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The Inside Scoop on the People & Places that Shape Atlanta Real Estate | |
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Office All Stars
This man knows something you don't. Or at least he thinks he does.
Atlanta's office market answered a couple of questions in 2010.
Among them: Who's going to lease all this speculative Buckhead office space? That would be companies such as Kids II, Sony Ericsson, JWT, Novelis and Northwestern Mutual. Who's going to buy 1155 Peachtree, the mostly vacant Campanile and former BellSouth HQ, after its emergence from foreclosure? That would be Dewberry Capital, which caught everyone's attention by paying $81 per square foot for the 428,755-square-foot Midtown tower. Eastdil Secured represented Wells Fargo in the sale.
After the Dewberry Capital acquisition, tenant Georgia's Own Credit Union renewed and expanded for 103,000 square feet at Campanile. Dewberry plans to begin renovations of the building this year.
"The way we look at it, Campanile is consistent with Dewberry Capital's investment strategy - the best real estate in the best location," said Ridr Knowlton, executive vice president of Dewberry Capital. "As we've learned even more about the building, we're continually impressed with the quality of construction and other features."
As the year progressed, we heard more and more about a bifurcated investment sales market with core assets at one end of the barbell and value-add on the other - and not much in between. Campanile was clearly the value-add trophy of 2010, and the end of the year saw 3344 Peachtree at the other end of the spectrum. In late December, Jackson, Miss.-based Parkway Properties REIT put 3344 Peachtree's 484,000-square-feet of office space under contract for $167.3 million, acquiring the Buckhead trophy, which is 93 percent leased, from developer Regent Partners and its investment partners. Jones Lang LaSalle's Chris Marshall and Ralph Smalley represented Regent.
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Buckhead Bounces Back
From left to right: Anton Kotze, Cameron Golden, Jeff Dils, Walter Fish, Chuck Francis, David Shope and Thad Ellis of Cousins Properties.
A moribund 2009 set the stage for Buckhead's momentum shift in 2010.
First up, Novelis relocated its North American headquarters to Atlanta to consolidate with corporate HQ and nearly tripled its local presence, taking 100,000 square feet at Tishman Speyer's new Two Alliance Center. Jones Lang LaSalle's Rob Metcalf, Brannan Moss and Shannon Gordon represented Novelis on the fast-tracked deal, taking on the assignment in February and completing negotiations by April. Tishman Speyer's Chris Ahrenkiel represented ownership.
Novelis' timing meant it had approximately 1 million square feet of new, speculative office space spread before it like a Thanksgiving buffet, as well as buildings developed in previous cycles.
"The timing of the Novelis deal was ideal because everything was out there and available," JLL's Metcalf said. "We hit the perfect storm."
Around the corner from Two Alliance, Cousins Properties' Terminus 200 rode a wave of leasing after Cousins and Morgan Stanley recapitalized the building. Recapitalization opened the doors for 330,000 square feet of leasing at the 564,000-square-foot tower, where Cousins' Walter Fish, Anton Kotze and Cameron Golden have leased a total of 380,000 square feet.
Cousins also made waves downtown, renewing and expanding InComm for 186,000 square feet at American Cancer Society Center and signing Carlock, Copeland & Stair for 52,000 square feet at 191 Peachtree. Abba Waller and Monica Davis of PartnersAtlanta represented InComm, while Ben Raney of Raney Real Estate represented Carlock, Copeland & Stair.
"The driving focus from day one was leasing," Cousins' Golden said. "Our main goal was to stabilize assets, and we were able to make a lot of progress." |
Lawyers Stay Put, Lease Less
Carter's Glenn Kolker is all smiles for his 2010 deals.
The era of the dwindling law firm footprint re-emerged in 2010, especially with two big Midtown requirements.
Kilpatrick Townsend - formerly Kilpatrick Stockton - renewed for 206,000 square feet at 1100 Peachtree St., where Carter's Glenn Kolker represents owner Manulife Financial. JLL's Duncan Gibbs, Shan Gastineau and Brad Armstrong represented the tenant, which previously occupied 270,000 square feet at 1100 Peachtree.
Alston & Bird raised eyebrows when it hired developer Daniel Corp., along with Cushman & Wakefield, to look into its Atlanta real estate needs, fueling speculation that the law firm may anchor a new building. In the end, Alston & Bird chose to renew and expand in Hines' One Atlantic Center for 340,000 square feet, expanding its presence at the tower by approximately 110,000 square feet at the expense of neighboring Mini Me, Atlantic Center Plaza, where it leased more than 200,000 square feet. C&W's Andy Ghertner, Ian Henderson and John Izzard represented Alston & Bird, while Hines John Heagy, Mark Ferris and Tori Kerr represented ownership. The deal brought the 1.2 million-square-foot icon to 90 percent leased.
Alston & Bird may have left a hole at Atlantic Center Plaza, but at least it didn't add more speculative office space to the Atlanta and Midtown market, Hines' Kurt Hartman said.
"It helps stabilize it because, No. 1, it's not introducing a whole new block of space," Hartman said. "Midtown, long-term, is a terrific market with all the right things going for it." |
Cox, GE Suburban Bright Spots
Parkwood Point.
Cox Enterprises ended 2010 as the Atlanta office market's biggest mover and shaker, continuing to consolidate operations in Central Perimeter while donating The Atlanta Journal-Constitution's Marietta Street HQ to the city of Atlanta. The AJC moved to 129,806 square feet at 223 Perimeter Center Parkway over the summer, joining Cox's corporate HQ, sibling AutoTrader and other pieces of the communications giant in the area. Cox also began construction - with Cousins serving as developer - of a 600,000-square-foot campus at Central Park for its technology operations. CB Richard Ellis' John Shlesinger represented Cox.
Not many deals could exalt the addition of net-new jobs in 2010, but GE Digital Energy's 106,000-square-foot, 10-year deal at Eola Capital's Parkwood Point will add more than 400 new GE employees to metro Atlanta. Parkwood Point will serve as GE Digital Energy's new HQ and place it nearby GE Energy's HQ. Eola's Bob Stoner represented ownership, while CBRE's Shlesinger and Brent Woodruff represented GE Digital Energy. |
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