Q2 2011 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 22%
150,000 100,000
20%
Square Feet
50,000 0 (50,000)
18% 2Q10
3Q10
4Q10
1Q11
2Q11
16%
(100,000) (150,000)
14%
(200,000)
Total SF
22,156,312
Vacancy Rate YTD Net Absorption
20.1% (226,629)
YTD Deliveries
0
Under Construction
0
12%
(250,000) (300,000)
10% Absorption
Deliveries
Avg. Class A Rate
$24.98
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q2 2011 VACANCY
UPDATE Recent Transactions in the Market
Q3 2011
SALES ACTIVITY
—
NET ABSORPTION CONSTRUCTION
—
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
675 Ponce de Leon
$27,000,000
1400 Peachtree
$6,000,000
2,000,000
$13.50
Jamestown Properties
1.7-acres
$81.02
1382 Peachtree St.
Dewberry Capital
$4,200,000
30,448
$137.94
1440 Dutch Valley Place
Big Brothers Big Sisters
$2,675,000
65,800
$40.65
Parkside Partners
Midtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Arnall Golden Gregory
171 17th Street
124,521
Class A Renewal
Regions Bank
Atlantic Center Plaza
80,000
Class A Lease
Teknion
271 17th Street
7,259
Class A Lease
Brickworks Atlanta
5,000
Class B Lease
•
Second quarter activity was lackluster in the Midtown office submarket. Though positive, absorption only amounted to 8,700 SF over the three month period. Leasing activity was no better with only two large transactions getting completed.
•
For the most part, Midtown has been holding its own given the modest office market conditions in Atlanta. The overall vacancy rate in the submarket is the same as it was a year ago. Midtown has managed to dodge the effect from its largest consolidations and contractions.
•
Not much is expected to change as it relates to Midtown office leasing. The submarket will see a handful of new deals in the second half of the year, but overall activity should continue to remain mute. New hiring and expansion from professional business firms is needed to jumpstart the submarket.
MARKET REPORT | Q2 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
TYPICAL FLOOR SIZE
23,500 SF
22,130 SF
26,360 SF
20,377 SF
22,269 SF
% LEASED
90%
94%
50%
66%
87%
44,403 SF
15,740 SF
319,858 SF
229,564 SF
56,047 SF
$28.50-$34.50
$33.00-$35.00
$35.32-$37.32
$25.00-$28.00
$23.30-$29.30
1
2
3
4
5
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
5
2 8 6
5 2
8
6 9
11
4 1 9
3
3
10
7
1
10
4
12
3 4 1 2 P. 2
| COLLIERS INTERNATIONAL
7
MARKET REPORT | Q2 2011 | ATLANTA OFFICE | MIDTOWN
ACTIVE PROJECTS Source: CoStar Property
1 SKY HOUSE 320 Multi-Family Units 8,400 SF Retail Developer: Novare Group
2 77 12TH STREET 314 Apartment Units Fall 2011 Ground-breaking Developers: Daniel Corporation/ Selig Enterprises
3 999 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
83%
41.6%
89%
92%
30.4%
50,935 SF
183,587 SF
25,000 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
Buildings by Number (see opposite page)
1.7-Acre Site Zoned for Mixed-Use Recently Sold for $6M Owner: Dewberry Capital
PROPOSED DEV. 4
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
METROPOLITAN CENTER 3
Center for Puppetry Arts
MARTA Rail Line Savannah College
New Construction
1400 PEACHTREE
Woodruff Arts
6 Center
570,000 SF Office Tower Mixed-Use Development Developer: Daniel Corp/MetLife/ Selig Company
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q2 2011 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS
512 offices in 61 countries on 6 continents
• Atlanta
landmark sold/Ponce City Market to reshape City Hall East: One of Atlanta’s largest landmarks recently sold. City Hall East, formerly the home of Sears Roebuck & Co. and previously occupied by the City of Atlanta, was purchased by Jamestown Properties for $27 million. Jamestown is planning a massive overhaul of the 85-year old building to include a redevelopment of the entire 2-million square foot structure. The project will be known as Ponce City Market. Plans will incorporate multiple elements in its design. This includes 500,000 SF of Class A office, approximately 300,000 SF of retail space, loft-style condominiums, several hundred multi-family residences and restaurant space. It is being compared to other developments such as the Ferry Building in San Francisco, Pike Place Market in Seattle and Chelsea Market in New York. Jamestown will invest over $150 million to clean up the aging building and make it habitable. Ponce City Market is planning to open in 2014.
• Dewberry
buys 1400 Peachtree for $6M: Dewberry Capital grabs another key parcel on Peachtree Street with the purchase of the 1.7-acre site at 1400 Peachtree. The site was previously owned by the Shailendra Group which bought it in 2006. It was foreclosed upon by United Community Bank in January. Dewberry Capital bought the property at a 66% discount in June, and in the process added another key addition to the developer’s list of Midtown properties.
• Regions
Bank moving to Midtown: The sixth largest bank in Atlanta has chosen to relocate to Midtown with a new lease transaction of 80,000 SF at Atlantic Center Plaza. The bank is looking to raise its profile amongst its competitors and the new lease will do just that. The bank will have signage atop the 24-story office tower and be visible to over 287,000 vehicles per day. 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 300,000 SF of retail space; 500,000 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.
COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS
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
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
PERSHING PARK PLAZA
909 W. PEACHTREE 12,000 SF Lease Russ Jobson / Bob Allen
3,430 SF Lease Lee Evans
715 PEACHTREE
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.
328,600 SF Lease Scott O’Halloran / Lee Evans
Accelerating success.
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