In the largest deal in Buckhead this year, Marsh & McLennan Cos. has signed an 11-year lease to move into Two Alliance Center, one of four new office towers opening in Buckhead.
Marsh, the building’s first tenant, will occupy about 125,000 square feet of the 500,000-square-foot, 20-story tower. The value of Marsh’s lease is estimated at between $42 million and $46 million, excluding concessions and escalation.
Two Alliance is owned by Tishman Speyer, which confirmed the transaction. Marsh, an insurance and services company, is moving from Prominence in Buckhead, where it occupies nearly half the building’s 424,000 square feet and has about 350 employees.
Mike Shelly, senior vice president with Atlanta-based Carter Real Estate, said the deal is significant because there was very little pre-leasing of the four office towers.
Cousins Properties has a 50,000-square-foot deal at its Terminus 200, but there was little activity at Phipps Tower, 3630 Peachtree or Two Alliance Center.
Observers have said the area is overbuilt, and the Buckhead Coalition ran full-page color ads in the Wall Street Journal promoting Buckhead’s empty condominiums and vacant office space as being historically affordable.
“Two Alliance is to be congratulated for making the deal,” said Shelly. “Marsh is a tenant with great credit. But when you see a tenant moving from one building to another, you get a loser in that submarket.
“Prominence was the recipient of a loss. Buckhead kept a tenant which didn’t go into another submarket. But at the end of the day, it was not a net absorption gain because they (Marsh) left more space than they will occupy in the new building.”
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