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Q2 2010 | BUCKHEAD

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

19,728,911

1,200,000

31%

Vacancy Rate

24.7%

26%

YTD Net Absorption

29,488

1,000,000 800,000 600,000

21%

400,000

0 (200,000)

YTD Deliveries

915,626

16%

200,000

11% 2Q09

3Q09

4Q09

1Q10

(400,000)

6% Absorption

Deliveries

Under Construction

0

2Q10

Avg. Class A Rate

$25.67

Source: CoStar Property

Vacancy

MARKET INDICATORS Q2 2010

NEXT QTR

UPDATE Recent Transactions in the Market SALES ACTIVITY

VACANCY PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

Tower Place 200 (‘09 Forc.)

$32,000,000

259,888

$123.13

CW Capital

3166 Mathieson Dr. (‘09)

$3,350,000

8,500

$394.12

Forum Inv. Properties

38 Old Ivy-3 & 4 (‘09)

$2,058,000

6,256

$328.96

ISP Sports

66 Lenox Pointe (‘09)

$880,000

3,240

$182.07

The Issa Law Firm

Buckhead

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Greenberg Traurig

Terminus 200

110,329

Class A Lease

Novelis

Two Alliance Center

100,200

Class A Lease

Omnicom Group

One Alliance Center

100,000

Class A Renewal

Wells Fargo

Prominence in Buckhead

57,704

Class A Lease

Buckhead office absorption is up 32% from this time last year. Second quarter’s positive absorption can be mostly attributed to a number of small occupancies ranging between 7,000 to 13,000 square feet. The larger move-ins for the quarter mostly consisted of relocations within the submarket which in some cases resulted in a net loss of occupied space.

Office leasing remains strong in the submarket. Tenants with leases expiring in the next couple of years, and requiring a full floor of office space are looking at Buckhead office towers.

Concessions and allowances are averaging a year of free rent and between $60-$80 per square foot on a 10-year deal for Class A office space in the submarket; still among the highest in Atlanta.


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | BUCKHEAD

SKYLINE REVIEW Space Available Direct Sublet 50 45 40

Floors

35 30 25 20 15 10 5

BUILDING RBA % LEASED LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

3344 Peachtree

Atlanta Plaza

3630 Peachtree

Two Alliance Center

Tower Place 100

482,699 SF

619,130 SF

436,585 SF

493,201 SF

609,936 SF

93.3%

76.7%

1.8%

61%

87%

12,475 SF

64,258 SF

428,785 SF

102,833 SF

23,135 SF

$32.00-$35.00

$25.00-$26.50

$32.00-$34.00

$32.00-$34.00

$24.50

1

2

3

4

5

3 2

8 4 10

5 5 1 4 9 7 10 6

6 12

P. 2

| COLLIERS INTERNATIONAL

8

3 7

1

2

9 11


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | BUCKHEAD

RECENT DELIVERIES 3 Source: CoStar Property

3630 PEACHTREE 436,585 SF Delivered January 2010 Developer: Pope & Land

4

TWO ALLIANCE CENTER Terminus 100

Terminus 200

Phipps Tower

The Lenox Bldg.

Prominence in Buckhead

581,874 SF

564,850 SF

479,041 SF

348,152 SF

424,309 SF

98%

42.2%

6.3%

81.4%

61.6%

11,842 SF

326,444 SF

442,365 SF

32,611 SF

133,323 SF

$30.50

$31.50-$32.75

$32.50

$26.00-$28.00

$24.50

6

7

8

9

10

AERIAL LEGEND

Buildings by Number (see opposite page)

493,201 SF Delivered September 2009 Developer: Tishman Speyer

7

TERMINUS 200

POINTS OF INTEREST

564,850 SF Delivered September 2009 Developer: Cousins Properties

1 Lenox Mall

7

UGA Terry College of Business Campus

2 Phipps Plaza

8

Ritz Carlton

3 Market Place

9

Intercontinental Hotel

4 Tower Walk

10

Grand Hyatt

5 Buckhead Station

11

JW Marriott

PHIPPS TOWER

Buckhead Village

479,041 SF Delivered March 2010 Developer: Crescent Resources

Lenox

8

MARTA Rail Line New Construction

Atlanta History

6 Center

12

COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q2 2010 | ATLANTA OFFICE | BUCKHEAD

IN THE NEWS

480 offices in 61 countries on 6 continents

• Sony

Ericsson relocating Americas HQ to Atlanta: As part of a global restructuring strategy, Sony Ericsson is moving from its current North American headquarters in Research Triangle Park, North Carolina to Terminus 200 in Buckhead. The company will lease two floors totaling 48,907 SF in the recently delivered office tower. The relocation provides Sony Ericsson with $4 million in state incentives, and closer proximity to its biggest customer AT&T Mobility and Hartsfield-Jackson International Airport. The move will bring 180 jobs to Atlanta including top management executives, sales persons and marketing staff. deal for Buckhead tower: One of the largest leases this year was recently signed at Buckhead’s Terminus 200 building. Greenberg Traurig will occupy 110,329 SF in the office tower, moving into the office tower next summer. The agreement took more than a year to be completed due to a restructuring of debt by Cousins Properties. The transaction brings Terminus 200 to almost 50% leased.

United States: 135 Canada: 39 Latin America: 17 Asia Pacific: 194 EMEA: 95

• Huge

•A

success story in Buckhead: Prominence in Buckhead, which lost its anchor tenant Marsh & McLennan in the first quarter, is back up to 62% leased thanks to recent lease signings. The building was 35% leased prior to 105,000 SF in lease commitments by Wells Fargo, Railcar Management and JP Morgan. Owners of the building have been credited with pursuing an aggressive strategy to increase occupancy.

$2 billion in annual revenue

• Over 2 billion square feet under

management • Over 15,000 professionals

UNITED STATES: AT A GLANCE | 3630 Peachtree

Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845

34-story, 735,296 SF mixed-use tower consisting of 420,201 SF of Class A office, 137 luxury condominium units and 16,384 SF of ground floor retail.

Delivered First Quarter 2010.

Office building currently 1.8% leased.

3.9-acre site located on the northwest corner of Peachtree Road and Peachtree-Dunwoody Road which provides unequalled vista views.

Bob Allen

Bob Mathews

Full project, including phase II residential tower, is a collaborative effort from four developers: Pope & Land, Duke Realty, Novare Group and Post Properties.

Neal Baker

Craig Mendel

Convenient and easy walking access to surrounding world-class shopping, fine dining and luxury hotels. Also within a mile of two MARTA rail stations.

Russ Jobson

Jodi Selvey

Nicole Kamen

Fred Sheats

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:

Patrick Braswell

Scott O’Halloran

Lee Evans

Hugh Pafford

Jeff Kelley

Pete Shelton

Brett Kingman

Andrew Walker

Michael Lipton

Bob Ward

COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS

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 480 offices throughout more than 61 countries worldwide.

LENOX TOWERS

PEACHTREE PALISADES

NORTH TOWER 343 - 7,356 SF Lease SOUTH TOWER 343 - 17,214 SF Lease Jodi Selvey / Scott O’Halloran

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

www.colliers.com/atlanta

Accelerating success.


2Q 2010 | Atlanta Buckhead Office | Market Report