Q4 2010 | MIDTOWN
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 800,000
24%
19,908,163
Vacancy Rate
21.1%
22%
600,000
Square Feet
Total SF
20% 400,000
18%
200,000
16% 14%
0
YTD Net Absorption
180,930
YTD Deliveries
752,710
Under Construction
0
12% 4Q09
1Q10
2Q10
3Q10
4Q10
(200,000)
10% Absorption
Deliveries
Avg. Class A Rate
$26.11
Source: CoStar Property
Vacancy
MARKET INDICATORS Q4 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
Wells Fargo
171 17th Street
180,000
Class A Renewal
Schiff Hardin
The Proscenium
34,572
Class A Renewal & Expansion
Robins, Kaplan, Miller & Cir.
One Atlantic Center
22,922
Class A Lease
•
Midtown continued to show itself as one of the strongest submarkets in Atlanta’s office market in 2010. For the second straight year the submarket finished with positive absorption. Since losing tenants in 2008, Midtown has filled 381,436 SF of space over the past two years.
•
Rental rates are starting to show more of an upward trend. The average quoted rental rate is up $1.61/sf from third quarter. Although some of this increase is due to statistical adjustment, it still suggests a steady, increasing trend is taking place.
•
The activity Midtown experienced over the past couple of years is expected to continue going forward. The submarket will attract much of the same attention from companies seeking space in 2011.
MARKET REPORT | Q4 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%
31.1%
57.8%
86.1%
57,999 SF
15,740 SF
459,458 SF
291,582 SF
56,047 SF
$26.70-$32.70
$33.00-$35.00
$34.00-$36.00
$24.00-$26.00
$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 | Q4 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%
41.8%
95.4%
79.9%
30.4%
52,965 SF
183,587 SF
21,459 SF
181,189 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 | Q4 2010 | ATLANTA OFFICE | MIDTOWN
IN THE NEWS
480 offices in 61 countries on 6 continents
• Three
choice Midtown parcels picked up: Three parcels of land located in premium Midtown locations have been sold to land investors who plan to hold them for future development. It is worth mentioning all three parcels were originally owned by Novare Group prior to the economic downturn. The parcels went back to the lenders and have now been resold. The first parcel was repurchased by NoteSouth, a new investment firm with the owner of Novare Group, Jim Borders as an officer. The second parcel located at 1163 W. Peachtree was bought by Avanti Properties. The last parcel at 22 14th Street was purchased by John Carlos. No current development plans have been made for any of the land. of Atlantic Station means big changes: AIG has sold the 586,000 SF retail development of Atlantic Station to a joint venture between CB Richard Ellis Investors and North American Properties. No price has been given yet. The transfer of ownership will result in changes at the retail complex. Among them will be stores and restaurants which appeal to the younger Midtown crowd, the creation of shopping districts and improvements to the parking deck underneath the development.
United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95
• Sale
• Midtown
office tenants playing musical chairs: As is the case with other Atlanta submarkets in 2010, Midtown saw companies within the submarket leasing space and moving to more affordable, and sometimes higher-quality locations. A perfect example of this can be seen at 1075 Peachtree where Atlanta Capital Mgmt., Seyfarth Shaw and Boston Consulting have leased space, moving from other Midtown locations. 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
1,769 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
Lee Evans
Scott O’Halloran
Deming Fish
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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