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ATLANTA-Colonnades Properties of New York is betting it will find an anchor by fall 2002 for a planned 10-story, 500,000-sf addition to its Downtown six-building, 2.55 million-sf Peachtree Center complex at 229 Peachtree St.

Fall 2002 is the expected completion date of Colonnades’ 11-story, 2,100 space parking garage that is being built at an estimated hard construction cost of $10,000 per space or $21 million, area construction industry estimators tell GlobeSt.com on condition of anonymity.

The office building will be constructed atop the parking deck. When completed, the garage and office building will have a total 21 levels.

Colonnades officials couldn’t be reached at GlobeSt.com’s publication deadline to learn plans for the new office space. But area brokers who have been following the developer’s progress tell GlobeSt.com the developer won’t break ground on the new office building until an anchor is found.

The garage is expected to house 10,000-sf of ground-level retail. The site is across from the Steak & Ale restaurant at Peachtree Center Avenue and Andrew Young International Boulevard. Trammell Crow Co. is developing the project for Colonnades.

Colonnades was formerly known as the Taylor Simpson Group founded in 1979 by Paul Taylor Jr. Taylor Simpson became Colonnades in early 2000 after Taylor Simpson merged with Northco Management Services.

Taylor Simpson had purchased the four-block Peachtree Center from two different owners–NLI Properties Inc., the real estate division of Nippon Life Insurance Co., and the Equitable Life Assurance Society of the United States. The $245 million purchase price in fall 1998 equates to $96 per sf, a bargain today, local area brokers tell GlobeSt.com.

“Comparable class A mega properties such as Peachtree Center would go for at least $200 per sf today,” an office broker who has worked the Downtown market for 15 years tells GlobeSt.com.

Peachtree Center was designed by Atlanta architect John Portman Jr. and built in phases from 1967 to 1988.

Colonnades, like New York-based Taylor Simpson, was founded in 1979 as the real estate subsidiary of Lazard Freres, the New York investment banking firm. Colonnades is now privately owned by senior officers of the company and Prudential Real Estate Investors.

Colonnades owns 30 office properties encompassing 11 million sf and valued at $2 billion. The firm also owns 1,000 hotel rooms, 1,000 apartment units and 600 acres of development land in multiple markets from Miami to Minneapolis, according to its Web site.

The 14.65 million-sf Downtown office submarket had a negative 56,418 sf net absorption, a 92.1 occupancy level and 1.16 million sf of vacant space in the second quarter, according to research by Atlanta-based Richard Bowers & Co. The average rental rate was $22.82 per sf.

In the class A sector, the occupancy jumped to 93.9% with 401,958 sf vacant at an average asking rent of $26.08 per sf.

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