2Q 2010 | Atlanta Northwest Office

Page 1

Q2 2010 | NORTHWEST ATLANTA

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 100,000

50,000

Vacancy Rate

19%

YTD Net Absorption

18% 3Q09

4Q09

1Q10

2Q10

(50,000)

15% Absorption

Deliveries

19.2% (22,557)

YTD Deliveries

0

Under Construction

0

17% 16%

(100,000)

24,318,917

20%

0 2Q09

Total SF

Avg. Class A Rate

$20.56

Source: CoStar Property

Vacancy

MARKET INDICATORS Q2 2010 VACANCY

NEXT QTR

UPDATE Recent Transactions in the Market SALES ACTIVITY

PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

1886 Stallion Pkwy.

$2,882,000

10,840

$265.87

International Capital, LLC

1580 Terrell Mill Rd.

$2,800,000

24,784

$112.98

Reformed Theo. Semin.

3825 Cherokee St.

$1,635,000

10,000

$163.50

Braden & Flanagan, LTD

Olde Ivey Condo 110

$1,425,000

13,000

$109.62

Goddard School

Cumberland

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

GE Energy

Parkwood Point

106,638

Class A Lease

JM Huber

Cumberland Center II

55,716

Class A Lease

WinSonic Digital Media

2251 Lake Park Dr.

33,794

Class B Lease

Principal Financial Services

Riveredge Place

24,561

Class A Renewal

Though absorption in second quarter was slightly positive for the Cumberland office market, the vacancy rate continues to remain flat. Around 4.7 million square feet of vacant space is available for lease in the submarket.

Physician’s Education moved into almost 100,000 SF of Class B space in the submarket in second quarter. This was the second largest move-in for the Atlanta office market.

The average rental rate for office in the Cumberland market is down 2.8% from this time last year. Over the past two and a half years, average rates have dropped 8.7%.

Deal activity in the submarket has picked up over the last three months. Positive absorption is expected in third quarter, and leasing activity is anticipated to remain strong for the remainder of the year.


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | NORTHWEST ATLANTA

SKYLINE REVIEW Space Available Direct Sublet 35

Source: CoStar Property

30

Floors

25 20 15 10 5

BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

Riverwood 100

Overlook III

300 Galleria

200 Galleria

Cumberland Center II

502,519 SF

438,709 SF

433,366 SF

438,273 SF

413,247 SF

86.9%

71%

77%

73%

93.9%

24,931 SF

33,101 SF

23,139 SF

23,094 SF

18,534 SF

$25.00

$23.50-$25.00

$24.50

$15.00-$22.00

$22.50

1

2

3

4

5

One Paces West

Two Paces West

Platinum Tower

3200 Wildwood Plaza

274,948 SF

371,523 SF

312,591 SF

701,327 SF

78.5%

73.8%

86%

76.3%

47,550 SF

47,550 SF

20,550 SF

69,425 SF

$20.50-$21.00

$20.50-$21.00

$22.00

$23.50-$24.25

6

7

8

9

35 30

Floors

25 20 15 10 5

BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

P. 2

| COLLIERS INTERNATIONAL


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | NORTHWEST ATLANTA

9 5

4

8

4

3 3

2 1 5

1 2

4 1 2

6 7

6

PLANNED CONSTRUCTION

AERIAL LEGEND Buildings by Numbers (see opposite page)

1 2555 CUMBERLAND PKWY. 206,000 SF Class A office Construction contingent upon leasing Developer: Shailendra Group

New Construction

POINTS OF INTEREST Chattahoochee Recreation Center

1 Cumberland Mall

4

2 Galleria Mall

5 Dobbins Air Base

3

Cobb Energy Arts Centre

6 Vinings Area

2

RIVERWOOD PROJECT $300M project 530,000 SF Class A office 90,000 SF retail 400 residential units 200 room hotel Developer: Seven Oaks Co.

COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | NORTHWEST ATLANTA

IN THE NEWS bringing smart grid division to Atlanta: The Cumberland area will be home to GE’s newest business division focused on smart grid technology. The company announced it will be leasing just over 100,000 SF of office at Parkwood Point with plans to move into the space by the beginning of October. As part of the project, a $15 million Smart Grid Center of Excellence is also planned. This announcement establishes a new industry to the area and will position Atlanta as a leader in green energy. As both the Atlanta Business Chronicle and Atlanta Journal-Constitution have reported, the new division will bring approximately 400 high-paying jobs to the area over the next three years. Growth in the smart grid industry could also lead to more companies seeking office space in the area. In addition, local companies already associated with smart grid technology could likely expand. The Cumberland market stands to benefit the most from the space demand. The new division expands GE’s presence in the Cumberland market. GE Energy is headquartered at Wildwood and the company currently leases over 450,000 SF in the area.

480 offices in 61 countries on 6 continents

• GE

• Atlanta

office complex part of $1.4B deal: RiverEdge Summit is expected to be part of a 33-property portfolio sold to Dividend Capital as soon as the deal closes. iStar Financial is selling the two buildings along with 20 other office buildings and 11 industrial properties. RiverEdge Summit is valued at $63 million.

United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95 •

$2 billion in annual revenue

• Over 2 billion square feet under

management • Over 15,000 professionals

UNITED STATES: KENNESAW | MARIETTA | CHEROKEE CO. Office Market Stats

100,000

20%

Total SF

19%

Vacancy Rate

18.6%

18%

YTD Net Absorption

66,816

17%

YTD Deliveries

24,236

16%

Under Construction

79,150

80,000 60,000 40,000

24,318,917

Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845

20,000 0 (20,000)

2Q09

3Q09

4Q09

1Q10

2Q10

(40,000) (60,000)

15% Absorption

Deliveries

Avg. RentalRate

$18.41 Source: CoStar Property

Vacancy

COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTHWEST ATLANTA LISTINGS

JONQUIL VILLAGE

2700 CUMBERLAND

GALLERIA 600

10,376-20,752 SF Lease Andrew Walker

34,812 SF Sublease Andrew Walker / Fred Sheats / Bob Mathews

14,200 SF Sublease Pete Shelton

TWO BARRETT LAKES

ONE RIVERSIDE

RAVINE ONE

9,317 SF Sublease Jeff Kelley / Pete Shelton / Bob Ward

15,624 SF Sublease Brett Kingman / Russ Jobson

4,306 SF Sublease 7,338 SF Sublease Andrew Walker / Pete Shelton

www.colliers.com/atlanta

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen

Bob Mathews

Neal Baker

Craig Mendel

Patrick Braswell

Scott O’Halloran

Lee Evans

Hugh Pafford

Russ Jobson

Jodi Selvey

Nicole Kamen

Fred Sheats

Jeff Kelley

Pete Shelton

Brett Kingman

Andrew Walker

Michael Lipton

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 480 offices throughout more than 61 countries worldwide.

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