Q3 2011 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 200,000
22%
100,000
20% 18%
0 3Q10
4Q10
1Q11
2Q11
3Q11
16%
Total SF
22,200,659
Vacancy Rate YTD Net Absorption
19.7% (239,871)
YTD Deliveries
0
Under Construction
0
(100,000) 14%
(200,000)
12%
(300,000)
10% Absorption
Deliveries
Avg. Class A Rate
$24.89
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q3 2011
UPDATE Recent Transactions in the Market
Q4 2011
SALES ACTIVITY
—
VACANCY NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
675 Ponce de Leon
$27,000,000
2,000,000
$13.50
Jamestown Properties
—
1400 Peachtree
$6,000,000
1.7-acres
$81.02
Dewberry Capital
—
728-736 West Peachtree
$4,439,600
25,400
$174.79
SunTrust Banks
1382 Peachtree St.
$4,200,000
30,448
$137.94
Big Brothers Big Sisters
Midtown
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Atlanta Gas Light
Ten Peachtree Place
260,000
Class A Renewal
SunTrust
Campanile
95,510
Class A Lease
Gensler
999 Peachtree
21,136
Class A Lease
HDR Engineering
1100 Peachtree
18,700
Class A Lease
•
Midtown saw occupancy drop in the third quarter. The year-to-date total absorption in the submarket is now at (239,871) SF; thanks mostly to vacating Class B tenants.
•
Despite the occupancy loss, third quarter leasing in the submarket was among the most active in Atlanta’s office market. Atlanta Gas Light’s 260,000 SF lease renewal at Ten Peachtree Place is the largest transaction so far this year.
•
For the final quarter of the year, Midtown is expected to see more move-ins than move-outs. There will be some shuffling around from existing tenants making intrasubmarket moves; however, leasing activity which occurred during the first half of the year will finally show up as positive absorption in the submarket. Still, Midtown will likely finish 2011 in negative territory.
MARKET REPORT | Q3 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
89.5%
94%
50%
66%
91%
66,748 SF
15,740 SF
313,895 SF
229,564 SF
46,162 SF
$27.20-$32.70
$35.35
$35.32-$37.32
$26.00
$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 | Q3 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
87%
43.3%
95.3%
90.4%
51.8%
38,471 SF
183,587 SF
17,700 SF
181,189 SF
205,001 SF
$27.00-$29.00
$29.50-$30.50
$28.00-$32.00
$23.00-$30.00
$30.50-$32.00
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 | Q3 2011 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS • SunTrust’s
512 offices in 61 countries on 6 continents
• Midtown’s
United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
GA HQ moving to Midtown: The Georgia division of SunTrust Banks recently signed a lease for 95,510 SF at the Campanile building. This lease was one of the largest to occur in the third quarter in the submarket. The bank plans to relocate as many as 350 employees from its current location at 25 Park Place in Downtown. The move is part of a major real estate realignment for the bank. With this lease, Campanile will be 50% leased. SunTrust will move into the building in June 2012. Promenade II gets multiple bids: The Promenade II building, which was put up for sale back in September, has received multiple offers from investors looking to own the 38-story trophy tower. The list includes Cousins Properties, Brookdale Group, Granite Properties and Regent Partners. Beacon Capital is selling the building because it does not fit into its core portfolio. The sale, which could reach up to $170/sf, should close by the end of the year.
• 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. 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. 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
•
$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
3,430 SF Lease Lee Evans
12,000 SF Lease Russ Jobson / Bob Allen
715 PEACHTREE
THE BILTMORE
328,600 SF Lease Scott O’Halloran / Lee Evans
3,756 SF Sublease Brett Kingman
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.
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