Office Submarket Report
ATLANTA | MIDTOWN
Q1 2016
Key Takeaways
Market Indicators
Relative to prior period
> Midtown led the Atlanta office market in space absorbed in the
first quarter, seeing its occupancy levels increase by a total of
267,783 square feet. Kaiser-Permanente’s move into Pershing
Point Plaza accounted for the majority of this increase.
NET ABSORPTION
RENTAL RATE
*Projected
Summary Statistics
All
Classes
Class A
Class B
22.2
16.2
5.2
Vacancy Rate
10.8%
12.4%
7.2%
Change From Q4 2015
-1.2%
-1.3%
-0.9%
268
208
47
-
-
-
568
568
-
$27.43
$30.19
$20.89
3.3%
2.3%
5.3%
Midtown Office Market
Total Inventory
(Millions Square Feet)
> Early indications suggest Midtown will be one of Atlanta’s strongest
office submarkets this year.
Absorption, Deliveries and Vacancy
Square Feet
-
CONSTRUCTION
> Cousins Properties broke ground on NCR’s corporate headquarters
early this quarter. This project is the first office building to begin
construction since 1075 Peachtree; and the first of three likely to
begin this year.
14%
Absorption YTD
(Thousands Square Feet)
300,000
13%
250,000
Construction Deliveries YTD
(Thousands Square Feet)
200,000
12%
150,000
100,000
Midtown
Q2 2016*
VACANCY
> The overall vacancy rate in Midtown is down to 10.8% which puts
it in direct competition to the Buckhead submarket. With activity
remaining consistent and strong in Midtown, and average rental
rates quickly approaching Buckhead levels, it will not be long
before the submarket is considered Atlanta’s most desired.
350,000
Midtown
Q1 2016
Under Construction
(Thousands Square Feet)
11%
50,000
Asking Rents
Per Square Foot Per Year
10%
0
1Q15
2Q15
Absorption
3Q15
4Q15
Deliveries
1Q16
Average Quoted
Vacancy
Change From Q4 2015
UPDATE - Recent Transactions in the Market
Notable Leasing Activity
TENANT
PROPERTY
LANDLORD
SIZE (SF)
TYPE
Baker Hostetler
1170 Peachtree St.
John Hancock Real Estate
67,960
Class A Lease
Pindrop Security
817 W Peachtree St.
Novare Group
45,000
Class B Expansion
Polsinelli Shughart PC
One Atlantic Center
Hines
44,696
Class A Lease
Slater Hospitality Group
Ponce City Market
Jamestown
31,574
Class A Lease
Notable Sales Activity
PROPERTY
SALES DATE
SALE PRICE
SIZE (SF)
PRICE / SF
BUYER
Midtown Center
10/16/2015
$167,667,275
512,101
$327.41
CBRE Global Investors
Colony Square
12/1/2015
$166,000,000
888,698
$186.79
North American Properties
The Peachtree
11/20/2015
$60,300,000
345,254
$192.58
Oaktree Capital Management LP
Carriage Works
2/8/2016
$27,000,000
144,000
$187.50
Stockbridge Capital Group
Sources: CoStar Property, Colliers Research
Skyline Review
Space Available
Direct
Sublet
50
45
40
Floors
35
30
25
20
15
10
5
BUILDING
One Atlantic
Center
1180 Peachtree
1075 Peachtree
Promenade
1100 Peachtree
RBA
1,100,312 SF
670,443 SF
762,804 SF
774,535 SF
581,833 SF
TYPICAL
FLOOR SIZE
23,500 SF
22,130 SF
26,360 SF
24,630 SF
22,269 SF
% LEASED
89.9%
95.9%
87.1%
96.6%
96.2%
61,413 SF
21,904 SF
36,934 SF
11,382 SF
9,227 SF
$34.00-$38.00
$40.00-$42.00
$37.50-$39.50
$38.25-$40.50
$35.50-$38.50
1
2
3
4
5
LARGEST
SPACE AVAIL.
RENTAL RATE
PER SF (Gross)
10
7
5
2
6
8
3
5
6
8
4
9
11
1
2
9
4
3
10
12
1
4
3
2
2
7
Office Submarket Report | Q1 2016 | Midtown | Colliers International - Atlanta
1
Active Projects
Source: CoStar Property
1
NCR HEADQUARTERS
485,000 SF Office Tower
$220M development
Under Construction
Developer: Cousins Properties
2
999 Peachtree
271 17th Street
The Proscenium
Regions Plaza
Campanile Plaza
621,946 SF
541,870 SF
533,135 SF
502,369 SF
465,000 SF
22,995 SF
26,252 SF
25,000 SF
20,816 SF
23,857 SF
94.4%
89.6%
92.9%
78.1%
52.1%
22,995 SF
26,252 SF
24,239 SF
55,985 SF
204,129 SF
$34.00
$36.00
$32.00-$35.00
$33.00
$30.00-$32.50
6
7
8
9
10
GEORGIA TECH HPC
700 SPRING STREET
620,000 SF Office Space
80,000 SF Data Center
40,000 SF Retail
In Planning
Developers: Portman Holdings
3
Aerial Legend
T3 ATLANTIC STATION
$60M development
220,000 SF Creative Office
In Planning
Developers: Hines Interests
Points of Interest
1 Georgia Tech
7
Colony Square
2 Atlantic Station
8
Federal Reserve
Proposed Dev.
4
Buildings by Number
(see opposite page)
3
Center for
Puppetry Arts
9
Margaret Mitchell
House & Museum
4
Savannah College
of Art & Design
10
Technology
Square
11
The Fox Theater
12
The Varsity
MARTA Rail Line
New Construction
5 Ansley Park
6
3
Woodruff Arts
Center
Office Submarket Report | Q1 2016 | Midtown | Colliers International - Atlanta
METROPOLITAN CENTER
570,000 SF Office Tower
Mixed-Use Development
Developer: Daniel Corp/MetLife/
Selig Company
In The News
> Hines buys block in Atlantic Station: Following its purchase of the retail portion of Atlantic
Station late last year, and also in addition to its T3 loft office project a little further up on 17th Street,
Hines Interests recently purchased the long-vacant site known as “Block C” in Atlantic Station at
the western end of the 17th Street Bridge. The developer paid $13.6 million for the 2.7-acre site
where it plans to build two loft style office buildings that could combine for up to 500,000 square
feet. The design of the buildings will be much different from the normal glass towers already
present in the mixed-use development. Instead, it will utilize materials like steel, concrete, brick
and wood to embody the loft-office style feel prospective tenants in Midtown market are seeking.
> Dewberry to add retail, office to Midtown’s Campanile building: Dewberry Capital wants to
add several floors and street-level retail to the Campanile Building according to plans recently
presented to the Midtown Development Review. The local developer would like to add six floors
to the building totaling an additional 150,000 square feet. The plans also call for a less complex
retail expansion consisting of 77,000 square feet along Peachtree Street. No timetable has been
set as of yet, however, Dewberry is working alongside city leaders to fine-tune the expansion.
AT A GLANCE | Georgia Tech HPCC Details
FOR MORE INFORMATION
Scott Amoson
VP, Director of Research | Atlanta
+1 404 877 9286
[email protected]
COLLIERS INTERNATIONAL
ATLANTA OFFICE SPECIALISTS
Monica Davis
Michael Lipton
Scott DeMyer
Bob Mathews
Lee Evans
Craig Mendel
Deming Fish
Scott O’Halloran
Chuck Francis
Paul Reese
> Second phase of Technology Square to be
named “Coda” and include a new 21-story
office/high performance computer center.
Chris Goershel
Emily Richardson
Huston Green
Jodi Selvey
Josh Gregory
Fred Sheats
> To contain 620,000 sq. ft. of office, anchored
by Georgia Tech; 80,000 sq. ft. of high
performance computing space; 40,000 sq.
ft. of street level retail; and 20,000 sq. ft. of
outdoor living space.
Reeves Henritze Pete Shelton
Tim Huffman
Hayes Swann
Russ Jobson
Will Tyler
Jeff Kelley
Andrew Waguespack
> Portman Holdings will develop the complex
located at Spring and W. Peachtree Streets.
Dany Koe
Andrew Walker
Mike Lash
Bob Ward
> To break ground Fall 2016, with an anticipated
delivery in January 2019.
Drew Levine
Colliers International | Atlanta Office | Midtown Listings
1355 PEACHTREE
CARRIAGE WORKS
1475 PEACHTREE
609-10,004 SF
Lease/Sale
Fred Sheats /
Andrew Walker
956 SF Sublease
Paul Reese
2,200-43,875 SF
For Lease
Pete Shelton /
Bob Ward / Drew Levine
1447 PEACHTREE
PERSHING PARK PLAZA
344-6,147 SF Lease
Will Tyler /
Scott DeMyer
4,838 SF Lease
Scott O’Halloran /
Lee Evans /
Deming Fish
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every reasonable effort has been made to ensure its accuracy, we cannot guarantee it. No
responsibility is assumed for any inaccuracies. Readers are encouraged to consult their
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4
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