The obvious winner is Barry Real Estate Cos. which plans to construct a $50 million, 14-story, 260,000-sf building in fall 2005. The project will overlook Centennial Olympic Park and be about four blocks from the planned $200 million Georgia Aquarium scheduled to open in fall 2005 and the planned $100 million World of Coca-Cola museum. The two-acre tower site is at Spring and Alexander streets near the Civic Center MARTA station.
Southern, the Atlanta parent of Georgia Power, picked Barry over Richard Bowers & Co., owner of the 22-story, 325,000-sf 270 Peachtree St. Building where Southern has been the anchor tenant since 1995, occupying 162,500 sf. Southern's 10-year lease at the 43-year-old Bowers building, also called the Southern Company Center, expired in December.
For Bowers, Southern's relocation of 400 employees, sometime in 2006 or early 2007, could mean a potential revenue loss of about $3.25 million a year if the space isn't rented at that time, Downtown brokers tell GlobeSt.com. With class A office vacancies at 25%, the leasing effort at the Bowers building, as well as at other Downtown office structures, will be challenging, brokers say.
For Barry, snagging Southern will mean an estimated annual rent flow of about $2.6 million or a 12-year aggregate rent of $31.2 million, based on an effective rent of about $20 per sf, brokers in a position to know tell GlobeSt.com. Atlanta-based bullock Mannelly Partners Inc. reports the average quoted class A office rent at $21.22 per sf.
Downtown business supporters are also winners in Southern's decision to remain in the central business district, especially since the Midtown section has been regularly siphoning off tenants from Downtown, brokers tell GlobeSt.com.
"It's Downtown versus Midtown right now," a broker who is involved in finding a large block of space here for a potential out-of-state corporate tenant, tells GlobeSt.com.
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