Downtown Atlanta’s 2nd Quarter Office Market Report
DOWNTOWN ATLANTA OFFICE MARKET AT A GLANCE
• Move-in activity at 191 Peachtree and the Nuclear Regulatory Commission officially moving into its space at the Marquis One tower at Peachtree Center helped push second quarter absorption levels to 88,179 SF Downtown.
• Office leasing over the past three months has been modest at best for the submarket. The vacancy rate for Downtown office is not likely to fluctuate too much for the remainder of the year.
• The average rental rate for office space Downtown dropped yet again in second quarter to $18.51/SF; down 7% from this time last year. The Class A average is down 5.4% from mid-year 2009.
• Downtown could have the highest concentration of new development activity once it returns to Atlanta.
DOWNTOWN ATLANTA IN THE NEWS
• GSU business school plans new building: Backing away from plans to purchase an existing office building Downtown and redeveloping it, Georgia State University’s business school is now planning to have it’s own building constructed for expansion of the school. Details of the project are limited, however, the Atlanta Business Chronicle reports six sites are being considered for the new building. It is likely the chosen location will be close to GSU’s current business school on Broad Street. The university has hired an international architecture firm as the master planner for the project. Construction could begin by 2015, subject to funding, and is expected to occur in phases. Increased business school enrollment is driving the need for the expansion.
• Multimodal gets moving: Plans for a multimodal transit terminal Downtown are back on track as transportation planners have decided to tackle the $320 million project by pursuing a master developer. The 16-acre parcel known as “The Gulch” will be the site for the development. The facility will house 400 buses, eight MARTA tracks and inter-city and commuter rail lines for metro Atlanta residents. Commercial development above the terminal would include office, retail and multi-family buildings. The project as a whole is being touted as one of Downtown’s most ambitious redevelopments. The process of deciding on the master developer begins this September when requests for qualifications are due. The DOT then plans to select the winning bidder by May 2011. The first phase of the project would then likely begin late 2011 or early 2012.
SALES TRANSACTIONS
75/95 Poplar St. (‘09) sold for $3,250,000 or $49.68 / Square Foot
120 Ralph McGill Blvd. (Forc.) sold for $2,950,000 or $127.82 / Square Foot
159 Ralph McGill Blvd. (Forc.) sold for $1,200,000 or $33.33 / Square Foot
139 Ralph McGill Blvd. sold for $850,000 or $43.59 / Square Foot
LEASE TRANSACTIONS
Hawkins Parnell Thackston Young leased 71,000 RSF at SunTrust Plaza
Newcomb & Boyd leased 42,000 RSF at SunTrust Plaza
Trend Influence leased 30,500 RSF at SunTrust Plaza
Colo leased 12, 315 RSF at 55 34 Peachtree St.
DOWNTOWN ATLANTA STATS
Total SF: 25,168,828
Vacancy Rate: 15.8%
YTD Net Absorption: (40,368)
YTD Deliveries: 0
Under Construction: 0
Avg. Class A Rate: $19.52
