Real Estate Notes
Rental rate for office space in Atlanta hits a new high
Atlanta Business Chronicle - by Tony Wilbert
Atlanta's overall rental rate for all classes of office space hit an all-time high of $19.03 per square foot during the third quarter, according to Richard Bowers & Co.'s quarterly office report. The third-quarter rate represents a 3.5 percent increase when compared with the same period in 1995, when space rented for an average of $18.39 per square foot. The average rate at the end of 1995 was $18.37.
According to the Bowers report, office space in the Buckhead/Lenox submarket leased for the highest average rate, at $22.10 a square foot. Space in the Interstate 20 West/Greenbriar area went for the bargain rate of $10.35 per square foot.
President Richard Bowers said the tight office market is forcing up rental rates, which his company projected would rise $1 per square foot this year. Bowers & Co. is reporting a vacancy rate of 7.89 percent for the Atlanta area's 92.4 million square feet of office space, and the rate should decrease, Bowers said. "The market's going to continue to tighten," and rental rates will continue to climb, Bowers said.
"The urban corridor has got a little more space, especially in downtown and midtown," Bowers said. "Everything else is pretty well leased."
Bowers said some safety valves are kicking in to help offset rising rates. He said a lot of leasing alternatives exist in the far-northern suburbs where rental rates are more economically priced when compared with space in trophy buildings that averages $23 to $25 a square foot. Bowers said he expects to see some companies migrate to the farther suburbs.
On the transaction side, Bowers said business is good but not as good as last year. He expects his company to perform 550 deals this year, "a little down" from last year, he said.
Looking ahead, Bowers is optimistic. "The Atlanta real estate market, overall, is pretty hot in all sectors," he said. "It's a good market for owners, for a change."
EDWARDS REALTY JOINS RE/MAX. Barbara Edwards Realty in Conyers will join the Re/Max real estate network Nov. 15 and will conduct business as Re/Max East. Re/Max East will be at 1400 Dogwood Drive in Conyers, the location of Barbara Edwards, and will serve the eastern portion of the Atlanta metropolitan area. Barbara Edwards will be the broker-owner for the Re/Max East location, and her 46 real estate professionals will move to the Re/Max team.
"The professional reputation associated with the Re/Max name was a primary reason for my conversion to the Re/Max affiliation for my real estate company," Edwards said. She also said Re/Max can provide regional and national support with continuing education and training classes and local and national conventions.
Edwards started Barbara Edwards Realty in 1987. She has more than 25 years' experience in real estate sales, marketing and brokerage management. Edwards also has worked for Head Realty and Allied Properties in the Conyers-Rockdale County market.
Saundra Gotfredson, regional director and vice president for Re/Max of Georgia, said Re/Max East will build on the traditions Edwards has established at her realty company. "We're confident that Barbara's affiliation with the Re/Max organization will help maintain her position as a market leader and assist in growing her real estate firm to even greater success in the future," Gotfredson said.
FOREIGN INVESTORS LOVE CITY. Atlanta has been rated the best U.S. city for foreign real estate investments for the third year in a row, according to a survey conducted by The Association of Foreign Investors in U.S. Real Estate (AFIRE). James A. Fetgatter, AFIRE's chief executive, said foreign investors love Atlanta because of its high job growth, its vigorous broad-based economy and its location as the international business center of the Southeast.
Washington, D.C., rated as the second most popular U.S. city among foreign investors, followed by Boston, Los Angeles and Chicago. AFIRE said foreign investors have more than $29 billion in U.S. real estate.
Although foreign investors had ranked retail opportunities as the most-desirable product type for the past four years, the category dropped to fourth place this year and office space topped the list. Foreign investors also like investing in American property more than European and Asian options, the survey found. Eighty-one percent of respondents said U.S. real estate was a better investment than European property; 77 percent favored U.S. investments over those in Southeast Asia.
PANTLIN JOINS FAISON. Larry Pantlin, a former senior vice president and portfolio manager for Merrill Lynch, Hubbard in New York, has joined Faison as the managing director of retail development for the Atlanta region. Morris Ewing, the Charlotte, N.C.-based Faison's Southeast regional partner, said Pantlin's 15 years of experience and representation of retail portfolios worth nearly $500 million will benefit Faison. "His strong relationships with national and regional anchor retailers and [his] diverse background in development and redevelopment make Larry a tremendous asset to our team," Ewing said.
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