ATLANTA-Despite an overall class A office vacancy of 17.6% and a third-quarter negative absorption of 119,278 sf in the Buckhead submarket here, Chicago-based Trizec Properties Inc. is moving ahead with its planned speculative Two Alliance Center at 3500 Lenox Rd.

In a prepared statement, David Canaday, Trizec’s senior vice president of the firm’s Central Region, says the building should be ready for occupancy in January 2008 after an April 2006 groundbreaking. He says Trizec has started preleasing activity with a formal marketing campaign scheduled for late November.

Locally based Colliers Cauble & Co. research director Scott Amoson puts the average asking full-service, class A office rent in Buckhead at $25.26 per sf. The 9.85-million-sf Buckhead class A market has 1.74 million sf of vacant space.

Canaday didn’t disclose the estimated development cost of the project. However, area construction industry sources familiar with comparable projects tell the building can’t be erected for less than $200 per sf or an estimated total $100 million for the entire undertaking.

Canaday says Two Alliance Center will be the third phase of the 10-acre Alliance Center master plan. Two Alliance Center will complement the 558,000-sf, 20-story One Alliance Center. Co-developed in 2001 by Trizec and Atlantic Capital Properties LLC, the building is fully leased. Locally based Julian LeCraw & Co. also has a nearby 40-story condo tower on a site sold by Trizec to LeCraw in 2001.

Canaday says the decision to build Two Alliance Center now was made after One Alliance Center, also a spec-built undertaking, reached 100% occupancy after four years. “With the 100%-leased One Alliance Center establishing itself as a premier property…the development of Two Alliance Center is a logical next step,” he says. Canaday calls Buckhead “the most attractive and strongest [office] submarket in Atlanta.”

Construction plans for Two Alliance Center also come as locally based Cousins Properties Inc. announces its estimated $116-million, 582,000-sf, 27-story Terminus 100 class A office structure in Buckhead has reached the 46% preleasing level. The under-construction, spec-built building is expected to open in 2007.

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