ATLANTA OFFICE REPORT
Buckhead Submarket
Q3 2022
Vacant and Sublease Space Hit Highs as Buckhead Sees Major Delivery
2.3% rise in vacancy rate YTD
ABSORPTION AND VACANCY RATE
• Buckhead saw negative absorption of 61,903 square feet in Q3, its third-consecutive negative absorption quarter of 2022. The submarket’s overall vacancy rate rose 160 basis points (1.6%) in Q3, in large part thanks to the delivery of One Phipps Plaza. The 23.6% vacancy rate across all property classes is the highest figure on record for the Buckhead submarket.
200,000
24%
0
22%
‐200,000
20%
‐400,000
18%
‐600,000
• One Phipps Plaza delivered in September, bringing 365,263 square feet of vacant space into the submarket. The building is 39% leased, with deals signed by Novelis (95,742 sf) and Goldman Sachs (29,851 sf). These move-ins are expected to happen in the coming quarters, which should help offset some of the vacancy.
16%
‐800,000
14%
‐1,000,000 ‐1,200,000
Q1 2021
• Sublease availability continued its rise in Buckhead, with 3.9% of the submarket’s inventory (over 850,000 sf) available for sublease.
Q3 2021 Absorption
Q1 2022
Q3 2022
Vacancy Rate
12%
Source: CoStar
BUCKHEAD
Total Inventory SF
Direct Vacancy Rate
Sublease Vacancy Rate
Total Vacant SF
Vac Rate Q3 ‘22
Vac Rate Q2 ‘21
Net Absorp Q3 ‘22
Net Absorp YTD
Deliveries YTD
Under Constr
Avg Rent (FSG)
Class A
18,028,482
24.0%
1.6%
4,620,399
25.6%
24.1%
(5,040)
(121,185)
365,263
129,751
$38.05
Class B
3,368,642
14.9%
0.4%
516,323
15.3%
13.6%
(58,176)
(99,940)
-
58,000
$29.76
Class C
410,282
3.5%
0.0%
14,543
3.5%
3.9%
1,313
134
-
-
$25.76
Total
21,807,406
22.2%
1.4%
5,151,265
23.6%
22.0%
(61,903)
(220,991)
365,263
187,751
$36.97
RECENT BUCKHEAD LEASES Property
Landlord
SF
Lease Type
Lockton Companies
Tenant
Terminus 100
Cousins Properties
37,938
Renewal
JPMorgan Securities
Monarch Tower
Highwoods Properties
12,990
Expansion
Tidwell Group
1277 Lenox Park
Bridge Investment Group
9,483
New Lease
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
Garden Hills Office Building
The Elliot
129,751 SF | Sep 2023
58,000 SF | Dec 2022
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 Q3 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.
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