ATLANTA OFFICE REPORT
Buckhead Submarket
Q2 2022
Slow Start to 2022 for Buckhead as Sublease Space Hits 18-Year High
1.8% rise in vacancy since Q1 2021
ABSORPTION AND VACANCY RATE
• Buckhead saw negative absorption of 194,261 square feet in Q2, its second-consecutive negative absorption quarter of 2022. The submarket’s overall vacancy rate rose 90 basis points (0.9%), the highest figure Buckhead has seen since 2011.
200,000
24%
0
22%
‐200,000
• Sublease space is at it’s highest mark since 2004, with 3.8% of the submarket’s inventory (over 830,000 square feet) available for sublease. Buckhead’s sublease availabilities have nearly doubled in the past year, as only 2.3% of existing inventory (487,000 square feet) was on the market in Q2 of 2021. • Buckhead has the third-most space under construction of any Atlanta submarket, with 575,814 square feet under way, which is slightly above the submarket’s 10-year average. These three buildings combined are currently 53.7% pre-leased.
20%
‐400,000
18%
‐600,000
16%
‐800,000
14%
‐1,000,000 ‐1,200,000
Q4 2020
Q2 2021 Absorption
Q4 2021
Q2 2022
Vacancy Rate
12%
Source: CoStar
BUCKHEAD
Total Inventory SF
Direct Vacancy Rate
Sublease Vacancy Rate
Total Vacant SF
Vac Rate Q2 ‘22
Vac Rate Q1 ‘21
Net Absorp Q2 ‘22
Net Absorp YTD
Deliveries YTD
Under Constr
Avg Rent (FSG)
Class A
17,687,069
22.7%
1.6%
4,300,319
24.3%
23.4%
(160,697)
(166,062)
-
517,814
$37.78
Class B
3,020,940
11.0%
0.1%
335,549
11.1%
10.0%
(32,385)
(31,167)
-
58,000
$28.49
Class C
436,852
3.6%
0.0%
15,856
3.6%
3.4%
(1,179)
(1,179)
-
-
$27.71
Total
21,144,861
20.6%
1.4%
4,651,724
22.0%
21.1%
(194,261)
(198,408)
-
575,814
$36.90
RECENT BUCKHEAD LEASES Property
Landlord
SF
Lease Type
Goldman Sachs
Tenant
1 Phipps Plaza
Simon Property Group
29,851
New Lease
RSUI Group, Inc.
945 E Paces Ferry
Zeller
24,193
Expansion
251 Armour Dr
Northwood Office
20,168
New Lease
Freud America RECENT BUCKHEAD INVESTMENT SALES Property
Price
SF
$/SF
Date
Buyer
The Pinnacle
$220,000,000
430,124
$511
5/18/2022
STRS Ohio
3630 Peachtree
$202,000,000
438,646
$461
1/14/2022
Granite Properties
1025 Lenox Park Blvd
$148,500,000
331,013
$448
4/13/2022
The Simpson Organization
ACTIVE BUCKHEAD UNDER CONSTRUCTION PROJECTS
One Phipps Plaza
Garden Hills Office Building
The Elliot
388,063 SF | Sep 2022
129,751 SF | Sep 2023
58,000 SF | Dec 2022
Simon Property Group
Brand Properties
Cross-Town Realty
Source: CoStar, LPC Research
lpcsoutheast.com The information contained herein has been obtained from the owner of the property or from a source deemed reliable. While Lincoln Property Company has no reason to doubt its accuracy, we do not guarantee it.
ATLANTA OFFICE REPORT | BUCKHEAD SUBMARKET Q2 2022
IN THE MARKET • The Pinnacle sells for $220 million: The 1998-built Buckhead office tower at 3455 Peachtree Rd traded in May for $200 million, or just over $511 per square foot. The buyer is the State Teachers Retirement System of Ohio, who purchased the building from The Brookdale Group, who had acquired the asset in 2015. • The Simpson Organization acquires 1025 Lenox Park: Bridge Investment Group, after inking AT&T to a 10year, full-building renewal, has sold 1025 Lenox Park to The Simpson Organization for $184 million. 1025 Lenox Park is 331,000 square feet, and AT&T is the sole tenant. It is a part of the larger Lenox Park office complex, which Bridge acquired in 2018 for $225 million. • Greenstone Properties planning 19-story tower at Peachtree and Wieuca: Greenstone is under contract for a 2-acre property owned by the Church at Wieuca. They plan to build a 19-story, 500,000 square foot office tower as well as a 400-unit apartment tower on the site. Single-family housing is also included in the initial plans.
The Pinnacle
1025 Lenox Park
Lincoln Property Company Atlanta tracks Class A, B, and C office buildings that are 10,000 square feet or greater, and excludes owner occupied, medical, and government buildings.
Lincoln Buckhead Listings
Buckhead Tower
Lenox Center
Lenox Plaza
3399 Peachtree Rd NE
3355 Lenox Rd NE
3384 Peachtree Rd NE
1,500 SF - 160,000 SF
1,994 SF - 8,885 SF
2,400 SF - 5,000 SF
Michael Howell / Hunter Henritze Caroline Fisher
Matt Fergus / Robert deGolian
Matt Fergus / Robert deGolian
Need More Market Intel?
Spencer Papciak Research Manager 678.498.7676 spapciak@lpc.com
Lincoln Property Company Southeast 3405 Piedmont Road, Suite 450 Atlanta, GA 30305 404 266 7600
About LPC SE: Lincoln Property Southeast is a commercial real estate firm offering a comprehensive suite of value-added services for our clients. With our substantial local presence and history in the Southeast region, we are ideally situated to provide a superior service, which comes from knowing the goals and challenges faced by our clientele: tenants, investors, lenders and owners of commercial real estate. Our people and our philosophy are the key ingredients for Lincoln’s solid track record of success. The information contained herein has been obtained from the owner of the property or from a source deemed reliable. While Lincoln Property Company has no reason to doubt its accuracy, we do not guarantee it.
lpcsoutheast.com