Office Submarket Reports

Q1 2022

OVERVIEW

Ballantyne Corporate Park makes up an unusually large share of South 485’s 7.8 million SF office market, having been named home by big block tenants SPX, Brighthouse Financial, Dentsply Sirona and as a host Fortune 500 companies with major regional operations and outposts occupying large footprints in the park. As is the case throughout the submarket, this suburban trophy campus has experienced several quarters of soft demand and new product delivery, set against the backdrop of the COVID-19 pandemic and shifts in corporate real estate occupancy and labor trends, netting increased vacancy.

DATA, TRENDS AND CONSIDERATIONS

South 485’s 18.7% office vacancy is essentially the highest of all submarkets in the market. However, a very strong avg rental rate of $36 psf, is indicative of the unusually large percentage of product being comprised of high-end Class A product and pre- pandemic momentum. 1.7% rental rate growth lagging behind market avg’s underscores this point, as growth here projects to stagnate. The past year saw significant new construction delivery (500,000sf) to the submarket, and in turn only minimal development is currently underway (16,000sf), given already high vacancy rate and broader tends in local and national office markets. Investor activity in South 485 will always be relatively slow given Ballantyne Corporate Park, with a quiet $6.7 million transactions over the past year largely attributable to the trade of small medical office buildings.