2Q 2012 | Buckhead Atlanta Office | Market Report

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Q2 2012 | BUCKHEAD

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS

Square Feet

NEW SUPPLY, ABSORPTION AND VACANCY RATES 400,000

22%

350,000

21%

300,000

20%

250,000

19%

200,000

18%

150,000

17%

100,000

16%

50,000

15%

0

14% 2Q11

3Q11

Absorption

4Q11

1Q12

Deliveries

Total SF

20,562,505

Vacancy Rate

16.6%

YTD Net Absorption YTD Deliveries

0

Under Construction

0

Avg. Class A Rate

2Q12

464,566

$26.59

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q2 2012

UPDATE Recent Transactions in the Market

Q3 2012

SALES ACTIVITY VACANCY PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

Two Alliance Center

pending

493,201

pending

Highwoods Properties

Prominence in Buckhead

pending

424,309

pending

Crocker Partners

3399 Peachtree Rd.

$59,300,000

348,152

$170.33

Parmenter Realty

415 E Paces Ferry Rd

$3,500,000

26,570

$131.73

415 E. Paces Ferry LLC

Buckhead

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Sapient

3630 Peachtree

23,000

Class A Lease

Consulate of Japan

Phipps Tower

12,870

Class A Lease

Preparis Inc.

Tower Place 100

12,484

Class A Sublease

Counsel on Call

Lenox Towers

11,600

Class B Lease

Buckhead office absorption was second highest in Atlanta in the second quarter of 2012. The largest move-ins for the submarket over the past three months were SunTrust Robinson Humphrey expanding by 135,075 SF in Atlanta Financial Center and Greenberg Traurig which finally made its move into 93,466 SF at Terminus 200.

Office vacancy in Buckhead decreased for a sixth straight quarter and is down 7.5% from its peak in 2010. As of the end of second quarter, there were only 11 office properties in the submarket able to accommodate tenants seeking 30,000 square feet or more.

Leasing activity in the submarket continues to remain active; however, most of the larger leasing transactions taking place are beginning to shift to other submarkets, most notably Central Perimeter and Midtown which tend to compete most against Buckhead.


MARKET REPORT | Q2 2012 | ATLANTA OFFICE | BUCKHEAD

SKYLINE REVIEW Space Available Direct Sublet 50 45 40

Floors

35 30 25 20 15 10 5

BUILDING

3344 Peachtree

Atlanta Plaza

3630 Peachtree

Two Alliance Center

Tower Place 100

RBA

483,726 SF

650,827 SF

436,309 SF

493,201 SF

609,936 SF

TYPICAL FLOOR SIZE

25,358 SF

24,070 SF

28,259 SF

25,000 SF

21,000 SF

% LEASED

97.6%

66.7%

66.5%

94%

83.4%

13,405 SF

194,398 SF

75,568 SF

24,736 SF

20,610 SF

$34.00-$35.00

$26.50

$33.00-$34.50

$32.22-$35.22

$24.00-$26.00

1

2

3

4

5

LARGEST SPACE AVAIL. RENTAL RATE PER SF (Gross)

3 2

8 4 10

5

8

3 7 5

5 1 4 2 9 7 10 6 6 3

12

4 1 P. 2

| COLLIERS INTERNATIONAL

1

2

9 11


MARKET REPORT | Q2 2012 | ATLANTA OFFICE | BUCKHEAD

ACTIVE PROJECTS 1 Source: CoStar Property

BUCKHEAD ATLANTA $700M Mixed-Use Project 51,000 SF Boutique Office 311,500 SF Retail 370 Luxury Apartment Units Delivering 2013 Developer: Oliver McMillan

2

Terminus 100

Terminus 200

Phipps Tower

The Lenox Bldg.

Prominence in Buckhead

581,874 SF

564,850 SF

472,267 SF

348,152 SF

424,309 SF

23,529 SF

24,400 SF

25,000 SF

18,154 SF

22,332 SF

98.6%

90.2%

24.6%

81.1%

90.9%

13,974 SF

24,800 SF

193,228 SF

31,334 SF

11,459 SF

$34.40-$35.65

$33.75-$35.00

$34.00

$26.00-$28.00

$27.50

6

7

8

9

10

AERIAL LEGEND

POINTS OF INTEREST 1 Lenox Mall

7

UGA Terry College of Business Campus

3330 PEACHTREE Mixed-Use Project 100,000-200,000 SF Office Hotel/Restaurant/Multi-Family Developers: Regent Partners/ Pope & Land

3 PRESERVE PROP. SITE Proposed Luxury Apartments 2.5-acres Up to 250 units Developer: Preserve Properties

4 JLB PARTNERS SITE

2 Phipps Plaza Buildings by Number (see opposite page)

8

Ritz Carlton

3 Market Place

9

Intercontinental Hotel

4 Tower Walk

10

Grand Hyatt

Lenox

Proposed Luxury Apartments 373 units 6.5-acres Approximately $60M Project Developer: JLB Partners LP

MARTA Rail Line New Construction

5 CITYPLACE

5 Buckhead Station Atlanta History

6 Center

11

JW Marriott

12

Buckhead Village

Proposed Condo Development 16-acre Tract Foreclosed by Wells Fargo 2009 Currently For Sale

COLLIERS INTERNATIONAL |

P. 3


MARKET REPORT | Q2 2012 | ATLANTA OFFICE | BUCKHEAD

IN THE NEWS

522 offices in 62 countries on 6 continents

• Buckhead

mixed-use project moves forward: Regent Partners and Pope & Land Enterprises have begun the first stages of their Buckhead mixed-use project on Peachtree Street. Plans are to develop a 17,634 SF, two-story building to house a new TD Ameritrade financial services and trading center. The developers also have a second, larger phase project in line that will include a new building consisting of up to 150,000 SF for an unnamed European company’s US headquarters. Retail and either apartments or condos will be a part of the same project. apartments planned by Phipps Plaza: Columbus Realty Partners recently filed plans for a 320unit project in Buckhead, adjacent to Phipps Plaza at Wieuca Road and Park Avenue. The new development will have more than 300,000 square feet that would include several small apartment buildings. The developer is looking to cash in on Buckhead’s location and apartment fundamentals; and attract young employees in the area which prefer to live near entertainment, shopping and restaurants.

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

• New

• Long-awaited

Buckhead interchange revamp starts: The interchange of Georgia 400 and I-85 is being reconstructed to allow southbound motorists to access each thoroughfare directly without using arterial roads. For over 20 years, southbound motorists have had to exit GA 400 and/or I-85, then access arterial roads such as Sidney Marcus Blvd., Buford Hwy. and Lenox Rd. to gain access to I-85 and GA 400 northbound, respectively. The new interchange will relieve congestion on the arterial roads and keep traffic moving more freely. The GDOT hopes to have the project completed be the end of 2013.

AT A GLANCE | Buckhead Atlanta •

New owner Oliver McMillan will redevelop project formerly known as ‘Streets of Buckhead’

Purchased for $400 million; plans to invest an additional $300 million.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS

Urban village concept to include 346,006 SF of retail and restaurants; 98,360 SF of boutique offices; and two 20-story apartment complexes containing 370 units total. Work on the project to resume around the spring of 2012, with a target opening in 2014.

$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.

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

Accelerating success.

www.colliers.com/atlanta


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