Commercial Real Estate in Macon, GA
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Office Space Market Report
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The Middle Georgia
Commercial Real Estate Advisor
Office Market Overview 2006
Macon, Georgia
The Macon, Georgia downtown office market incurred a positive absorption in 2005 while the suburban market remained stable.
According to Fickling & Company’s recent survey, including a comparison of almost 1,000,000 square feet of office space in Bibb County, the 2005 suburban office market remained stable. Over 15,000 square feet of new space was added at 4931 Riverside Drive which is scheduled to open the first quarter of 2006 with over 13,000 square feet pre-leased. The suburban market maintained 83% occupancy which is virtually unchanged from 2004. A new office park is planned for development near the Northside Drive/Forest Hill Road area in north Macon that should further enhance the impact of the I- 75/north Macon sub-market. Additionally, a developer has purchased land on Bowman Road for a multi-use development and preliminary plans include an office park as well. This will add to the existing choices of build-to-suit projects which include Arkwright Landing, 4931 Riverside Drive, Northcrest Office Park, Preston Park, Bass Plantation, and 5444 Riverside Drive.
The recent survey of nearly 800,000 square feet of profiled office buildings in the downtown Macon area indicated that Macon’s downtown office market in 2005 showed significant improvement, primarily from the leasing of 100,000 sf in the Gateway Plaza Office Building. Downtown occupancy for year end 2005 was nearly 82% compared to 84% y ear end 2004. However, the market incurred a positive absorption of approximately 87,000 square feet due to the addition of the spaced leased in the Gateway Plaza Development. Activity for the downtown office sector is expected to improve in 2006 with rents and concessions remaining stable.
New “turn-key” construction cost, including building and land, range from $115 to $150 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. Tenant improvements for existing space vary significantly, but $10.00 per square foot seems to be the average.
| OFFICE SPACE | Low Rental Rate |
High Rental Rate |
Effective Avg. Rental Rate |
Vacancy Rate |
| DOWNTOWN OFFICE | ||||
| NEW CONSTRUCTION | $17.50 | $15.50 | $16.50 | 16% |
| CLASS A | $12.50 | $15.00 | $13.50 | 16% |
| CLASS B | $10.00 | $11.00 | $10.00 | 17% |
| SUBURBAN OFFICE | ||||
| NEW CONSTRUCTION | $16.00 | $20.00 | $17.00 | N/A |
| CLASS A | $13.00 | $18.50 | $14.50 | 12% |
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 w hen 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 along with expected costs.
| Downtown Macon | Suburban | ||
| Property | Max Cont. | Property | Max Cont. |
| 606 Cherry St | 16,000 | 1655 Eisenhower Pkwy | 24,779 |
| 577 Mulberry St | 13,086 | 93 Gateway | 8,000 |
| 484 Mulberry St | 6,200 | 3330 Northside Dr | 9,500 |
| 201 Second St | 9,386 | 4885 Riverside Dr | 3,100 |
| 5400 Bowman Rd | 26,000 | Highridge Center | 10,000 |
| Explanation of Lease Terminology | |||||
| Full Service Lease |
Gross Lease | 3 Net Lease | Absolute 3 Net |
Commence | |
| Janitorial service | $0.81 | $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% |