Midtown Atlanta’s 2nd Quarter Office Market Report
MIDTOWN ATLANTA AT A GLANCE:
• 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.
MIDTOWN ATLANTA IN THE NEWS:
• 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.
• Regions 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.
PROPERTIES SOLD:
Campanile is under contract for $35,000,000 (U/C) or $78.48 / Square Foot to Dewberry Capital
1315 Peachtree St. (‘09) sold for $6,600,000 or $120 / Square Foot to Perkins & Will
728-736 W. Peachtree St. for $2,299,000 or $78.20 / Square Foot to Midtown Opera, LLC
977 Ponce de Leon Ave. sold for $1,643,000 or $106.44 / Square Foot to Clare Jay LLC
LEASE TRANSACTIONS:
Kilpatrick Stockton leased 206, 140 RSF at 1100 Peachtree – Class A Renewal
Fisher & Phillips leased 49,222 RSF at 1075 Peachtree – Class A Lease
Vocalocity leased 28,017 RSF at 1375 Peachtree – Class A Sublease
Engauge Marketing leased 21,983 RSF at Promenade II – Class A Expansion
MIDTOWN ATLANTA STATS:
Total SF: 19,296,867
Vacancy Rate: 22.1%
YTD Net Absorption: (28,680)
YTD Deliveries: 752,710
Under Construction: 0
Avg. Class A Rate: $23.61
