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Q3 2010 | BUCKHEAD

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

19,818,757

1,200,000

31%

Vacancy Rate

26%

YTD Net Absorption

266,162

YTD Deliveries

908,852

23.5%

1,000,000 800,000 600,000

21%

400,000 16%

200,000 0 (200,000)

11% 3Q09

4Q09

1Q10

2Q10

(400,000)

6% Absorption

Deliveries

Under Construction

0

3Q10

Avg. Class A Rate

$25.07

Source: CoStar Property

Vacancy

MARKET INDICATORS Q3 2010

NEXT QTR

UPDATE Recent Transactions in the Market SALES ACTIVITY

VACANCY PROPERTY ADDRESS

SALE PRICE

SIZE SF

PRICE / SF

BUYER

NET ABSORPTION CONSTRUCTION

NO 2010 ACTIVITY

RENTAL RATE

Buckhead

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Kids II

Terminus 200

102,818

Class A Lease

J. Walter Thompson

3630 Peachtree

48,000

Class A Lease

Ridgeworth Capital

Terminus 200

34,000

Class A Lease

McCann Erickson

Terminus 200

24,190

Class A Lease

Buckhead posted its strongest quarter of office absorption in three years this quarter. Total occupancy increased by 267,541 SF over the past three months. The largest move-ins occurred in Two Alliance Center, Prominence and Terminus 200

Two headquarter relocations highlighted the submarket’s positive absorption in third quarter. Novelis relocated and expanded from its current Buckhead office to Two Alliance Center, moving into 100,178 SF. Sony Ericsson moved its North American headquarters from the Research Triangle in North Carolina to 48,907 SF at Terminus 200.

Buckhead’s newest office towers continue to see the strongest leasing activity in the market.


MARKET REPORT | Q3 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%

76.4%

24.4%

64.5%

88.2%

12,475 SF

64,258 SF

329,955 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 | Q3 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%

65.3%

16%

77.5%

64.5%

13,974 SF

184,886 SF

389,783 SF

32,611 SF

116,100 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 | Q3 2010 | ATLANTA OFFICE | BUCKHEAD

IN THE NEWS

480 offices in 61 countries on 6 continents

• Kids

II moving to Buckhead’s Terminus 200: One of the largest transactions to date was recently signed by Kids II which will be moving from its North Fulton office to Buckhead’s Terminus 200. The baby toy and products maker will move into just over 100,000 SF sometime next year, marking an expansion of their current office space usage at 555 North Point Center East in Alpharetta. Kids II decided to relocate to Buckhead to be closer to the Savannah College of Art & Design which it works closely with on product design. In addition, Terminus 200’s location will provide an expanded streetlevel showroom for the company. The lease raises the percentage leased in the building to 65%. future of CityPlace: CityPlace, once one of the most ambitious projects for Buckhead, was scrapped by The Related Group when a construction loan became unattainable. Subsequently the site was foreclosed upon and picked up by Wells Fargo for 27% less than the loan amount. Cousins Properties, which was going to develop condos for the original project, is now advising the bank and foresees the site as being a multi-family play. The 19 +/- acres at E. Paces Ferry & Roxboro remain undeveloped and far from its original plans of 3,860 residential units, 110,000 SF of retail and 28 town homes.

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

• The

• JLB

buys Buckhead site for apartment project: JLB Partners has purchased 6.5 acres for $10M at Pharr and Peachtree Roads where it plans to build a 300 apartment unit project beginning next year.

$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 24.4% leased.

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

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

Scott O’Halloran

Lee Evans

Hugh Pafford

Huston Green

Jodi Selvey

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

Fred Sheats

Nicole Kamen

Pete Shelton

COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen

Craig Mendel

Jeff Kelley

Hayes Swann

Brett Kingman

Andrew Walker

Michael Lipton

Bob Ward

Bob Mathews

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.

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

Accelerating success.

www.colliers.com/atlanta


3Q 2010 | Atlanta Buckhead Office | Market Report