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Q1 2012 | BUCKHEAD

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 22%

350,000

21%

300,000

20%

Square Feet

400,000

250,000

19%

200,000

18%

150,000

17%

100,000

16%

50,000

15%

0

14% 1Q11

2Q11 Absorption

3Q11

4Q11

Deliveries

Total SF

20,551,189

Vacancy Rate

18.3%

YTD Net Absorption YTD Deliveries

0

Under Construction

0

Avg. Class A Rate

1Q12

104,345

$24.66

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q1 2012

UPDATE Recent Transactions in the Market

Q2 2012

SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION

RENTAL RATE

PROPERTY ADDRESS

SALE PRICE

SIZE SF

PRICE / SF

BUYER

3399 Peachtree

$59,300,000

348,152

$170.33

Parmenter Realty

3314 Peachtree Rd./Land

$9,000,000

9,187

$979.65

Kurkin Forehand Brandes

3330 Peachtree Rd.

$5,500,000

62,499

$88

Pope & Land

Buckhead

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

AmWINS Colemont

3630 Peachtree

28,259

Class A Lease

Citigroup

The Pinnacle

27,126

Class A Lease

Asurion

Piedmont Center 6

20,000

Class A Lease

Stephens Inc.

3344 Peachtree

12,475

Class A Lease

Buckhead ended the first quarter of 2012 with just over 104,000 SF absorbed. Move-in activity was somewhat quiet with Kids II accounting for almost all of the space filled in the quarter at 102,818 SF.

The office vacancy rate in Buckhead has seen the largest drop of any other submarkets compared to this time last year. Over this period, Buckhead’s vacancy rate dropped 3.3%.

Buckhead’s office leasing activity remained steady in first quarter; however, the submarket saw less activity than other areas such as Central Perimeter, North Fulton and Northwest Atlanta. This could be due to the number of more affordable space options available in these other areas.

Buckhead is the most prominent submarket where previously signed transactions, some dating over a year ago, are now taking occupancy. Kids II was an example of this. The submarket’s absorption levels will be boosted by this move-in activity over the next six months.


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | BUCKHEAD

SKYLINE REVIEW Space Available Direct Sublet 50 45 40

Floors

35 30 25 20 15 10 5

BUILDING

3344 Peachtree

Atlanta Plaza

3630 Peachtree

Two Alliance Center

Tower Place 100

RBA

483,726 SF

650,827 SF

436,309 SF

493,201 SF

609,936 SF

TYPICAL FLOOR SIZE

25,358 SF

24,070 SF

28,259 SF

25,000 SF

21,000 SF

% LEASED

97.6%

67.3%

59.2%

92%

82.2%

13,405 SF

194,398 SF

84,777 SF

24,736 SF

20,610 SF

$34.00-$35.00

$26.50

$33.00-$34.50

$32.22-$35.22

$23.50-$24.50

1

2

3

4

5

LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

3 2

8 4 10

5

8

3 7 5

5 1 4 2 9 7 10 6 6 3

12

4 1 P. 2

| COLLIERS INTERNATIONAL

1

2

9 11


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | BUCKHEAD

ACTIVE PROJECTS 1 Source: CoStar Property

BUCKHEAD ATLANTA $700M Mixed-Use Project 51,000 SF Boutique Office 311,500 SF Retail 370 Luxury Apartment Units Delivering 2013 Developer: Oliver McMillan

2

Terminus 100

Terminus 200

Phipps Tower

The Lenox Bldg.

Prominence in Buckhead

581,874 SF

564,850 SF

472,267 SF

348,152 SF

424,309 SF

23,529 SF

24,400 SF

25,000 SF

18,154 SF

22,332 SF

98.6%

90.2%

18.4%

82.3%

93.6%

13,974 SF

24,800 SF

200,904 SF

31,334 SF

10,423 SF

$34.03-$35.28

$31.75-$33.00

$34.00

$26.00-$28.00

$27.00

6

7

8

9

10

AERIAL LEGEND

POINTS OF INTEREST 1 Lenox Mall

7

UGA Terry College of Business Campus

3330 PEACHTREE Mixed-Use Project 100,000-200,000 SF Office Hotel/Restaurant/Multi-Family Developers: Regent Partners/ Pope & Land

3 PRESERVE PROP. SITE Proposed Luxury Apartments 2.5-acres Up to 250 units Developer: Preserve Properties

4 JLB PARTNERS SITE

2 Phipps Plaza Buildings by Number (see opposite page)

8

Ritz Carlton

3 Market Place

9

Intercontinental Hotel

4 Tower Walk

10

Grand Hyatt

Lenox

Proposed Luxury Apartments 373 units 6.5-acres Approximately $60M Project Developer: JLB Partners LP

MARTA Rail Line New Construction

5 CITYPLACE

5 Buckhead Station Atlanta History

6 Center

11

JW Marriott

12

Buckhead Village

Proposed Condo Development 16-acre Tract Foreclosed by Wells Fargo 2009 Currently For Sale

COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | BUCKHEAD

IN THE NEWS

522 offices in 62 countries on 6 continents

• Long-awaited

Buckhead interchange revamp starts: The interchange of Georgia 400 and I-85 is being reconstructed to allow southbound motorists to access each thoroughfare directly without using arterial roads. For over 20 years, southbound motorists have had to exit GA 400 and/or I-85, then access arterial roads such as Sidney Marcus Blvd., Buford Hwy. and Lenox Rd. to gain access to I-85 and GA 400 northbound, respectively. The new interchange will relieve congestion on the arterial roads and keep traffic moving more freely. The GDOT hopes to have the project completed be the end of 2013. Atlanta expected to boost area retail: The new Buckhead Atlanta development is scheduled to begin reconstruction in the next couple of months. Once underway, the area south of Piedmont Road will begin carving out the landscape for a new retail destination in Buckhead. Despite the increased competition for customers, other retail landlords in the area believe the new project will have a positive affect on their existing properties, and solidify Buckhead as Atlanta’s premier retail destination. Once completed, Buckhead Atlanta will be the start of a retail corridor along Peachtree Road, extending all the way to Phipps Plaza and Selig Properties’ Buckhead Triangle.

United States: 147 Canada: 37 Latin America: 19 Asia Pacific: 201 EMEA: 118

• Buckhead

• Lenders

take back two Buckhead office buildings: Following failed negotiations to restructure debt, two office buildings with different owners were recently foreclosed upon. Securities Centre, which was purchased back in 2006 was foreclosed in November 2011 by Bank of America; and Resurgens Plaza, also purchased in 2006, went back to its lender CWCapital in December 2011.

AT A GLANCE | Buckhead Atlanta •

New owner Oliver McMillan will redevelop project formerly known as ‘Streets of Buckhead’

Purchased for $400 million; plans to invest an additional $300 million.

Urban village concept to include 311,500 SF of retail and restaurants; 51,000 SF of boutique offices; and two 20-story apartment complexes.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS

Work on the project to resume around the spring of 2012, with a target opening in 2014.

$1.8 billion in annual revenue

• Over 2.5 billion square feet under

management • Over 12,000 professionals

UNITED STATES: Colliers International Two Midtown Plaza | Suite 1100 1349 West Peachtree Street, NE Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen

Bob Mathews

Jill Bomar

Craig Mendel

Lee Evans

Scott O’Halloran

Deming Fish

Hugh Pafford

Huston Green

Jodi Selvey

Tim Huffman

Fred Sheats

Russ Jobson

Pete Shelton

Jeff Kelley

Hayes Swann

Drew Lavine

Will Tyler

Michael Lipton

Andrew Walker

Nicole Littleton

Bob Ward

This market report is a research document of Colliers International. Information herein has been deemed reliable and no representation is made as to the accuracy thereof. Colliers International-Atlanta, Inc., and certain of its subsidiaries, is an independently owned and operated business and a member firm of Colliers International Property Consultants, an affiliation of independent companies with over 520 offices throughout 62 countries worldwide.

PEACHTREE PALISADES 1,417 - 47,647 SF Lease Lee Evans / Scott O’Halloran

Accelerating success.

www.colliers.com/atlanta


1Q 2012 | Buckhead Atlanta Office | Market Report