center for
3 Puppetry Arts
1.7-Acre Site Zoned for Mixed-Use Recently Sold for $6M (Jun. ‘11) Owner: Dewberry Capital
OFF MAP PONCE CITY MARKET Mixed-Use Redevelopment 450,000 SF Office 245,494 SF Retail 20,645 SF Restaurants 204 Residential Units 160 Hotel Rooms Developers: Jamestown Prop./ Green Street Prop.
PROPOSED DEV. 4
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 2012 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS
522 offices in 62 countries on 6 continents
• Novare
proposes Midtown apartment tower: Atlanta developer Novare Group is proposing a new apartment tower in Midtown located near the intersection of Juniper and 6th Streets. The project which is being called 100 6th Street would consist of up to 320 units with street-level retail in a 23-story tower. The developer currently has SkyHouse, a 320-unit apartment tower, under construction at West Peachtree and 12th Streets. With both projects Novare is looking to take advantage of Atlanta’s growing population of young adults and the “rentership society” caused by the housing market collapse. in lead to buy Ten Peachtree Place: Following a brief stint on the market, Ten Peachtree Place is now under contract and expected to close by the end of May. Cousins Properties and CocaCola are expected to sell the 260,000 SF office building to Prudential Real Estate Investors for what could be $200 per square foot. The building’s largest tenant, AGL, signed a long-term renewal last year in the building. This lease renewal helped solidify Ten Peachtree Place as a core asset and is a reason why Prudential Real Estate was attracted to purchasing the building.
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
• Prudential
• Ad
agency Ogilvy & Mather makes big move to Midtown: Manhattan ad agency Ogilvy & Mather recently moved from its current offices in Roswell and Buckhead to 271 17th Street. The company opened its second U.S. digital labs in the new space, and moved some of its digital marketing functions from New York to Atlanta. The ad agency took a full floor in the building, or about 26,724 SF. The move into the heart of the city brings Ogilvy & Mather closer to some of its biggest clients, and also allows it to recruit new talent.
AT A GLANCE | City Hall East
•
Former Sears, Roebuck & Co. mailing facility and most recently Atlanta City Hall East.
•
2-million square foot complex to be redeveloped into a mixed-use project containing 245,000 SF of retail space; 450,000 SF of Class A office; loft-style condominiums; several hundred multi-family residences for sale and rent; and restaurants.
•
•
Jamestown Properties is investing $180 million into the redevelopment, including $15.5 million to the City of Atlanta for the property. Under construction as of 4th Quarter 2011.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS
•
$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
Jill Bomar
Craig Mendel
Lee Evans
Scott O’Halloran
Deming Fish
Hugh Pafford
Huston Green
Jodi Selvey
Tim Huffman
Fred Sheats
Russ Jobson
Pete Shelton
Jeff Kelley
Hayes Swann
Drew Lavine
Will Tyler
Michael Lipton
Andrew Walker
Nicole Littleton
Bob Ward
PERSHING POINT PLAZA 13,000-64,521 SF Sublease Scott O’Halloran / Lee Evans / Deming Fish
715 PEACHTREE
1355 PEACHTREE
328,600 SF Lease Scott O’Halloran / Lee Evans / Deming Fish
2,571 SF Sale/Lease 7,433 SF For Sale Andrew Walker / Fred Sheats
www.colliers.com/atlanta
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.
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