4Q 2011 | Atlanta Northwest Office | Market Report

Page 1

Q4 2011 | 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)

4Q10

1Q11

2Q11

3Q11

4Q11

(40,000)

14%

27,289,684 17%

YTD Net Absorption

137,533

YTD Deliveries

0

Under Construction

0

13%

(60,000) (80,000)

12% Absorption

Deliveries

Avg. Class A Rate

$21.29

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q4 2011 VACANCY

UPDATE Recent Transactions in the Market

Q1 2012

SALES ACTIVITY

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

Numerex

100 City View

37,194

Class A Lease

Coventry Healthcare

1100 Circle 75 Pkwy.

35,034

Class B Renewal

Floor & Decor

2233 Lakewood Dr.

30,810

Class A Lease

Homeowners Mortgage

Galleria 100

24,195

Class A Renewal

Though the fourth quarter of the year showed only a moderate amount of space absorbed in the Cumberland office market, the positive activity marks the fourth consecutive period with more tenants taking space than vacating space in the submarket.

Cumberland leasing activity remained steady throughout the year. The majority of leasing took place in the submarket’s Class A properties. Still, most of the Class A activity that occurred marketwide in the past year took place in neighboring submarkets. The Cumberland area ranked fifth in the Atlanta market in total leasing of this property type.

Much of the same is expected going forward for the Cumberland area. The submarket, however, has more momentum heading into 2012 given the amount of new projects occurring in the area.


MARKET REPORT | Q4 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

502,527 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

90.5%

69.3%

74%

86.7%

84.5%

9,931 SF

39,898 SF

22,822 SF

24,586 SF

48,491 SF

$22.00-$25.00

$22.50-$27.00

$17.00-$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

85.8%

82.3%

86%

88.8%

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 | Q4 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 | Q4 2011 | ATLANTA OFFICE | NORTHWEST ATLANTA

IN THE NEWS

512 offices in 61 countries on 6 continents

• Cobb

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.

• New

Home Depot facility bringing 700 jobs to Cobb: In a move to help boost its online business and consolidate its customer support services, Home Depot has chosen Cobb County for a new support call center which will bring 700 jobs to the county. The home improvement company will open the new facility in the Chastain Meadows office park about 12 miles north of its corporate headquarters. Home Depot was given multiple incentives by the county and state economic development authorities to locate the call center in Cobb County. Operations are expected to begin by late 2012.

Square Feet

KENNESAW | MARIETTA | CHEROKEE CO. Office Market Stats

140,000

18%

120,000

17%

100,000

16%

80,000

15%

60,000

8,837,320

Vacancy Rate

15%

YTD Net Absorption

13%

20,000

12%

0 4Q10

1Q11

2Q11

3Q11

4Q11

(40,000)

11% 10%

Absorption

Deliveries

YTD Deliveries

0

Under Construction

15,000

Avg. RentalRate

$16.00

Vacancy

Source: CoStar Property, Colliers Research

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

OVERLOOK III 11,184 SF Sublease Andrew Walker

www.colliers.com/atlanta

$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

176,234

14%

40,000

(20,000)

Total SF

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

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

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen

Bob Mathews

Lee Evans

Craig Mendel

Deming Fish

Scott O’Halloran

Huston Green

Hugh Pafford

Tim Huffman

Jodi Selvey

Russ Jobson

Fred Sheats

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.

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