4Q 2011 | Atlanta Midtown Office | Market Report

Page 1

Q4 2011 | MIDTOWN

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Square Feet

200,000 150,000 100,000 50,000 0 (50,000) (100,000) (150,000) (200,000) (250,000) (300,000)

22% 20% 18% 4Q10

1Q11

2Q11

3Q11

4Q11

16% 14%

Total SF

22,161,903

Vacancy Rate YTD Net Absorption

19.5% (144,941)

YTD Deliveries Under Construction

0 450,000

12% 10% Absorption

Deliveries

Avg. Class A Rate

$27.05

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q4 2011

UPDATE Recent Transactions in the Market

Q1 2012

SALES ACTIVITY VACANCY PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

Promenade II

$137,500,000

774,344

$177.57

Cousins Properties

201 17th Street

$48,800,000

349,402

$139.67

CBRE Investors

675 Ponce de Leon

$27,000,000

2,000,000

$13.50

Jamestown Properties

728-736 West Peachtree

$4,439,600

25,400

$174.79

SunTrust Banks

Midtown

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

FDIC

10 Tenth Street

102,619

Class A Renewal

Paul Hastings

The Proscenium

65,000

Class A Lease

Ogilvy & Mather

271 17th Street

26,724

Class A Lease

Routematch Software

One Atlantic Center

23,137

Class A Lease

Office occupancy in Midtown increased by 77,783 SF in the fourth quarter. The largest contributor to this gain was Regions Bank which consolidated from multiple offices in Atlanta to the submarket. The bank occupied 80,000 SF at Atlantic Center Plaza this past quarter.

Midtown finished the year with negative net absorption of (144,941) SF. The main reason for this was Bank of America vacating 328,600 SF of Class B space at 715 Peachtree in the first quarter.

Despite the overall loss of occupancy in Midtown, Class A product in the submarket actually saw an overall gain in space absorbed. This space type’s vacancy rate decreased 2.2% in the past year.

Midtown’s 2011 leasing activity was relatively modest, with renewals by Alston & Bird and AGL topping the list. In 2012, the submarket should see a bit of an uptick in activity as conditions improve.


MARKET REPORT | Q4 2011 | 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

669,575 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

90.6%

92.5%

50%

70.6%

83%

66,748 SF

15,740 SF

313,895 SF

202,756 SF

46,162 SF

$27.20-$32.70

$35.35

$35.82-$37.82

$26.00

$26.40-$32.40

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 | Q4 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 Groundbreaking pending Developers: Daniel Corporation/ Selig Enterprises

3 1400 PEACHTREE

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

88.8%

48.1%

98.1%

86.1%

51.8%

23,170 SF

172,045 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)

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 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 | Q4 2011 | ATLANTA OFFICE | MIDTOWN

IN THE NEWS

512 offices in 61 countries on 6 continents

• Two

Midtown towers sell: Midtown’s most recent office building sales include Promenade II and 201 17th Street. Cousins Properties won out for the bidding on the 38-story Promenade II office tower. The Atlanta-based real estate firm paid $137.5 million for the 774,344 SF trophy building; $178 per square foot. Meanwhile, CBRE Global Investors more recently closed on its purchase of 201 17th Street. The sales price for the property was close to $49 million, or $140 per square foot. The 349,402 SF office tower is the second office property purchased by CBRE Global Investors at Atlantic Station.

agency Ogilvy & Mather makes big move to Midtown: Manhattan ad agency Ogilvy & Mather will be moving from its current offices in Roswell and Buckhead to 271 17th Street. The company will open its second U.S. digital labs in the new office, moving some of its digital marketing functions from New York to Atlanta. The ad agency will be taking a full floor in the building, or about 26,724 SF. The move into the heart of the city will bring Ogilvy & Mather closer to some of its biggest clients, and also allow it to recruit new talent.

United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117

• Ad

• Apartment

tower set for Midtown: Novare Group plans to break ground soon on Midtown’s newest skyscraper, a 23-story high-rise apartment tower called SkyHouse. Financing for the project was secured back in December. The project will be located at the corner of West Peachtree Street and 12th Street. It will have 320 rental units and approximately 8,400 square feet of street-level retail. The apartment tower is expected to be completed by December 2012.

AT A GLANCE | City Hall East

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.

3,430 SF Lease Scott O’Halloran / Lee Evans

$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

Jamestown Properties is investing $180 million into the redevelopment, including $15.5 million to the City of Atlanta for the property.

Deming Fish

Scott O’Halloran

Huston Green

Hugh Pafford

Tim Huffman

Jodi Selvey

Under construction as of 4th Quarter 2011.

Russ Jobson

Fred Sheats

COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS

PERSHING PARK PLAZA

715 PEACHTREE 328,600 SF Lease Scott O’Halloran / Lee Evans

Jeff Kelley

Pete Shelton

Drew Lavine

Hayes Swann

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 512 offices throughout more than 61 countries worldwide.

Accelerating success.

www.colliers.com/atlanta


Turn static files into dynamic content formats.

Create a flipbook
Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.