3q11 atlanta office market report
TRANSCRIPT
8/3/2019 3Q11 Atlanta Office Market Report
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$18.50
$18.75
$19.00
$19.25
$19.50
$19.75
4Q10 1Q11 2Q11 3Q11 4Q11
Actual Rent (Price/SF) Forecasted Rent (Price/SF)
-525,000
-350,000
-175,000
0
175,000
350,000
3Q10 4Q10 1Q11 2Q11 3Q11
19.5%
20.0%
20.5%
21.0%
21.5%
22.0%
$18.75
$19.00
$19.25
$19.50
$19.75
$20.00
3Q10 4Q10 1Q11 2Q11 3Q11
Rent (Price/SF) Vacancy (%)
RESEARCH
3Q11
Atlanta office Market
The Atlanta office market posted its first quarter of positive absorption for
2011 at 275,104 square feet, bringing the year-to-date total to negative
263,545 square feet. The vacancy rate improved slightly to 21.2% in the
third quarter, from 21.3% in the second quarter, and remained above the
21.0% rate reported one year ago. The average asking rent in Atlanta fell to
$19.30/sf from $19.44/sf in the second quarter of 2011 and remained
below the $19.72/sf average rent reported one year ago. The averageasking rent in Atlanta remained 8.9% below the market high of $21.18/sf
reached in the second quarter of 2001, and has remained in the $19/sf
range for the past two years.
In the Urban Atlanta submarket, positive absorption of 570,755 square feet
took place in the third quarter, bringing the year-to-date net total to
148,355 square feet. The vacancy rate improved to 21.0% from 22.0% in
the second quarter. The average asking rent fell to $21.32/sf from
$21.69/sf reported one year ago. Within the Urban Atlanta submarket, the
Buckhead district posted 386,393 square feet of positive absorption. The
vacancy rate dropped to 20.6% from 22.7% in the previous quarter while
the average asking rent finished the quarter at $23.39/sf.
Total Inventory (SF) 168,369,255
Average Asking Rent (Price/SF) Total $19.30
Direct $19.58
Sublet $15.47
Vacancy Rate (%) Total 21.2%
Direct 19.9%
Sublet 1.3%
Net Absorption (SF) 3Q11 275,104
2Q11 -142,554
1Q11 -396,095
Under Construction (SF) 30,000
Table 1
Key Indicators
3Q10 3Q11 % Change
Vacancy Rate (%) 21.0% 21.2% 1.0%
Average Asking Rent (Price/SF) $19.72 $19.30 -2.1%
Table 2
Year Over Year
Figure 1
Weighted Average Asking Rent & Vacancy
Figure 2
Net Absorption (SF)
Figure 3
Newmark Knight Frank ModernTrax™ Forecast
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GE Consumer Finance 4125 Windward Plaza Dr North Fulton 203,245
FBI 2635 Century Ctr I-85/Northeast 136,000
Morris, Manning & Martin Atlanta Financial Ctr Buckhead 125,000
Arnall Golden Gregory 171 17th St Midtown 122,000
SunTrust 1155 Peachtree St Midtown 72,232
Tenant Address Submarket Square Feet
-5.0%
-2.5%
0.0%
2.5%
5.0%
7.5%
Aug-07 Aug-08 Aug-09 Aug-10 Aug-11
United States Atlanta
0.0%
2.5%
5.0%
7.5%
10.0%
12.5%
Aug-07 Aug-08 Aug-09 Aug-10 Aug-11
United States Atlanta
-7.5%
-5.0%
-2.5%
0.0%
2.5%
5.0%
Aug-07 Aug-08 Aug-09 Aug-10 Aug-11
United States Atlanta
3Q11
atlantaOffice market
The U.S. Bureau of Labor Statistics (BLS) reported that total nonfarm
employment in Chicago fell by 1.4% for the 12 months ending in August
2011, a loss of 30,800 jobs. In the month of August alone, however,
2,900 jobs were gained. The unemployment rate for the area has seen
little change in the past two years, rising to 10.4% at the end of August
2011 from 10.3% in August of 2009. The Consumer Price Index for the
Atlanta area increased 3.8% in the 12 months ending in August 2011.
The BLS reported that at the national level, employment increased by
1.0%, or 1.3 million jobs, for the 12 months ending August 2011,
compared to a loss of 89,000 jobs in the 12 months ending August 2010.
Figure 4
Total Nonfarm Employment, 12-Month % Change
Figure 5
Consumer Price Index, 12-Month % Change
Figure 6
Unemployment Rate
Table 3
Select Lease Transactions
Table 4
Select Sales Transactions
675 Ponce De Leon Ave NE Midtown 2,000,000 $15,400,000 $8
3350 Riverwood Pky SE Cumberland/Galleria 502,527 $78,300,000 $156
1117 Perimeter Ctr W Central Perimeter 391,422 $50,000,000 $128
2059 Northlake Pky Dekalb 250,000 $8,600,000 $34
3200 Downwood Cir NW Cumberland/Galleria 228,000 $4,128,000 $18
Address Submarket Square Feet Sale Price Price/SF
2
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Urban 58,277,903 570,755 19.7% 1.3% 21.0% $21.69 $16.07 $21.32
Buckhead 18,907,903 386,393 19.7% 1.0% 20.6% $23.66 $17.94 $23.39
Downtown 20,288,992 4,964 18.2% 1.7% 19.9% $18.26 $14.88 $17.97
Midtown 18,279,591 94,511 21.1% 1.3% 22.5% $23.81 $16.43 $23.30
Midtown West 801,417 84,887 28.3% 0.0% 28.3% $18.98 NA $18.98
Suburban 110,091,352 -295,651 20.0% 1.2% 21.2% $18.64 $15.23 $18.39
Airport/South Atlanta 4,795,184 32,450 18.2% 1.5% 19.7% $16.69 $11.63 $16.48
Central Perimeter 26,039,542 -101,188 23.1% 1.1% 24.3% $20.73 $17.80 $20.58
Cumberland/Galleria 22,176,625 -48,008 20.0% 1.1% 21.1% $18.94 $15.00 $18.60
Decatur 2,771,696 16,893 10.8% 0.6% 11.4% $20.95 $21.20 $20.97
East Cobb 970,672 -8,787 12.6% 1.1% 13.7% $16.44 $15.84 $16.40
I-20 East/Conyers 954,312 -8,083 16.7% 0.0% 16.7% $18.96 NA $18.96
I-20 West/Douglasville 845,331 19,818 11.6% 0.0% 11.6% $19.70 NA $19.70
I-85/Northeast 6,247,414 20,773 10.9% 1.2% 12.1% $17.93 $13.82 $17.69
I-85/I-285/Gwinnett 9,928,892 71,290 20.5% 1.1% 21.5% $18.03 $14.79 $17.85
Marietta/Kennesaw 4,237,029 9,292 19.7% 0.8% 20.5% $17.30 $17.83 $17.33
Norcorss/Peachtree Corners 6,498,569 -68,621 28.2% 1.6% 29.8% $15.76 $12.89 $15.48
North Fulton 21,473,074 -224,958 18.6% 1.9% 20.5% $17.96 $14.91 $17.64
Northlake/Stone Mountain 3,153,012 -6,522 18.7% 0.3% 19.0% $17.26 $15.65 $17.21
Atlanta 168,369,255 275,104 19.9% 1.3% 21.2% $19.58 $15.47 $19.30
Total Qtrly Net Direct Sublet Total Direct Avg. Sublet Avg. Total Avg.
Inventory Absorption Vacancy Vacancy Vacancy Asking Rent Asking Rent Asking Rent
(SF) (SF) Rate Rate Rate (Price/SF) (Price/SF) (Price/SF)
Table 5
Submarket Statistics
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RESEARCH
Paul Frischer
Executive Managing Director
212.372.2368
Matt Maison
Director, Research
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Chris Hanaway
Senior Research Analyst
212.372.2096
Peter Hur
Research Analyst
David Chase
Research Analyst
Dan Appel
Research Analyst
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