Signs of economic recovery are on the horizon as the rate of decline in home prices slows, but it will be awhile before Atlanta's real estate market begins to recover, experts say.
"It feels like one year out on the residential side and two years out on the commercial side," said Julian Diaz, chairman of the real estate department at Georgia State University.
"The office market is in poor shape and is expected to get worse in the next six months," he said. "But there is more optimism now than there was two years ago. Up to this point, there was very little evidence that banks were interested in getting their troubled assets off the books. Now there is some evidence that banks are interested in making those moves."
Investment activity, however, remains dormant as buyers sit on the sidelines to see where prices fall, according to a second quarter 2009 Atlanta office highlights report released this week by Jones Lang LaSalle.
Metro Atlanta's first major commercial foreclosure, the Equitable Building in downtown Atlanta, was acquired by Capmark Bank in June for $29.5 million, or $47 per square foot, down from nearly $91 a square foot the previous owner paid for the property just two years earlier.
In terms of areas, leasing interest was greatest in Buckhead, with tenants searching for more than 1.3 million square feet, the report said.
Overall in metro Atlanta, tenants went shopping for more than 5.5 million square feet of office space, up from 4.7 million square feet reported just six months ago, the report said. But interest didn't translate into overall leasing activity, with less than 2 million square feet of leases signed in the last three months, a decline from first quarter 2009.
Still, there were several significant transactions in the second quarter of 2009, the report said, including:
Atlanta will gain another Fortune 500 company with NCR's decision to move its national headquarters from Dayton to Gwinnett County.
Cousins Properties announced that its newest development, Terminus 200, signed a lease for 50,000 square feet with Firethorn Holdings, the first tenant for any of the four office towers under construction in Buckhead.
In downtown Atlanta, SunTrust signed a new lease for 250,000 square feet at Peachtree Center after shopping for more than a year.
And several major tenants are still in the market, the report said.
In Buckhead:
Kaiser Permanente is looking for 200,000 square feet.
Oracle is looking for 100,000 square feet.
Turner Construction is looking for 40,000 square feet.
The law firm Fisher & Phillips is looking at Buckhead and Midtown for 50,000 square feet.
In Midtown:
PricewaterhouseCoopers is searching for 150,000 square feet.
Hall Booth Smith & Slover is looking for 75,000 square feet.
Accounting firm Grant Thornton is looking for 30,000 square feet.
WebMD is looking in Midtown and downtown for at least 30,000 square feet.
Downtown Atlanta:
Bank of America is looking for up to 200,000 square feet and may also consider Buckhead.
KPMG wants 150,000 square feet.
The Fulton County public defender's office wants up to 60,000 square feet.
Atlanta Spirit is seeking 50,000 square feet.
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