Alston & Bird, one of Atlanta’s largest law firms, has hired a developer to explore constructing a Midtown building with the firm as the anchor tenant.
Senior vice president Steve Baile of Daniel Corp. confirmed Thursday his company has been chosen to investigate the project.
“It doesn’t mean they are moving,” he said. “They selected us to explore the possibility.”
Last year, the law firm said it was in the market for 300,000 to 350,000 square feet of space, down from the 420,000 square feet it has now. Other options include moving into another building or renewing leases at the current locations in One Atlantic Center and Atlantic Center Plaza. The leases expire in October 2013.
Alston & Bird is such a large firm it would have difficulty relocating to existing facilities, Baile said. Daniel Corp. has other Midtown properties, including the new 12th & Midtown building, but that property likely will be occupied when Alston & Bird’s leases expire in 2013.
Obtaining financing for a new property in the current economic climate will be difficult, because of challenges in the capital markets and struggles of high-profile office buildings, Baile said.
Rising vacancies and falling rental rates have made banks and other lenders reluctant to loan money for new commercial real estate developments or restructure loans for existing ones. Foreclosures are growing among high-profile properties.
Office-space supply continues to surpass demand, according to a report from Jones Lang LaSalle, a commercial real estate services firm. With new office buildings opening this year in Buckhead and Midtown, the vacancy rate is approaching 25 percent.
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