4q11 atlanta office market report

8/3/2019 4Q11 Atlanta Office Market Report

1/4

$18.50

$18.75

$19.00

$19.25

$19.50

$19.75

1Q11 2Q11 3Q11 4Q11 1Q12

Actual Rent (Price/SF) Forecasted Rent (Price/SF)

-300,000

-150,000

0

150,000

300,000

450,000

4Q10 1Q11 2Q11 3Q11 4Q11

20.5%

21.0%

21.5%

22.0%

22.5%

23.0%

$17.50

$18.00

$18.50

$19.00

$19.50

$20.00

4Q10 1Q11 2Q11 3Q11 4Q11

Rent (Price/SF) Vacancy (%)

RESEARCH

4Q11

Atlanta office Market

After a predominantly down year, the Atlanta office market posted positive

absorption of 381,039 square feet at the end of the fourth quarter of 2011,

bringing the year-end total to negative 24,299 square feet. The vacancy

rate improved slightly to 21.2% in the fourth quarter from 22.4% in the

third quarter, and remained below the 22.2% rate reported one year ago.

The average asking rent in Atlanta rose to $19.39/sf from $19.35/sf in the

third quarter of 2011 and remained below the $19.58/sf average rentreported one year ago. The average asking rent in Atlanta remained 8.5%

below the market high of $21.19/sf reached in the second quarter of 2001.

In the Urban Atlanta submarket, positive absorption of 12,819 square feet

took place in the fourth quarter, bringing the year-end total to positive

204,045 square feet. The vacancy rate improved to 21.7% from 24.5% in

the third quarter. The average asking rent grew to $21.79/sf from $21.53/sf

reported one year ago. Within the Urban Atlanta submarket, the Buckhead

district posted 64,478 square feet of positive absorption, marking its

seventh consecutive quarter of positive absorption. The vacancy rate

dropped to 21.0% from 24.8% reported one year ago, while the average

asking rent finished the quarter at $23.69/sf.

Total Inventory (SF) 165,464,561Average Asking Rent (Price/SF) Total $19.39

Direct $19.69

Sublet $15.39

Vacancy Rate (%) Total 21.2%Direct 20.0%

Sublet 1.2%

Net Absorption (SF) 4Q11 381,0393Q11 127

2Q11 -226,017

Under Construction (SF) 30,000

Table 1

Key Indicators

4Q10 4Q11 % ChangeVacancy Rate (%) 22.2% 21.2% -4.5%

Average Asking Rent (Price/SF) $19.58 $19.39 -1.0%

Table 2

Year Over Year

Figure 1Weighted Average Asking Rent & Vacancy

Figure 2Net Absorption (SF)

Figure 3Newmark Knight Frank ModernTrax Forecast


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Verint Systems 800 North Point Pky North Fulton 132,676

Ace Insurance 11575 Great Oaks Way North Fulton 100,000

CareerBuilder.com 5550 Peachtree Pky Norcross/Peachtree Corners 93,000

Lonza 1200 Bluegrass Lakes Pky North Fulton 69,000

Internap Network Services 1 Ravinia Dr Central Perimeter 61,737

Tenant Address Submarket Square Feet

-5.0%

-2.5%

0.0%

2.5%

5.0%

7.5%

Oct-07 Oct-08 Oct-09 Oct-10 Oct-11

United States Atlanta

0.0%

2.5%

5.0%

7.5%

10.0%

12.5%

Nov-07 Nov-08 Nov-09 Nov-10 Nov-11


-6.8%

-5.1%

-3.4%

-1.7%

0.0%

1.7%

Nov-07 Nov-08 Nov-09 Nov-10 Nov-11


4Q11

atlantaOffice market

The U.S. Bureau of Labor Statistics (BLS) reported that total nonfarm

employment in Atlanta fell by 0.6% for the 12 months ending in

November 2011, representing a loss of 13,100 jobs. In the month of

November alone, however, 13,300 jobs were gained. The unemployment

rate for the area improved to 9.2% at the end of November 2011 from

10.3% in November of 2010. The Consumer Price Index for the Atlanta

area increased 3.1% in the 12 months ending in October 2011.

For the U.S. overall, the BLS reported that total nonfarm employment

increased 1.2%, or 1.6 million jobs, in the 12 months ending in November

2011. The unemployment rate was 8.6%, compared to 9.0% in October

and 9.9% in November 2010. The CPI increased 3.4% for the 12 months

ending in November 2011.

Figure 4Total Nonfarm Employment, 12-Month % Change

Figure 5Consumer Price Index, 12-Month % Change

Figure 6Unemployment Rate

Table 3Select Lease Transactions

Table 4Select Sales Transactions

1230 Peachtree St NE Midtown/Pershing Point 774,344 $137,500,000 $178

760 Doug Davis Dr Airport/South Atlanta 334,306 $63,000,000 $188

3400 Old Milton Pkwy North Fulton 286,500 $41,708,333 $146

2500 Northwinds Pkwy North Fulton 299,665 $33,144,034 $111

3780 Mansell Rd North Fulton 252,960 $25,200,000 $100

Address Submarket Square Feet Sale Price Price/SF

2


3/4

Urban 55,867,194 12,819 20.4% 1.3% 21.7% $22.18 $16.31 $21.79Buckhead 18,344,294 64,478 19.9% 1.0% 21.0% $23.91 $19.05 $23.69

Downtown 20,441,892 -78,243 18.9% 1.5% 20.5% $18.50 $14.52 $18.20

Midtown 16,279,591 9,740 22.6% 1.4% 24.0% $25.58 $16.81 $24.86

Midtown West 801,417 16,844 26.2% 0.0% 26.2% $18.99 NA $18.99

Suburban 109,597,367 368,220 19.9% 1.1% 21.0% $18.60 $15.01 $18.35Airport/South Atlanta 4,841,110 66,723 17.0% 1.5% 18.6% $16.91 $9.75 $16.70

Central Perimeter 25,754,343 85,131 22.9% 1.2% 24.1% $20.70 $16.53 $20.43

Cumberland/Galleria 22,204,433 41,688 19.8% 0.9% 20.6% $18.67 $14.49 $18.33

Decatur 2,760,152 -3,595 11.0% 0.6% 11.6% $21.20 $21.20 $21.20

East Cobb 970,738 15,703 11.3% 1.1% 12.4% $15.78 $15.84 $15.78

I-20 East/Conyers 954,312 2,798 16.4% 0.0% 16.4% $18.44 NA $18.44

I-20 West/Douglasville 845,331 -4,819 12.2% 0.0% 12.2% $19.62 NA $19.62

I-85/Northeast 6,131,990 41,822 11.1% 0.8% 11.9% $18.07 $12.79 $17.83

I-85/I-285/Gwinnett 10,025,939 -14,211 21.6% 1.0% 22.6% $17.77 $14.79 $17.62

Marietta/Kennesaw 4,237,033 98,426 19.1% 0.8% 19.9% $17.11 $17.83 $17.15

Norcorss/Peachtree Corners 6,474,191 34,879 28.7% 1.2% 29.9% $15.53 $11.93 $15.25

North Fulton 21,239,540 19,777 18.1% 1.7% 19.7% $18.45 $15.21 $18.10

Northlake/Stone Mountain 3,158,255 -16,102 19.1% 0.3% 19.5% $17.24 $15.65 $17.19

Atlanta 165,464,561 381,039 20.0% 1.2% 21.2% $19.69 $15.39 $19.39

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 5Submarket Statistics

www.newmarkkf.com


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Sustainably

Newmark Knight Frank

RESEARCH

Paul FrischerExecutive Managing Director

212.372.2368

[email protected]

Matt MaisonDirector, Research

212.372.2099

[email protected]

Chris HanawaySenior Research Analyst

212.372.2096

[email protected]

Peter HurResearch Analyst

David ChaseResearch Analyst

Dan AppelResearch Analyst

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4q11 atlanta office market report

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