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Q4 2010 | MIDTOWN

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 800,000

24%

19,908,163

Vacancy Rate

21.1%

22%

600,000

Square Feet

Total SF

20% 400,000

18%

200,000

16% 14%

0

YTD Net Absorption

180,930

YTD Deliveries

752,710

Under Construction

0

12% 4Q09

1Q10

2Q10

3Q10

4Q10

(200,000)

10% Absorption

Deliveries

Avg. Class A Rate

$26.11

Source: CoStar Property

Vacancy

MARKET INDICATORS Q4 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

271 17th Street

$75,000,000

548,039

$136.85

CBRE Investors

Campanile

$36,000,000

446,626

$80.60

Dewberry Capital

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

Alston & Bird Law Firm

One Atlantic Center

340,000

Class A Renewal & Contraction

Wells Fargo

171 17th Street

180,000

Class A Renewal

Schiff Hardin

The Proscenium

34,572

Class A Renewal & Expansion

Robins, Kaplan, Miller & Cir.

One Atlantic Center

22,922

Class A Lease

Midtown continued to show itself as one of the strongest submarkets in Atlanta’s office market in 2010. For the second straight year the submarket finished with positive absorption. Since losing tenants in 2008, Midtown has filled 381,436 SF of space over the past two years.

Rental rates are starting to show more of an upward trend. The average quoted rental rate is up $1.61/sf from third quarter. Although some of this increase is due to statistical adjustment, it still suggests a steady, increasing trend is taking place.

The activity Midtown experienced over the past couple of years is expected to continue going forward. The submarket will attract much of the same attention from companies seeking space in 2011.


MARKET REPORT | Q4 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

1,079,312 SF

669,575 SF

752,710 SF

774,344 SF

581,833 SF

87%

93%

31.1%

57.8%

86.1%

57,999 SF

15,740 SF

459,458 SF

291,582 SF

56,047 SF

$26.70-$32.70

$33.00-$35.00

$34.00-$36.00

$24.00-$26.00

$23.30-$29.30

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 | Q4 2010 | ATLANTA OFFICE | MIDTOWN

RECENT DELIVERIES 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

446,626 SF

79.4%

41.8%

95.4%

79.9%

30.4%

52,965 SF

183,587 SF

21,459 SF

181,189 SF

213,348 SF

$27.00-$29.00

$31.00-$32.00

$28.00-$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 | Q4 2010 | ATLANTA OFFICE | MIDTOWN

IN THE NEWS

480 offices in 61 countries on 6 continents

• Three

choice Midtown parcels picked up: Three parcels of land located in premium Midtown locations have been sold to land investors who plan to hold them for future development. It is worth mentioning all three parcels were originally owned by Novare Group prior to the economic downturn. The parcels went back to the lenders and have now been resold. The first parcel was repurchased by NoteSouth, a new investment firm with the owner of Novare Group, Jim Borders as an officer. The second parcel located at 1163 W. Peachtree was bought by Avanti Properties. The last parcel at 22 14th Street was purchased by John Carlos. No current development plans have been made for any of the land. of Atlantic Station means big changes: AIG has sold the 586,000 SF retail development of Atlantic Station to a joint venture between CB Richard Ellis Investors and North American Properties. No price has been given yet. The transfer of ownership will result in changes at the retail complex. Among them will be stores and restaurants which appeal to the younger Midtown crowd, the creation of shopping districts and improvements to the parking deck underneath the development.

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

• Sale

• Midtown

office tenants playing musical chairs: As is the case with other Atlanta submarkets in 2010, Midtown saw companies within the submarket leasing space and moving to more affordable, and sometimes higher-quality locations. A perfect example of this can be seen at 1075 Peachtree where Atlanta Capital Mgmt., Seyfarth Shaw and Boston Consulting have leased space, moving from other Midtown locations. 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 investing $180 million into the redevelopment, including $15.5 million to the City of Atlanta for the property.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS

PERSHING PARK PLAZA

THE PROSCENIUM

1,790-5,220 SF Lease Lee Evans

1,769 SF Sublease Jeff Kelley / Bob Ward / Pete Shelton

400 TRABERT AVE.

715 PEACHTREE

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

342,860 SF Lease Scott O’Halloran / Lee Evans

909 W. PEACHTREE

1570 NORTHSIDE DR.

12,000 SF Lease Russ Jobson / Bob Allen

4,075 SF Sublease Jodi Selvey

www.colliers.com/atlanta

$2 billion in annual revenue

• Over 2 billion square feet under

management • Over 15,000 professionals

UNITED STATES: 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

Craig Mendel

Lee Evans

Scott O’Halloran

Deming Fish

Hugh Pafford

Huston Green

Jodi Selvey

Russ Jobson

Fred Sheats

Nicole Kamen

Pete Shelton

Jeff Kelley

Hayes Swann

Brett Kingman

Andrew Walker

Michael Lipton

Bob Ward

Bob Mathews

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.

4Q | Atlanta Midtown Office | Market Report  

Colliers International | Atlanta 4Q 2010 report for Midtown Atlanta office market

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