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Q1 2012 | NORTHWEST ATLANTA

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

100,000

Vacancy Rate

18%

80,000

17%

Square Feet

60,000 40,000

16%

20,000

15%

0

(20,000)

1Q11

2Q11

3Q11

4Q11

1Q12

(40,000)

14%

27,307,866 17.2%

YTD Net Absorption

(59,442)

YTD Deliveries

0

Under Construction

0

13%

(60,000) (80,000)

12% Absorption

Deliveries

Avg. Class A Rate

$21.33

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

Riverwood 100

$81,500,000

502,527

$162.18

Highwoods Properties

4111 Northside Pkwy.-IBM

$53,600,000

825,000

$64.97

Atlanta Public Schools

355 Tower Rd.

$10,450,000

55,000

$190

Wellstar Health System

1090,1130 Northchase Pky.

$7,700,000

165,205

$46.61

Crossgate Partners

Cumberland

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Travelport

300 Galleria

150,000

Class A Renewal

Graphic Packaging

RiverEdge Summit

109,556

Class A Lease

Gentiva

Riverwood 100

60,000

Class A Renewal & Expansion

Silverpop Systems

200 Galleria

22,822

Class A Expansion

The Cumberland office market saw modest negative absorption in the first quarter following two consecutive quarters of occupancy gains. The increase in vacancy can be traced to tenant consolidations within the submarket and also a few tenant relocations to neighboring submarkets.

Activity in the Cumberland office market is lackluster, yet balanced. The area is seeing a mixed bag of both tenant vacancies, space renewals and new leasing. This submarket, however, has lagged behind competing markets such as Buckhead and Central Perimeter which are winning the majority of the larger leasing requirements.

Not much is expected to change for the submarket’s office market over the next few months. Nevertheless, Cumberland remains one of the most viable options to tenants seeking office space.


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA

SKYLINE REVIEW Space Available Direct Sublet 35

Source: CoStar Property

30

Floors

25 20 15 10 5

Riverwood 100

Overlook III

200 Galleria

400 Galleria

Cumberland Center II

502,527 SF

438,709 SF

438,273 SF

440,000 SF

413,247 SF

TYPICAL FLOOR SIZE

21,889 SF

26,000 SF

22,000 SF

23,157 SF

24,308 SF

% LEASED

90.2%

85.5%

74%

86.7%

84.3%

24,931 SF

38,512 SF

23,094 SF

24,586 SF

49,500 SF

$24.50

$23.50-$24.50

$17.00-$21.00

$24.50

$22.50

1

2

3

4

5

One Paces West

Two Paces West

Platinum Tower

The Towers at Wildwood Plaza

RBA

274,948 SF

371,523 SF

312,591 SF

706,307 SF

TYPICAL FLOOR SIZE

22,000 SF

20,640 SF

21,000 SF

43,362 SF

% LEASED

85.8%

82.3%

86.9%

88.7%

34,253 SF

20,734 SF

11,186 SF

25,341 SF

$21.00-$21.50

$21.00-$21.50

$22.50

$19.75-$23.00

6

7

8

9

BUILDING RBA

LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

35 30

Floors

25 20 15 10 5

BUILDING

LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

P. 2

| COLLIERS INTERNATIONAL


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA

9 5

4

8

3

4 2 3

2 1 5

1

1

4 2

6 7

6

AERIAL LEGEND

PLANNED CONSTRUCTION

Buildings by Numbers (see opposite page)

1

RIVERWOOD PROJECT

2

555 GALLERIA

New Construction

POINTS OF INTEREST Chattahoochee Recreation Center

1 Cumberland Mall

4

2 Galleria Mall

5 Dobbins Air Base

3

Cobb Energy Arts Centre

$300M project 530,000 SF Class A office 90,000 SF retail 400 residential units 200 room hotel Developer: Seven Oaks Co.

250,000-300,000 SF Class A Build-To-Suit Construction contigent upon leasing Developer: Childress Klein

6 Vinings Area

COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q1 2012 | ATLANTA OFFICE | NORTHWEST ATLANTA

IN THE NEWS

522 offices in 62 countries on 6 continents

• Gentiva

expansion smaller than expected: Gentiva Health Services recently signed a renewal & expansion totaling 60,000 square feet at Riverwood 100. The amount of the expansion totals about 7,000 square feet. Back in 2011, the company was reported seeking almost 65,000 square feet for expansion, following an acquisition of Odyssey Healthcare in Dallas, TX and possibly adding 100 jobs. The new lease, however, does not include these additional jobs and for the time being it appears the smaller expansion will suit the company’s short-term needs.

County nabs over two dozen major projects in 2011: The economic development teams in Cobb County and the Cumberland Community Improvement District were busy securing new business in 2011. The area attracted over two dozen major projects in the last twelve months. The most recent win was the announcement of Home Depot choosing Cobb for a new customer support call center which will bring 700 jobs to the county. Other big wins in the year were Osmotica Pharmaceutical Corp. investing $20 million in a manufacturing and R&D facility in Marietta, Novelis choosing the Kennesaw area for a new research and development center, and CCH Small Firm Services choosing to bring 200 employees from outside the state to its Kennesaw operation. Business leaders hope these accomplishments will provide momentum going forward into 2012 as they target specific industry clusters such as aerospace, business & professional services, supply-chain logistics and information technology.

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

• Cobb

Square Feet

KENNESAW | MARIETTA | CHEROKEE CO. Office Market Stats

140,000

18%

120,000

17%

100,000

16%

80,000

15%

60,000

8,608,157

Vacancy Rate

15.3%

YTD Net Absorption

32,161

14%

40,000

13%

20,000

12%

0 (20,000)

Total SF

1Q11

2Q11

3Q11

4Q11

1Q12

(40,000)

11% 10%

Absorption

Deliveries

YTD Deliveries

0

Under Construction

16,650

Avg. RentalRate

$16.06

Vacancy

Source: CoStar Property, Colliers Research

COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTHWEST ATLANTA LISTINGS

JONQUIL VILLAGE

955 COBB PLACE BLVD.

GALLERIA 600

10,376-20,752 SF Lease Andrew Walker

10,731 SF Lease Andrew Walker

14,200 SF Sublease Pete Shelton

OVERLOOK III 11,184 SF Sublease Andrew Walker

www.colliers.com/atlanta

NEWMARKET BUSINESS PROF. BLDGS. @ PARK WOODSTOCK 1,060-4,653 SF Lease Bldg. 970 19,311 SF For Sale Lee Evans / Scott O’Halloran Andrew Walker / Craig Mendel

$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.

Accelerating success.


1Q 2012 | Northwest Atlanta Office | Market Report