Office Sales Volume at Record High for Over-$5M Properties

Over the past year, dollar volume rose to more than $3 billion, the highest level for a 12-month period in the last decade, says Glen H. Atkin, a market analyst in the Encino, CA-based home office of Marcus & Millichap. "With economic activity and absorption improving, investors' interest in Atlanta office properties has intensified, dramatically driving a large increase in volume and steady price appreciation," Atkin notes.

The median price for over-$5 million-valued buildings has increased by 6% to $112 per sf. "Volume and price growth, however, were mainly due to larger transactions, with deals valued at over $5 million nearly doubling and the median price climbing 11% to $121 per sf," Atkin says. Six major players, led by Wells Realty, UBS and Duke Realty Corp., accounted for over 40% of the total dollar volume.

"The only downside to the investment market involves deals valued under $5 million, which posted a drop in sales activity," the analyst says. Median prices for these properties fell by 8% to $96 per sf from mid-2004 to mid-2005.

Big deals in 2005 included Crescent Real Estate Equities' purchase of the 442,930-sf, 91%-leased One Buckhead Plaza at 3060 Peachtree Road NW for $130 million or $294 per sf; the sale of 605,529-sf Tower Place 100 at 3340 Peachtree Road NE for $105.96 million or $174 per sf; Rreef's purchase of the 513,000-sf, 92%-leased Lakeside Commons complex at 980 Hammond Dr. for $80 million or $156 per sf; and Centennial Tower, a 637,000-sf property at 101 Marietta St. that sold for $74.5 million or $117 per sf.