Atlanta’s second-largest commercial real estate brokerage has reached a deal to keep its local home with the city’s largest office landlord.
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Colliers renewed 40K SF at Promenade Tower in Midtown, the 38-story, 775K SF skyscraper at 15th and Peachtree streets, Cousins Properties Executive Vice President Richard Hickson said during an earnings call last week. Hickson said the renewal at the tower helped to push up the firm's rental rates on its vintage office spaces.
“All of our markets with second-generation activity saw roll-ups in rent, and Atlanta was the largest contributor,” Hickson said Friday. “In particular, we had a significant roll-up in rents on the renewal of a major customer at Promenade Tower in Midtown.”
Hickson later identified Colliers as the tenant that renewed at Promenade.
The Colliers renewal is part of a wave of leasing activity that has lifted Cousins' Sun Belt portfolio.
Cousins CEO Colin Connolly said the firm’s amenity-rich trophy office properties — what he called “lifestyle buildings” — have been experiencing a bump in interest from tenants. While demand for the highest-caliber office properties is increasing, developers have stopped building new ones, which is helping to reduce competition among those assets.
“A market today like Atlanta or Tampa, which in the lifestyle segment are fairly tight, we’re having a good degree of success,” Connolly said. “We think the Sun Belt migration and the flight to quality are going to be really powerful. And Cousins is sitting right at the intersection of those trends.”
Cousins reported 1M SF of late-stage leasing activity in its portfolio in the second quarter, with Atlanta leading the way. Cousins signed 391K SF across 40 Q2 office leases, including 240K SF in new leases and expansions, Hickson said. That also helped push net rents to $37.64 per SF, the third-highest quarterly level in Cousins’ history, he said.
The company reported net income of $21.4M on revenues of $420.2M for the first half of 2024, down from a net income of $45.4M during the first half of 2023. Cousins has more than 19M SF of rentable office space in the Sun Belt, including markets like Austin, Charlotte and Tampa, Florida.
Cousins also managed to lease 33K SF of new deals at 3350 Peachtree, the 18-story, 413K SF office tower formerly known as Capital City Plaza that it recently redeveloped. Hickson said the tower is now 84% leased, but he didn't identify specific tenants.
“We're also seeing a resurgence in migration and companies that are looking to move from the West Coast or Midwest, even Northeast,” Connolly said. “And not all complete relocations, but certainly a lot of large hub activity.”
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