Commercial Real Estate in Macon, GA
Larry E. Crumbley, CCIM, CPM, SIOR, CRE
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Office Space Market Report - 2009
Choose from one of these market reports:
The Middle Georgia
Commercial Real Estate Advisor
2009 Office Market Overview
Macon, Georgia
In 2008, the Macon, Georgia downtown office market showed a slight increase in occupancy while the suburban office market occupancy decreased slightly over 2007.
New “turn-key” construction costs, including building and land, range from $130 to $165 per square foot for projects under 10,000 square feet. There are no significant perks such as free rent currently present in the Macon market, however this could change in 2009 as Landlords get more aggressive with landing quality tenants. Tenant improvements for existing space vary significantly, but $10.00 per square foot seems to be the average. As construction costs increase, owners and tenants are forced to utilize creativity such as longer term leases, buy-out options and office configuration flexibility in order to make future tenant build-out more feasible. Since the first quarter of 2008 construction costs have trended downward. This is expected to continue well into 2010, when inflation will be back in play, and construction prices are expected to lead the way. Thus, now may be the best time to build office buildings.
The strongest Macon office submarket is the Zebulon Rd./I-475 area. Occupancy in that area has maintained above 95% for the past several years.
| OFFICE SPACE | Low Rental Rate |
High Rental Rate |
Effective Avg. Rental Rate |
Vacancy Rate |
| DOWNTOWN OFFICE | ||||
| NEW CONSTRUCTION | $16.50 | $18.00 | $17.55 | 16% |
| CLASS A | $13.50 | $16.50 | $15.00 | 22% |
| CLASS B | $10.00 | $13.00 | $11.00 | 17% |
| SUBURBAN OFFICE | ||||
| NEW CONSTRUCTION | $17.00 | $20.00 | $18.00 | N/A |
| CLASS A | $14.00 | $19.00 | $17.50 | 18% |
| CLASS B | $10.00 | $14.00 | $12.00 | 25% |
Note: The rents in the table above are based on Full Service. However, numerous combinations of services are quoted in the Middle Georgia market and the terms describing what is included are often confusing, so verification of what rent actually includes when getting quotes is important. Below is a summary of the type of leases, that may be discussed and what they are usually intended to include as part of Landlord obligations along with expected costs.
| Downtown Macon | Suburban | ||
| Property | Max Cont. | Property | Max Cont. |
| 606 Cherry St | 16,000 SF | 1655 Eisenhower Pkwy | 24,779 SF |
| 577 Mulberry St | 13,086 SF | 93 Gateway | 8,000 SF |
| 3330 Northside Dr | 9,500 SF | Highridge Center | 10,000 SF |
| 201 Second St | 8,600 SF | 4885 Riverside Dr | 10,000 SF |
Downtown Market
The recent survey of over 900,000 square feet of profiled office buildings in the downtown Macon area indicated that Macon’s downtown office market in 2008 incurred a slight decrease in vacancy rate in 2008. Occupancy for year end 2008 was at 82%. As 2009 gets underway and the economic recession continues, landlords are expected to become more aggressive in attracting quality tenants to their buildings.
Suburban Market
The suburban office market vacancy rate increased slightly in 2008 from 20% in 2007 to 21% in 2008. Additionally Fickling & Company’s recent survey, including a comparison of almost 1,000,000 square feet of suburban office space in Bibb County, shows a slight negative absorption in 2008 compared to 2007. Phase I construction on a new 80,000 square foot office park, Northside Crossing, located at Northside and Forest Hill Road, was completed in 2008 with construction of 6 new buildings. Phase 1 of the project comprises over 25,000 square feet. Both build-to-suit lots and spec buildings are available. This should further enhance the impact of the I-75/North Macon sub-market. Additionally, plans continue to move forward for a small office development which is part of a multi-use project on Bowman Road. An 8,000 square foot spec office building has already been constructed, and the development can handle up to an additional 100,000 square feet. Bass Plantation Development has 3 buildings complete or under construction totaling 100,000 sf with land available for an additional 190,000 sf. This will add to the existing choices of build-to-suit projects which include Arkwright Landing, Elnora Drive Developments, 4931 Riverside Drive, Northcrest Office Park, Preston Park and 5444 Riverside Drive. There are also several other office developments that are in the planning stages.
| Explanation of Lease Terminology - Landlord Obligations | |||||
| Full Service Lease |
Gross Lease | 3 Net Lease | Absolute 3 Net |
Commence | |
| Janitorial service | $0.95 | $0.00 | $0.00 | $0.00 | Varies |
| Utilities | $1.75 | $0.00 | $0.00 | $0.00 | |
| Light bulbs, plumbing, electrical | $0.10 | $0.10 | $0.00 | $0.00 | |
| HVAC repairs | $0.08 | $0.08 | $0.00 | $0.00 | Varies |
| Taxes | $1.10 | $1.10 | $0.00 | $0.00 | |
| Insurance | $0.18 | $0.18 | $0.00 | $0.00 | |
| Common Maintenance | $0.25 | $0.25 | $0.00 | $0.00 | |
| Roof and Structure | Landlord | Landlord | Landlord | Tenant | |
| Office Occupancy History | ||
| Year | Suburban | Downtown |
| 2003 | 81% | 83% |
| 2004 | 83% | 84% |
| 2005 | 81% | 82% |
| 2006 | 82% | 85% |
| 2007 | 80% | 80% |
| 2008 | 79% | 82% |
^ Top
A 23,000 sf building with 3,000 sf climate controlled storage available and approximately 300 sf office area and a restroom.
Originally built as Lincoln Mercury Dealership. Contains 25400 sf on 5.7 acres. Modern showroom, parts and service area
Publix anchored center with 2,300 to 15,000 sf spaces available. Some are easily converted to office use. Prices range from $12 to $22 psf. Second floor space is 3000 to 15,000 sf and is served by an elevator.