Q2 2010 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
800,000
24%
Vacancy Rate
700,000
22%
600,000
20%
500,000 400,000
18%
300,000
16%
200,000
14%
100,000
22.1%
YTD Net Absorption YTD Deliveries
(28,680) 752,710
Under Construction
0
12%
0 (100,000)
19,296,867
2Q09
3Q09
Absorption
4Q09
1Q10
Deliveries
2Q10
10%
Avg. Class A Rate
$23.61
Source: CoStar Property
Vacancy
MARKET INDICATORS Q2 2010
NEXT QTR
UPDATE Recent Transactions in the Market SALES ACTIVITY
—
VACANCY NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Campanile
$35,000,000 (U/C)
446,000
$78.48
Dewberry Capital
1315 Peachtree St. (‘09)
$6,600,000
55,000
$120
Perkins & Will
728-736 W. Peachtree St.
$2,299,000
29,400
$78.20
Midtown Opera, LLC
977 Ponce de Leon Ave.
$1,643,000
15,436
$106.44
Clare Jay LLC
Midtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Kilpatrick Stockton
1100 Peachtree
206,140
Class A Renewal
Fisher & Phillips
1075 Peachtree
49,222
Class A Lease
vocalocity
1375 Peachtree
28,017
Class A Sublease
Engauge Marketing
Promenade II
21,983
Class A Expansion
•
Second quarter office occupancy dropped by 56,789 SF in Midtown. The submarket’s absorption activity has been bouncing from positive to negative over the past year. This is expected to continue through the remainder of 2010.
•
Midtown is one of three office submarkets under performing from last year’s absorption totals.
•
The vacancy rate in Midtown increased slightly between quarters; up only 0.3%. Compared to this time last year, the rate is up 2.7%. The amount of space available in the submarket remains in record territory at 4.6 million square feet.
•
Despite inconsistent activity and record vacancy, Midtown’s average rates are trending upwards.
MARKET REPORT | Q2 2010 | 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
1,100,312 SF
670,700 SF
752,710 SF
774,344 SF
581,833 SF
75.9%
92.5%
22.6%
52.4%
84.2%
126,779 SF
15,740 SF
523,654 SF
345,338 SF
83,020 SF
$28.20-$34.20
$33.11-$36.61
$36.00-$38.00
$26.50
$24.00-$30.00
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 | Q2 2010 | ATLANTA OFFICE | MIDTOWN
NEW CONSTRUCTION 3 Source: CoStar Property
1075 PEACHTREE ST. 752,710 SF Delivered 1st Qtr. 2010 Developer: Selig/Daniel JV
6
999 Peachtree
271 17th Street
The Proscenium
Atlantic Center Plaza
Campanile Bldg.
621,908 SF
548,039 SF
533,135 SF
499,601 SF
444,322 SF
77.8%
40.6%
96.6%
79.9%
13.9%
52,965 SF
157,820 SF
25,393 SF
44,912 SF
220,348 SF
$27.00-$29.00
$31.00-$32.00
$30.00-$32.00
$23.00-$30.00
$29.50-$30.50
6
7
8
9
10
AERIAL LEGEND
Buildings by Number (see opposite page)
271 17TH STREET
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
534,120 SF Delivered April 2009 Developer: AIG Global/Carter
PLANNED CONSTR. 1 1400 PEACHTREE 400,000-500,00 SF Office Tower Mixed-Use Development Developer: Shailendra Group/ Jamestown Properties
2
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 | Q2 2010 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS
480 offices in 61 countries on 6 continents
• Dewberry
puts Campanile under contract: The Atlanta Business Chronicle confirmed Atlanta investor John Dewberry is on his way to becoming the new owner of Campanile Plaza. The 446,000 SF office tower located in the heart of Midtown is under contract for $35 million, a bargain by any standard. The last sale of the building occurred in 2007 for three times this amount. Earlier this year, Campanile was taken back by Wells Fargo, the lender for the property, by means of a deed in lieu of foreclosure from Transwestern Investment. Purchasing the office tower will raise Dewberry’s profile as a true institutional investor and become one more piece to his portfolio of Midtown properties. The contract for sale outbid other renowned Atlanta developers including Cousins Properties and Tishman Speyer. Bank eyes Midtown regional HQ: Looking to raise its profile amongst Atlanta’s many larger banks, Regions Bank is close to leasing about 80,000 SF of office space on four floors at Atlantic Center Plaza. The Birmingham, Alabama-based bank is the sixth largest in Atlanta and has its current office in Central Perimeter. The move to Midtown will give the bank an intown presence and allow it to compete head on against it’s bigger rivals. The four floors to be occupied will come from Alston & Bird law firm, which will likely be consolidating into its offices at One Atlantic Center Plaza.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• Regions
•
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 professionals
UNITED STATES: 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 currently negotiating to purchase the property from the City of Atlanta for $27 million.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS
PERSHING PARK PLAZA
THE PROSCENIUM
1,790-5,220 SF Lease Lee Evans
9,508 SF Sublease Jeff Kelley / Bob Ward / Pete Shelton
400 TRABERT AVE.
COLONY SQUARE 400
3,644 SF Lease; 10,428 SF Sale Jeff Kelley / Bob Ward / Pete Shelton
1,972 SF Sublease Bob Allen
909 W. PEACHTREE
1570 NORTHSIDE DR.
12,000 SF Lease Russ Jobson / Bob Allen
4,075 SF Sublease Jodi Selvey
www.colliers.com/atlanta
Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen
Bob Mathews
Neal Baker
Craig Mendel
Patrick Braswell
Scott O’Halloran
Lee Evans
Hugh Pafford
Russ Jobson
Jodi Selvey
Nicole Kamen
Fred Sheats
Jeff Kelley
Pete Shelton
Brett Kingman
Andrew Walker
Michael Lipton
Bob Ward
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.
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