ATLANTA OFFICE REPORT
Midtown Submarket
Q2 2022
Midtown Leads Atlanta Market in Q2 •
• •
4.0% fall in vacancy in last 4 quarters
ABSORPTION AND VACANCY RATE
Midtown saw positive absorption of 646,073 square feet in Q2 of 2022, tops across the Atlanta office market. The urban submarket has positive absorption of over 1.6 million square feet over the past four quarters. Q2’s figure was driven primarily by Google occupying 396,761 square feet at 1105 W Peachtree. Other prominent moves were located in the West Midtown micromarket, highlighted by MacDermid Graphic Solutions and The 3rd Spot moving into a combined 71,000 square feet at The Works.
26%
1,000,000 800,000
24%
600,000
22%
400,000
20%
200,000 0
Vacancy rates fell in Q2, dropping 220 basis points (2.2%) across all property classes, and 240 basis points (2.4%) among Class A properties.
18%
‐200,000
16%
‐400,000
14%
‐600,000
Midtown leads the Atlanta market in construction, with 7 buildings totaling 1,707,009 square feet under construction. This represents 41% of the total square footage under construction in the Atlanta market. 32% of the under construction space in Midtown is currently pre-leased.
12%
‐800,000 ‐1,000,000
Q4 2020
Q2 2021 Absorption
Q4 2021
Q2 2022
10%
Source: CoStar
Vacancy Rate
MIDTOWN
Total Inventory SF
Direct Vacancy Rate
Sublease Vacancy Rate
Total Vacant SF
Vac Rate Q2 ‘22
Vac Rate Q1 ‘22
Net Absorp Q2 ‘22
Net Absorp YTD
Deliveries YTD
Under Constr
Avg Rent (FSG)
Class A
21,754,326
21.9%
1.1%
5,002,102
23.0%
25.4%
592,855
541,495
100,000
1,675,184
$41.66
Class B
3,230,876
8.8%
1.0%
314,675
9.7%
11.1%
44,799
69,941
-
31,825
$27.35
Class C
853,642
7.9%
0.0%
67,754
7.9%
8.9%
8,419
23,475
-
-
$26.98
Total
25,838,844
19.8%
1.1%
5,384,531
20.8%
23.0%
646,073
634,911
100,000
1,707,009
$41.00
TOP MIDTOWN LEASES Q2 2022 Tenant Georgia Tech
Property
Landlord
SF
Lease Type
Coda
Portman Holdings
38,000
Expansion
TVS Design
Promenade Central
Cousins Properties
37,580
New Lease
Sovos
Star Metals Offices
The Allen Morris Company
25,543
New Lease
RECENT MIDTOWN INVESTMENT SALES Property
Price
SF
$/SF
Date
Buyer
1180 Peachtree
$465,000,000
690,835
$673
July 2022
Piedmont Office Realty Trust
Atlantic Yards
$385,000,000
523,511
$735
July 2022
KKR
999 Peachtree Street
$223,900,000
621,956
$360
10/22/2021
Piedmont Office Realty Trust
ACTIVE MIDTOWN UNDER CONSTRUCTION PROJECTS
Midtown Union
14th & Spring
765 Echo Street
612,947 SF | Aug 2022
320,089 SF | Jul 2022
274,974 SF | May 2023
MetLife
Greenstone Properties
Lincoln Property Company
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 | MIDTOWN SUBMARKET Q2 2022
IN THE MARKET • 1180 Peachtree and Atlantic Yards trade: July saw two big trades in Midtown as 1180 Peachtree was acquired by Piedmont Office Realty Trust and Atlantic Yards was purchased by Global Atlantic Financial Group, a KKR subsidiary. 1180 Peachtree traded for $465 million, or $637/sf. Atlantic Yards sold for $385 million, or $734/sf – a lower figure than predicted when the asset first hit the market. • National companies establishing technology and innovation centers in Midtown: Airbnb, Nike, and Ford Motor Company are among the firms that have announced they are establishing new technology and innovation centers in Midtown. Airbnb is establishing an initial office at The Interlock, and Nike has its sights set on the Star Metals Offices for their technology center. Ford has also taken 12,000 square feet for its innovation lab at 8West. • Cash App bringing 100 jobs to the Eastside Trail: Payment service company Cash App is occupying 30,000 square feet and moving over 100 jobs to The Mill, located on the site of the former Masquerade concert venue.
1180 Peachtree
Atlantic Yards
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 Midtown Listings
CIRCA 730
One & Two Midtown Plaza
1372 Peachtree
730 Peachtree St NE
1360 Peachtree St NE | 1349 Peachtree St NE
1372 Peachtree St
1,700 SF - 19,786 SF
1,100 SF - 60,035 SF
38,451 SF
Hunter Henritze / Caroline Fisher
Hunter Henritze / Caroline Fisher
Hunter Henritze / Michael Howell
Michael Howell / Robert deGolian
Michael Howell
Caroline Fisher
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