February 19, 2013
IN THE NEWS – Prediction: Big Leases for Central Perimeter
Real Estate Bisnow
We sat down with one of the leaders of the Central Perimeter’s office properties—Ackerman & Co’s Kris Miller. He predicts the Atlanta office market will absorb anywhere from 1.5M to 3M SF this year. And most importantly, the bulk of that could be in Central Perimeter. There’s been activity especially within the potential build-to-suit sector, where Ackerman has a key site at the corner of Abernathy Parkway and GA 400: “We’ve issued half a dozen proposals for build-to-suits in the past 12 months on the Abernathy site,” Kris tells us.
Even with the quickly shrinking availability of prime office space in Central Perimeter, getting another tower started is not as easy as it sounds. Tenants aren’t jumping to pay $30/SF full service on a new construction when high-end existing office space in CP commands $22/SF on average, Kris says. “So far, the only organization or significant user of size in metro Atlanta who has been able to justify that cost is Cox (above).” Of course, most of that cost is because a frog prince is rumored to live beneath those lily pads.
Last year, Ackerman made a number of value-add buys. This year, Kris tells us to expect more of the same, with buys potentially in retail, office and MOB. Ackerman also is harvesting part of its portfolio: it’s in the market with three flex office buildings at Phoenix Office Park, including 1669 Phoenix Parkway, fully leased to such tenants as PNC Bank and Credit Union Loan Source (above).
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