Buckhead Ends the Year With Positive Absorption
• The Buckhead submarket recorded its first quarter of positive absorption in Q4 at 87,731 square feet. This successful quarter of absorption was bolstered largely in part by the anticipated 89,553 square foot move in of Novelis at the recently delivered One Phipps Plaza along with JP Morgan’s expansion at Monarch Tower. Despite these occupancy gains, Buckhead remains in negative territory year-to-date with absorption at -74,517.
• Buckhead vacancy declined by 40 basis points this quarter leading to a rate of 22.5% to end the year. This rate represents an overall rise of 1.5% year-over-year. In addition to vacancy, sublease availability declined by 70 basis points from the previous quarter.
rise in vacancy in 2022
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
Tenant Property Landlord SF Lease Type Aldridge Pite, LLP Piedmont Center 5-8 The Ardent Companies 26,829 Sublease Total Traffic & Weather Network Peachtree Palisades Holder Properties 18,325 New Lease Prologis 3350 Peachtree Cousins Properties 14,651 New Lease TOP BUCKHEAD LEASES Q4 2022 12% 14% 16% 18% 20% 22% 24% ‐1,200,000 ‐1,000,000 ‐800,000 ‐600,000 ‐400,000 ‐200,000 0 200,000 Q2 2021Q4 2021Q2 2022Q4 2022 Absorption Vacancy Rate Garden Hills Office Building The Elliot 129,751 SF | Sept 2023 58,000 SF | Mar 2022 GardenBrand LLC Cross-Town Realty BUCKHEAD Total Inventory SF Direct Vacancy Rate Sublease Vacancy Rate Total Vacant SF Vac Rate Current Qtr Vac Rate Prior Qtr Net Absorp Q4 Net Absorp YTD Deliveries Under Constr Avg Rent (FSG) Class A 18,055,906 23.0% 1.3% 4,387,922 24.3% 24.9% 114,022 49,008 - 129,751 $37.89 Class B 3,368,642 14.8% 0.5% 515,842 15.3% 14.6% (25,519) (122,887) - 58,000 $29.54 Class C 466,288 3.8% 0.0% 17,884 3.8% 3.7% (772) (638) - - $25.61 Total 21,890,836 21.4% 1.1% 4,921,648 22.5% 22.9% 87,731 (74,517) - 187,751 $36.72 ACTIVE BUCKHEAD UNDER CONSTRUCTION PROJECTS Property Price SF $/SF Date Buyer 3630 Peachtree $202,000,000 438,646 $461 1/14/2022 Granite Properties The Pinnacle $220,000,000 430,124 $511 5/18/2022 STRS Ohio 1025 Lenox Park Blvd $148,500,000 331,013 $448 4/13/2022 The Simpson Organization RECENT BUCKHEAD INVESTMENT SALES
ABSORPTION AND VACANCY RATE Source: CoStar Source: CoStar, LPC Research
1.7%
ATLANTA OFFICE REPORT
Buckhead Submarket Q4 2022
• 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 10- year, fullbuilding 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.
• Novelis occupies space at new headquarters : Novelis has officially moved into 90,000 square feet of space in Buckhead’s newest office tower, One Phipps Plaza. The company chose to downsize from their previous space in Buckhead’s Two Alliance Center (125,000 sf) in favor of a hybrid work model where it will house roughly 500 employees in the Atlanta area.
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Lincoln Property Company Southeast 3405 Piedmont Road, Suite 450 Atlanta, GA 30305 404 266 7600
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. IN THE MARKET ATLANTA OFFICE REPORT | BUCKHEAD SUBMARKET Q4 2022
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. Nathan Bell Research Manager 229.349.4781 nbell@lpc.com
Buckhead Tower Lenox Center Lenox Plaza 3399 Peachtree Rd NE 3355 Lenox Rd NE 3384 Peachtree Rd NE 1,500 SF - 200,000 SF 1,200 SF - 8,885 SF 1,200SF - 9,500 SF
Michael Howell / Hunter Henritze
Caroline Fisher
Matt Fergus / Robert deGolian
Matt Fergus / Robert deGolian
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.
The Pinnacle
One Phipps Plaza
