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Atlanta Business Chronicle
January 29, 2007

Condo, office projects lead slew of new development

by Martin Sinderman
Contributing writer
Joann Vitelli

Major new office towers are nearing completion, a wave of pricey condominiums are getting ready to hit the market and upper-end retailers are busy checking out locations for future stores.

In short -- it's just another day in Buckhead.

In the office arena, the demand dynamic of the Buckhead market is changing, according to David Tennery, principal of Regent Partners LLC, developer of 3344 Peachtree, the 50-story mixed-use tower incorporating about 470,000 square feet of office space, related retail stores and restaurants and topped by 93 condominium units priced in the $1 million-plus range.

"We're seeing much larger tenants in Buckhead now," Tennery said.

Recent deals at the more than 30 percent-leased 3344 Peachtree include a 45,000-square-foot lease with the real estate services provider Jones Lang LaSalle Inc., which will open its Atlanta office and the headquarters of its national retail unit here when the building opens in early 2008.

Real estate companies are but one of the business types that are drawn to Buckhead locations, said Sam Holmes, vice chairman of CB Richard Ellis Inc., which will be moving its Atlanta operation out of Tower Place into new digs at Cousins Properties Inc.'s 27-story, 650,000-square-foot Terminus 100 office building, part of the mixed-use office/retail/residential/hotel Terminus project.

Slated to open this April, more than 80 percent of Terminus 100 is committed to tenants including Bain & Co., Citgroup, Cumulus Media Inc., Synovus and Atlantic Capital Bank.

Cousins now plans a third quarter construction start on Terminus 200, a 22-story, 520,000-square-foot office tower, according to Larry Gellerstedt, president of the Atlanta-based REIT's office/multifamily division.

Cousins has also begun the presales phase of 10 Terminus Place, marketing the first 142 condominiums, starting in the $400,000 to $600,00 range, of what will ultimately be more than 750 residential units.

These condominiums are likely to have plenty of competition. According to preliminary figures from the Haddow & Co. real estate consulting firm, there were 34 active (e.g., completed and/or under construction with unsold units) condo projects under way in Buckhead as of year-end 2006, with another 2,000 units on the drawing boards.

Forty-eight percent, or 2,027 of the 4,222 units, in these active projects were sold or under contract in this market, where condo absorption typically hits about 850 units annually.

The mix of pricey residential in close proximity to high-density commercial development is going to be taken to the next level in the next couple of years.

"The thing we really have to watch now is the volume of really expensive units that will deliver this year and next," said Haddow & Co. head David Haddow.

Anchored by the 1.6 million-square-foot Lenox Square and 825,000-square-foot Phipps Plaza malls, Buckhead has long been a destination for shoppers from throughout the Southeast.