Richard Bowers, chairman of Richard Bowers & Co., wants to keep the big utility firm with 400 employees at its 22-story, 325,000-sf building at 270 Peachtree St. But Hal Barry, chairman of Barry Real Estate Cos., is trying to interest the blue ribbon-tenant into taking about 170,000 sf at his planned 10-story Centennial Hill building overlooking Centennial Olympic Park.
Without Southern as the anchor tenant, the Centennial Hill project will probably go to the back burner, brokers in a position to know tell GlobeSt.com. Southern's 162,500-sf lease at Bowers' building expires in December 2005.
Depending on its length and size, the leasing deal could be valued between $65 million and $80 million, Downtown brokers tell GlobeSt.com. Downtown rents have been sliding since the first of the year when vacancies hovered at the 20% mark, according to the local office of Marcus & Millichap.
"That declining rent picture puts Southern in an extremely favorable bargaining position," says a Downtown office broker who represents several properties. He says, for example, if Southern is paying $20 per sf now at the Bowers building on an estimated 20-year lease, that would translate to an aggregate rent of $65 million.
However, if Southern decided to increase its space to 200,000 sf to accommodate future growth at either the Bowers or the Barry building, the estimated aggregate rent could reach $80 million over 20 years, figured on a $20-per-sf base rent.
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