Page 1

Q1 2011 | CENTRAL PERIMETER

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 200,000

22% 20%

Square Feet

100,000

Total SF

29,023,718

Vacancy Rate

20%

YTD Net Absorption

(148,762)

18% 0

16% 1Q10

2Q10

3Q10

4Q10

1Q11

14%

(100,000)

YTD Deliveries Under Construction

0 300,000

12% (200,000)

10% Absorption

Deliveries

Avg. Class A Rate

$22.05

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q1 2011

UPDATE Recent Transactions in the Market

Q2 2011

SALES ACTIVITY

VACANCY NET ABSORPTION CONSTRUCTION

RENTAL RATE

PROPERTY ADDRESS

SALE PRICE

SIZE SF

PRICE / SF

BUYER

600 Morgan Falls Rd.

$5,000,000

106,678

$46.87

Parkway Properties

5424 Glenridge Dr.

$4,250,000

15,000

$283.33

Shoffland Holdings LLC

4800 Ashford Dunwoody

$3,400,000

44,992

$75.57

4800 Ashford Dunw. LLC

8215 Roswell Rd.-Bldg 300

$720,000

10,000

$72

Anthente Ind. Holdings

Central Perimeter

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Zurich North America

1001 Perimeter Summit

112,316

Class A Lease

EchoStar Corp.

211 Perimeter Center Pky.

49,978

Class A Renewal

Mary Hall Freedom House

200 Hannover Park Rd.

19,300

Class C Renewal

Skylight Financial

1455 Lincoln Pkwy.

17,203

Class A Renewal

The Central Perimeter submarket experienced a rough start to the year in terms of office absorption. Occupancy dropped by almost 150,000 SF in the first quarter thanks to tenant consolidations to neighboring submarkets.

The submarket has the highest concentration of vacant space in the Atlanta office market. Since this time last year, the overall vacancy rate has increased by 1.3%. This is the largest increase of any other office submarket during this period.

With office demand tepid in Atlanta, Central Perimeter continues to struggle finding tenants to fill existing vacancies. The submarket is known to attract Fortune 500 companies. The problem is these companies remain cautious on expansion plans.


MARKET REPORT | Q1 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

SKYLINE REVIEW Space Available Direct Sublet 35

Source: CoStar Property

30

Floors

25 20 15 10 5

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

Concourse VI

Concourse V

Three Ravinia

Glenridge Highlands II

2002 Summit Blvd.

697,400 SF

687,107 SF

813,145 SF

415,000 SF

390,139 SF

83.4%

94.9%

89.4%

52.9%

81.5%

48,868 SF

76,491 SF

51,205 SF

184,543 SF

48,000 SF

$24.00-$25.00

$24.0-$25.00

$24.00

$22.50-$26.50

$26.50

1

2

3

4

5

7000 Central Park

400 Northpark

One Ravinia

Two Ravinia

64 Perimeter Ctr. E

415,324 SF

586,256 SF

386,239 SF

437,826 SF

381,432 SF

86.3%

74.9%

65.8%

84.1%

10.6%

16,362 SF

131,509 SF

47,204 SF

24,312 SF

363,630 SF

$23.50

$25.00-$25.50

$20.00-$22.00

$21.50-$23.50

$20.00-$21.00

6

7

8

9

10

35 30

Floors

25 20 15 10 5

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

P. 2

| COLLIERS INTERNATIONAL


MARKET REPORT | Q1 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

7 2 4

5

6

1

8 9 3

10

1 1 2 5 3

2

3

4

4 6

PLANNED CONSTRUCTION

AERIAL LEGEND

1

3

Buildings by Number (see opposite page) MARTA Rail Line New Construction

POINTS OF INTEREST

4004 PERIMETER SUMMIT

600,000 SF Planning Stage Developer: Barry Real Estate

400,000 SF Planning Stage Developer: Hines Properties

2

1 Perimeter Mall

4 Scottish Rite

2 Northside Hospital

5 Perimeter Place

St. Joseph’s 3 Hospital

240 PERIMETER CTR. PKWY.

6 Marist High School

4

ABERNATHY 400

TWO NORTH PLACE

350,000 SF Planning Stage Delivering TBD Developer: Ackerman/Russell

230,000 SF Planning Stage Delivering TBD Developer: Crocker Partners COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q1 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

IN THE NEWS

480 offices in 61 countries on 6 continents

•A

deal for 31-story Three Ravinia tower stalls: Early lease termination rights for its largest tenant put the sale of Three Ravinia on hold. The 31-story, 813,000 SF tower is Central Perimeter’s largest and has been on the market for over a year. The owner of the building, Colonial Properties Trust, was recently in discussions with Crocker Partners to sell the building; however, concerns arose as to the future intentions of the building’s largest tenant, InterContinental Hotels Group. InterContinental has early termination rights on its current lease at Three Ravinia. The company is looking to expand its Atlanta presence and such a prospect in the market is a gold mine for other building owners who are willing to offer extremely aggressive incentive packages for such a creditworthy tenant. The uncertainty of what the company will do with its current space at Three Ravinia is hampering the owner’s ability to sell the building, as seen by Crocker Partners deciding to opt out of the investment.

• Developers

plans new hotel in Perimeter Summit: Legacy Property Group and Seven Oaks Company are planning a 160-room boutique hotel at Perimeter Summit which will be the first hotel built in several years in the submarket. The targeted date of completion for the new hotel is the summer of 2013.

• Zurich

American chooses Perimeter Summit: Zurich American Insurance Co. signed a lease for 112,316 SF at 1001 Perimeter Summit, moving from space at 3003 Perimeter Summit close by. The move is an expansion of the company’s current office footprint in Atlanta and part of a regional consolidation which could bring up to 150 new jobs to the submarket. AT A GLANCE | Hammond Half-Diamond Interchange

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

$2 billion in annual revenue

• Over 2 billion square feet under

management • Over 15,000 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

Half-diamond interchange: Northbound entrance to GA 400 from Hammond Drive, Southbound exit from GA 400 to Hammond Drive.

Expected to relieve congestion at GA 400 and I-285.

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS:

Hammond Drive bridge will be replaced and raised higher to make room for future expansion of GA 400 lanes.

Bob Allen

Bob Mathews

Lee Evans

Craig Mendel

Project will cost an estimated $18 million to complete; completion date scheduled for Fall 2011.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | CENTRAL PERIMETER LISTINGS

Deming Fish

Scott O’Halloran

Huston Green

Hugh Pafford

Tim Hoffman

Jodi Selvey

Russ Jobson

Fred Sheats

Nicole Kamen

Pete Shelton

Jeff Kelley

Hayes Swann

Brett Kingman

Andrew Walker

Drew Levine

Bob Ward

Michael Lipton

219 PERIMETER CTR. 4,942-21,947 SF Sublease Bob Mathews / Fred Sheats

1455 LINCOLN PKWY. 4,392 SF Sublease Brett Kingman / Russ Jobson 5883 GLENRIDGE

8215 ROSWELL RD. Bldgs. 600, 1000 10,000-15,000 SF Sale Hugh Pafford / Jodi Selvey

www.colliers.com/atlanta

16,104 SF Sublease Fred Sheats

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.

5620 GLENRIDGE 84,500 SF Lease/Sale Hugh Pafford

Accelerating success.

1Q 2011 | Atlanta Central Perimeter Office | Market Report  

Colliers International | Atlanta 1Q 2011 report for Central Perimeter Atlanta office market

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