At the close of 2011, construction for office product was under way in two of the submarkets cited in this Report: Midtown, with a 750,000-square-foot project; and Central Perimeter, with a total of 616,000 square feet. Northwest Atlanta and Northeast Atlanta are also adding multiple projects with a combined total of 462,130 square feet.

Throughout 2011, 11 new office projects were delivered to the Metro Atlanta area totaling 133,674 square feet.

As noted, the average quoted asking rate for available office space in all classes in Metro Atlanta was $18.67 for the fourth quarter of 2011.

Quoted rental rates per square foot at the end of 2011 for the six submarkets singled out include: Midtown, $24.91; Upper Buckhead, $23.98; Central Perimeter, $19.83; Downtown Atlanta, $18.55; Cumberland/Galleria, $18.26; and North Fulton/Forsyth County, $17.66.

• Downtown Atlanta 14.6%
• North Fulton/Forsyth County 16.3%
• Cumberland/Galleria 17.2%
• Midtown 18.2%
• Upper Buckhead 19.3%
• Central Perimeter 20.7%

Buckhead was a leading submarket with year-to-date net absorption of 725,118 square feet. North Fulton/Forsyth County also recorded positive net absorption for the year of 246,220 square feet, and the Cumberland/Galleria submarket closed 2011 with a net of 10,083 square feet.

The Midtown submarket showed a negative net absorption of 98,433 square feet. Central Perimeter’s YTD figure also fell into the negative, (152,785 square feet), as did Downtown Atlanta, with a negative (437,171) square feet.

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.

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.

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

Additional Images

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.