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ATLANTA-It could only happen in Atlanta where developers and investors remain unfazed by soaring vacancy levels and continue to plan at least nine million sf of new mixed-use space for the area as the economy improves, brokers following the market tell GlobeSt.com.

For example, in the Central Perimeter submarket, where vacancies in some sectors are at 30%, developers and their backers are still betting the Interstate 285 and GA 400 axis will be metro’s commercial hot spot 10 years from now, according to preliminary development plans filed with various county offices.

Weak leasing activity to date, however, dispels such growth projections. For example, Erik Pawloski, research director at locally based Bullock Mannelly Partners Inc., says Central Perimeter recorded negative absorption of 70,245 sf in the first quarter and posted a vacancy mark of 28.1%. Scott L. Amoson, research coordinator at Atlanta-based Colliers Cauble & Co., notes the Perimeter and North Fulton submarkets account for 45% of the total amount of sublease space in the metro office market.

Still, Bullock Mannelly’s Pawloski remains bullish on the Perimeter market. “Despite some of the highest vacancy rates in the Atlanta area, the Central Perimeter submarket is fundamentally in a transitional phase,” the researcher tells GlobeSt.com. “This submarket has the unusual luxury of having around 550,000 sf of office space being removed from the market with Sembler Co.’s demolition of 100 and 125 Perimeter Center for their Perimeter Place development.”

Pawloski says “this action alone, assuming no new absorption and no new delivered product, will reduce the vacancy rate to 26.6% from 28.1%. Additionally, the last two quarters have passed with no deliveries and assets under construction are virtually non-existent.”

He notes the Central Perimeter market is home to numerous Fortune 500 companies “and continues to attract new luxury housing developments.”

Looking into his crystal bowl for 2005 and beyond, Pawloski tells GlobeSt.com, “Anticipate an improvement in the Central Perimeter office fundamentals and increase in activity as the economy continues to progress and the supply of space is held constant.”

Metro area developers appear to be accepting the same gospel, already planning for better economic times, brokers who patrol the Perimeter area tell GlobeSt.com. Among the planned projects are two by Sembler Co. of St. Petersburg, FL. The Florida-based developer, which already has a large presence in metro area development circles, would like to build Perimeter Place at Perimeter Center West at Perimeter Center Parkway. That undertaking would have 500,000 sf of retail and 550 condominium units within a 27-story tower and a six-story apartment complex.

At Ashford-Dunwoody Road, across from Perimeter Mall, Sembler also plans Park Place with 20,000 sf of retail and 110 condo units. Griffin Co. plans 347,500 sf of office, 22,500 sf of retail and 130 condos at NorthPlace, located on Barfield Road, between Mount Vernon and Abernathy roads.

Equity Office Properties and Cousins Properties Inc. like Perimeter Town Center at Perimeter Center Parkway, across from the Dunwoody Marta station. On the developers’ drawing boards are one million sf of office, 25,000 sf of retail and 650 condo units.

Ackerman & Co. and HJ Russell and Co. plan 500,000 sf of office, 40,000 sf of retail, 150 condos and a 400-room hotel at a former park-and-ride site near the Sandy Springs Marta station at the corner of Barfield and Abernathy roads.

At 211 Perimeter Center Parkway, near Dunwoody Marta station, the area is zoned for up to 370,000 sf of office, 20,000 sf of retail, 438 residential units and a 200-room hotel. An $8-million parking garage has already been built at the site.

Also approved for additional space are Northpark Town Center, adding 2.4 million sf of retail and a 400-room hotel; Central Park and 1155 Perimeter Center West, each approved for 400,000 sf; Perimeter Summit, 2.3 million sf; and Concourse, 1.5 million sf.

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