WHAT'S IN STORE FOR CENTRAL PERIMETER

Central Perimeter  activity is up and is coming on strong as an office submarket. But how much of that activity will translate into deals remains to be seen. That's what more than 350 real estate pros heard yesterday at Bisnow's Future of the 400 Corridor event at The Retreat at Perimeter Summit.
 
Seven Oaks Co's  Bob Voyles (on right with Wakefield Beasley's Lamar Wakefield) says there are quite a few mystery companies in CP ?tire kicking? to possibly lead build-to-suit office  buildings, but ?we don't know if they're real.? (Guys, don't you know passing notes at events is not allowed?)
 
Bob joined our Central Perimeter panel, which included Hines Interests? John Heagy, Ackerman & Co's  Pat Chesser, PM Realty's Bill Weghorst, and UPS director of real estate Chuck Altimari. Bill notes that office absorption in CP turned a corner this year, and so far there's been 350k SF of positive absorption in the area (not even counting the big State Farm deal). ?[Absorption] could go substantially higher than that,? Bill says, predicting that by 2014, office vacancies in CP—now at 22%—could fall below 15%. (But can he predict the next time the Falcons will win the Super Bowl?)
 
Pat also notes that while the market is tightening, available space is ?choppy? with fewer big blocks available. Does that mean we'll see a new someone build a new office tower in the Atlanta submarket that's the same size as all of Charlotte's office market? With construction costs translating to at least $30/SF rents, probably not anytime soon without significant pre-leasing (say 50% to 75% with a strong credit tenant), he says.
A few of the panelists contemplated life after the loss of the TSPLOST, especially when it comes to further traffic fixes. (We're writing a one-act play about a man who contemplates his life as he can't get to work because of the traffic.) ?We didn't just lose, we got our rear ends kicked into the next county,? Bob quipped during the event. But he and a few other panelists see real possibility that an overhaul to the GA 400 and I-285 interchange will happen without TSPLOST. UPS?s Chuck concurred, saying that PCID is now finding a way  to help fund  the project. Stay tuned for more coverage from our event next week.

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