Q2 2011 | NORTHWEST ATLANTA
ATLANTA
SUBMARKET REPORT
TRENDS & HIGHLIGHTS
Square Feet
NEW SUPPLY, ABSORPTION AND VACANCY RATES 60,000
18%
40,000
17%
20,000
16%
0 (20,000)
2Q10
3Q10
4Q10
1Q11
2Q11
15% 14%
(40,000) (60,000)
13%
(80,000)
12% Absorption
Deliveries
Total SF
27,425,666
Vacancy Rate
16.9%
YTD Net Absorption
52,411
YTD Deliveries
0
Under Construction
0
Avg. Class A Rate
$20.97
Source: CoStar Property, Colliers Research
Vacancy
MARKET INDICATORS Projected
Q2 2011
UPDATE Recent Transactions in the Market
Q3 2011
SALES ACTIVITY VACANCY PROPERTY ADDRESS
NET ABSORPTION CONSTRUCTION
—
RENTAL RATE
SALE PRICE
SIZE SF
PRICE / SF
BUYER
4111 Northside Pkwy.-IBM
$53,600,000
825,000
$64.97
Atlanta Public Schools
—
Dupree @ Powers Ferry
$20,450,000
137,818
$148.38
Piedmont Office Realty
—
2400 Lake Park Dr.
$7,700,000
103,962
$74.07
OA Development
Corporate Forum
$7,200,000
183,162
$39.31
Ackerman & Co.
Cumberland
LEASING ACTIVITY
www.colliers.com/atlanta
TENANT
PROPERTY ADDRESS
SIZE SF
TYPE
Wells Fargo
Overlook III
38,197
Class A Renewal & Expansion
MasTec
One Riverside
25,969
Class A Sublease
Thomson Reuters
Cumberland Center II
23,741
Class A Renewal
Sertec
5665 New Northside
23,277
Class A Lease
•
The Cumberland office market absorbed almost 44,000 SF of office space in the second quarter of 2011. The largest move-in over the three month period was JM Huber which took occupancy of 55,716 SF at Cumberland Center II. This was the most positive quarter of activity for the submarket since the fourth quarter of 2009.
•
Cumberland’s office vacancy rate decreased slightly thanks to the positive quarter; however, the rate has shown little to no movement over the past three years. This is due to anemic market conditions and the slow recovery from the recession.
•
The submarket is expected to see activity continue to fluctuate quarter-to-quarter, and likely finish 2011 with only modest activity. As the economy improves, so too will this area of Atlanta’s office market.
MARKET REPORT | Q2 2011 | 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
502,519 SF
438,709 SF
438,273 SF
440,000 SF
413,247 SF
TYPICAL FLOOR SIZE
21,899 SF
26,000 SF
22,000 SF
23,157 SF
24,308 SF
% LEASED
84%
72%
72%
79%
95%
24,942 SF
30,951 SF
23,094 SF
24,586 SF
48,491 SF
$25.00
$22.50-$27.00
$16.00-$21.00
$24.50
$22.50
1
2
3
4
5
One Paces West
Two Paces West
Platinum Tower
3200 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
84%
82%
90%
78%
34,253 SF
20,734 SF
12,487 SF
69,425 SF
$20.50-$21.00
$20.50-$21.00
$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 | Q2 2011 | 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 | Q2 2011 | ATLANTA OFFICE | NORTHWEST ATLANTA
IN THE NEWS • Medtech
512 offices in 61 countries on 6 continents
• Overlook
United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117
relocating HQ to Vinings: Medtech, which is an operator of technical schools that focus on health care and technology, will relocate its existing headquarters at the Circle 75 Office Park to the Overlook II building in Vinings. The company will lease 11,000 SF for more than 10 years. Medtech’s vice president said the amenities near Overlook II and also the available space to expand prompted the relocation.
III lands Wells Fargo expansion: Overlook III will see almost a floor of space taken off the market as Wells Fargo recently signed a renewal and expansion deal in the building. The bank renewed its office space of 16,657 SF and expanded by an additional 21,540 SF. The transaction is part of a broader consolidation by the bank in metro Atlanta. About 100 people in Wells Fargo’s commercial real estate banking group will occupy the space in Overlook III.
• Highwoods
plans to buy Riverwood 100: Highwoods Properties has become the frontrunner to land one of Cumberland’s trophy office towers. As previously mentioned, GE Asset Management put the 502,000 SF office building up for sale at the beginning of the year. The seller selected Highwoods as the buyer of the tower and the two companies have now entered into final negotiations. The expected sales price for Riverwood 100 is expected to be upwards of $80 million. The transaction is likely to be completed in the third quarter.
KENNESAW | MARIETTA | CHEROKEE CO. Office Market Stats
80,000
18% 17%
60,000
Square Feet
16% 40,000
15%
20,000
8,529,575
Vacancy Rate
16%
YTD Net Absorption
13% 2Q10
3Q10
4Q10
1Q11
2Q11
12% 11%
(40,000)
10% Absorption
Deliveries
$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
48,247
YTD Deliveries
0
COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:
Under Construction
0
Bob Allen
Bob Mathews
Lee Evans
Craig Mendel
14%
0 (20,000)
Total SF
•
Avg. RentalRate
Vacancy
$16.15
Source: CoStar Property, Colliers Research
COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTHWEST ATLANTA LISTINGS
Deming Fish
Scott O’Halloran
Huston Green
Hugh Pafford
Tim Hoffman
Jodi Selvey
Russ Jobson
Fred Sheats
Nicole Kamen
Pete Shelton
Jeff Kelley
Hayes Swann
Brett Kingman
Andrew Walker
Drew Levine
Bob Ward
Michael Lipton
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
9,317 SF Sublease Jeff Kelley / Pete Shelton / Bob Ward
15,624 SF Sublease Brett Kingman / Russ Jobson
NEWMARKET BUSINESS PARK 1,060-4,463 SF Lease Lee Evans / Scott O’Halloran
www.colliers.com/atlanta
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.
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