Volume 1, August 2011

Atlanta Market Overview...continued

That said, the Class A office market did show some of those signs owners and Landlord Brokers are seeking. Atlanta's Class A office space recorded positive net absorption for the fifth straight quarter. Atlanta's Class A market recorded positive absorption of nearly 92,000 square feet in the second quarter and a decrease in vacancy from 20.7 percent to 20.6 percent. These figures seem to indicate tenants are taking advantage of lower rental rates to upgrade to Class A space while others are locking in before concessions dry up and rates stabilize.

This decrease in vacancy has its costs...rental rates dropped even in the stronger Class A market. In the second quarter, quoted rental rates for Atlanta's best office space fell from $21.69 a square foot in the first quarter to $21.58 a foot in the second.

Several large Class A leases and renewals/extensions were completed in the second quarter. Law firm Arnall Golden Gregory extended its lease for more than 122,000 square feet at 171 17th Street in Atlantic Station till 2024. In Buckhead, North Highland signed a new lease for nearly 70,000 square feet at Cousins Properties' Terminus 200.

Looking ahead, the third quarter is off to a good start. Law firm Morris Manning & Martin committed to a lease extension for 118,000 square feet at Atlanta Financial Center after seriously considering a move to Midtown's Campanile tower.

Submarket Snapshot: Downtown Office

Overall inventory: 26.7 million square feet
Vacant space: 4.5 million square feet
Vacancy Rate: 18.1 percent
YTD Net Absorption: (297,618) square feet
Class A YTD Net Absorption: 133,594 square feet
Average Quoted Rate, Class A: $19.36
Available Tract: 377 Centennial Olympic Park Drive

A prime opportunity to develop a high-rise, mixed-use project downtown is 377 Centennial Olympic Park Drive. The 2.36-acre site is zoned SPI-16.

“It’s the only sizable property adjacent to the park, the Georgia Aquarium, the new World of Coca-Cola and the future Civil Rights Museum,” said Alan Joel, principal of JGRE. The site offers tremendous exposure on the Downtown Connector to more than 300,000 cars a day, said Joel, listing associate for the property.

Source: The CoStar Office Report, Q2 2011

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2011 Joel & Granot Real Estate, LLC
962 Howell Mill Road, NW Atlanta, GA 30318  |  phone (404) 869-2600  |  
info@joelandgranot.com
Commercial Real Estate Services, Atlanta, GA