“It’s a nice building, but they were looking for a pretty high rental (rate),” Erich Durlacher, a creditors’ rights and bankruptcy attorney at Burr & Forman in Atlanta, told The Atlanta Journal-Constitution before HNTB’s announcement. “It appears no one was really in the market or had the appetite for that.”
Terms of the lease were not immediately released. With metro Atlanta facing a glut of unused office space, many landlords have reduced rents or offered enticing allowances for improvements and other incentives to land new tenants. But high-end offices, also called class A or trophy, have seen their average rental rates continue to increase.
Credit: Courtesy Midtown Alliance
Credit: Courtesy Midtown Alliance
Developed by Greenstone Properties in a partnership with Goldman Sachs, the office tower at 1150 Spring St. was sold to San Francisco-based Shorenstein Properties in July. The project was also supported by the Development Authority of Fulton County, which provided the original development team with $6.6 million in property tax savings over a 10-year period — an incentive transferred to Shorenstein when the building changed hands.
HNTB’s relocation was reported last week by the Atlanta Business Chronicle and Bisnow. Claude Esposito, vice president at Shorenstein, said landing HNTB affirms his confidence in the property and its appeal to large office users.
“HNTB’s relocation underscores the quality and efficiency of 14th & Spring and its incredible accessibility to transit and walkability to the heart of Midtown,” he said in the release. “We plan to make significant additional investments in the property to deliver an exceptional experience for our tenants.”
HNTB said it will occupy three floors at the 12-story building. While lease terms were not disclosed, a permit with Atlanta’s planning department showed the lease should be for nearly 70,000 square feet, roughly double HNTB’s office footprint downtown within the 191 Peachtree tower.
HNTB’s expansion also runs counter to many office relocations and consolidations since the 2020 COVID-19 shutdown, which saw companies reduce their workplace footprints.
The amount of empty or unwanted office space in metro Atlanta was 32.3% at the end of September, according to real estate services firm CBRE. This year’s third quarter ended a five-quarter streak of record-breaking office availability, but the figure remains at near-historic highs.
David Rubenstein, a Savills vice chairman who oversees the real estate services firm’s Atlanta operations, said last week that HNTB’s lease announcement is one that could generate momentum.
“I think it’s somewhat of a market mover,” he said. “… It’s a real important sign for the market.”
