Q2 2012 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 300,000
Square Feet
250,000 200,000 150,000 100,000 50,000 0 (50,000)
2Q11
3Q11
Absorption
4Q11
1Q12
Deliveries
2Q12
20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10%
Total SF
22,251,996
Vacancy Rate
17.1%
YTD Net Absorption
464,351
YTD Deliveries Under Construction
0 450,000
Avg. Class A Rate
Vacancy
$26.95
Source: CoStar Property, Colliers Research
MARKET INDICATORS Projected
Q2 2012
UPDATE Recent Transactions in the Market
Q3 2012
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Promenade II
$137,500,000
774,344
$177.57
Cousins Properties
—
Ten Peachtree Place
$61,400,000
258,917
$237.14
Prudential Real Estate
—
201 17th Street
$48,800,000
349,402
$139.67
CBRE Investors
855 Peachtree St.
$4,500,000
17,346
$259.43
Shops at Viewpoint LLC
Midtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Oxford Industries
999 Peachtree
30,713
Class A Lease
EarthLink
1375 Peachtree
22,562
Class A Sublease
Legacy Property Group
1180 Peachtree
14,413
Class A Lease
MJ Brunner Inc.
1100 Peachtree
12,076
Class A Lease
•
For the second consecutive quarter, Midtown’s office absorption topped 200,000 square feet. Most of the occupancy gains in second quarter were from tenants ranging between 10,000 to 30,000 square feet. The largest move-in was SunTrust which moved into 95,510 SF at Campanile.
•
Midtown’s office vacancy rate has dropped 2% percent from this time last year. The submarket is currently tied for second in year-to-date absorption with Buckhead.
•
Office leasing has been steady in Midtown, but only for full-floor transactions and smaller. Larger transactions greater than 50,000 SF are taking place where supply is abundant, rents are low and incentives are more aggressive.
•
Midtown should finish the year with its strongest office absorption since 2005.
MARKET REPORT | Q2 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
670,443 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
90.8%
96.3%
63.3%
71.4%
87.2%
66,748 SF
9,510 SF
136,343 SF
95,797 SF
46,162 SF
$28.50-$34.50
$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 | Q2 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.
621,007 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
93.5%
65.6%
100%
82.8%
52%
22,520 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-$26.50
$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 | Q2 2012 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS • Jamestown
522 offices in 62 countries on 6 continents
• KanAm
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
makes move to sell 999 Peachtree: Jamestown Properties has placed 999 Peachtree on the market. With only a few spaces remaining following recent transactions, Jamestown has brought the building up to 94% leased and shifted its focus to Ponce City Market which is Atlanta’s largest reurbanization project. Jamestown is asking approximately $160 million for the office tower and hopes to receive multiple offers from real estate investors seeking core assets. to sell Midtown AT&T office towers: Like many other office owners in Atlanta, KanAm has decided to place the Midtown I & II office buildings, 100% leased to AT&T, on the market for sale. The German real estate investor is liquidating the fund the buildings are in as a result of the euro crisis and uncertainty overseas. The buildings were bought back in 2007 for $242 million. The sales price for the two office buildings totaling 832,000 SF has yet to be disclosed.
• Third
new Midtown apartment tower planned: Novare Group and Batson-Cook Development are planning yet another apartment tower in Midtown; the third in less than a year. The project will be known as 100 Sixth Street and located behind the Viewpoint condo tower. Expected completion is in 2014.
• Prudential
buys Ten Peachtree Place for $61 million: Prudential Real Estate Investors completed its purchase of Ten Peachtree Place in May paying $61.4 million for the 260,000 SF office tower. The building was previously owned by a partnership between Cousins Properties and The Coca-Cola Co. Factors attracting Prudential to the office investment were its long-term lease with AGL Resources and its close proximity to MARTA. AT A GLANCE | Ponce City Market
•
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
PERSHING POINT PLAZA
715 PEACHTREE
13,000-64,521 SF Sublease Scott O’Halloran / Lee Evans / Deming Fish
328,600 SF Lease Scott O’Halloran / Lee Evans / Deming Fish
ONE ATLANTIC CTR.
1355 PEACHTREE
11,538 SF Sublease Pete Shelton / Bob Ward / Jeff Kelley
2,571 SF Sale/Lease 7,433 SF For Sale Andrew Walker / Fred Sheats
www.colliers.com/atlanta
•
$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
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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