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ATLANTA-Big bucks are involved as two major developers vie for the signature of Southern Co. on a new 15-year or 20-year Downtown office lease. After a year of site searching, Southern has narrowed the landlord field to two and is expected to decide by year end, central business district brokers tell GlobeSt.com.

Richard Bowers, chairman of Richard Bowers & Co., wants to keep the big utility firm with 400 employees at its 22-story, 325,000-sf building at 270 Peachtree St. But Hal Barry, chairman of Barry Real Estate Cos., is trying to interest the blue ribbon-tenant into taking about 170,000 sf at his planned 10-story Centennial Hill building overlooking Centennial Olympic Park.

Without Southern as the anchor tenant, the Centennial Hill project will probably go to the back burner, brokers in a position to know tell GlobeSt.com. Southern’s 162,500-sf lease at Bowers’ building expires in December 2005.

Depending on its length and size, the leasing deal could be valued between $65 million and $80 million, Downtown brokers tell GlobeSt.com. Downtown rents have been sliding since the first of the year when vacancies hovered at the 20% mark, according to the local office of Marcus & Millichap.

“That declining rent picture puts Southern in an extremely favorable bargaining position,” says a Downtown office broker who represents several properties. He says, for example, if Southern is paying $20 per sf now at the Bowers building on an estimated 20-year lease, that would translate to an aggregate rent of $65 million.

However, if Southern decided to increase its space to 200,000 sf to accommodate future growth at either the Bowers or the Barry building, the estimated aggregate rent could reach $80 million over 20 years, figured on a $20-per-sf base rent.

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