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