Midtown Submarket Q4 2022
Midtown Leads All Submarkets in Absorption for 2022
• After leading the market in absorption for two consecutive quarters, Midtown recorded 36,618 square feet in absorption ranking fourth amongst submarkets in Q4. However, from an annual standpoint, Midtown prevailed to be the strongest submarket with 844,500 square feet absorbed in 2022.
• Midtown vacancy remains virtually flat with a slight decrease of 10 basis points from the previous quarter to now stand at 21.7%. Despite the positive absorption this quarter, vacancy remains in an elevated position due to the handful of largely vacant deliveries in Q3. This elevated vacancy will likely continue into the mid-year of 2023 when large block occupancies by tenants such Invesco’s 301,573 square feet move in at Midtown Union occurs.
• Midtown led the way this year in construction activity with 1,073,036 square feet in deliveries and 1,393,428 square feet currently underway.
in absorption year-to-date
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 Cadence Bank 999 Peachtree Street Piedmont Office Realty Trust, Inc. 27,000 New Lease Simon Kutcher One Atlantic Center Starwood Capital Group 12,857 New Lease Millhouse 10 10th Union Investment 6,732 Sublease TOP MIDTOWN LEASES Q1 2022 10% 12% 14% 16% 18% 20% 22% 24% 26% ‐600,000 ‐400,000 ‐200,000 0 200,000 400,000 600,000 800,000 1,000,000 Q2 2021 Q4 2021 Q2 2022 Q4 2022 Absorption Vacancy Rate 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 MIDTOWN Total Inventory SF Direct Vacancy Rate Sublease Vacancy Rate Total Vacant SF Vac Rate Q4 ‘22 Vac Rate Q3‘22 Net Absorp Q1 ‘22 Net Absorp YTD Deliveries Under Constr Avg Rent (FSG) Class A 22,073,110 22.8% 1.3% 5,329,594 24.1% 24.3% 37,857 766,301 1,033,036 1,393,428 $42.57 Class B 3,250,797 9.3% 0.6% 322,603 9.9% 9.9% (2,155) 52,608 40,000 - $27.52 Class C 898,551 4.0% 0.0% 35,638 4.0% 4.1% 916 25,591 - - $24.57 Total 26,222,458 21.5% 1.2% 5,687,835 21.7% 21.8% 36,168 844,500 1,073,036 1,393,428 $41.72 ACTIVE MIDTOWN UNDER CONSTRUCTION PROJECTS 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 $223,900,000 621,946 $360 10/22/2021 Piedmont Office Realty Trust RECENT MIDTOWN INVESTMENT SALES
ABSORPTION AND VACANCY RATE Source: CoStar Source: CoStar, LPC Research
844,500
ATLANTA OFFICE REPORT
• 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.
• Adobe set to open office in Atlanta: Adobe, the computer software company known for applications such as Photoshop and InDesign has inked a 6,000 square foot lease in Colony Square. Adobe currently has approximately 150 to 200 employees residing in Metro Atlanta that operate under a hybrid work model. This buildout will consist of converting a retail space into a small office that will serve as an area for employees to gather as well as attract future talent.
• One Atlantic Center hits the market: Five years after buying One Atlantic, Starwood Capital Group has put the building on the market. While the listing price is not disclosed, it was previously purchased by Starwood Capital Group for $318 million or $288.91 per square foot. This 1,101,022 square foot building is 92.4% leased.
Lincoln Midtown Listings
Intel? 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. Nathan Bell Research Manager 229.349.4781 spapciak@lpc.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. IN THE MARKET ATLANTA OFFICE REPORT | MIDTOWN SUBMARKET Q4 2022
Need More Market
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 - 9,945 SF 1,100 SF - 60,035 SF Fully Leased Hunter Henritze / Caroline Fisher Michael Howell / Robert deGolian Hunter Henritze / Caroline Fisher Michael Howell Hunter Henritze / Michael Howell Caroline Fisher
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.
1180 Peachtree
One Atlantic Center