04/27/09 -
Has the Office Vacancy Rate Become Irrelevant?
Has the Office Vacancy Rate Become Irrelevant?
Latest CoStar State of the Market/Industry Outlook Finds Disconnect Between Job Loss Totals and Absorption in the Office Market
By Mark Heschmeyer
April 15, 2009
The U.S. office vacancy rate has not broken through the 13% barrier for 14 years since the end of the great oversupply build-up of the late 1980s and early 1990s. Even now, 15 months into the most severe recession since the 1930s, the U.S. office vacancy rate still hovers below a relatively modest 12.5%.
In its First Quarter 2009 Office Review delivered this week, CoStar Group asked the question: "What's wrong with this picture?"
"Never has a vacancy rate chart been more useless in commercial real estate than right now," Andrew Florance, President and CEO of CoStar Group, told an online audience of more than 800 CoStar clients who viewed the presentation this week. "When the market is moving this rapidly you have to switch gears and look at it from a different angle."
"When you consider the most recent job loss totals and then look for the implied negative absorption in the office market, it's completely missing right now," Florance added. "We've had massive job losses but so far only 20 million square feet of negative absorption."
"Based upon the job losses we've seen to date, we should be seeing something on the order of 450 million square feet of negative absorption compared to the negative 20 [million] we've actually experienced," Florance said. "So there's a complete disconnect right now between job losses and absorption."
Total Available Nearly Double Total Vacant
However, Florance noted that not every job lost will necessarily translate into negative net absorption, nor did he advocate forever writing off the value of the vacancy stat. He did, however, clearly pointed out its inefficiency in analyzing current commercial real estate markets when conditions are undergoing rapid changes and the usually narrow gap between the amount of space listed as vacant and the amount being marketed as available widens considerably.
Delving deep into an analysis of CoStar Group data and supplementing widely used current economic indicators, CoStar Group forecasted that the U.S. office vacancy could shoot up to 18.2% in 2010.
That number is a 300 basis point increase from CoStar Group's forecast issued at the end of 2008 just three months ago. Florance said the predicted increase correlates directly with the worsening labor situation and the predicted increases in the number of jobs that will be lost in the next two years.
Unlike in the mini-recession following the dot.com bust in 2001, negative net absorption now is not immediately detectable, Florance explained.
When the Internet bubble burst in 2001, the impact was immediate. Start-up companies with no operating history that had leased hundreds of thousands of square feet in anticipation of rapid growth went belly up immediately. The space was never occupied and went back on the market immediately, Florance said.
Job losses today are coming from long-established, Fortune 1000 companies. These types of companies, Florance said, are reluctant to give back the space or put it on the market. Hence, there is an abundantly large but hidden supply of available space.
At no other time in the past 25 years has there been so much unlisted, and therefore undetected, space available for lease. There are several reasons for this, Florance said.
- Tenants have been unwilling to take the hit on their balance sheet from accelerated depreciation and rent loss differential on their leased space.
- The established tenants are still hopeful about being able to rehire laid off staff.
- Major tenants such as those in the financial services industry are fighting bigger fires involving billions of dollars and not currently focusing on a few million dollars in underutilized space.
- Smaller and mid-sized tenants are worried that putting their unused space up for sublease could send an impression that they are not financially stable.
- Building owners are not recognizing failed tenants so as to avoid any negative impact on their balance sheet.
- Landlords are having trouble forcing out insolvent tenants. And
- Lenders are not forcing the issue of recognizing unoccupied space as long as owners are still collecting rents and making loan payments. That way they don't have to write down the value of their loan asset.
CoStar Group tracks both available and vacant space and the discrepancy between the two have been growing increasingly wider since 2006.
At the start of 2006, there was an approximately 300 basis point spread between the then vacancy rate of about 11.25% and the then availability rate of about 14.25%.
Today, that spread is about 1,100 basis points with the total availability of office space now approaching one-fourth of total supply.
Leasing Activity Plummets
Another factor is also working to depress the national office market. The office leasing market experienced a huge drop off in activity this past quarter.
Looking at the 15 largest office markets in the country, total leasing activity is off 46% from what it was in the same period last year. In the first quarter of last year, nearly 71.7 million square feet of deals were completed; that number dropped to 38.8 million in the first quarter of this year.
Only in the Atlanta metro area has leasing activity held up.
Total Leasing Activity
| By Market | 1Q 2008 | 1Q 2009 | % Decline | | New York City | 11,341,653 | 4,913,275 | 57% | | Washington, DC | 7,978,117 | 4,897,472 | 39% | | Chicago | 6,291,007 | 3,047,459 | 52% | | Los Angeles | 5,460,099 | 3,316,846 | 39% | | Boston | 5,102,162 | 2,452,647 | 52% | | Philadelphia | 3,457,500 | 1,602,625 | 54% | | Northern New Jersey | 3,368,045 | 2,305,122 | 32% | | Dallas/Fort Worth | 6,511,908 | 2,575,046 | 60% | | Atlanta | 3,975,517 | 3,972,812 | 0% | | Houston | 5,021,679 | 3,431,621 | 32% | | Westchester/So. CT/Long Island | 3,504,940 | 1,882,646 | 46% | | Detroit | 2,145,274 | 1,055,041 | 51% | | Denver | 3,491,316 | 1,781,824 | 49% | | Seattle/Puget Sound | 1,918,413 | 1,199,681 | 37% | | Minneapolis/St. Paul | 2,086,912 | 391,226 | 81% | | Total | 71,654,542 | 38,825,343 | 46% | |
As fewer deals are getting done, available space is staying on the market longer and longer. According to CoStar Group numbers, the average number of days from when a space goes on the market to when a lease is signed has increased from about 270 days at the start of 2006 to 415 days last quarter.
Office Sales Prices Collapse
The last item of really bad news coming out of the CoStar First Quarter 2009 Office Review was that the price of office buildings sold in the first quarter plummeted dramatically.
Class A office prices dropped 21% in the first quarter compared to prices recorded in the previous quarter. Prices peaked in the first quarter of 2008 and are down 51% since then to less than $200/square foot.
Class B office prices dropped 40% in the first quarter compared to prices recorded in the previous quarter. Prices peaked in the third quarter of 2008 and are down 55% since then to about $130/square foot.
Class C office prices dropped 24% in the first quarter compared to prices recorded in the previous quarter. Prices peaked in the third quarter of 2008 and are approaching $116/square foot.
Sales volume is also way down from their unsustainable peak of nearly $18 billion per quarter in early 2007 to a little less than their 30-year historical average of around $2 billion in deals per quarter this past quarter.
Jonathan A. Sarnat
Empire South Commercial Real Estate, LLC
1845 Defoor Avenue NW, Atlanta, GA 30318
Phone: 404-213-3990 Fax: 404-581-5884
jon@empiresouth.com empiresouth.com
03/24/09 -
Stocks surge on bank plan, rise in home sales
Stocks surge on bank plan, rise in home sales
NEW YORK (AP) -- Wall Street got the news it wanted on the economy's biggest problems -- banks and housing -- and celebrated by hurtling the Dow Jones industrials up nearly 500 points.
Investors added rocket fuel Monday to a two-week-old advance, cheering the government's plan to help banks remove bad assets from their books and also welcoming a report showing a surprising increase in home sales. Major stock indicators surged about 7 percent, including the Dow, which had its biggest percentage gain since October.
Analysts who have seen the market's recent false starts are still hesitant to say Wall Street is indeed recovering from the collapse that began last fall. But the day's banking and housing news bolstered the growing belief that the economy is starting to heal, and that is what had investors buying.
"It's just hard to argue that there isn't an improvement in economic activity on the horizon," said Jim Dunigan, executive vice president at PNC Wealth Management.
The market began turning around two weeks ago on news that Citigroup Inc. was operating at a profit in January and February. A spate of more upbeat economic reports helped the market build on its gains, although the rally stalled last Thursday and Friday.
Analysts said they saw more fundamental strength in Monday's buying than they saw at the start of the rally. Dave Rovelli, managing director of trading at brokerage Canaccord Adams, said there appeared to be less short covering, which occurs when traders are forced to buy to cover misplaced bets that stocks would fall. Short covering contributed to the market's surge after the Citigroup news.
"There is definitely new buying," he said. Rovelli also said the approaching end of the quarter can make money managers eager to buy into a market to make the statements they send to clients look stronger.
Stocks shot higher at the opening and kept going. The Treasury Department said its bad asset cleanup program would tap money from the government's $700 billion financial rescue fund and involve help from the Federal Reserve, the Federal Deposit Insurance Corp. and the participation of private investors.
The market had been waiting for weeks to hear details of the government's plan for helping banks get rid of bad assets. Treasury Secretary Timothy Geithner announced an outline of the program last month but provided few details then about how it would work, leading to a stock plunge that sliced 380 points from the Dow.
But while analysts were pleased with the market's performance Monday, they were also still cautious; Wall Street more than gave back its big yearend rally and continued falling during January and February.
Subodh Kumar, an independent investment strategist in Toronto, said the Fed's announcement that it would buy government debt and the details on plans to help banks are giving traders hope for recovery.
"The market is shedding some of its excess pessimism. That doesn't mean the market goes straight up," he said.
The National Association of Realtors' existing home sales report was overwhelmingly positive for investors although it showed a decline in home prices in February. Investors are embracing any sign that a glut in homes for sale may be easing. Monday's data followed a dose of good housing news last week as housing starts for February came in much better than expected.
The Dow rose 497.48, or 6.8 percent, to 7,775.86, its highest finish since Feb. 13. It was the biggest point gain for the blue chips since Nov. 13 when they rose 552 points and the biggest percentage gain since Oct. 28, when they rose 10.9 percent. It was the fifth-biggest point gain in the Dow's history.
Broader stock indicators also surged. The Standard & Poor's 500 index rose 54.38, or 7.1 percent, to 822.92, crossing the psychological milepost of 800. The Nasdaq composite index rose 98.50, or 6.8 percent, to 1,555.77.
The Russell 2000 index of smaller companies rose 33.61, or 8.4 percent, to 433.72.
The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, jumped 7 percent. That's a paper gain of about $700 billion.
More than 10 stocks rose for every one that fell on the New York Stock Exchange, where consolidated volume came to nearly 7.5 billion shares, about even with Friday's pace.
The Dow is now up 1,228 points, or 18.8 percent, from March 9, when it finished at its lowest point in nearly 12 years, although it's still down 1,000 points in 2009. The S&P 500 is up 21.6 percent in that time.
The Dow and the S&P 500 index remain more than 45 percent below their peak in October 2007.
Collapsing home prices and the damage they have caused banks are at the center of the economy's current problems and are a major focus for the stock market. Banks have sharply curbed lending after becoming weighed down with loans that have gone bad, especially mortgages.
Investors had been largely disappointed in the government's efforts to date to restore the banks to health, but finally seemed encouraged by the long-awaited announcement of details for the bad loan cleanup plan.
"The actions that we're getting from a policy standpoint are very helpful in removing the sand from the gears," said Alan Gayle, senior investment strategist at RidgeWorth Investments. "That is going to be good for the financials."
Shares of the country's largest banks, which have been pounded in recent weeks over concerns about their ability to weather the crisis, soared on Monday. Citigroup Inc. jumped 19.5 percent, and Bank of America Corp. added 26 percent.
Even banks seen as being on better footing posted big advances. JPMorgan Chase & Co. rose 25 percent, while Wells Fargo & Co. rose 24 percent.
Investors welcomed the rise in home sales Monday although the biggest jump in nearly six years came as first-time buyers pounced on deep discounts of foreclosures and other distressed properties. Analysts say it could be a nascent sign of recovery. But only weeks ago traders might have dwelled on the 15.5 percent drop in median prices.
"It's like putting on a different pair of glasses and you think you saw something different today than you saw yesterday," Dunigan said.
Bond prices were mixed as stocks rose. The moves were moderate as investors remained mindful of the Federal Reserve's plan announced last week to buy government debt to help drive down borrowing costs by reducing interest rates.
The yield on the benchmark 10-year Treasury note, which moves opposite its price, rose to 2.68 percent from 2.64 percent late Friday. The yield on the three-month T-bill rose to 0.21 percent from 0.19 percent.
Oil rose $1.73 to settle at $53.80 a barrel and the dollar was mixed against other major currencies. Gold fell. The price of gold has risen in recent weeks as investors have worried about the faltering economy and a weaker dollar.
Overseas, Britain's FTSE 100 rose 2.9 percent. Germany's DAX index rose 2.7 percent, and France's CAC-40 rose 2.8 percent. Japan's Nikkei stock average rose 3.4 percent.
11/25/08 -
London, Tokyo, New York Office Rents Fall First Time Since 2002
London, Tokyo, New York Office Rents Fall First Time Since 2002
By Daniel Taub
Nov. 25 (Bloomberg) -- Office rents in London’s West End, midtown Manhattan and Tokyo fell in the third quarter for the first time in almost seven years as the global financial crisis cut demand, CB Richard Ellis Group Inc. said.
The total office occupancy cost in the West End was 139.50 pounds ($248.66) per square foot a year in the 12 months ended Sept. 30, down 5.1 percent from a year earlier, Los Angeles-based CB Richard Ellis said today in its semiannual global-office survey. Rents in London, midtown Manhattan and central Tokyo last fell from a year earlier in January 2002, during the last recession.
Rents fell in the three cities as the economic crisis dampened demand for space among banks and investment companies. Rents worldwide are likely to fall for the rest of this year and the first quarter of 2009 as the financial crisis spreads throughout the world’s economies, Raymond Torto, CB Richard Ellis’s global chief economist, said in an interview.
“London’s West End or places that are showing declines right now are the leading edge of what’s going to happen the next six months, obviously,” Torto said.
Even as financial centers showed declines, office costs in the 172 markets CB Richard Ellis tracks increased 8 percent on average in the past year, almost double the global inflation rate. Three of the five fastest-growing cities were in the Middle East, with costs up the most in Abu Dhabi, with a 95 percent rise.
“You’ve got a lot of places that are not feeling the effects of the financial crisis,” Torto said. “Not every place is a financial center.”
Tokyo, Manhattan
Total office occupancy costs dropped 5.3 percent to $184.26 per square foot annually in central Tokyo, and 9.9 percent to $151.69 in outlying wards of Tokyo, said CB Richard Ellis, the world’s largest commercial real estate brokerage.
In midtown Manhattan, they dropped 2.7 percent to $98.08. Total office occupancy costs are rents plus other service charges by landlords.
Even with the rent decline, London’s West End remained the world’s most expensive office market in the third quarter, CB Richard Ellis said. It was followed by Moscow, where office costs rose 30 percent to $234.73 a square foot, and Hong Kong’s central business district, where they rose 29 percent to $231.59.
Tokyo Gains
Central Tokyo was the fourth most expensive office market in the third quarter, followed by Mumbai’s central business district, with annual occupancy costs of $170.85 a square foot; Dubai, at $156.53; Tokyo’s outer wards; London; Singapore, at $135.13; Hong Kong’s prime districts, at $132.97; and Abu Dhabi.
Among the 50 office markets with the fastest-growing office costs, only nine were in North America in the third quarter, down from 15 when CB Richard Ellis last reported rankings six months ago. “The slowing economic situation in North America has started to dampen occupancy cost growth rates,” CB Richard Ellis said in today’s report.
The Asia Pacific region had the fastest growth in office costs in the third quarter, with an average increase of 26 percent, CB Richard Ellis said. Ho Chi Minh City, Vietnam, had the fastest growth in rents worldwide after Abu Dhabi, with total occupancy costs rising 51 percent to $92.83 in the third quarter, the brokerage said.
“Places like Abu Dhabi or Ho Chi Minh City, there is a theme to why they’re at the top of the list,” Torto said. “The theme is that they’re new places for financial markets. They don’t have a lot of quality space, and the little bit that there is, is wildly bid up.”
11/05/08 -
Post Properties Q3 profit up 177%
Post Properties Q3 profit up 177%
The Atlanta-based multifamily real estate investment trust (NYSE: PPS) had net income of $25.2 million and earnings of 57 cents a share, compared with net income of $9.1 million and earnings of 21 cents a share in the third quarter of 2007. Revenue in the third quarter increased 2.1 percent to $67.8 million.
The results for the third quarter of 2008 included $2.8 million in casualty losses from estimates of damage sustained at Houston properties during Hurricane Ike and, $2.2 million in severance charges from job cuts and $23.5 million in gains from the sales of apartment communities.
Funds from operations (FFO) for the third quarter was $16.1 million, or 36 cents a share, compared with FFO of $23.9 million, or 53 cents share, for the third quarter of 2007.
“For several months, we have been positioning the company to weather current conditions in capital markets and the economy, taking steps to build liquidity, bolster the balance sheet, reduce costs and manage risks,” said David P. Stockert, president and CEO of Post Properties, in a a news release. “While we expect economic conditions to remain challenging for some time, we also believe we can use this period to strengthen our competitive position in order to take advantage of future opportunities.”
07/17/08 -
Jacoby's vision for Hapeville
Jacoby's vision for Hapeville
Compared to office markets surrounding a few other major U.S. airports, Atlanta's never took off.
But Jim Jacoby, whose Jacoby Development Inc. converted an abandoned steel mill in Midtown into the mixed-use success story Atlantic Station, proposes to build 2.1 million square feet of offices and a 500,000-square-foot data center on the site of the former Ford Hapeville plant.
The 122-acre site -- which Jacoby has under contract -- could house Fortune 500 headquarters, logistics-related companies that need offices near the airport and international firms that want to expand in the U.S. In that way, Jacoby executives say, the Hartsfield-Jackson Atlanta International Airport market would resemble the office markets at major U.S. airports such as LAX.
The plans for the Ford site, presented to state planners March 10, would add as much office space over the next 12 years as the airport office market developed over the past few decades. And the project could create a burgeoning employment center south of Atlanta.
It's all part of Jacoby's vision to reshape the Hapeville Ford Plant into a 6.5 million-square-foot mixed-use redevelopment with 1.6 million square feet of retail and 2.2 million square feet for a hotel and conference center.
But, more specifically, it could fuel an office market that for decades struggled to get off the ground.
"It's an extremely ambitious project," said Jim Stormont, with Atlanta-based Grove Street Partners, which is developing a $200 million-mixed use project near the airport in College Park.
"No one has really gone out on a limb like this at the airport," Stormont said. "It's as if [Jacoby is] creating a self-fulfilling prophecy by trying to build an entire market himself. And, if he can pull it off, it's not only good for the airport, but good for the entire [southside] market."
Jacoby and his team were inspired by looking at other airport office markets around Dulles, Reagan National and LAX, which housed major national and international corporations.
"We said we have the potential to do something like that here at Hartsfield-Jackson," said Scott Condra, senior vice president of development at Jacoby.
"There was [little] class A office at all at the airport, even though it was the busiest in the world," Condra said. "We think that's just how the airport has evolved."
The airport office markets that caught Jacoby's attention are years ahead of Atlanta's, according to research from the national brokerage firm Cushman & Wakefield.
LAX/El Segundo in Los Angeles has nearly 14 million square feet of office space, with rents at $26.64 per square foot and a vacancy rate of 19 percent.
Dulles International Airport in Virginia houses nearly 8.5 million square feet of offices, with rents at $31.31 per square foot and vacancy at nearly 22 percent. And Ronald Reagan Washington National Airport has 7.5 million square feet with only 6.2 percent vacancy and rents of $47.33 per square foot.
Meanwhile, Hartsfield-Jackson has just 2.5 million square feet in office space, with rents at $12.50 per square foot and nearly 18 percent vacancy.
It makes up just a sliver of a metro Atlanta office market that's the seventh-largest in the country, according to Torto Wheaton Research, a division of the national real estate brokerage firm CB Richard Ellis Inc. Metro Atlanta has about 123 million square feet of office space, with the bulk of it in class A offices in the Central Perimeter, Buckhead, Midtown and downtown submarkets.
"Office development has been, historically, on the north side of Atlanta," Condra said, "but the airport is such an economic driver that we looked at this site a lot."
To pull the trigger on the project, Jacoby Development needed one final piece to fall in place -- the commitment to an international terminal that opens up access to Interstate 75 and the airport's east side. That move could spur the same kind of hotel and other development that blossomed on the airport's west side to do the same thing on its east.
Once completed in 2011, the more than $1 billion Maynard Jackson International Terminal will have 12 new international gates and an 1,100-space parking facility.
The new terminal will create the first access to Hartsfield-Jackson via Interstate 75, and it will link the main terminal at Concourse E by underground train. Plans for the terminal were "the biggest factor for us," Condra said.
While more than 9 million international travelers came through Hartsfield-Jackson in 2007, at least 13 million international passengers are expected to use the international terminal by 2015. One of the first projects Jacoby would try to complete is at least 4,000 parking spaces linked to the airport by a shuttle system.
Jacoby submitted initial plans for the project, known as the Hapeville Ford Plant Redevelopment, March 5. But his group, including Condra and Norcross-based consultants Kimley-Horn and Associates Inc., gave more details about the redevelopment at a March 10 meeting with planners from the Atlanta Regional Commission and the Georgia Regional Transportation Authority.
The development may also include a warehouse and distribution center for airport vendors, Condra said. The vendor warehouse, would give the airport space for additional restaurants and shops.
Jacoby may also try to dispose of the airport's municipal solid waste with Geoplasma technology. The process vaporizes waste at high temperatures, converting it to plasma, or gas, and eventually into another byproduct -- electricity.
Jacoby has created a division, Jacoby Energy, that aims to develop and market the technology.
08/09/07 -
Atlanta reverses its population stagnation City has become a growth magnet
Atlanta reverses its population stagnation City has become a growth magnet
The Atlanta Journal-Constitution
Published on: 08/10/07
People are flocking to live in the city of Atlanta, fueling a residential construction boom and a second year of growth that is reversing a decades-long trend of population loss and stagnation.
The city's population increased 12,600 last year — the largest single increase in more than 30 years, according to the Atlanta Regional Commission.
"People are starting to get tired of the long commutes from the suburbs," said Steve Cover, commissioner of Atlanta's department of planning and community development.
"They're looking for communities where you can literally walk to anything you want — the park, the museum, the grocery store, Georgia Tech," Cover said. "People are looking for a change of lifestyle. Younger people, young couples, empty nesters, that's the trend that we're seeing."
The metro area's 10 counties are booming, too, surpassing the 4 million population mark, according to the population estimates released by the ARC on Thursday.
Henry County's growth rate remained the eighth-fastest in the country, as it has been since 2000, according to the U.S. Census Bureau. Henry added 8,800 people.
Fulton County added the most people in the region in the last year — 33,400 — fueled by Atlanta's growth. Gwinnett was No. 2, adding 20,600 residents.
But growth is slower than in the 1990s, when Gwinnett added more than 23,000 people annually.
"We needed to catch our breath and these numbers show we have done so," said Gwinnett County Commissioner Lorraine Green. "It's a natural slowing of the growth process. We're taking a much more proactive approach to saving green space and planning for the future."
New Atlantans are moving to glitzy towers in Midtown and Buckhead and single-family homes in places like Cabbagetown and East Atlanta.
Many are moving into new housing. The city issued 10,779 housing building permits in 2006 — more than any of the 10 counties. Gwinnett came in second at 8,956, according to ARC numbers.
Much of the new intown housing is condominiums, an alternative to life in the suburbs, said Sonya Moste, director of marketing and public relations for the Atlanta Development Authority, the city's economic development arm.
"Look at Atlantic Station. You can just look at the cranes," she said. "In the past, people had to move to the suburbs because there wasn't enough housing, and affordable housing in Atlanta."
The city's boom struck the ARC's number crunchers, said Mike Alexander, chief of the ARC's research division.
"We thought, 'Oh my God! The city of Atlanta is doing something!'"
Atlanta lost population in the 1970s and 1980s and stayed flat in the 1990s.
From April 1, 2005, to April 1, 2006, the city gained 9,500 people, according to ARC estimates. It topped that feat this last year.
"That's a monumental change," Alexander said.
The construction activity is all over, not just Midtown and Buckhead, but also older neighborhoods that were once stagnant, like Reynoldstown, Cabbagetown and sections of East Atlanta, he said.
The trend is good for the economy, said Moste.
"It's the population that creates the vitality and the vibrancy of a city. You want people on the street."
08/09/07 -
You Can Tell Area Bank Used To Be A Pizza Hut
May 31, 2006 | Issue 36•20
03/15/07 -
Atlanta’s Population to Double within the Next 13 Years
Atlanta’s Population to Double within the Next 13 Years
According to a study conducted by Cousins Properties - one of the country’s top diversified development companies - Atlanta’s population should reach 808,000 by 2020. While the population is 470,688 - based on the census estimate released in July 2005 (Wikipedia: Atlanta, Georgia) - is expected to double by the year 2020. To be able to grasp that number one can look at today’s San Francisco, the fourth-largest city in California and the fourteenth-largest in the United States, with a 2005 population of 739,426 (Wikipedia: San Francisco, California). In the past two decades Atlanta has experienced unprecedented growth -- the metro population has grown in the past decade by nearly 40%, from 2.9 million to 4.1 million people.
Top 50 Cities in the U.S. by Population and Rank
| | 7/1/2005
population
estimate | 4/1/2000
census
population | 4/1/1990
census
population | Numeric
population
change
1990–2000 | Percent
population
change
1990–2000 | Size rank
1990 | Size rank
2000 | Size rank
2005 |
|---|
| New York, N.Y. | 8,143,197 | 8,008,278 | 7,322,564 | 685,714 | 9.4 | 1 | 1 | 1 |
| Los Angeles, Calif. | 3,844,829 | 3,694,820 | 3,485,398 | 209,422 | 6.0 | 2 | 2 | 2 |
| Chicago, Ill. | 2,842,518 | 2,896,016 | 2,783,726 | 112,290 | 4.0 | 3 | 3 | 3 |
| Houston, Tex. | 2,016,582 | 1,953,631 | 1,630,553 | 323,078 | 19.8 | 4 | 4 | 4 |
| Philadelphia, Pa. | 1,463,281 | 1,517,550 | 1,585,577 | –68,027 | –4.3 | 5 | 5 | 5 |
| Phoenix, Ariz. | 1,461,575 | 1,321,045 | 983,403 | 337,642 | 34.3 | 10 | 6 | 6 |
| San Antonio, Tex. | 1,256,509 | 1,144,646 | 935,933 | 208,713 | 22.3 | 9 | 9 | 7 |
| San Diego, Calif. | 1,255,540 | 1,223,400 | 1,110,549 | 112,851 | 10.2 | 6 | 7 | 8 |
| Dallas, Tex. | 1,213,825 | 1,188,580 | 1,006,877 | 181,703 | 18.0 | 8 | 8 | 9 |
| San Jose, Calif. | 912,332 | 894,943 | 782,248 | 112,695 | 14.4 | 11 | 11 | 10 |
| Detroit, Mich. | 886,671 | 951,270 | 1,027,974 | –76,704 | –7.5 | 7 | 10 | 11 |
| Indianapolis, Ind. | 784,118 | 781,870 | 741,952 | 49,974 | 6.7 | 13 | 12 | 12 |
| Jacksonville, Fla. | 782,623 | 735,617 | 635,230 | 100,387 | 15.8 | 15 | 14 | 13 |
| San Francisco, Calif. | 739,426 | 776,733 | 723,959 | 52,774 | 7.3 | 14 | 13 | 14 |
| Columbus, Ohio | 730,657 | 711,470 | 632,910 | 78,560 | 12.4 | 16 | 15 | 15 |
| Austin, Tex. | 690,252 | 656,562 | 465,622 | 190,940 | 41.0 | 25 | 16 | 16 |
| Memphis, Tenn. | 672,277 | 650,100 | 610,337 | 39,763 | 6.5 | 18 | 18 | 17 |
| Baltimore, Md. | 635,815 | 651,154 | 736,014 | –84,860 | –11.5 | 12 | 17 | 18 |
| Fort Worth, Tex. | 624,067 | 534,694 | 447,619 | 87,075 | 19.5 | 29 | 27 | 19 |
| Charlotte, N.C. | 610,949 | 540,828 | 395,934 | 144,894 | 36.6 | 33 | 26 | 20 |
| El Paso, Tex. | 598,590 | 563,662 | 515,342 | 48,320 | 9.4 | 22 | 23 | 21 |
| Milwaukee, Wis. | 578,887 | 596,974 | 628,088 | –31,114 | –5.0 | 17 | 19 | 22 |
| Seattle, Wash. | 573,911 | 563,374 | 516,259 | 47,115 | 9.1 | 21 | 24 | 23 |
| Boston, Mass. | 559,034 | 589,141 | 574,283 | 14,858 | 2.6 | 20 | 20 | 24 |
| Denver, Colo. | 557,917 | 554,636 | 467,610 | 87,026 | 18.6 | 28 | 25 | 25 |
| Louisville-Jefferson County, Ky.1 | 556,429 | 256,231 | 269,063 | 12,832 | –4.8 | 58 | 67 | 26 |
| Washington, DC | 550,521 | 572,059 | 606,900 | –34,841 | –5.7 | 19 | 21 | 27 |
| Nashville-Davidson, Tenn.2 | 549,110 | 545,524 | 510,784 | 59,107 | 11.6 | 26 | 22 | 28 |
| Las Vegas, Nev. | 545,147 | 478,434 | 258,295 | 220,139 | 85.2 | 63 | 32 | 29 |
| Portland, Ore. | 533,427 | 529,121 | 437,319 | 91,802 | 21.0 | 27 | 28 | 30 |
| Oklahoma City, Okla. | 531,324 | 506,132 | 444,719 | 61,413 | 13.8 | 30 | 29 | 31 |
| Tucson, Ariz. | 515,526 | 486,699 | 405,390 | 81,309 | 20.1 | 34 | 30 | 32 |
| Albuquerque, N.M. | 494,236 | 448,607 | 384,736 | 63,871 | 16.6 | 40 | 35 | 33 |
| Long Beach, Calif. | 474,014 | 461,522 | 429,433 | 32,089 | 7.5 | 32 | 34 | 34 |
| Atlanta, Ga. | 470,688 | 416,474 | 394,017 | 22,457 | 5.7 | 38 | 39 | 35 |
| Fresno, Calif. | 461,116 | 427,652 | 354,202 | 73,450 | 20.7 | 48 | 37 | 36 |
| Sacramento, Calif. | 456,441 | 407,018 | 369,365 | 37,653 | 10.2 | 37 | 40 | 37 |
| New Orleans, La. | 454,863 | 484,674 | 496,938 | –12,264 | –2.5 | 24 | 31 | 38 |
| Cleveland, Ohio | 452,208 | 478,403 | 505,616 | –27,213 | –5.4 | 23 | 33 | 39 |
| Kansas City, Mo. | 444,965 | 441,545 | 435,146 | 6,399 | 1.5 | 31 | 36 | 40 |
| Mesa, Ariz. | 442,780 | 396,375 | 288,091 | 108,284 | 37.6 | 53 | 42 | 41 |
| Virginia Beach, Va. | 438,415 | 425,257 | 393,069 | 32,188 | 8.2 | 39 | 38 | 42 |
| Omaha, Nebr. | 414,521 | 390,007 | 335,795 | 54,212 | 16.1 | 47 | 44 | 43 |
| Oakland, Calif. | 395,274 | 399,484 | 372,242 | 27,242 | 7.3 | 35 | 41 | 44 |
| Miami, Fla. | 386,417 | 362,470 | 358,548 | 3,922 | 1.1 | 46 | 47 | 45 |
| Tulsa, Okla. | 382,457 | 393,049 | 367,302 | 25,747 | 7.0 | 44 | 43 | 46 |
| Honolulu CDP,3 Hawaii | 377,379 | 371,657 | 365,272 | 6,385 | 1.7 | 41 | 46 | 47 |
| Minneapolis, Minn. | 372,811 | 382,618 | 368,383 | 14,235 | 3.9 | 43 | 45 | 48 |
| Colorado Springs, Colo. | 369,815 | 360,890 | 281,140 | 79,750 | 28.4 | 54 | 48 | 49 |
| Arlington, Tex. | 362,805 | 332,969 | 261,721 | 71,248 | 27.2 | 62 | 54 | 50 |
1. Louisville and Jefferson County merged in Jan. 2003. Figures prior to 2003 are for Louisville city only.
2. Nashville-Davidson city is consolidated with Davidson County.
3. Honolulu Census Designated Place; by agreement with the State of Hawaii, the Census Bureau does not show data separately for the city of Honolulu, which is coextensive with Honolulu County.
Source: U.S. Census Bureau. Web: www.census.gov . For 1900–2005 population estimates, see Population of the 20 Largest U.S. Cities, 1900–2005.
Jonathan Sarnat Empire South Commercial Real Estate
02/04/07 -
Beltline park plan a mystery
Beltline park plan a mystery
By DAVID PENDEREDThe Atlanta Journal-Constitution
Published on: 02/05/07 Jim Martin never expected the biggest proposed park along Atlanta's Beltline to be developed overnight. But now he worries that the site, which is an active quarry, will become a dangerous eyesore before the park is built.
"The Beltline planners talk about what it will be in 20 years," said Martin, who chairs a neighborhood planning unit that borders the planned park near the railroad yards in northwest Atlanta. "So the question is: What happens between then and now? I've heard there's already illegal dumping, [and] it could attract a lot of homeless people."
Lots of Atlanta residents have similar questions about the planned Westside Park. But answers have been slow in coming. What's known is that the park will house a drinking water reservoir, and possibly a recreational lake. Beyond that, no plans for the park have been made public since Atlanta Mayor Shirley Franklin announced in January 2006 that it will become the Beltline's prime jewel.
Fulton County Commissioner Emma Darnell, who represents the area, said her constituents repeatedly ask for updates on the park. She's at a loss to offer specific information, even though she serves on the boards of the city's development arm, Atlanta Development Authority, and the city's entity that's overseeing Beltline planning, Atlanta Beltline Inc.
"The No. 1 interest of folks in the area near and around the quarry is what's going on," Darnell said. "That's the big concern right now. Talk to anyone at random in those neighborhoods and they don't have a clue as to what's going on. The city of Atlanta should be able to answer all those questions."
Truth is, all that's certain at this point is that the park is supposed to become a regional attraction, much like Piedmont Park, Atlantic Station and Centennial Olympic Park. Most of the Beltline will be paid for with a projected $1.7 billion in future property taxes collected by three local entities — Atlanta City Council, the Atlanta school board and Fulton County's Board of Commissioners.
The Trust for Public Land removed about 18,000 tires from a 10-acre site next to the quarry it recently sold to Atlanta, said Jim Langford, TPL's executive director.
But the planning process for the 140-acre park isn't to start until at least April, said Tina Arbes, chief financial officer of Atlanta Beltline Inc. Planning for the reservoir is to begin about the same time, said Janet Ward, spokeswoman for the city's Department of Watershed Management.
Arbes said the park could encompass 230 acres within five years, as more land is purchased. Local residents will be involved, but how that will happen has yet to be worked out, she said.
"We recognize the Westside Park is an extremely important component of the Beltline and we have every intention of making sure community involvement is part of the process," Arbes said. "The goal is to have some components of the park available within the next several years."
The company that mines the quarry, Vulcan Materials Co., has until mid-2008 to shut down and vacate. The company met with the city's lawyers and parks officials in November to talk about what Vulcan can do to make it easier for the site to be shaped into a park, said Jimmy Fleming, Vulcan's manager of governmental affairs. More talks are to be scheduled, he said.
Vulcan is required by state law to return the site to some useful form, Fleming said. That means stabilizing disturbed soil and planting vegetation, he said. It only makes sense to groom the ground according to the overall plans for the park, he said.
"The reality hasn't been determined yet," he said. "We don't want to do things the city would have to undo."
12/20/06 -
Industrial area poised for new development
Industrial area poised for new development
Atlanta Business Chronicle - December 15, 2006
by Lisa R. Schoolcraft
Staff writer
A heavily industrial area of northwest Atlanta that lies between Midtown's new Atlantic Station development and booming Buckhead may be on the verge of a wave of redevelopment.
Prolific condominium developer Jim Borders, CEO of Novare Group Inc., has locked up several blocks along Howell Mill Road with an eye toward a future mixed-use project.
And real estate services firm Carter has signed Piedmont Hospital as lead tenant for a planned, 275,000-square-foot class A medical office building at Howell Mill Road and Interstate 75 -- part of a larger mixed-use development at the site.
The planned development comes on the heels of The District at Howell Mill, a 300,000-square-foot Wal-Mart anchored shopping center that Atlanta-based Selig Enterprises Inc. opened this fall.
The new shopping center is spurring more commercial and residential interest in the area.
"There are some areas that need one event to pull them onto the radar screen," said Ralph Williams, who oversees the marketing and sales of more than $150 million in townhouses for Paces Ferry Realty. "The Selig redevelopment has had a huge impact on that area."
Novare purchased 1950 Howell Mill Road, roughly 5 acres, Aug. 30 for $6.7 million, according to Alan Wexler, president of Databank Inc., a commercial real estate research firm.
The company is working to assemble the blocks from the U.S. Post Office site to the corner where McDonald's sits, roughly bounded by Collier, Howell Mill, Emery and Beck streets, said Borders.
"We do think it is a redevelopment site in the future," Borders said. The time frame could be anywhere from two to 10 years because of the long-term leases held by the post office and McDonald's. "For now we're going to be landlords, but next year we will have conversations with the neighborhoods and post office."
Any redevelopment of the site would have "a significant neighborhood component," he said. Currently, the site's zoning does not allow for a lot of housing and Novare would try to rezone it for that use.
"There could be an office component there," Borders said. "The zoning allows for more office [space] than it does residential."
Changing landscape
Selig Enterprises didn't seek out the site that would eventually become The District at Howell Mill, one of the company's largest developments.
Post Properties Inc. (NYSE: PPS) had it first, then sold it to another Atlanta-based company, The Home Depot Inc. (NYSE: HD), said Scott Selig, vice president of the privately held Selig Enterprises.
The proposed Home Depot "got blasted by the neighborhood" when Selig Enterprises was brought in to try to make the retail site work, he said. The company worked for eight years, first with Home Depot, then Costco Wholesale Corp., and finally Wal-Mart Stores Inc. before bringing the retail center to life.
Selig Enterprises felt the site was worth a gamble.
"On Howell Mill Road you weren't going to find 18 acres like that and have all that frontage between Howell Mill and Northside [Drive]," Selig said. "That's an up-and-coming area. The demographics are changing."
Home buyers are starting to take notice of the area that's being called "Midtown West" because "it is one of the only areas where you can get into the city for a decent price," said Leslie N. Woodie, an agent with Harry Norman, Realtors, who lives in the Whitley Heights neighborhood, near Marietta Boulevard and Chattahoochee Avenue.
The neighborhoods of Underwood Hills, Springlake, Collier Hills, Windsor Hills and Loring Heights offer older homes selling in the $200,000s, she said. Newer homes in Adams Crossing start in the $300,000s.
The majority of homes in the area were built in the 1960s "and offer some of the best value in the city," Woodie said. "This is a heavily industrial area and people don't realize there is residential behind and in between. What I like about my neighborhood is when the industrial employees go home, it's nice and quiet here."
Bolton Academy is a new school in the area, catering to many of the younger families moving in with children, she said.
"What you are seeing is 2-bedroom, 1-bath or 2-bedroom, 2-bath homes selling at prices never seen before," Williams said.
Selig's The District at Howell Mill wasn't the only factor in making those neighborhoods more desirable, "but it does bring retail near to you and people make housing decisions based on how they are going to live there," Williams said. "Retail plays a part in that."
Edens & Avant also plans to redevelop a shopping center at Moores Mill and Bolton roads. However, Julie Culbreath, a spokeswoman for the privately held developer, said it was not ready to discuss the plans for Moores Mill Crossing.
All that change will drive other development, such as the Novare project.
"Our history has been developing on Peachtree Street, but we like to look at great urban sites," Borders said. "Frankly, we've been looking at this [Collier and Howell Mill] site for several years."
What makes the Midtown West area ripe for redevelopment is its great neighborhoods and relatively low density as an urban center, Borders said.
With Atlantic Station just a few miles from the District at Howell Mill, big-box retail is in place, Selig said. He expects Howell Mill Road will begin to see trendy boutique retail.
"For the most part, the big parcels are accumulated and accounted for," Selig said. "I think you are going to start seeing some of the trendy stores come and infill between these big centers."
12/06/06 -
Business Card Confirms Real-Estate Salesman Is Eddie Money
December 5, 2006 | Issue 39•04
STOCKTON, CA—The suspicions of house hunters Paul and Gail Barnett were confirmed Tuesday when a business card revealed that the Century 21 agent showing them a two-bedroom split-level ranch was indeed rocker Eddie Money. "He looked just like the guy who sang 'Two Tickets To Paradise,' but I figured it must just be somebody who resembles him," Gail said. "But then, right there on the card, it said 'Edward Money.'" Gail praised Money for his thoroughness and professionalism.
09/30/06 -
Wayne Mason drops Beltline plans
Atlanta Business Chronicle - September 21, 2006
by Jill Lerner
Staff Writer
Developer Wayne Mason, owner of a five-mile stretch of the proposed Beltline project, has pulled his rezoning application -- and with it, his offer to donate 46 acres of land to the city for future Beltline use.
The Beltline is a proposed 22-mile loop of former rail line in the city that planners hope to turn into parks, trails and transit.
Mason needed zoning approvals to build the residential units he claimed were necessary, in order for his donation offer to make fiscal sense.
On Sept. 19, the city of Atlanta proposed that Mason's group trade its 66 acres in exchange for development rights.
In June, Mason, who was frustrated by what he claimed was the Atlanta Development Authority's disregard for his input in the planning process, told Atlanta Business Chronicle that if his NorthEast Atlanta Beltline Group LLC withdrew its application, it would consider selling the land.
Mason, a Gwinnett County developer who controls land near 10th St. and Monroe Drive next to Piedmont Park and, through a partnership, at Amsterdam Walk, submitted a rezoning proposal that calls for just under 3,100 residential units -- including 750 units in two high-rise towers near Piedmont Park.
"After nearly two years, we have every reason to be skeptical of the entire Beltline project and we have serious questions about its feasibility," Mason said in a statement. "To realize the Beltline, there has to be property ownership. Given the city's lack of ownership of any land in the 22 mile Beltline, their lack of money to buy the land and the highly speculative nature of their proposal to us, we realize that like other visions, this one is unlikely to sustain itself."
In a statement, Mayor Shirley Franklin said the Beltline will happen, "make no mistake."
08/24/06 -
What’s Another Billion Between Friends? Equity Office Puts Up More For-Sale Signs
Office REIT Restates Amount of Assets Planned for Disposition, Adding Another Billion Dollars Worth and Taking a $185 Million Charge in Third Quarter
| |
| 191 Peachtree, which accounts for 65% of a $185 million impairment charge EOP will take in the third quarter. |
Keeping its fingers crossed that investor demand for U.S. office property maintains its torrid pace, Chicago-based Equity Office Properties Trust (NYSE:
EOP) announced plans to add another billion dollars in assets to those it plans to sell by the end of 2007.
The company now proposes to trim $3 billion to $3.5 billion worth of buildings from its portfolio, up from the $2 billion to $2.5 billion level it stated just three weeks ago. EOP said it expects to record more than $700 million in gains from selling assets during that timeframe.
Earlier this month, EOP announced that it planned to exit the Atlanta market, where it owns more than 7 million square feet of office space. Other markets it singled out for dispositions include Chicago, Denver and Northern California.
With the sales, EOP does not plan to pay a special dividend and does not expect the loss of revenue from the sold assets to dilute the company’s stock value over time.
"We continue to encounter exceptionally strong demand for office assets at very attractive pricing," Richard Kincaid, Equity Office’s president and chief executive officer, said in a prepared statement. "As a result, we have increased our pipeline and extended the timeframe of our previously planned dispositions. We will continue to leverage market conditions, and our level of sales may fluctuate in response to changing opportunities. Current market conditions offer us the opportunity to maximize value and further strengthen our portfolio."
The same week that EOP announced it was pulling out of Atlanta, it announced its first disposition there, a building swap with Cousins Properties (NYSE:
CUZ) where Cousins would acquire EOP’s 191 Peachtree building in downtown Atlanta for $153 million (approximately $127 per square foot) and EOP would acquire Cousins’ Frost Bank Tower in Austin, Texas, for $188 million (approximately $354 per square foot).
The 191 Peachtree sale accounts for 65% of a $185 million, or $.46 per diluted share, non-cash impairment charge EOP will take in the third quarter that will hit FFO and net earnings.
Analysts estimate that EOP's Atlanta portfolio represents close to $1 billion of the total it plans to sell. The company is expected to try and find a single buyer for its Atlanta buildings, which include the 23-building, three million-square-foot Perimeter Center office complex valued at approximately $540 million, the 774,000-square-foot Promenade II office tower valued at $159 million, the 424,0000-square-foot Prominence in Buckhead building valued at $106 million, the 433,000-square-foot 200 Galleria valued at $82 million, the five-building, 390,000-square-foot Lakeside Office Park valued at $58 million, and the two-building, 600,000-square-foot Central Park office complex valued at $12 million.
Analysts had mixed reviews over Thursday’s announcement, but many praised the company for selling some assets in the current cycle and taking advantage of prices at historically high levels. Some responded with little enthusiasm, though.
"We continue to view execution of large-scale corporate and portfolio restructurings as expensive, that drag on earnings and seldom turn out as budgeted," stated UBS analyst Jamie Feldman in a note issued Thursday.
Feldman suggested that EOP would be better off concentrating on leasing its buildings. Job growth has fueled a rebound in many major office markets. Feldman was especially critical of the $185 million charge, which he called a "destruction in value" because it reflected 191 Peachtree’s value after depreciation compared with its actual sales price.
Thursday’s announcement had little effect on EOP’s stock price, as EOP closed at $36.98, down $.06 from Wednesday’s close.
01/12/06 -
Analytics
Vacant Space for Atlanta Office Market
Historical Analysis, All Classes |
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Commercial Real Estate
