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(Carl Cronan is editor of Real EstateFlorida.)

ATLANTA-Lending constraints apparently aren’t discouraging owners of large-scale office buildings from going to market with their properties, according to local investment brokers. Furthermore, sales are on par with the last five years’ average, as opposed to being down significantly from last year’s boom.

The latest office property put up for bid is the two-building, 700,000-sf Colony Square complex in Midtown Atlanta, owned by Tishman Speyer Properties LP. The property, which is being marketed by Eastdil Secured LLC, opened in 1972 and recently underwent $5 million worth of renovations, according to the Tishman Speyer’s Web site.

Neither Tishman Speyer nor Eastdil Secured executives returned calls inquiring about the sale, though Atlanta office brokers are watching the sale closely as an indicator of the investment market for properties at all levels this year.

Few office properties are on the market in Atlanta lately, largely because of diminished expectations by owners and extremely tight capital markets, brokers say. They speculate that larger properties than Colony Square will go to market later this year if conditions improve.

“There are still a lot of investors interested in the Atlanta market,” Will Yowell, vice chair of investment properties at CB Richard Ellis in Atlanta, tells GlobeSt.com. However, with so few sellers and buyers in the marketplace, sales volume through this year’s first quarter was only a tenth of that through the first three months of 2007, he says.

Another way to look at Atlanta’s deal velocity, Yowell points out, is from an average of office sales over the last five years, before prices for some high-profile buildings soared beyond $200 per sf in 2006 and 2007. Cap rates for core properties were up only 25 to 50 basis points over the past year, he says.

The median sale price for office buildings in Atlanta jumped nearly 15% in 2007, at close to $160 per sf, with cap rates in the mid-7% range, according to Marcus & Millichap Real Estate Investment Services. The firm is advising investors to target properties north of Downtown Atlanta, where many companies are relocating and taking on new space.

Yowell believes larger deals than Colony Square are on the horizon, which may balance out the office investment picture in Atlanta through the remainder of 2008. “It’s going to be, in my opinion, more of a backend-loaded year,” he says.

Tishman Speyer bought Colony Square, currently 92% occupied, in the fall of 2006 as part of a 3.5-million-sf portfolio purchase from Trizec Properties Inc. totaling $675 million, or $193 per sf. A 140,000-sf retail mall and the 467-room Sheraton Colony Square Hotel accompany the towers, which have 22 and 24 stories.

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