Premium content from Dorey’s Atlanta Office Guide – by Walter Fish
Downtown Submarket Report – 4th Qtr 2011

Effective Rental Rates
Class A office space: $26.00-$28.00 per SF
Class B office space: $15.00-$17.00 per SF
Class C office space: $12.00-$14.00 per SF

Concessions:
All concessions are dependent upon credit worthiness of tenant, length of term, and other concessions structured into the deal.

• Free Rent: 1/2 month to full month for each lease year, subject to other concessions within the lease.
• Tenant Improvement Allowance: $15-$25 psf depending on lease term.
• Moving Allowance: Included in Tenant Improvement Allowance.

Absorption Rate: -64,268 SF in 4th Qtr. 2011*
Vacancy Rate: 17.95% in 4th Qtr. 2011*
* Source: CoStar Group, Inc.

New office projects in the area: 55 Allen Plaza, 180 Peachtree, 200 Peachtree, Ellis Street Hotel, Courtyard by Marriott, Ritz Carlton upgrades, and the lobby renovation at Georgia Pacific.

In conjunction with these projects has been Cousins’ revitalization of 191 Peachtree, rehabilitating the building’s lobby and street presence, bringing life and foot traffic back to a key stretch of Peachtree Street and the city center. These projects, particularly 191 Peachtree, have been the key driver behind several straight quarters of positive absorption for the Downtown Submarket.

Major office leases or announcements: Mckenna, Long & Aldridge: 163,000 SF at SunTrust Plaza
Habitat for Humanity: 55,000 SF at 270 Peachtree
CoreNet Global: 19,000 SF at Georgia Pacific
Carlock Copeland: 52,000 square feet at 191 Peachtree
Commerce Club: 26,252 square feet at 191 Peachtree
Woodruff Foundation: 8,700 square feet 191 Peachtree
HKS: 16,000 square feet at 191 Peachtree

Other trends in the submarket that should be noted: The Peachtree Streetcar, which is slated to begin operating in early 2013, will provide connectivity for the core of downtown, improving accessibility to key business destinations and event venues. The system will also serve as the catalyst for additional transit oriented development within the loop.

Furthermore, there is significant ongoing capital investment from the City of Atlanta, Central Atlanta Progress, and the Downtown CID; including parks, traffic light technology, and various beautification projects.

Downtown offers the best value, the strongest connectivity (airport, MARTA, etc.) and the lowest crime rate among Atlanta’s in-town Submarkets.

Premium content from Dorey’s Atlanta Office Guide – by Connie Engel
Cumberland/Galleria Submarket – 4th Qtr 2011

Effective Rental Rates
Class A office space: $20.00-$24.00 per SF
Class B office space: $15.00-$19.00 per SF
Class C office space: $10.00-$14.00 per SF

Concessions:
All concessions are dependent upon credit worthiness of tenant, length of term, and other concessions structured into the deal.

• Free Rent: One month per year of lease term.
• Tenant Improvement Allowance: $10 to $25 per RSF depending on length of term.
• Moving Allowance: Negotiable based on terms and generally built into TI package.

Absorption Rate: 16,259 SF in 4th Qtr 2011*
Vacancy Rate: 19.99% in 4th Qtr 2011*
* Source: CoStar Group, Inc.

New office projects in the area: No new buildings are under construction in the Cumberland market. Probably nothing projected for a while. The last major buildings came on-line in 2001.

Major office leases or announcements: It might be good to note the large number of 3,000-1,500 SF users on the market. Hopefully this up-tick in the market bodes well that the larger requirements are not far behind.

Other trends in the submarket that should be noted: There are limited blocks of large contiguous space on the market. This fact is unfortunate since we want new companies to move here and existing large users to remain here.

Premium content from Dorey’s Atlanta Office Guide – by Jeff BellamyI
Central Midtown Submarket – 4th Qtr 2011

Effective Rental Rates
Class A office space: $22.00-$30.00 per SF
Class B office space: $15.00-$20.00 per SF
Class C office space: N/A

Concessions:
All concessions are dependent upon credit worthiness of tenant, length of term, and other concessions structured into the deal.

• Free Rent: One to two months per year of lease term.
• Tenant Improvement Allowance: T.I. packages are anywhere from $15.00 to $75.00 per square foot.
• Moving Allowance: Typically rolled into T.I. packages, if any.

Absorption Rate: 53,524 SF in 4th Qtr. 2011*
Vacancy Rate: 25.1 % in 4th Qtr. 2011*
* Source: Jones Lang LaSalle

New office projects in the area: There has been no speculative office construction here since Selig/Daniel’s 753,000-square-foot 1075 Peachtree tower delivered in early 2010. New development is not expected in the near-term due to the abundance of existing inventory and faltering economic and employment recovery. Although office construction is indefinitely on pause, Daniel Corp. and Selig Enterprises will soon break ground on a 22-story multifamily tower at their 12th & Midtown complex, while Novare Group has a 23-story tower in the works at the corner of Spring and 13th Streets.

Major office leases or announcements: Arnall Golden Gregory renewed 122,000 square feet at Atlantic Station in July and will reconfigure its space to bring additional attorneys on board. It was announced that SunTrust’s Atlanta Bank will be moving into 95,000 square feet at Campanile Plaza when it relocates from a Downtown building that was sold to Georgia State University.

Other trends in the submarket that should be noted: Midtown has seen modest absorption gains so far this year, but overall, demand remains weak and the pipeline of active net new prospects is thin. For the first quarter of 2012, the submarket is likely to see existing occupiers continue to play musical chairs as the tenant-friendly conditions hold sway.

301/311 Old Clay Street in Marietta, GA contains approximately 1.1 acres located at the intersection of Old Clay St. and S. Marietta Pkwy with a large amount of frontage on S. Marietta Pkwy. This highly visible site is minutes from busy Atlanta Rd., Marietta Square, and Wellstar Kennestone Hospital. Southern Polytechnic University and Life University also sit close by. The site has not only been targeted by the city of Marietta as being located in a designated TAD, but also is eligible for Opportunity Zone tax credits, which allows a 5 year, $3,500 per year per employee tax credit for new hires. The site is currently zoned Community Retail Commercial, and with underground parking, allows for up to 102,290 square feet of mixed use development.

Asking Price: $450,000 (Negotiable)

Total Acreage: Approx. 1.17 Acres

Total Square Feet: Approx. 50,965 SF

Divisible: Negotiable (Land consists of 2 Lots)

Download the Summary Demographic Report with more information – 311 Old Clay St, Marietta Report

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Premium content from Dorey’s Atlanta Office Guide – by Thomas W. Miller III
Central Buckhead Submarket – 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:

• 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.
• 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.
• 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.

Premium content from Dorey’s Atlanta Office Guide – by Josh Baine
Central Perimeter Submarket – 4th Qtr 2011

Effective Rental Rates
Class A office space: $20.00-$27.00 per SF
Class B office space: $16.00-$19.50 per SF
Class C office space: $14.00-$15.50 per SF

Concessions:

• Free Rent: One to one and a half months of free rent per year of lease term, outside the term.
• Tenant Improvement Allowance: $3.00-$6.00/RSF per lease year.
• Moving Allowance: $1.50-$2.00/RSF and generally included in the tenant improvement conversation.

Absorption Rate: -87,326 SF in 3rd Qtr. 2011*
Vacancy Rate: 22.94% in 3rd Qtr. 2011*
* Source: CoStar Group, Inc.

New office projects in the area: Cox Enterprises continues to develop two 300,000-square-foot buildings in an effort to consolidate their operations. One building is expected to deliver summer 2012 and the adjacent building will follow in late 2012. Integra Construction is developing its new headquarters at 185 Allen Road. This Class B structure will feature LEED certification and will accommodate 16,000 SF spread over two stories. A remaining ground floor block of 4,109 SF is available with delivery in early 2012. Posted rental rates for the project are $18.50/SF on a full-service basis. Building signage fronting Allen Road is available as well as monument signage; this would make an excellent opportunity for a medical office tenant or professional services firm. Contact Andrew Walker with Colliers International for additional information.

Major office leases or announcements: The North Terraces has seen a great deal of leasing velocity over the last quarter. They were successful in signing AFC Enterprises for 56,370 SF scheduled for a 3Q 2011 move-in date. AFC develops, operates and franchises Popeyes restaurants. Alan Joel and Dan Granot with Joel & Granot handled the transaction for AFC. Ventyx also inked a deal with North Terraces to the tune of 55,257 SF and is scheduled to start packing 2Q 2012. Ventyx is a leading business solutions provider offering software, data and advisory services. Also, Frank Farrell with Ackerman & Co. signed a new deal with Federated Insurance for 8,600 SF at Two Premier Plaza. The much anticipated Hammond half diamond interchange is open for business. Now the focus will be on the diverging the diamond interchange at I-285 and Ashford Dunwoody Road.

Other trends in the submarket that should be noted: Central Perimeter continues to be one of the strongest submarkets in Atlanta. GA 400, MARTA and free parking all make this vibrant submarket attractive to corporate users. The submarket is experiencing the flight to quality as companies in Class B and C buildings relocate to Class A projects to take advantage of lower rental rates and a plethora of leasing concessions. In the last five quarters, the Central Perimeter Class B market has seen negative net absorption equaling more than 100,000 SF per quarter.

Michael’s Checklist for Moving a Medical Practice
Premium content from Dorey’s Atlanta Office Guide – by Michael Ulin

It is not uncommon for physicians and medical groups to remain at the same location indefinitely. However, at some point during the life cycle of the practice, the need or opportunity may arise to relocate. This can be a daunting task, but with a bit of preparation, it is completely manageable. Here are some thoughts about the most important areas to consider when preparing for a move.

Planning Makes for Good Execution
Experts, veteran physicians and office managers would agree not to wait until the last minute to plan a move. A general rule of thumb is to begin preparing at least 6 months in advance. Final details, including identifying and purging items to be recycled, shredded or disposed of may be refined in the last 90 days.

Many critical components impact patient service and practice performance. One example is telecommunications suppliers, who require advance scheduling for relocation and restoration. It’s always a good idea to get a head start contacting phone and internet service providers as well as wiring specialists. Another priority is contacting local utility companies weeks ahead of the move to provide desired begin and end dates. Anticipating electricity or water service change appointments may require a physical presence at the new location. Actual moving dates should be determined by patient and staff needs. It is worthwhile to evaluate and choose an ideal period for your practice to move; often a weekend move can minimize practice disruption.

The Team Needs a Quarterback
In most practices, the office manager or administrator will guide the moving project. Having a knowledgeable play caller ensures that issues are addressed properly and allows physicians to remain focused on patient needs. Arranging regular planning meetings to keep everyone involved avoids surprises or misunderstandings and since the project will affect the entire staff and office team, it’s important to get employees excited about the move. Offering tours, sharing property details, amenities and photos can help motivate them.

Crunching the Numbers
Negotiating the costs of a move can be complex. Experts recommend obtaining at least three bids in order to make an informed decision. But don’t get taken in by a low bid. Monte Townsend, general manager with Floor Brothers, Inc., a company specializing in commercial relocation services says “Evaluate low bids carefully. You’ll want to make sure that provider has adequately appraised the scope of work, the contents and they have visited the physical locations involved.”

When reaching pricing arrangements, be careful not to exceed pricing language for protection. Often it is difficult to fully assess a project prior to the physical move. This can result in additional costs (e.g. dock time, access issues, elevator complications). At the very least, require a formal approval of any changes beyond the original scope of work.

One silver lining of a move is an opportunity to save money. Phone and internet service will likely have to be re-established, so it’s a good time to review contracts with technology providers and identify potential savings offered by a new vendor.

License to Operate
It is imperative to obtain the proper commercial insurance as required by the lease document or building owner. This may be required prior to occupancy. Also, obtain confirmation from the project manager that all licenses and permits necessary to run equipment and store chemicals and/or medications are in place. The new landlord may have requirements for documentation as well.

Knowledge is Power
Gather a list of everyone who needs to know about the move – patients, payors, vendors and service providers. Inform them of the new address via mail, phone calls and emails at least four weeks in advance. Update website and social media feeds, and don’t forget to change printed collateral materials such as business cards, letterheads, envelopes, etc. It may be beneficial to include directions about parking or access to the office to avoid delays for patient scheduling during initial visits at the new location. Make sure the appointment scheduling team is prepared with the new address and contact information, moving date and any specific dates the office will be closed.

Mover Know-How
A moving company specializing in moving medical technology and equipment will ensure that everything is up-and-running when you reopen, and will also help avoid legal and technical nightmares. A certificate of insurance is required by the building or owner – make sure the mover is properly insured or access may be denied. Townsend suggests that information technology be set up and that equipment be re-calibrated. “When working with an Optical surgeon recently we found that there were specific pieces that needed advance scheduling for calibration”, offers Townsend. Lead time for manufacturers or approved agents to address these machines can be several weeks. Ninety percent of medical equipment will not pose an issue, but certain medical equipment that comes in contact with biohazardous or chemical materials (i.e. inert gases), will need to be cleaned or sterilized preceding the move. For example, a blood machine or analyzer that leaks biohazardous materials is a violation that could result in a lawsuit.

Lastly, consider the impact of HIPAA regulations. General effort is required to conceal private patient information. Protection is critical to maintain proper compliance – placing these items in crates instead of boxes provides more security.

Tech Savvy
Choose a good technology consultant who understands the current system, existing setup and can assist in planning the new space. Understanding how phone and computer systems will operate at the new location is an essential safeguard. “Frequent discussion with your consultant is the best way to ensure minimal disruption” says Richard Stokes with Network 1 Consulting Inc. The involvement of a project manager is integral to this process. This responsibility, which often falls on the office manager or practice administrator, requires the help of an experienced professional. This person will manage the process efficiently and avoid costly mistakes like delayed timing that can impact billing and reimbursement according to Stokes. Its best to plan at least 90 days out for telecommunication needs like T-1 lines, and a minimum of 45 days for installation, which may be subject to volume and holiday schedules. Additionally, Stokes recommends, together with a consultant, the early planning for the location of the wiring, the server rack as well as determining proper access to equipment, and considering the temperature of server / telecommunication rooms.

Sweat the Small Stuff
A few days before to the move, confirm the date and time with the landlord, especially as it relates to parking, loading dock and elevator access. On moving day, be prepared with keys and have extra copies on hand to avoid entry delays for movers on the clock.

Contingency Plans
Think through some likely scenarios and specific tactics to address them. For example, arrange for a roll-over to another office or answering service as back-up in case the phones don’t work. Leave directions at the old location in the event patients show up there. Let them know where to park for best access to the new suite, parking costs, etc.

Party on
Celebrate reaching the end of the process and remember with reward everyone involved with a party or gift to recognize each team member’s contribution to the project.

Premium content from Dorey’s Atlanta Office Guide – by Tom Parker

East Atlanta / Decatur Submarket Report – 3rd Qtr 2011

Effective Rental Rates:
Class A office space: $19.50-$22.00 per SF
Class B office space: $15.00-$19.00 per SF
Class C office space: $8.00-$12.00 per SF

Concessions:

• Free Rent: Generally one to one and ½ months per year of term.
• Tenant Improvement Allowance: $12.00-$15.00 for renewals and $18.00-$25.00 for new deals of 5 years or longer.
• Moving Allowances: None.

Absorption Rate: -18,887 SF in 2nd Qtr. 2011*
Vacancy Rate: 10.36%* in 2nd Qtr. 2011*
* Source: CoStar Group, Inc.

New office projects in the area: There are no new developments under way in Decatur.

Major office leases or announcements in the area: No deal announcements yet, but a good bit of activity.

Other trends in the submarket that should be noted: Influx of tenants from other submarkets based on amenity base in Downtown Decatur and competitive lease rates. Market activity in the small to medium size deal is picking up.

Downtown Submarket Report – 3rd Qtr 2011
Premium content from Dorey’s Atlanta Office Guide – by Brian D. Hogg

Effective Rental Rates:
Class A office space: $18.50-$22.50 per SF
Class B office space: $16.00-$18.00 per SF
Class C office space: $14.00-$16.00 per SF

Concessions:

• Free Rent: One (1) to One and a half (1.5) months per lease year.
• Tenant Improvement Allowance: $5.00-7.00 per RSF per lease year.
• Moving Allowances: $1.00-$1.50 per RSF.

Absorption Rate: -108,315 SF in 2nd Qtr. 2011*
Vacancy Rate: 18.14% in 2nd Qtr. 2011*
* Source: CoStar Group, Inc.

New office projects in the area: The closing of the sale of the Equitable Building, now known as 100 Peachtree, and City Hall East on July 11th are some major transactions that will bring new and stable commercial offerings to the downtown submarket, as these iconic buildings go through the upgrading and transformation process.

America’s Capital Partners, the new owner of 100 Peachtree Street, are former downtown building owners and have stated they really like the downtown market and are glad to be back as a player.

Jamestown along with subsidiary Green Street Partners plan to create a Chelsea Market concept with residences, stores and office lofts.

Major office leases or announcements: SunTrust Bank continues to absorb additional downtown space in the Marquis Two, SunTrust Plaza, and SunTrust Plaza Garden Offices buildings.

McKenna Long Aldrige (MLA) signed a 15-year extension at SunTrust Plaza for 163,315 RSF. MLA occupies floors 45-55 of SunTrust Plaza and was represented by Ian Henderson and Jon Izard of Cushman & Wakefield. Brian Hogg of Portman Management Company represented the landlord in this transaction.

Other trends in the submarket that should be noted: Downtown continues to attract the relocation of major institutions such as the Football Hall of Fame now relocating from South Bend, Indiana to Marietta Street next to the World Congress Center and the Omni Hotel. This new addition joins the expansion of the Aquarium with the new dolphin exhibit and the pending Center for Civil and Human Rights at Pembroke Place. All additions support and expand the amenities available to occupants of downtown office space, which are the best in the metro area, along with the ease of access to the downtown submarket. At mid-year, the downtown submarket has the third best Class A absorption per Co-Star.

Cumberland/Galleria Submarket – 3rd Qtr 2011
Premium content from Dorey’s Atlanta Office Guide – by Stephen Clifton

Effective Rental Rates:
Class A office space: $20.00-$24.00 per SF
Class B office space: $15.00-$19.00 per SF
Class C office space: $10.00-$14.00 per SF

Concessions:

• Free Rent: One month per year of lease term.
• Tenant Improvement Allowance: $10 to $25 per RSF depending on length of term.
• Moving Allowances:Negotiable based on terms and generally built into TI package.

Absorption Rate: 20,387 SF 2nd Qtr. 2011*
Vacancy Rate: 19.72% in 2nd Qtr. 2011*
* Source: CoStar Group, Inc.

New office projects in the area: There are currently no new buildings under construction in the Cumberland/Galleria submarket.

Major office leases or announcements: Buck Consultants renewed approximately 38,000 RSF at 200 Galleria and Powerplan Consultants moved to 200 Galleria from 1600 Parkwood. Kemira signed an approximately 45,000 RSF lease at 1000 Parkwood and will be moving in during the 3rd quarter of this year.

Other trends in the submarket that should be noted: The Cumberland/Galleria submarket typically lags behind Central Perimter and sees a higher vacancy rate and flatter rental rates. The Cumberland/Galleria submarket also has little absorption and a significantly smaller sized tenant base than markets such as Central Perimeter and North Fulton.