Skyline Views

Mississippi REIT Rules Roost in Atlanta

ATLANTA (Aug. 4, 2011) - Very quietly, a Mississippi REIT has stormed to the top of the ranking of Atlanta office owners.

Parkway Properties of Jackson now owns 7,690,355 square feet of office space across metro Atlanta, according to its website. Thanks to its acquisition this spring of Eola Capital and record-breaking purchase of 3344 Peachtree (pictured at left), Parkway leapfrogged perennial leaders Cousins Properties and CB Richard Ellis Investors, which recently acquired the 271 17th Street tower in Atlantic Station.

Cousins owns 5,378,000 square feet of office space in metro Atlanta, according to a recent SEC filing (Page 13). 

What does all this mean? It's interesting to CRE people, and it arms transplanted Mississipians with a point of pride when Georgians tease the Magnolia State about being No. 1 in obesity. Georgia ranks 18th.

And while Atlanta is years ahead of Jackson in pretty much everything, a book set in Jackson and written by Kathryn Stockett of Atlanta's Brookwood Hills neighborhood is getting gobs of attention this week in advance of its big-screen debut.

 

Buckhead's Regent Partners Secures Position for Potential 3344 Peachtree Encore

ATLANTA (June 1, 2011) - Regent Partners has put itself in position to replicate its success with 3344 Peachtree just across the street.

The Atlanta developer and Pope & Land Enterprises have contracted to buy the five-story building at 3330  Peachtree Road, according to an article this week by Bisnow reporter Jarred Schenke. The mid-rise building is the former home of American InterContinental University's Buckhead campus.

Regent Partners' David Tennery tells Bisnow that Regent will redevelop the property as an office-centric mixed-use development by either using the existing structure or tearing down the mid-rise. (Our money is on Regent razing the building and created a twin to 3344 Peachtree, which set a new price-per-square-foot record when Regent sold the building to Parkway Properties early this year.

Skyline Views speculated as much when we reported about a year ago that Grubb & Ellis' Tom Miller had just listed the 60,000-square-foot building at 3330 Peachtree for sale. The building is listed as available on Tower Place 100's web site. Tower Place is one of Regent's signature developments in Atlanta.

Could this be the start of the next building boomlet in Buckhead? Probably not. But if Regent and Pope & Land redevelop the site, they could be first to market again when demand once again creates the need for a new office high-rise in Buckhead - whenever that occurs.

 

Wilbert News Strategies Leases HQ Space in Atlanta

By Tony Wilbert

ATLANTA (May 3, 2011) - After writing about thousands of companies signing more than 10,000 office leases, I realized this spring it finally was time for me to sign a lease of my own.

Earlier this spring Wilbert News Strategies leased its first office space for the firm's headquarters. Our 1,832-square-foot lease at Peachtree 25th on the southern edge of Buckhead isn't large compared with recent six-figure deals signed in Atlanta, but for WNS it's a big step.

Wilbert News Strategies is a public relations, communications and social media firm. While we're proud to be considered a top real estate communications firm, we have clients in a a wide spectrum of industries including beverages, legal, hospitality, construction and wealth management.

On Saturday, Caroline and I celebrated our firm's lease with our tenant rep and his wife at Bone's. Today, we erected our logo on the wall to make it official.

When we started Wilbert News Strategies, our largest client, Carter, let us set up shop at its headquarters at 171 17th St. in Atlantic Station. It was a great set up and enabled the firm to grow quickly. Grow we did - to the point where we needed a space of our own. (Of course, WNS owes a big thank you to all Carter associates, especially President Scott Taylor, for helping make our launch possible two years ago. Carter remains our largest client, and we are honored to work for the company.)

When it came time to search for space, no doubt existed about whether to use a commercial Realtor. We asked Dale Lewis, a friend and Carter broker, to be our broker and assist us in our search. We toured several cool spaces and reconnected with old friends and sources as they toured us through their buildings.

We picked an office building in Midtown as our favorite, but we could not come to terms with the landlord. While we had a general idea of how much office space we desired, we had a much firmer idea of how much we could spend each month.

This led us to take a look at Peachtree 25th, a 10-story office tower in the Brookwood micro-market that we had not considered during Round 1. We checked out a couple spaces in the complex and then toured the space on the 10th floor that would become our new corporate home.

The owner of Peachtree 25th, Atlanta Property Group, did a great job working with us on getting a lease done. We signed a 5.5-year lease and moved into the top-floor space in March.

Since we moved in, we've only had one tenant rep cold call us in person (despite building policy allowing no solitication). We told him we are more than happy with Dale and Carter - and about not having to think about our office search for several years.

 

 

 

Time is Right to Plan Next Wave of Office Towers

ATLANTA (Oct. 7, 2010) - Even as the country's office vacancy rate flirts with record levels, now is the time to start planning for the next wave of office construction. That's the point of view from tenant rep Ken Ashley, who hangs his shingle in Cushman & Wakefield's Atlanta office.

For the record, I agree with Ken, as you'll see when you read his post. 

He lays out a pretty solid argument for starting the process now using five points. The first point is that it takes awhile to entitle and build office towers. Even the cookie-cutter four-story, 100,000 square feet office building in Suburb X can take 18 months. Towers take even longer, and two years out, the office market better be better (or we're all in trouble).

His second reason to start the process now is that while demand is a critical component, so too is money. Capital is out there chasing deals, and some of it will be dedicated to building - not just buying - product.

For Ashley's other three reasons, check out his post on The Commercial Tenant Resource.

Dewberry Does It; Campanile Office Tower is His

By Tony Wilbert, WNS PR

ATLANTA (September 9 2010) - The Dew has done it.

John Dewberry closed this week on his stunning acquisition of Campanile in Midtown, according to Real Estate Rooster and Bisnow Atlanta. Bailey Webb, Rooster reporter, broke the news at 9:20 a.m. today. (Thanks to Rooster for the cool photo at left.)

The acquisition is stunning because Dewberry's bid for the former BellSouth headquarters tower was dead in the water only hours before he won the deal. We hear Dewberry's personal visit to Eastdil Secured's office sealed the deal after he was alerted he was not the winner - or even the runner-up.

Word is, Dewberry had the guts to put down $6 million hard to ensure he won the building he coveted. The purchase price was about $36 million.

For Dewberry, a friend and sometime client, buying Campanile further solidifies his position as a major Midtown property owner. He was Midtown when Midtown wasn't cool.

1075 Peachtree: Atlanta's Last Trophy Tower?

By Tony Wilbert, WNS PR

ATLANTA (Aug. 17, 2010) - 1075 Peachtree just might be the last speculative trophy office tower built in Atlanta. That's my assessment after reading Henry Unger's column in today's Atlanta Journal-Constitution.

 Here's how I reached this conclusion. In Henry's column, Studley President Michael Colacino and key Atlanta executive Clark Dean offer their thoughts on the national office market. Coliacino states bluntly that office tenants today are "in a positon of control like never before."

That's interesting. But the most though-provoking comment from the execs is that the days of developing speculative trophy towers without any preleasing are gone - forever. Forget about getting a lender to fund one of these again. Based on this logic, 1075 Peachtree would be the last spec trophy office tower in Atlanta.

Daniel Corp. and Selig Enterprises developed 1075 Peachtree, the office component of the massive 12th & Midtown mixed-use development, on a pure spec basis, with no tenants signed. And at 725,000 square feet, 1075 Peachtree is the largest multitenant office tower developed in Atlanta since - hell, since SunTrust Plaza.

The office tower at 1075 Peachtree has landed several tenants, including law firms Seyfarth Shaw and Fisher & Phillips. It also signed Boston Consulting Group, and we hear another high-profile law firm is seriously considering the 38-story tower with a Loews Hotel built in.

If 1075 Peachtree indeed is the last of the spec trophy office towers in Atlanta, at least it will have a bunch of high-profile tenants - and a nice seven-figure light wall - to celebrate.

Cousins' Gellerstedt: Atlanta's "True" Office Vacancy is 25-30%

By Tony Wilbert, WNS PR

ATLANTA (Aug. 12, 2010) - While news of large office leases in Atlanta is good to hear, the metro area's office market won't really bounce back until the region begins creating new jobs again, Cousins Properties CEO and President Larry Gellerstedt said today.

"Truly there's 25-30 percent vacancy" in Buckhead, Midtown and Downtown, Gellerstedt said. "Nothing really gets better until there's true job growth." Compounding the issue: tenants typically require less space than they used to, he added.

So while watching landlords "steal tenants from each other" is good sport, "none of us really wins in an environment where there's no real job growth going on," Gellerstedt said.

Gellerstedt made his comments during a "fireside chat" with local business columnist Maria Saporta and Republican candidate for Georgia Attorney General Sam Olens at the Databank Mid Year Real Estate Symposium. The half-day event, which attracted an overflow crowd, is being held at The Temple in Midtown.

Olens, who resigned in March as chairman of the Cobb County Commission to run for attorney general, said metro Atlanta must regain its competitive edge to ensure it doesn't lose new job opportunities to areas such as Research Triangle Park, N.C., where "the government is throwing around [incentive] dollars like it's water."

"We always assumed that we didn't have to reinvest in Atlanta because the jobs would automatically be here," Olens told the crowd.

So, when will metro Atlanta's job picture improve? This year should be a wash, and the area should gain 50,000 jobs the next two years after. "Atlanta is getting better, but ... we've got some catching up to do first," Gellerstedt said.

Bottom Hit, What's Next for ATL Office Market?

ATLANTA (Aug. 9, 2010) - It's official: Atlanta's office market has "hit bottom," according to an article in The Atlanta Journal-Constitution. In the article, the AJC cited reports from Jones Lang LaSalle, CoStar and Grubb & Ellis saying Atlanta's office vacancy rate peaked (at 17 percent to 22 percent, depending on the source).

So what's next? Will the market begin an upward climb or bounce along the bottom for a while? We have seen some good signs such as the large leases signed recently in Buckhead. 

News of several of the six-figure office leases including Greenberg Traurig at Terminus 200 (left) and GE Energy at Parkwood Point in Cobb County has buoyed the spirits of brokers, especially landlord and tenant reps involved in the deals. Other recent big office deals actually will have a negative impact on net absorption as companies move to more-efficient spaces. And as last week's unemployment report shows, the job growth needed to create true net absorption probably won't materialize this year.

We should get some insight this week when local business columnist Maria Saporta interviews Cousins Properties CEO Larry Gellerstedt at the Databank Symposium on Thursday. In June, Gellerstedt said Atlanta's recovery remains "fragile and muted." It'll be interesting to hear what he thinks two months later. (2010 generally has been a pretty good year for REITs.)

It also will be interesting to hear from Georgia State University economist Rajeev Dhawan has to say at the Databank Symposium. In early 2009, Dhawan procrastinated that the national recession would not end until this year. The Databank crowd, of course, will want Dhawan to tell them when the commercial real estate market will turn.

Talk of A-Town: Sales from Space City to Midtown

ATLANTA (July 21, 2010) - Investment sales are being talked about all over sunny, sweltering Atlanta today - and the chatter includes Houston, Redskins' country, New York and our own Midtown.

Atlantans are playing a role in Houston's investment sales market. Goddard Investment Group of Buckhead has hired Eastdil Secured (no surprise here) to market Heritage Plaza, a 1.2 million-square-foot office tower in downtown Houston, according to Real Estate Report. Goddard, whose namesake Bob Goddard also is independent chairman of Post Properties, acquired the property in 2005 for about $130 million. Real Estate Alerts says the tower now is valued at as much as $310 million - thanks to the improvements Goddard made and the new tenants it attracted.

Up the East Coast, in Northern Virginia, Northrop is expected to buy (not lease, buy) an office tower in Falls Church for its new headquarters. The company announced in April that it would move its headquarters from Southern California to Northern Virginia, aka Redskins country. An article in The Wall Street Journal today supposes that Northrop decided to buy instead of lease because of coming changes in accounting rules that will make companies record leases as liabilities (instead of an expense) on their balance sheet. 

And in New York, WSJ reporter Anton Troianovski reports that Atlanta-based Ackerman & Co. lost $2 million in its sale of 9000 Central Park (at left) to Cox Enterprises. Ackerman bought the Central Perimeter tower in 2007 for $33 million and sold it this year for $31 million. In a refreshingly honest assessment of the investment, Ackerman President Kris Miller tells Troianovski, "It turns out we were wrong" about the potential upside of the 205,000-square-foot building that would be about half-vacant when the firm bought it.

And finally, back home, Atlanta's commercial real estate industry is abuzz with word of a high-profile firm closing in on a deal to acquire Campanile. That's the former BellSouth headquarters at 14th & Peachtree in Midtown being marketed by Eastdil Secured. And, the buyer won't be Brookdale Group as Skyline Views speculated last week.

U.S. Office Market Headed for Record Vacancy?

By Tony Wilbert, Wilbert News Strategies

AUSTIN, Texas (June 4, 2010) - The. U.S. office market will bottom out by year end, but not before the national vacancy rate eclipses a 25-year record. That's what Bob Bach, senior economist at Grubb & Ellis told the National Association of Real Estate Editors journalism conference today.

"The leasing markets continue to deteriorate, there's no question about it," Bach told NAREE members gathered at the Hilton Austin. "They'll bottom out by year end then gradually recover for three to four years before reaching equilibrium."

Bach said it's ironic office vacancy rates are increasing even as demand among investors for core class A office assets ramps up. 

The U.S. office market's vacancy rate jumped to 17.9 percent in the first quarter, a 50 basis point quarter-to-quarter increase. This steep increase surprised and chagrined Bach, who said the highest vacancy rate he's seen in 25 years of tracking it is 18 percent.

"We'll most certainly sail past that," Bach said. "It means there's probably still a lot of shadow space out there."

The economist's comments prompted moderater and NAREE Austin conference Chairman Ralph Bivins to make sure he heard Bach right that we're on the verge of breaking a record. Yes, it's true, Bach said.

And the country's worst office markets? Phoenix and Detroit, according to Bach.