Q1 2012 | NORTHWEST ATLANTA
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES
Total SF
100,000
Vacancy Rate
18%
80,000
17%
Square Feet
60,000 40,000
16%
20,000
15%
0
(20,000)
1Q11
2Q11
3Q11
4Q11
1Q12
(40,000)
14%
27,307,866 17.2%
YTD Net Absorption
(59,442)
YTD Deliveries
0
Under Construction
0
13%
(60,000) (80,000)
12% Absorption
Deliveries
Avg. Class A Rate
$21.33
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q1 2012
UPDATE Recent Transactions in the Market
Q2 2012
SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
PROPERTY ADDRESS
SALE PRICE
SIZE SF
PRICE / SF
BUYER
Riverwood 100
$81,500,000
502,527
$162.18
Highwoods Properties
—
4111 Northside Pkwy.-IBM
$53,600,000
825,000
$64.97
Atlanta Public Schools
—
355 Tower Rd.
$10,450,000
55,000
$190
Wellstar Health System
1090,1130 Northchase Pky.
$7,700,000
165,205
$46.61
Crossgate Partners
Cumberland
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Travelport
300 Galleria
150,000
Class A Renewal
Graphic Packaging
RiverEdge Summit
109,556
Class A Lease
Gentiva
Riverwood 100
60,000
Class A Renewal & Expansion
Silverpop Systems
200 Galleria
22,822
Class A Expansion
•
The Cumberland office market saw modest negative absorption in the first quarter following two consecutive quarters of occupancy gains. The increase in vacancy can be traced to tenant consolidations within the submarket and also a few tenant relocations to neighboring submarkets.
•
Activity in the Cumberland office market is lackluster, yet balanced. The area is seeing a mixed bag of both tenant vacancies, space renewals and new leasing. This submarket, however, has lagged behind competing markets such as Buckhead and Central Perimeter which are winning the majority of the larger leasing requirements.
•
Not much is expected to change for the submarket’s office market over the next few months. Nevertheless, Cumberland remains one of the most viable options to tenants seeking office space.
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA
SKYLINE REVIEW Space Available Direct Sublet 35
Source: CoStar Property
30
Floors
25 20 15 10 5
Riverwood 100
Overlook III
200 Galleria
400 Galleria
Cumberland Center II
502,527 SF
438,709 SF
438,273 SF
440,000 SF
413,247 SF
TYPICAL FLOOR SIZE
21,889 SF
26,000 SF
22,000 SF
23,157 SF
24,308 SF
% LEASED
90.2%
85.5%
74%
86.7%
84.3%
24,931 SF
38,512 SF
23,094 SF
24,586 SF
49,500 SF
$24.50
$23.50-$24.50
$17.00-$21.00
$24.50
$22.50
1
2
3
4
5
One Paces West
Two Paces West
Platinum Tower
The Towers at Wildwood Plaza
RBA
274,948 SF
371,523 SF
312,591 SF
706,307 SF
TYPICAL FLOOR SIZE
22,000 SF
20,640 SF
21,000 SF
43,362 SF
% LEASED
85.8%
82.3%
86.9%
88.7%
34,253 SF
20,734 SF
11,186 SF
25,341 SF
$21.00-$21.50
$21.00-$21.50
$22.50
$19.75-$23.00
6
7
8
9
BUILDING RBA
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
35 30
Floors
25 20 15 10 5
BUILDING
LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)
P. 2
| COLLIERS INTERNATIONAL
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA
9 5
4
8
3
4 2 3
2 1 5
1
1
4 2
6 7
6
AERIAL LEGEND
PLANNED CONSTRUCTION
Buildings by Numbers (see opposite page)
1
RIVERWOOD PROJECT
2
555 GALLERIA
New Construction
POINTS OF INTEREST Chattahoochee Recreation Center
1 Cumberland Mall
4
2 Galleria Mall
5 Dobbins Air Base
3
Cobb Energy Arts Centre
$300M project 530,000 SF Class A office 90,000 SF retail 400 residential units 200 room hotel Developer: Seven Oaks Co.
250,000-300,000 SF Class A Build-To-Suit Construction contigent upon leasing Developer: Childress Klein
6 Vinings Area
COLLIERS INTERNATIONAL |
P. 3
MARKET REPORT | Q1 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA
IN THE NEWS
522 offices in 62 countries on 6 continents
• Gentiva
expansion smaller than expected: Gentiva Health Services recently signed a renewal & expansion totaling 60,000 square feet at Riverwood 100. The amount of the expansion totals about 7,000 square feet. Back in 2011, the company was reported seeking almost 65,000 square feet for expansion, following an acquisition of Odyssey Healthcare in Dallas, TX and possibly adding 100 jobs. The new lease, however, does not include these additional jobs and for the time being it appears the smaller expansion will suit the company’s short-term needs.
County nabs over two dozen major projects in 2011: The economic development teams in Cobb County and the Cumberland Community Improvement District were busy securing new business in 2011. The area attracted over two dozen major projects in the last twelve months. The most recent win was the announcement of Home Depot choosing Cobb for a new customer support call center which will bring 700 jobs to the county. Other big wins in the year were Osmotica Pharmaceutical Corp. investing $20 million in a manufacturing and R&D facility in Marietta, Novelis choosing the Kennesaw area for a new research and development center, and CCH Small Firm Services choosing to bring 200 employees from outside the state to its Kennesaw operation. Business leaders hope these accomplishments will provide momentum going forward into 2012 as they target specific industry clusters such as aerospace, business & professional services, supply-chain logistics and information technology.
United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118
• Cobb
Square Feet
KENNESAW | MARIETTA | CHEROKEE CO. Office Market Stats
140,000
18%
120,000
17%
100,000
16%
80,000
15%
60,000
8,608,157
Vacancy Rate
15.3%
YTD Net Absorption
32,161
14%
40,000
13%
20,000
12%
0 (20,000)
Total SF
1Q11
2Q11
3Q11
4Q11
1Q12
(40,000)
11% 10%
Absorption
Deliveries
YTD Deliveries
0
Under Construction
16,650
Avg. RentalRate
$16.06
Vacancy
Source: CoStar Property, Colliers Research
COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTHWEST ATLANTA LISTINGS
JONQUIL VILLAGE
955 COBB PLACE BLVD.
GALLERIA 600
10,376-20,752 SF Lease Andrew Walker
10,731 SF Lease Andrew Walker
14,200 SF Sublease Pete Shelton
OVERLOOK III 11,184 SF Sublease Andrew Walker
www.colliers.com/atlanta
NEWMARKET BUSINESS PROF. BLDGS. @ PARK WOODSTOCK 1,060-4,653 SF Lease Bldg. 970 19,311 SF For Sale Lee Evans / Scott O’Halloran Andrew Walker / Craig Mendel
•
$1.8 billion in annual revenue
• Over 2.5 billion square feet under
management • Over 12,000 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
Jill Bomar
Craig Mendel
Lee Evans
Scott O’Halloran
Deming Fish
Hugh Pafford
Huston Green
Jodi Selvey
Tim Huffman
Fred Sheats
Russ Jobson
Pete Shelton
Jeff Kelley
Hayes Swann
Drew Lavine
Will Tyler
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 520 offices throughout 62 countries worldwide.
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