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Q2 2010 | MIDTOWN

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

800,000

24%

Vacancy Rate

700,000

22%

600,000

20%

500,000 400,000

18%

300,000

16%

200,000

14%

100,000

22.1%

YTD Net Absorption YTD Deliveries

(28,680) 752,710

Under Construction

0

12%

0 (100,000)

19,296,867

2Q09

3Q09

Absorption

4Q09

1Q10

Deliveries

2Q10

10%

Avg. Class A Rate

$23.61

Source: CoStar Property

Vacancy

MARKET INDICATORS Q2 2010

NEXT QTR

UPDATE Recent Transactions in the Market SALES ACTIVITY

VACANCY NET ABSORPTION CONSTRUCTION

RENTAL RATE

PROPERTY ADDRESS

SALE PRICE

SIZE SF

PRICE / SF

BUYER

Campanile

$35,000,000 (U/C)

446,000

$78.48

Dewberry Capital

1315 Peachtree St. (‘09)

$6,600,000

55,000

$120

Perkins & Will

728-736 W. Peachtree St.

$2,299,000

29,400

$78.20

Midtown Opera, LLC

977 Ponce de Leon Ave.

$1,643,000

15,436

$106.44

Clare Jay LLC

Midtown

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Kilpatrick Stockton

1100 Peachtree

206,140

Class A Renewal

Fisher & Phillips

1075 Peachtree

49,222

Class A Lease

vocalocity

1375 Peachtree

28,017

Class A Sublease

Engauge Marketing

Promenade II

21,983

Class A Expansion

Second quarter office occupancy dropped by 56,789 SF in Midtown. The submarket’s absorption activity has been bouncing from positive to negative over the past year. This is expected to continue through the remainder of 2010.

Midtown is one of three office submarkets under performing from last year’s absorption totals.

The vacancy rate in Midtown increased slightly between quarters; up only 0.3%. Compared to this time last year, the rate is up 2.7%. The amount of space available in the submarket remains in record territory at 4.6 million square feet.

Despite inconsistent activity and record vacancy, Midtown’s average rates are trending upwards.


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | MIDTOWN

SKYLINE REVIEW Space Available Direct Sublet 50 45 40 35

Floors

30 25 20 15 10 5

BUILDING

One Atlantic Center

1180 Peachtree

1075 Peachtree

Promenade II

1100 Peachtree

RBA

1,100,312 SF

670,700 SF

752,710 SF

774,344 SF

581,833 SF

75.9%

92.5%

22.6%

52.4%

84.2%

126,779 SF

15,740 SF

523,654 SF

345,338 SF

83,020 SF

$28.20-$34.20

$33.11-$36.61

$36.00-$38.00

$26.50

$24.00-$30.00

1

2

3

4

5

% LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

5

2 8 6

5 8

6 9

11

4 1 9

1

3

10

7

10

2

12

3 4 1 2 P. 2

| COLLIERS INTERNATIONAL

7


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | MIDTOWN

NEW CONSTRUCTION 3 Source: CoStar Property

1075 PEACHTREE ST. 752,710 SF Delivered 1st Qtr. 2010 Developer: Selig/Daniel JV

6

999 Peachtree

271 17th Street

The Proscenium

Atlantic Center Plaza

Campanile Bldg.

621,908 SF

548,039 SF

533,135 SF

499,601 SF

444,322 SF

77.8%

40.6%

96.6%

79.9%

13.9%

52,965 SF

157,820 SF

25,393 SF

44,912 SF

220,348 SF

$27.00-$29.00

$31.00-$32.00

$30.00-$32.00

$23.00-$30.00

$29.50-$30.50

6

7

8

9

10

AERIAL LEGEND

Buildings by Number (see opposite page)

271 17TH STREET

POINTS OF INTEREST 1 Georgia Tech

7

Colony Square

2 Atlantic Station

8

Federal Reserve

9

Margaret Mitchell House & Museum

4 of Art & Design

10

Technology Square

5 Ansley Park

11

The Fox Theater

12

The Varsity

Center for

3 Puppetry Arts

534,120 SF Delivered April 2009 Developer: AIG Global/Carter

PLANNED CONSTR. 1 1400 PEACHTREE 400,000-500,00 SF Office Tower Mixed-Use Development Developer: Shailendra Group/ Jamestown Properties

2

MARTA Rail Line Savannah College

New Construction

Woodruff Arts

6 Center

METROPOLITAN CENTER 570,000 SF Office Tower Mixed-Use Development Developer: Daniel Corp/MetLife/ Selig Company COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | MIDTOWN

IN THE NEWS

480 offices in 61 countries on 6 continents

• Dewberry

puts Campanile under contract: The Atlanta Business Chronicle confirmed Atlanta investor John Dewberry is on his way to becoming the new owner of Campanile Plaza. The 446,000 SF office tower located in the heart of Midtown is under contract for $35 million, a bargain by any standard. The last sale of the building occurred in 2007 for three times this amount. Earlier this year, Campanile was taken back by Wells Fargo, the lender for the property, by means of a deed in lieu of foreclosure from Transwestern Investment. Purchasing the office tower will raise Dewberry’s profile as a true institutional investor and become one more piece to his portfolio of Midtown properties. The contract for sale outbid other renowned Atlanta developers including Cousins Properties and Tishman Speyer. Bank eyes Midtown regional HQ: Looking to raise its profile amongst Atlanta’s many larger banks, Regions Bank is close to leasing about 80,000 SF of office space on four floors at Atlantic Center Plaza. The Birmingham, Alabama-based bank is the sixth largest in Atlanta and has its current office in Central Perimeter. The move to Midtown will give the bank an intown presence and allow it to compete head on against it’s bigger rivals. The four floors to be occupied will come from Alston & Bird law firm, which will likely be consolidating into its offices at One Atlantic Center Plaza.

United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95

• Regions

$2 billion in annual revenue

• Over 2 billion square feet under

management • Over 15,000 professionals

UNITED STATES: AT A GLANCE | City Hall East

Former Sears, Roebuck & Co. mailing facility and most recently Atlanta City Hall East.

First opened in 1926.

2-million square foot complex to be redeveloped into a mixed-use project containing retail space, including boutique shops and anchor-tenant space up to 150,000 SF for a major retailer. Residences and restaurants are also part of the redevelopment project.

Jamestown Properties is currently negotiating to purchase the property from the City of Atlanta for $27 million.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS

PERSHING PARK PLAZA

THE PROSCENIUM

1,790-5,220 SF Lease Lee Evans

9,508 SF Sublease Jeff Kelley / Bob Ward / Pete Shelton

400 TRABERT AVE.

COLONY SQUARE 400

3,644 SF Lease; 10,428 SF Sale Jeff Kelley / Bob Ward / Pete Shelton

1,972 SF Sublease Bob Allen

909 W. PEACHTREE

1570 NORTHSIDE DR.

12,000 SF Lease Russ Jobson / Bob Allen

4,075 SF Sublease Jodi Selvey

www.colliers.com/atlanta

Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen

Bob Mathews

Neal Baker

Craig Mendel

Patrick Braswell

Scott O’Halloran

Lee Evans

Hugh Pafford

Russ Jobson

Jodi Selvey

Nicole Kamen

Fred Sheats

Jeff Kelley

Pete Shelton

Brett Kingman

Andrew Walker

Michael Lipton

Bob Ward

This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 480 offices throughout more than 61 countries worldwide.

Accelerating success.


2Q 2010 | Atlanta Midtown Office | Market Report  

Colliers International | Atlanta 2Q 2010 report for the Midtown Atlanta office market

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