By David Pendered
Cousins Properties reports that it’s leased 95 percent of the Terminus project in Buckhead, underscoring the reported rebound in metro Atlanta’s office sector.
Rebound is a relative term. Rajeev Dhawan, of Georgia State University, and other economists point to the dearth of commercial construction and bank financing to contend the market has not recovered its pre-recession level.
But there’s no denying that Atlanta was mentioned twice in a generally positive report on commercial real estate issued Tuesday by CBRE Group, Inc. Apartment prices at Terminus are part of the reason Atlanta made the list.
Published apartment prices at Crescent Terminus range up to $3,865 for a two bath, two bedroom unit with 1,501 square feet on the fourth floor, according to the website. The brand identity states: “High standards. No apologies.”
Based on Cousins’ report, only about 61,000 square feet of office space remains available at Terminus, located south of Lenox Square near the corner of Peachtree and Piedmont roads. The two towers comprise 1.2 million square feet in towers of 27 floors and 25 floors, according to the website.
“The Buckhead real estate market continues to gain momentum with corporate relocations and new multi-family and retail offerings, and we’re excited to be a part of it,” Thad Ellis, Cousins’ senior vice president and Atlanta market leader, said in a statement.
Reports from a number of market observers align along the notion that metro Atlanta’s office market is improving:
- Richard Bowers & Co.’s report for the first quarter notes: “Lack of new deliveries bodes well for the continuation of rising rental rates, which have increased each of the past seven quarters, and rising occupancy.”
- A comparison of Bowers’ reports, analyzing the first quarters of 2010 and 2014, shows the region’s total occupancy rate has improved by almost 2.6 percent, to 82.7 percent, while average rental rates have increased by 17 cents per square foot;
- Brennen Goddard’s report on the first quarter showed rental rates showed a, “$0.13 [per square foot] increase in rental rates from the end of the previous quarter, when rents were $19.60 PSF.” The rate represents an increase during the quarter of 0.0066 percent.
CBRE Group, Inc. reported for the first quarter of a slight decline in vacancy, a slight increase in rental rates, and that this was the, “16th straight quarter without a new office building delivery.”
- The CBRE report issued Tuesday, on the second quarter, listed Atlanta at the forefront in two sectors, apartment and warehouse, and echoed part of the Bowers’ report: “The office recovery continues to advance with the lack of development in most markets as well as strength in private-sector payrolls continuing to support occupancy growth.”
These reports constitute the sort of information that Dhawan characterized as “noise” that makes it difficult to interpret what’s really happening in the economy. During a speech at GSU in May, Dhawan noted that institutional investors would be funding projects if the commercial real estate market had truly rebounded.
“Where is the financing?” Dhawan said. “There is no word of financing; these are projects. These towers [under construction] are done by private equity, not by banks.”
Cousins has announced that Terminus is now leased at the highest level since Terminus 200 was completed in 2008. Cousins declined through a spokeswoman to release pricing information for Terminus, such as rental rates, concessions and other terms.
Cousins did release recent lease signings that include:
- 11,778 square feet: Prince Global Sports, as it relocates headquarters from New Jersey;
- 7,861 square feet: Fidelity Investments;
- Unspecified expansion and renewal: Lockton Companies;
- Unspecified expansion and renewal: Cousins’ Fusion ATL fitness center, which now provides programs and services from Peachtree Orthopedics;
- Industry Tavern: New full-service restaurant recently opened.
“We are thrilled about the amount of activity going on at Terminus,” Ellis said.