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.

 

Wall Street Journal Agrees: Parkway's 3344 Peachtree Purchase Could Be Milestone

ATLANTA (Dec. 28, 2010) - News of Parkway Properties pending purchase of 3344 Peachtree has made it to The Wall Street Journal.

Last week, Skyline Views said Parkway's stated purchase price of $167.3 million for the vertical mixed--use development's office and retail components would set a price-per-square-foot record in Buckhead. At more than $346 a foot, the deal would eclipse the sale of the Pinnacle, which Cousins Properties sold for $343 a square foot.

In this morning's Plots & Ploys column in the WSJ's Property Report, office market reporter Anton Troianovski writes, "the [3344 Peachtree] deal could prove to be a milestone for Buckhead, which saw a slew of high-end office developments built just as demand for space tumbled. Now, developers report that tenants are slowly creeping back, although it could still take a long time for the market to stabilize."

It's nice to see the national press reporting some good news out of tony Buckhead.

As Acquisitions Slow, Multifamily Companies to Focus on Development

By Tony Wilbert, WNS PR

ATLANTA (Sept. 29, 2010) - As multifamily acquisition opportunities begin to dry up, apartment development will return in select cities, a panel of top multifamily experts said today.

"The acquisition window was a lot shorter than we all thought," Post Properties CEO Dave Stockert said. "We think we have a window in the next couple years" on the development front.

At Amli Residential Partners, "My job changed from acquisition to development in about a week," CEO Greg Mutz said, half-joking. 

Stockert and Mutz joined Gables Residential President and CEO David Fitch and Wood Partners CFO and COO Joe Keough to discuss the multifamily market at a Bisnow Atlanta panel at the W Hotel in Midtown. Some 500 people packed hip hotel's Great Room to hear the panel, moderated by King & Spalding real estate partner Clayton Howell.

When Post does start developing again, don't look for the public REIT to jump at the chance to be part of additional mixed-use developments. Stockert said it's difficult to match up the residential and retail cycles to ensure the project works as well as planned.

"We're trying to look at some of our existing projects and make them a little more simple," he said. While not specifically mentioning Allen Plaza, Stockert's comments seemed to put in doubt its commitment to the struggling mixed-use project in downtown Atlanta.

Post Allen Plaza initially was scheduled to open in 2009. The project has not been started.

Though multifamily companies will shift their focus to new product, Stockert doesn't expect new development to ramp up too quickly, thanks to tighter debt markets. "I don't think it will be anything like 0-60 [mph] because I think the debt markets will hold things back."

And those companies such as Post that can access debt through lines of credit will be paying a higher price for it, the Post CEO said. "We're going to pay a lot bigger spread than we paid before."

Having a tougher time financing new product "will blessedly, at least for the next little bit, slow things down," Mutz added.

As for the overall industry, Mutz said demand for rentals is going up, and that's leading to higher rents. However, the lack of new job creation is a concern. "We could end up stalling a bit. Unless we sart getting job recovery, [the multifamily rebound] will stall at some point," he said.

 

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.