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Q1 2012 | MIDTOWN

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

300,000

Vacancy Rate

Square Feet

200,000 100,000 0 1Q11

2Q11

3Q11

4Q11

1Q12

(100,000)

(200,000) (300,000) Absorption

Deliveries

20% 19% 18% 17% 16% 15% 14% 13% 12% 11% 10%

22,225,522 18.4%

YTD Net Absorption

241,527

YTD Deliveries Under Construction

0 450,000

Avg. Class A Rate

$27.00

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q1 2012

UPDATE Recent Transactions in the Market

Q2 2012

SALES ACTIVITY VACANCY PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

Promenade II

$137,500,000

774,344

$177.57

Cousins Properties

201 17th Street

$48,800,000

349,402

$139.67

CBRE Investors

675 Ponce de Leon

$27,000,000

2,000,000

$13.50

Jamestown Properties

728-736 West Peachtree

$4,439,600

25,400

$174.79

SunTrust Banks

Midtown

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

tvsdesigns

Promenade II

74,854

Class A Renewal & Contraction

IMG Worldwide

1075 Peachtree

42,868

Class A Lease

Norfolk Southern

Promenade II

37,000

Class A Lease

Duane Morris

1075 Peachtree

27,898

Class A Lease

Midtown had the second highest amount of office space absorbed in the first quarter. Occupancy increased by 241,527 square feet during the period. The largest move-ins contributing to this increase were mostly full floor transactions; examples being Ogilvy & Mather at 217 17th Street, Gensler at 999 Peachtree and Routematch at One Atlantic Center.

Leasing activity in Midtown has been fairly consistent and steady over the past year. Since the first quarter of 2012, the overall office vacancy rate in the submarket has dropped one percent.

The average rental rate for office space in Midtown is the highest in the Atlanta market at $24.52/sf. Still, despite the positive conditions, rents have yet to show any signs of trending upwards.

Looking ahead, Midtown is expected to be one of the stronger office submarkets in Atlanta in 2012.


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | MIDTOWN

SKYLINE REVIEW Space Available Direct Sublet 50 45 40

Floors

35 30 25 20 15 10 5

BUILDING

One Atlantic Center

1180 Peachtree

1075 Peachtree

Promenade II

1100 Peachtree

RBA

1,079,312 SF

669,575 SF

752,710 SF

774,344 SF

581,833 SF

TYPICAL FLOOR SIZE

23,500 SF

22,130 SF

26,360 SF

24,372 SF

22,269 SF

% LEASED

90.7%

93.9%

58.9%

71.4%

85.9%

66,748 SF

15,740 SF

249,950 SF

95,797 SF

46,162 SF

$27.50-$33.00

$33.25-$35.25

$36.00-$38.00

$26.00

$27.68-$32.93

1

2

3

4

5

LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

7 5

10

2 8 6 3

3 5 2

4

8

6 9 11

1 4

9

1

10 12

3 4 1 2 P. 2

7

| COLLIERS INTERNATIONAL


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | MIDTOWN

ACTIVE PROJECTS Source: CoStar Property

1 SKY HOUSE 320 Multi-Family Units 8,400 SF Retail Under Construction Developer: Novare Group

2 77 12TH STREET 314 Apartment Units Under Construction Developers: Daniel Corporation/ Selig Enterprises

3 1400 PEACHTREE

999 Peachtree

271 17th Street

The Proscenium

Atlantic Center Plaza

Campanile Bldg.

621,908 SF

541,318 SF

533,135 SF

499,601 SF

446,626 SF

22,995 SF

26,300 SF

25,000 SF

20,816 SF

23,382 SF

89.1%

65.6%

100%

84.1%

52%

23,170 SF

105,534 SF

20,480 SF

181,189 SF

203,357 SF

$27.00-$29.00

$29.50-$30.50

$28.00-$32.00

$23.00-$26.00

$28.65-$30.65

6

7

8

9

10

AERIAL LEGEND

Buildings by Number (see opposite page)

POINTS OF INTEREST 1 Georgia Tech

7

Colony Square

2 Atlantic Station

8

Federal Reserve

9

Margaret Mitchell House & Museum

4 of Art & Design

10

Technology Square

5 Ansley Park

11

The Fox Theater

12

The Varsity

Center for

3 Puppetry Arts

1.7-Acre Site Zoned for Mixed-Use Recently Sold for $6M (Jun. ‘11) Owner: Dewberry Capital

OFF MAP PONCE CITY MARKET Mixed-Use Redevelopment 450,000 SF Office 245,494 SF Retail 20,645 SF Restaurants 204 Residential Units 160 Hotel Rooms Developers: Jamestown Prop./ Green Street Prop.

PROPOSED DEV. 4

MARTA Rail Line Savannah College

New Construction

Woodruff Arts

6 Center

METROPOLITAN CENTER 570,000 SF Office Tower Mixed-Use Development Developer: Daniel Corp/MetLife/ Selig Company COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | MIDTOWN

IN THE NEWS

522 offices in 62 countries on 6 continents

• Novare

proposes Midtown apartment tower: Atlanta developer Novare Group is proposing a new apartment tower in Midtown located near the intersection of Juniper and 6th Streets. The project which is being called 100 6th Street would consist of up to 320 units with street-level retail in a 23-story tower. The developer currently has SkyHouse, a 320-unit apartment tower, under construction at West Peachtree and 12th Streets. With both projects Novare is looking to take advantage of Atlanta’s growing population of young adults and the “rentership society” caused by the housing market collapse. in lead to buy Ten Peachtree Place: Following a brief stint on the market, Ten Peachtree Place is now under contract and expected to close by the end of May. Cousins Properties and CocaCola are expected to sell the 260,000 SF office building to Prudential Real Estate Investors for what could be $200 per square foot. The building’s largest tenant, AGL, signed a long-term renewal last year in the building. This lease renewal helped solidify Ten Peachtree Place as a core asset and is a reason why Prudential Real Estate was attracted to purchasing the building.

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

• Prudential

• Ad

agency Ogilvy & Mather makes big move to Midtown: Manhattan ad agency Ogilvy & Mather recently moved from its current offices in Roswell and Buckhead to 271 17th Street. The company opened its second U.S. digital labs in the new space, and moved some of its digital marketing functions from New York to Atlanta. The ad agency took a full floor in the building, or about 26,724 SF. The move into the heart of the city brings Ogilvy & Mather closer to some of its biggest clients, and also allows it to recruit new talent.

AT A GLANCE | City Hall East

Former Sears, Roebuck & Co. mailing facility and most recently Atlanta City Hall East.

2-million square foot complex to be redeveloped into a mixed-use project containing 245,000 SF of retail space; 450,000 SF of Class A office; loft-style condominiums; several hundred multi-family residences for sale and rent; and restaurants.

Jamestown Properties is investing $180 million into the redevelopment, including $15.5 million to the City of Atlanta for the property. Under construction as of 4th Quarter 2011.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | MIDTOWN LISTINGS

$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

PERSHING POINT PLAZA 13,000-64,521 SF Sublease Scott O’Halloran / Lee Evans / Deming Fish

715 PEACHTREE

1355 PEACHTREE

328,600 SF Lease Scott O’Halloran / Lee Evans / Deming Fish

2,571 SF Sale/Lease 7,433 SF For Sale Andrew Walker / Fred Sheats

www.colliers.com/atlanta

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.

Accelerating success.


1Q 2012 | Atlanta Midtown Office | Market Report