Investment Bank Balloons by 140 KSF at Atlanta Financial Center
- Aug 08, 2011
August 8, 2011
By Barbra Murray, Contributing Editor
Atlanta’s struggling Buckhead office market gets some good news as SunTrust Robinson Humphrey Inc., a longtime tenant at Atlanta Financial Center, expands its 92,300-square-foot home at the premier 904,500-square-foot office-and-retail complex by 150 percent. With the amendment of its lease with property owner Hines, the corporate and investment banking firm has added 137,600 square feet of elbowroom for a total occupancy of 229,900 square feet, and taken the title of the largest office tenant in the Buckhead submarket.
Located along Peachtree Rd. in Atlanta’s financial district, AFC has been part of Hines’ portfolio since 2001, when the real estate company partnered with General Motors Asset Management to purchase it from Overseas Partners (AFC) Inc. The property consists of two 13-story buildings and a 19-story tower, developed between 1982 and 1989. SunTrust Robinson Humphrey has been on AFC’s tenant roster since the very beginning, as the firm, in its previous incarnation as Robinson Humphrey, co-developed the complex with the Metropolitan Life Insurance Company of New York.
Commercial real estate services firm Jones Lang LaSalle represented SunTrust Robinson Humphrey in its new lease transaction with Hines, which extends the investment banking concern’s stay by 11 years. The deal pushes AFC’s occupancy level up to 85 percent, well above average in Buckhead, where the vacancy rate for Class A properties is 21.8 percent, as per a second quarter report by JLL. The average vacancy rate for the entire Atlanta Class A office market is also 21.8 percent. SunTrust Robinson Humphrey’s sizeable lease says more about AFC than the Atlanta market, according to Hines.
“What’s attractive about AFC is it is really at the center of the financial market, it’s right on the MARTA line and it has the richest amenities package,” John Heagy, a senior vice president with Hines, told Commercial Property Executive. Heagy and colleagues Tori Kerr, Brian Eichenseer and Scott Martin represented Hines in the lease transaction. That package includes trendy restaurant and retail offerings, as well as a 19,000 square-foot fitness facility.
“Nothing has changed for Atlanta in terms of anything we can point to as a driver,” he said. “There’s been pent-up demand. We had 1 million square feet of net absorption over the last six months, and that’s a good metric for us, but it’s not being driven by job growth. It’s a function of companies that have held off, and held off on their needs.”
Given the high vacancy levels, landlords have to vie vigorously to land those few businesses that are planning expansions or relocations. Another recent lease deal at AFC, Morris Manning & Martin L.L.P.’s 15-year extension of its lease and expansion to nearly 118,300 square feet, is a case in point. “We competed vigorously for the law firm deal,” Heagy said. “That’s a wonderful piece of business. The best deal you can make is with an existing tenant taking 10 to 20 percent more space for the long term.”