Office Space Market Report - 2011

Choose from one of these market reports:

Retail Market Industrial Market UPDATED for 2011 Office Market UPDATED for 2011


The Middle Georgia
Commercial Real Estate Advisor


2011 Office Market Overview
Macon, Georgia

During 2010 the Macon Georgia downtown office market remained stable with nominal absorption. The suburban office market incurred a slight increase in occupancy compared to 2009.

New “turn-key” construction costs, including building and land, range from $125 to $180 per square foot for projects under 10,000 square feet. This represents a slight increase over the last 12 months due primarily to increases in key construction materials. Landlords continue to offer aggressive incentives to keep existing tenants and secure new tenants. Tenant improvements for existing space vary significantly, but $10.00 per square foot seems to be the average. Tenant finish costs have stabilized from previous lows. Slab to slab tenant construction costs range from $40 to $60 per square foot. The appetite for existing owner occupied buildings trended upward in 2010 as aggressive pricing attracted the attention of the professional office user seeking to own versus lease.

The lack of readily available tenant improvement funds has motivated owners and tenants to utilize creativity such as longer term leases, buy-out options and office configuration flexibility in order to make future tenant improvements more feasible. As expected, construction costs in general have stabilized and as the economy eventually begins to trend upward, inflation is expected to be a primary influence on the construction costs.

The strongest Macon office submarket again 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 $19.00 $18.00 n/a
CLASS A $13.50 $16.50 $15.00 16%
CLASS B $9.00 $13.00 $11.00 20%
SUBURBAN OFFICE
NEW CONSTRUCTION $17.00 $20.00 $18.00 23%
CLASS A $14.00 $19.00 $17.50 17%
CLASS B $10.00 $14.00 $12.00 26%

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.

Explanation of Lease Terminology - Landlord Obligations
Full Service Lease Gross Lease 3 Net Lease Absolute 3 Net Comments
Janitorial service $0.95 $0.00 $0.00 $0.00 Varies
Utilities $2.25 $0.00 $0.00 $0.00
Light bulbs, plumbing, electrical $0.12 $0.12 $0.00 $0.00
HVAC repairs $0.10 $0.10 $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

Profile of significant office space available in Bibb County
Downtown Macon Suburban
Property Max Cont. Property Max Cont.
510 Walnut St 10,000 SF 1655 Eisenhower Pkwy 24,779 SF
577 Mulberry St 11,000 SF Bowman Rd 8,000 SF
201 Second St 8,600 SF Highridge Center 10,000 SF
439 Mulberry St 9,000 5400 Bowman Rd 26,600 SF
455 Walnut St 15,500 Lakeside Commons 8,000 SF
3330 Northside Dr 9,500 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 experienced no significant change in vacancy for 2010 versus 2009. Occupancy for year end 2010 was at 83%. It is believed Downtown Macon’s occupancy will remain relatively stable during the next 12 months since Downtown remains one of Middle Georgia’s most viable office areas.

Suburban Market The suburban office market vacancy rate was 24% in 2010 which is down from 29% in 2009. Fickling & Company’s recent survey of almost 1 million square feet of suburban office space in Bibb County shows a positive absorption of approximately 60,000 sf from 2009 to 2010. Build to suite and speculative building was almost nonexistent during 2010 and no significant plans are underway for new construction in 2011. The area’s buildable office land inventory remains abundant. Northside Crossing Lakeside Commons, Bass Plantation, Arkwright Landing, Elnora Drive Developments, 4931 Riverside Dr, North Crest Office Park, Preston Park, and 5444 Riverside Dr., have buildable office land available.

Looking forward, the suburban office market should continue to improve as the demand slowly catches up to the inventory. Small gains in occupancy are projected in 2011. As in the past, most of the new office leases in both suburban and downtown markets were from relocation and expansion of existing office users.

 
Office Occupancy History
Year Suburban Downtown
2003 81% 83%
2004 83% 84%
2005 81% 82%
2006 82% 85%
2007 80% 80%
2008 79% 82%
2009 71% 82%
2010 76% 83%


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Featured Properties

Plantation Commons Bldg 500

Multi Tenant Office Bldg with one 1340 sf space available. Great floor plan. Class A.Multi Tenant Office Bldg with one 1340 sf space available. Great floor plan. Class A.

Rivergate Shopping Center

Publix anchored center with two spaces of about 4500 sf each on the front by Carol's Linens with quoted rent of $16.00 psf and an inline space by AAA for $16.00 psf. The 2250 sf restaurant space previously Taylor Made Grill is $19.00 psf. Additionally there is a 900 sf space for $19 psf NNN. Publix anchored center with two spaces of about 4500 sf each on the front by Carol's Linens with quoted rent of $16.00 psf and an inline space by AAA for $16.00 psf. The 2250 sf restaurant space previously Taylor Made Grill is $19.00 psf. Additionally there is a 900 sf space for $19 psf NNN.