ATLANTA OFFICE REPORT
Midtown Submarket
Q3 2022
Midtown Leads Atlanta Market for Second Consecutive Quarter
ABSORPTION AND VACANCY RATE
• Midtown saw positive absorption of 175,532 square feet in Q3 of 2022, once again tops across the Atlanta office market. Midtown has seen 838,572 square feet of positive absorption year-to-date, which also leads the market.
26%
1,000,000 800,000
24%
600,000
22%
400,000
• The story in Midtown for Q3 was a 270 basis point (2.7%) rise in vacancy rate despite the positive absorption figure. This is thanks to 4 buildings totaling 1,118,036 square feet delivering in Q3, most of it vacant space. Midtown Union, 14th and Spring, and Allied Studios all delivered in Q3, and were a combined 37% leased at the time of completion. These tenants however will not occupy their space until Q4 or Q1 of 2023 at the earliest.
20%
200,000 0
18%
‐200,000
16%
‐400,000
14%
‐600,000
12%
‐800,000 ‐1,000,000
• Midtown still leads the Atlanta market in space under construction, with 1,168,428 square feet under way.
4.0% fall in vacancy in last 4 quarters
Q1 2021
Q3 2021 Absorption
Q1 2022
Q3 2022
Vacancy Rate
10%
Source: CoStar
MIDTOWN
Total Inventory SF
Direct Vacancy Rate
Sublease Vacancy Rate
Total Vacant SF
Vac Rate Q3 ‘22
Vac Rate Q2 ‘22
Net Absorp Q3 ‘22
Net Absorp YTD
Deliveries YTD
Under Constr
Avg Rent (FSG)
Class A
22,215,732
23.5%
1.1%
5,479,282
24.7%
21.8%
196,762
749,628
1,178,036
1,168,428
$42.47
Class B
3,265,538
10.0%
1.0%
360,347
11.0%
9.2%
(22,430)
64,269
40,000
-
$27.99
Class C
966,341
6.9%
0.0%
66,554
6.9%
7.0%
1,200
24,675
-
-
$28.71
Total
26,447,609
21.3%
1.1%
5,906,183
22.3%
19.6%
175,532
838,572
1,218,036
1,168,428
$41.80
TOP MIDTOWN LEASES Q3 2022 Tenant
Property
Landlord
SF
Lease Type
Anduril
Allied Studios
Jamestown
140,000
New Lease
Nelson Mullins
201 17th St
KBS
103,156
Renewal
FTI Consulting
One Atlantic Center
Starwood Capital Group
23,137
Renewal
RECENT MIDTOWN INVESTMENT SALES Property
Price
SF
$/SF
Date
Buyer
1180 Peachtree
$472,000,000
691,000
$683
8/10/2022
Piedmont Office Realty Trust
Atlantic Yards
$385,000,000
523,511
$735
7/19/2022
KKR
999 Peachtree Street
$223,900,000
621,956
$360
10/22/2021
Piedmont Office Realty Trust
ACTIVE MIDTOWN UNDER CONSTRUCTION PROJECTS
Spring Quarter
765 Echo Street
Interlock Office Phase II
538,126 SF | Jul 2025
274,974 SF | May 2023
209,174 SF | Aug 2023
Portman Holdings
Lincoln Property Company
SJC Ventures
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 Q3 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 $472 million, or $683/sf. Atlantic Yards sold for $385 million, or $734/sf – a lower figure than predicted when the asset first hit the market. • The Varsity sets sights on possible land sale: Atlanta’s iconic restaurant The Varsity has hired Cushman & Wakefield to market its four-acre property for possible development. This comes in the wake of several land sales in Midtown for greater than $10 million per acre. • National companies establishing technology and innovation centers in Midtown: Airbnb, Nike, Walmart 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 15,400 square feet for its innovation lab at 8West.
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 - 72,000 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