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In Atlanta's Buckhead, Vacant Office Towers Set Off Battle
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By MAURA WEBBER SADOVI at The Wall Street Journal...
Few of the country's office markets are as competitive as Atlanta's upscale Buckhead neighborhood, where the owners of four new and largely vacant office towers are locked in a bruising battle for tenants.
Consider the deal that Phipps Tower just cut to attract its first tenant, Speakeasy, a 37-year-old Atlanta communications-consulting company that provides coaching to corporate executives.
The company, which is moving from Midtown Atlanta, just leased roughly 14,000 square feet in the building. While new tenants signing long-term leases in Atlanta these days can get 12 to 18 months of free rent, Speakeasy got more than 18 months, according to a person familiar with the matter. Also, Speakeasy's starting rent is in the low-$30-a-square-foot range including expenses and the landlord will be contributing something in the range of $80 a square foot to build interior space, the person says.
Back when the developers of the new Atlanta buildings were penciling out their finances, landlords were offering just six months of free rent, interior work worth less than $50 a square foot and rents starting in the mid-$30 range, according to Andrew Lechter, executive vice president and branch manager in Atlanta with Studley Inc., a real-estate services firm that specializes in representing tenants.
But Atlanta's office market tanked and Phipps Tower had little choice if it wanted to lure Speakeasy. "If Phipps Tower didn't do the deal then somebody else would," says Mr. Lechter, who wasn't involved in the Speakeasy lease negotiations. "It's an ugly time to be a landlord."
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Posted By - Featured Agent - 03/10/2010
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