AIG Downsizing, Heading To Buckhead From Central Perimeter
A multinational insurance and financial giant is jumping from a prominent Atlanta suburb into Buckhead.
American International Group, better known as AIG, has inked a 42K SF lease at One Alliance Center, a 20-story, more-than-550K SF tower in Buckhead. The move was confirmed by Highwoods Properties Director of Leasing Mike Wells and comes just days after a Cousins Properties executive told stock analysts that the firm was expected to vacate its building in Central Perimeter.
“While nothing has been formally announced by our customer, we do believe that AIG, [which has] 105K SF at NorthPark [Town Center, will] likely relocate to Buckhead in February of 2019,” Cousins Properties President Colin Connolly said.
Emails to AIG were not returned as of press time.
It is unclear if the lease puts an end to the question of what AIG intended to do in Atlanta. As Bisnow reported last year, the company was eyeing an office consolidation of at least 600K SF in either Dallas or Atlanta.
AIG's principal operations in Atlanta are at Cousins' NorthPark Town Center office complex in Sandy Springs. While the firm will be emptying more than 100K SF there, Connolly said an undisclosed tenant, described as “a strong, growing company,” is in talks to backfill 75K SF of the vacancy.
For AIG, the firm shifted its focus to Buckhead in order to capitalize on a location for better recruitment and employee retention, Wells said. AIG is set to occupy the 10th and 11th floors at One Alliance Center.
Word of AIG's move comes on the heels of a big leasing win for Cousins some 14 miles to the north of Sandy Springs. Earlier this month, Cousins announced that it landed AXIS Capital Holdings Ltd. to a 76K SF lease for 15 years at the planned 10000 Avalon office project, the sister building to 8000 that was a home run for Cousins and its joint-venture partner, Hines.
AXIS plans to occupy three floors of the 251K SF, Class-A building in the Avalon mixed-use project in Alpharetta, an affluent northern suburb of Metro Atlanta. Hines and Cousins are expected to break ground this year on the $97M project, which will deliver by 2020.
Cousins executives painted a picture of an Atlanta market that is seeing robust demand during its Q2 earnings call with analysts. Cousins CEO Larry Gellerstedt said all its markets are benefiting from job growth that is outpacing the U.S. average as well as constrained new office development. Despite recent slowdowns in office absorption and job growth in Atlanta, Gellerstedt remained bullish on the metro region's overall health.
Atlanta's office landlords saw net absorption fall by 145K SF during the second quarter despite a strong start to the year, according to a recent Newmark Knight Frank report. That led to a slight increase in the vacancy rate to 17.1%. Both those signs could be indicating that Atlanta's “expansion mode has ended,” NKF officials said in the report.
But Gellerstedt said these declines were “not reflective of the activity our teams are seeing on the ground. We believe this decline is temporary and market activity remains elevated with the significant potential for additional corporate relocations on the horizon.”