Q3 2010 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
800,000
Vacancy Rate
24%
19,666,465 21.9%
22%
600,000
20% 400,000
18%
200,000
16% 14%
0
YTD Net Absorption
118,882
YTD Deliveries
752,710
Under Construction
0
12% 3Q09
4Q09
1Q10
2Q10
3Q10
(200,000)
10% Absorption
Deliveries
Avg. Class A Rate
$23.60
Source: CoStar Property
Vacancy
MARKET INDICATORS Q3 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
271 17th Street
$75,000,000
548,039
$136.85
CBRE Investors
Campanile
$36,000,000
446,626
$80.60
Dewberry Capital
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
Alston & Bird Law Firm
One Atlantic Center
340,000
Class A Renewal & Contraction
Kilpatrick Stockton
1100 Peachtree
206,140
Class A Renewal
Georgia’s Own Credit Union Campanile
102,000
Class A Renewal & Expansion
Purchasing Power
37,000
Class A Lease
Pershing Point Plaza
•
Midtown posted the second highest amount of positive absorption in third quarter compared to all other submarkets. Occupancy increased by 122,620 SF in the three month period. Most of the occupiers in third quarter were from tenants with spaces between 10,000-20,000 SF.
•
The average quoted rate for office space in Midtown increased for the third straight quarter. Though 4.3 million square feet of space is vacant, it appears landlords in the submarket are feeling confident enough to hold firm on their rental rates and even raise them in some instances.
•
Leasing activity in Midtown remains steady and the submarket is expected to help lead the office market recovery next year. Large prospects in the market are keeping Midtown on their short list.
MARKET REPORT | Q3 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
1,079,312 SF
669,575 SF
752,710 SF
774,344 SF
581,833 SF
87%
93%
24%
54.4%
86.5%
57,999 SF
15,740 SF
512,918 SF
329,464 SF
56,047 SF
$26.70-$32.70
$33.10-$35.10
$34.00-$36.00
$24.00-$26.50
$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 | Q3 2010 | ATLANTA OFFICE | MIDTOWN
RECENT DELIVERIES 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
446,626 SF
79.4%
40.6%
97.9%
77.1%
30.4%
52,965 SF
157,820 SF
25,393 SF
44,912 SF
213,348 SF
$27.00-$29.00
$31.00-$32.00
$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)
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 | Q3 2010 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS
480 offices in 61 countries on 6 continents
• Alston
& Bird consolidates into One Atlantic Center: Atlanta’s largest law firm will not be relocating to a new office development, but will instead be consolidating from its space in Atlantic Center Plaza to One Atlantic Center. Alston & Bird leases about 435,000 SF between both buildings. Due to budget crunching, the law firm will downsize to a total of 340,000 SF in One Atlantic Center after its current landlord Hines Properties was able to put together an enticing incentives package to stay put. The lease takes the 1.1 million sq. ft. tower to 87% leased. Occupancy of the expansion space will begin in 2012.
plans $180M investment in City Hall East: Plans for City Hall East call for a complete redevelopment and makeover of the historic building by Jamestown Properties. Investment in the project would be about $180 million, including paying the city of Atlanta $15.5 million for the property. The redevelopment would include a mix of retail, offices and residences. Twenty percent of the 1.1 million square feet project would be stores. The Atlanta City Council recently approved sale of the property.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• Jamestown
• Regions
Bank eyes Midtown regional HQ: Looking to raise its profile among 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 move from its current office in Central Perimeter 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 likely come from Alston & Bird law firm, which recently decided to consolidate to One Atlantic Center. 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
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.
715 PEACHTREE
3,644 SF Lease; 10,428 SF Sale Jeff Kelley / Bob Ward / Pete Shelton
342,860 SF Lease Scott O’Halloran / Lee Evans
909 W. PEACHTREE
1570 NORTHSIDE DR.
12,000 SF Lease Russ Jobson / Bob Allen
4,075 SF Sublease Jodi Selvey
www.colliers.com/atlanta
•
$2 billion in annual revenue
• Over 2 billion square feet under
management • Over 15,000 professionals
UNITED STATES: 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
Craig Mendel
Neal Baker
Scott O’Halloran
Lee Evans
Hugh Pafford
Huston Green
Jodi Selvey
Russ Jobson
Fred Sheats
Nicole Kamen
Pete Shelton
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Michael Lipton
Bob Ward
Bob Mathews
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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