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| Atlanta Office Space Market - Buckhead |
(Reported by)
Thomas W. Miller III
Executive Vice President
Grubb & Ellis
Tom.Miller@Grubb-Ellis.com
770-552-2411
Looking for space? Tom has 18 years of CRE experience.
Largest Deal in 2010: Argosy - Lakeside Commons II, 82,606 rsf
Deals Closed in 2010: 93
Associations:
ACBR, NAIOP, Sandy Springs Chamber of Commerce - Executive Committee Board Member
• Multiple years Top 10 ACBR Office Producer; 2008 Top Office Landlord Producer
• Multiple years Top 5 NAIOP Office Producer; 2008 Top Producer
• 2008 ABC Office Deal of the Year
• 2006 Phoenix Award; 10 year MDC recipient
• Alvin B. Cates Award recipient |
Buckhead Submarket Report - 4th Qtr 2011
Effective Rental Rates:
Class A office space: $22.00-$30.00 per SF
Class B office space: $17.00-$22.00 per SF
Class C office space: $14.00-$17.00 per SF
Concessions:
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Free Rent: 1 to 1.5 months per lease year outside of the revenue term. Subject to occupancy and commencement date of the lease, tenant’s financial strength and term of lease. |
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Tenant Improvement Allowance: TI packages have been all over the map in recent years. With the addition of the new supply, several of those landlord’s chose to offer $80.00 to $100.00 TI packages and even offered to give the tenant’s back cash and free credit in the event they did not use their negotiated allowance. Aside from those select buildings, the typical TI range is in the $20 to $40 range for a typical 5 to 10 year term. Many deals in the 3 to 5 year range end up being “Turn-Key’ with modifications being limited to paint, carpet and minor modifications. |
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Moving Allowance: Any moving allowances offered are typically deducted from the landlord’s budgeted allowance and may range from $2.00 on the low end to $5.00 per RSF on the higher end. |
Absorption Rate: 387,200 SF in 3rd Qtr. 2011*
Vacancy Rate: 20.05% in 3rd Qtr. 2011*
* Source: CoStar Group, Inc.
New office projects in the area: There are still no new developments slated for delivery in the Buckhead submarket following the addition of 1 million square feet of new inventory in Q1 2010 that finished out the last over building cycle. On the remote horizon is OliverMcMillan’s “Buckhead Atlanta” project which is planned to include 100,000 rentable square feet of office space upon completion, estimated to be Q4 2013.
Major office leases or announcements: Now the largest tenant in Buckhead, Sun Trust Robinson Humphrey is doubling their space at the Atlanta Financial Center and will occupy a total of 229,894 rentable square feet, which is an expansion of about 80,000 RSF according to published reports. Atlanta Financial Center also retained and expanded veteran tenant Morris Manning & Martin after much discussion about their possible relocation to Midtown. The law firm now occupies 118,281 square feet at AFC. In acquisition news, Piedmont Office Realty Trust, in partnership with Carter, acquired The Medici on the Fulton County courthouse steps for $87 a foot. Next door neighbor, The Forum, was recently put on the market by Ronus Properties and the seller is hopeful it will bring in $180-200 a foot. Another recent sale was the vacant 3330 Peachtree building (60,000 RSF) to a partnership of Regent Partners and Pope & Land, brokered by yours truly. My opinion is this is the strongest site by a mile in Buckhead at this time and would not be surprised at all to see them land an anchor tenant and break ground on a redevelopment in 2012. This development would make financial sense however, as the new building would likely not be more than 130,000 RSF and would most likely entail an anchor tenant in the 60,000 to 70,000 RSF size range. Numerous tenants, including Mag Mutual, would be great candidates for this location. 
Other trends in the submarket that should be noted: Other trends we have started to see recently are tenants starting to pull back again much like in 2008 and 2009. Many seem to be very uncertain about the future and could be reluctant to make significant long term decisions with the current quagmire of our government in Washington. Last year we started to see more tenants make long term decisions regarding office space and expansion, however, in very recent months, we have worked with numerous tenants that want to make shorter term decisions and delay the longer term decisions until we have more comfortable footing in many areas affecting business locally, nationally and globally. That said, this writer feels like Atlanta, despite all of the negative national press we get about water, city government, education, traffic, etc., is a great place for companies to do business and should continue to be a magnet over the long term for large tenant relocations and business growth based on the abundant positive attributes that keep us all living here. |
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TOP 10 Sublease Blocks of Space in Buckhead
TOP 10 Largest Contiquous Blocks of Space in Buckhead
Scroll to bottom to view |
| Buckhead Premier Office Property Short-List* |
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Two Alliance Center
3500 Lenox Road
RATE:
$23.00-27.00 (NNN)
MAX CONTIG:
14,493 SF |
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| Tishman Speyer |
|
|
| 17,000 SF |
New |
Prudential |
Tenant Rep: Alan Joel, Dave Smith & Holley Mitchell – Joel & Granot Real Estate |
01/2011 |
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Two Buckhead Plaza
3050 Peachtree Road
RATE:
Inquire
MAX CONTIG:
24,000 SF |
 |
| Two Realty Partners |
|
|
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The Lenox Building
3399 Peachtree Road at Lenox Square
RATE:
$25.00-27.00(G)
MAX CONTIG:
41,676 SF |
 |
| CBRE |
|
|
| 42,369 SF |
New Lease |
State Bank |
Tenant Rep: Shlesinger/Holmes CBRE |
6/2011 |
| 13,605 SF |
New Lease |
James Bates |
Tenant Rep: Shlesinger/Holmes CBRE |
6/2011 |
| 2,806 SF |
New Lease |
JMK |
Tenant Rep: N/A |
6/2011 |
| 2,139 SF |
New Lease |
Intuitus |
Tenant Rep: Bennett Gottlieb/CBRE |
8/2011 |
| 4,724 SF |
New Lease |
American Global Logistics LLC |
Tenant Rep: Dan Granot/Joel & Granot |
4/2011 |
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Two Live Oak Center
3445 Peachtree Road
RATE:
$22.00-23.00
MAX CONTIG:
37,191 SF |
 |
 |
| Cousins Properties Inc. |
|
|
| 7,985 SF |
New Lease |
PNC Bank |
Tenant Rep: Ian Henderson @ Cushman & Wakefield |
7/2011 |
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3630 Peachtree
3630 Peachtree Rd
RATE:
$22.50-24.00 (N)
MAX CONTIG:
90,000 SF |
Pope & Land
Enterprises, Inc. |
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| Duke Realty Corporation |
|
|
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Piazza at Paces - The Forum
3290 Northside Parkway
RATE:
$19.50 (N)
MAX CONTIG:
96,000 SF |
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| Two Realty Partners |
|
|
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Piedmont Court
3098 Piedmont Road
3091, 3109 Maple Drive
RATE
:
$14.00-22.00
MAX CONTIG:
17,739 SF |
 |
| Richard Bowers & Co. |
|
|
| 898 SF |
New |
AccuQuest Hearing Center |
Tenant Rep: Geoff Dearing, Return Real Estate |
04/2011 |
| 2,806 SF |
Renewal |
Mosaic Restaurant |
Tenant Rep: Direct |
01/2011 |
| 893 SF |
Renewal |
Atlanta Models & Talent |
Tenant Rep: Direct |
01/2011 |
| 597 SF |
New |
Atlanta Electrology Centre |
Tenant Rep: Direct |
05/2011 |
| 3,318 SF |
Renewal |
Event Streams |
Tenant Rep: Eric Ramer, Icon Commercial |
04/2011 |
| 1,071 SF |
New |
TANology |
Tenant Rep: Direct |
05/2011 |
| 1,731 SF |
New |
FNS, Inc. |
Tenant Rep: Direct |
01/2011 |
| 4,324 SF |
Renewal |
Atlanta Children’s Clinical Center |
Tenant Rep: Bob, Day Capital Partners |
05/2011 |
| 807 SF |
Renewal |
Dr. Alesia Reynolds |
Tenant Rep: Direct |
06/2011 |
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The Pinnacle
3455 Peachtree Road, N.E.
RATE:
$28.00-29.00 (G)
MAX CONTIG:
15,929 SF |
|
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| Cousins Properties Inc. |
|
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| 4,129 SF |
New |
Buckhead Legal |
Tenant Rep: Ryan Doyle @ NAI Brannen Goddard |
8/2011 |
| 7,755 SF |
New |
Gordon & Rees |
Tenant Rep: Andy Lechter @ Studley |
7/2011 |
| 2,065 SF |
New |
Citigroup |
Tenant Rep: Jim Palermo @ CBRE |
6/2011 |
| 9,084 SF |
Renewal |
Reynolds Capital |
Tenant Rep: N/A |
N/A |
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Prominence in Buckhead
3475 Peachtree Road, NE
RATE:
$25.50 (G)
MAX CONTIG:
59,432 SF |
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| Jones Lang LaSalle |
|
|
| 24,816 RSF |
New |
Capgemini |
Tenant Rep: Dom Wyatt, Jones Lang LaSalle |
N/A |
| 10,454 RSF |
New |
Lavista Associates |
Tenant Rep: Tom Davenport, Lavista Associates |
N/A |
| 7,518 RSF |
New |
Urban Design Group |
Tenant Rep: Wes Vaughn, CRESA Partners |
N/A |
| 5.067 RSF |
New |
American United Life Insurance |
Tenant Rep: Jeff Frantz, Jones Lang LaSalle |
N/A |
| 4,091 RSF |
Expansion |
Railcar Management, LLC |
Tenant Rep: Harold Wyatt, Wyatt Realty Company, LLC |
N/A |
| 3,724 RSF |
Expansion |
NetRoadShow |
Tenant Rep: Hansell Roddenberry, CRESA Partners |
N/A |
| 3,200 SF |
New |
Homrich, Klein & Associates |
Tenant Rep: Philip Covin / Joel & Granot |
N/A |
| 2,000 SF |
New |
Titan Holdings, USA |
Tenant Rep: Beau Odom / Newmark Knight Frank |
N/A |
| 11,000 SF |
New |
Berman Fink Van Horn, P.C. |
Tenant Rep: Billy Hobbs & David Rubenstein / CRESA Partners |
N/A |
| 2,600 SF |
New |
Morgan Joseph TriArtisan, LLC |
Tenant Rep: Gina DeRaffele / Ackerman & Company |
N/A |
| 600 SF |
Expansion |
Prologis |
Tenant Rep: Jodi Selvey / Colliers International |
N/A |
| 10,000 SF |
New |
Jones & Kolb |
Tenant Rep: Kevin Creel - CresaPartners |
04/2011 |
| 10,000 SF |
New |
SagePath, Inc. |
Tenant Rep: Andrew Waguespack - CresaPartners |
04/2011 |
| 24,000 SF |
New |
Barnes & Thornburg |
Tenant Rep: Ken Ashley & Sam Hollis, Cushman & Wakefield |
01/2011 |
|
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Resurgens Plaza
945 East Paces Ferry Road, NE
RATE:
$24.50-26.50 (G)
MAX CONTIG:
69,786 SF |
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| PM Realty Group |
|
|
| 11,584 RSF |
New |
ShopVisible, LLC |
Tenant Rep: David Ellis, Ackerman & Co. |
5/2011 |
| 2,475 RSF |
New |
The Law Offices of Michael Lawson Neff, P.C. |
Tenant Rep: Ann Cyphers, Cyphers Brokerage Associates |
N/A |
| 6,726 RSF |
Renewal |
The Breckenridge Group Inc. |
Tenant Rep: Brad Armstrong, Dom Wyant, Jones Lang LaSalle |
2/2011 |
| 3,010 RSF |
Renewal |
Theodore A. Erck, LLC |
Tenant Rep: N/A |
3/2011 |
| *Short-List represents featured properties inside Dorey’s Atlanta Office Guide. The Done Deals shown in this Short List are reported to us quarterly as a voluntary effort. It does not represent a comprehensive report of done deals for all Short List properties. |
| Top 10 Sublease Blocks of Space in Buckhead |
1. 26,002 SF ......... One Alliance Center – Term Negotiable
2. 24,500 SF ......... Atlanta Plaza One – Thru May 2013
3. 24,142 SF ......... Terminus 200 – Thru Aug 2014
4. 22,736 SF ......... Atlanta Plaza One – Thru May 2013
5. 20,004 SF ......... One Buckhead Plaza – Thru Oct 2013
6. 18,253 SF ......... Peachtree 25th Building – Thru Oct 2012
7. 17,335 SF ......... Two Buckhead Plaza – Term 5 yrs
8. 14,950 SF ......... Two Live Oak Center - Thru Sept 2013
9. 13,974 SF ......... Terminus 100 – Thru July 2017
10. 12,475 SF ......... 3344 Peachtree – Thru Apr 2016 |
| Top 10 Largest Contiguous Blocks of Space in Buckhead |
1. 254,810 SF ......... Atlanta Plaza One
2. 200,904 SF ......... Phipps Tower
3. 184,409 SF ......... Phipps Tower
4. 96,000 SF ......... Piazza at Paces – The Forum
5. 90,000 SF ......... 3630 Peachtree
6. 74,446 SF ......... 3630 Peachtree
7. 69,786 SF ......... Resurgens Plaza
8. 62,499 SF ......... 3330 Peachtree Rd NE
9. 59,432 SF ......... Prominence in Buckhead
10. 52,468 SF ......... Atlanta Plaza One
Source: Dorey's Office Guide & CoStar Group, Inc. (December 2011).
Methodology: Only existing available spaces as reported to CoStar researchers are included. Proposed/Planned are excluded. Please send Updates/Corrections to CoStar and Dorey. |
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