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Naibg atlanta-3 q2011

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  • 1. 3Q’11 ATLANTA OFFICE MARKET Leasing Highlights in Select CoStar Markets Color Coded by Vacancy Rate MARKET OVERVIEW The Atlanta Office market ended the third quarter 2011 with a vacancy rate of 19.6%. This rate represents a slight decrease North Fulton Vacancy: 19.3% from the previous quarter rate of 19.8%. This decrease YTD Abs: 67K SF Quoted Rates: $17.82 PSF occurred in a quarter where Atlanta saw 309,022 SF in net absorption and one building, 4,000 SF, deliver to the market. Central Perimeter Quoted rental rates ended the quarter at $19.08 PSF, down from last quarter rate of $19.19 PSF. Currently there is Northwest Atlanta Vacancy: 22.9% Vacancy: 19.8% YTD Abs: (353)K SF YTD Abs: 9K SF Quoted Rates: $18.42 PSF Quoted Rates: $20.17 PSF 765,077 SF of office product under construction in Northeast Atlanta Vacancy: 22.5% Metro Atlanta. Buckhead YTD Abs: (95)K SF Quoted Rates: $16.63 PSF Vacancy: 20.1% YTD Abs: 685K SF Quoted Rates: $23.32 PSF Downtown Atlanta ECONOMIC OVERVIEW West Atlanta Vacancy: 17.5% Vacancy: 26.8% YTD Abs: (356)K SF YTD Abs: 65K SF Quoted Rates: $17.66 PSF Most economists Quoted Rates: $15.17 PSF believe the European UNEMPLOYMENT RATE SEPT 2011 Midtown Atlanta Northlake debt crises will National 9.1% Vacancy: 20.8% Vacancy: 11.9% YTD Abs: (417)K SF Quoted Rates: $22.83 PSF YTD Abs: (49)K SF Quoted Rates: $17.48 PSF remain a threat to Georgia 10.3% the global economy Atlanta MSA 10.3% into 2012. Lower oil prices and the recent end to Japanese supply disruptions South Atlanta Vacancy: 19.1% stemming from the March earthquake have lifted YTD Abs: (129)K SF Quoted Rates: $17.51 PSF impediments to consumer spending, ending the third quarter better-than-expected. However, uncertainty will impact the confidence of business leaders and consumers dampening future business investment and hiring. Vacancy Rate: Less than 5% 5% to 10% 10% to 15% 15% to 20% Over 20% Atlanta’s outlook for the remainder of 2011 is optimistic. The healthcare, education and supply chain/distribution industriesLEASING HIGHLIGHTS continue to grow for Atlanta, as our business climate, locationSelect Markets by Vacancy Rate (YTD) to major transportation hubs, technology and talent pool remain favorable for corporate relocations. MARKET INDICATORS Vacancy Net Construction Rental Brannen Goddard Rate Absorption Rates Commercial Real Estate Services, Worldwide. 404 812 4000 | fax 404 816 3939 | www.naibg.com Suite 1100 | 5555 Glenridge Connector | Atlanta GA 30342 Information is deemed from reliable sources. No warranty is made as to its accuracy. ATLANTA OFFICE MARKET // Third Quarter 2011
  • 2. CONSTRUCTION ACTIVITY ATLANTA OFFICE MARKET THIRD QUARTER 2011 At the close of the quarter, the Atlanta Office market had a single building, 4,000 SF, in new construction VACANCY deliveries. This compares to 40,162 SF in deliveries last quarter and 21,000 SF this time last year. The overall vacancy rate at the end of the third quarter 2011 is 19.6%, down from the previous quarter when it Currently there is 765,077 SF of new office projects was 19.8%. The current rate represents over 41.2 million under construction (11 buildings), an increase from the square feet of vacant office space throughout the Metro 451,318 SF that was underway this time last year. Atlanta Office market, a 1% increase from this time last year. The current amount of vacant sublease space is 2.1 The largest projects currently underway are Cox million square feet, down slightly from last quarter. Headquarters, Buildings 1 & 2, totaling 600,000 SF located in the Central Perimeter submarket. NET ABSORPTION At the close of the quarter, an overall net absorption of QUOTED RENTAL RATES 309,022 SF was reported, an increase over the previous The current overall quoted Atlanta Office rental rate of quarter. The recorded net absorption for the current $19.08 PSF represented a $0.11 PSF decrease in rental quarter by class follows: Class A: 116,750 SF, Class B: rates from the end of the previous quarter, when rents 144,780 SF and Class C: 47,492 SF. were $19.19 PSF. Leasing activity was over 2.9 million square for the quar- The Class A rental rates are reported at $21.50 PSF with ter, up from the previous quarter. the highest rate reported in the Buckhead submarket at $24.55 PSF with Midtown closely following at $24.18 PSF. YTD NET ABSORPTIONS BY BUILDING TYPE » CLASS A 1,037,416 SF Class B sector ended the quarter with quoted rental rates » CLASS B (1,408,548) SF of $16.29 PSF, which is $0.11 PSF lower than last quarter » CLASS C (104,301) SF and $0.45 PSF lower than this time last year. » YTD (475,433) SFVACANCY RATES BY CLASS 5% Class A Class B Class C Total25.0% 95%20.0% Direct Sublet 15.0%10.0% 5.0% 0.0% 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
  • 3. MARKET HIGHLIGHTS ABSORPTION & DELIVERIESSignificant Third Quarter 2011 Lease Transactions (New & Renewal) Net Absorption Deliveries 2,500Building Submarket Square Feet Tenant Name 2,000Windward Plaza - Bldg 300 North Fulton 203,245 GE Consumer Finance 1,500Atlanta Financial Center - South Upper Buckhead 135,075 SunTrust Robinson Humphrey 1,0002635 Century Center Chamblee 119,178 FBICompanile Plaza Midtown 72,232 SunTrust Bank 5004501 Northpoint Parkway North Fulton 59,501 Total Systems Services 0 (500)Significant Third Quarter 2011 Construction Deliveries (1,000)Building Submarket Square Feet Class (1,500) 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 20114536 Nelson Brogdon Blvd - Bldg B Northeast Atlanta 4,000 B 1q 2q 3q 4q 1q 2q 3q 4q 1q 2q 3qSignificant Third Quarter 2011 Properties Under ConstructionBuilding Submarket Square Feet DeliveryCox Headquarters Bldg 1 Central Perimeter 300,000 2Q 2012 FUTURE DELIVERIESCox Headquarters Bldg 2 Central Perimeter 300,000 4Q 2012 350,000Parkway Professional Northeast Atlanta 67,500 4Q 2011 300,0007316 Spout Springs Road Northeast Atlanta 20,000 3Q 20111887 Powder Springs Road Northwest Atlanta 16,650 3Q 2012 250,000 200,000All Construction Activity (Markets Ranked by Under Construction Square Footage) 150,000 Under Construction Inventory 100,000Market # Bldgs Total RBA Preleased SF Preleased % Available SF 50,000Central Perimeter 3 616,000 611,840 99.3% 4,160Northeast Atlanta 3 94,634 35,965 38.0% 58,669 - 2011 4Q 2012 1Q 2012 2Q 2012 3Q 2012 4QNorthwest Atlanta 2 25,150 14,700 58.4% 10,450South Atlanta 1 14,293 14,293 100% 0Northlake 1 10,000 100 1.0% 9,900North Fulton 1 5,000 0 0.0% 5,000Midtown Atlanta 0 0 0 0.0% 0West Atlanta 0 0 0 0.0% 0Downtown Atlanta 0 0 0 0.0% 0Buckhead 0 0 0 0.0% 0Totals 11 765,077 676,898 88.5% 88,179 ©2011 NAI Brannen/Goddard, LLC. Data compiled from CoStar Group, Inc.OVERALL VACANCY & QUOTED RATES Vacancy Rate Average Vacancy Quoted Rates 25.00% $21.50 $21.00 20.00% $20.50 15.00% $20.00 $19.50 10.00% $19.00 5.00% $18.50 0.00% $18.00 2008 3q 2008 4q 2009 1q 2009 2q 2009 3q 2009 4q 2010 1q 2010 2q 2010 3q 2010 4q 2011 1q 2011 2q 2011 3q
  • 4. TOTAL ATLANTA OFFICE MARKET STATISTICS THIRD QUARTER 2011 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Sublease SF Total SF Vac% Absorption Deliveries Const SF RatesBuckhead 117 19,763,394 3,779,640 183,231 3,962,871 20.1% 685,587 0 0 $23.32Central Perimeter 266 29,490,494 6,478,652 287,806 6,766,458 22.9% (353,524) 0 316,000 $20.17Downtown Atlanta 157 26,152,374 4,225,499 343,024 4,568,523 17.5% (356,019) 0 0 $17.66Midtown Atlanta 136 22,216,380 4,373,146 253,529 4,626,675 20.8% (417,459) 0 0 $22.83North Fulton 337 24,435,587 4,299,612 423,016 4,722,628 19.3% 67,394 0 0 $17.82Northeast Atlanta 460 21,404,091 4,588,724 218,838 4,807,562 22.5% (94,778) 40,162 87,500 $16.63Northlake 397 19,545,028 2,230,948 104,275 2,335,223 11.9% 48,602 0 0 $17.48Northwest Atlanta 465 32,873,212 6,192,130 300,961 6,493,091 19.8% 8,996 0 16,650 $18.42South Atlanta 281 11,409,561 2,105,416 78,025 2,183,441 19.1% (129,234) 19,015 0 $17.51West Atlanta 57 2,986,956 801,535 0 801,535 26.8% 65,002 0 0 $15.17TOTALS 2,673 210,277,077 39,075,302 2,192,705 41,268,007 19.6% (475,433) 59,177 420,150 $19.08CLASS “A” STATISTICS Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Sublease SF Total SF Vac% Absorption Deliveries Const SF RatesBuckhead 51 14,739,004 2,941,483 159,303 3,100,786 21.0% 690,290 0 0 $24.55Central Perimeter 77 20,176,282 3,784,686 159,178 3,943,864 19.5% (49,991) 0 300,000 $21.89Downtown Atlanta 26 13,720,911 2,640,966 341,714 2,982,680 21.7% 111,702 0 0 $19.09Midtown Atlanta 33 14,326,101 3,087,443 221,157 3,308,600 23.1% 126,353 0 0 $24.18North Fulton 99 14,118,568 2,358,353 344,950 2,703,303 19.1% (29,365) 0 0 $19.78Northeast Atlanta 61 6,338,845 1,424,105 124,685 1,548,790 24.4% (73) 0 67,500 $19.84Northlake 21 2,651,153 373,350 18,338 391,688 14.8% 42,057 0 0 $19.87Northwest Atlanta 77 15,695,460 2,614,231 188,068 2,802,299 17.9% 127,614 0 0 $20.89South Atlanta 20 1,393,033 417,901 32,963 450,864 32.4% 18,829 0 0 $20.21West Atlanta 1 71,500 0 0 0 0.0% 0 0 0 $0.00TOTALS 466 103,230,857 19,642,518 1,590,356 21,232,874 20.6% 1,037,416 0 367,500 $21.50CLASS “B” STATISTICS Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Sublease SF Total SF Vac% Absorption Deliveries Const SF RatesBuckhead 43 4,466,292 779,068 23,928 802,996 18.0% 30,925 0 0 $18.30Central Perimeter 135 8,073,163 2,327,190 128,628 2,455,818 30.4% (309,316) 0 16,000 $18.09Downtown Atlanta 74 9,319,414 1,102,509 1,310 1,103,819 11.8% (409,745) 0 0 $14.88Midtown Atlanta 81 7,214,988 1,232,711 20,948 1,253,659 17.4% (545,267) 0 0 $18.05North Fulton 215 9,672,251 1,864,337 71,533 1,935,870 20.0% 125,381 0 0 $15.00Northeast Atlanta 350 13,557,793 3,018,370 90,558 3,108,928 22.9% (66,420) 40,162 20,000 $14.63Northlake 280 13,773,177 1,547,919 85,937 1,633,856 11.9% 18,884 0 0 $17.45Northwest Atlanta 328 15,095,121 3,381,504 112,893 3,494,397 23.1% (132,045) 0 16,650 $15.90South Atlanta 198 8,125,275 1,324,720 45,062 1,369,782 16.9% (159,109) 19,015 0 $17.12West Atlanta 36 1,328,621 135,739 0 135,739 10.2% 38,164 0 0 $18.81TOTALS 1,740 90,626,095 16,714,067 580,797 17,294,864 19.1% (1,408,548) 59,177 52,650 $16.29CLASS “C” STATISTICS Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Sublease SF Total SF Vac% Absorption Deliveries Const SF RatesBuckhead 23 558,098 59,089 0 59,089 10.6% (35,628) 0 0 $18.18Central Perimeter 54 1,241,049 366,776 0 366,776 29.6% 5,783 0 0 $13.60Downtown Atlanta 57 3,112,049 482,024 0 482,024 15.5% (57,976) 0 0 $13.69Midtown Atlanta 22 675,291 52,992 11,424 64,416 9.5% 1,455 0 0 $11.55North Fulton 23 644,768 76,922 6,533 83,455 12.9% (28,622) 0 0 $14.06Northeast Atlanta 49 1,507,453 146,249 3,595 149,844 9.9% (28,285) 0 0 $13.11Northlake 96 3,120,698 309,679 0 309,679 9.9% (12,339) 0 0 $14.29Northwest Atlanta 60 2,082,631 196,395 0 196,395 9.4% 13,427 0 0 $15.40South Atlanta 63 1,891,253 362,795 0 362,795 19.2% 11,046 0 0 $14.10West Atlanta 20 1,586,835 665,796 0 665,796 42.0% 26,838 0 0 $11.25TOTALS 467 16,420,125 2,718,717 21,552 2,740,269 16.7% (104,301) 0 0 $13.85 Source: CoStar Group, Inc. Brannen Goddard 5555 Glenridge Connector, Suite 1100 Atlanta GA 30342 www.naibg.com Commercial Real Estate Services, Worldwide. ©2011 NAI Brannen/Goddard, LLC