3Q 2011 | Atlanta Buckhead Office | Market Report

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Q3 2011 | BUCKHEAD

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Total SF

400,000

Vacancy Rate

24%

20,604,921 19%

350,000 22%

Square Feet

300,000 250,000

YTD Net Absorption

628,786

20%

200,000 18%

150,000 100,000

16%

50,000 0

YTD Deliveries

0

Under Construction

0

14% 3Q10

4Q10

Absorption

1Q11

2Q11

Deliveries

Avg. Class A Rate

3Q11

$24.83

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q3 2011

UPDATE Recent Transactions in the Market

Q4 2011

SALES ACTIVITY VACANCY PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

3344 Peachtree Rd.

$167,300,000

483,726

$345.86

Parkway Properties

3314 Peachtree Rd./Land

$9,000,000

9,187

$979.65

Kurkin Forehand Brandes

3330 Peachtree Rd.

$5,500,000

62,499

$88

Pope & Land

Buckhead

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

SunTrust Robinson Humphrey

Atlanta Financial Center

229,894

Class A Renewal & Expansion

Morris Manning Martin

Atlanta Financial Center

124,000

Class A Renewal & Expansion

Capgemini

Prominence

24,816

Class A Lease

Prudential

Tower Place 200

16,045

Class A Lease

Yet again Buckhead is proving its dominance in the Atlanta office market. The submarket saw its occupancy increase by 352,658 SF in the third quarter. The largest move-ins contributing to this absorption were Windham Brannon taking 35,817 SF at 3630 Peachtree, Novelis moving into its expansion of 25,030 SF at Two Alliance and SecurAmerica occupying 20,838 SF at the Lenox Building.

Over 628,000 SF of office space has been filled in Buckhead year-to-date. This is the largest amount of all Atlanta office submarkets; and on the whole, basically accounts for all of the positive office absorption in the Atlanta market in 2011.

The office vacancy rate in Buckhead is below 20% for the first time since the end of 2009. Activity in Buckhead’s newest buildings over the past two years have helped lower their delivery impact.


MARKET REPORT | Q3 2011 | 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

436,275 SF

493,201 SF

609,936 SF

TYPICAL FLOOR SIZE

25,358 SF

24,070 SF

28,877 SF

25,000 SF

21,000 SF

% LEASED

98.5%

61.6%

44%

89.4%

86.4%

12,475 SF

254,810 SF

84,795 SF

14,493 SF

15,775 SF

$32.00-$35.00

$26.50

$32.60-$34.10

$35.00-$38.00

$23.50-$24.50

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 | Q3 2011 | 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

100%

91.8%

18.4%

82.1%

90.1%

13,974 SF

24,800 SF

200,904 SF

20,838 SF

34,616 SF

$34.03-$35.28

$34.60-$35.85

$32.80

$26.00-$27.00

$25.50

6

7

8

9

10

AERIAL LEGEND

POINTS OF INTEREST 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

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

Buildings by Number (see opposite page)

Lenox

Proposed Luxury Apartments 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 | Q3 2011 | ATLANTA OFFICE | BUCKHEAD

IN THE NEWS

512 offices in 61 countries on 6 continents

• Streets

of Buckhead ‘restart’ delayed to next year: OliverMcMillan, the new owner of the former Streets of Buckhead site, has delayed construction of the project’s redo to the end of the first quarter of 2012. Development of the restructured project, now named Buckhead Atlanta, was expected to begin late 2011; however, the developer’s aim to combine the ideas of its own with those of former owner Ben Carter Properties has resulted in some of the delay. Part of the process includes scaling down the luxury aspects from Ben Carter’s plans. OliverMcMillan still plans to keep some parts of Buckhead Atlanta as luxury-oriented, but also wants to bring other elements into the fold in order to drive foot traffic. Fall 2013 is the new targeted opening date for the overhaul. keeps major tenant: The Atlanta Financial Center in Buckhead has kept yet another major tenant. SunTrust Robinson Humphrey decided to renew its 90,000 SF existing lease and also expand by another 140,000 SF making it the largest tenant in the complex; and also the largest lease in the submarket this year. The transaction comes on the heels of Morris Manning & Martin deciding to renew at Atlanta Financial Center following a consideration to move to Midtown’s Campanile building. With both transactions, the Atlanta Financial Center complex is now 80% leased. SunTrust Robinson expects to grow in the near future and needed the expansion space to accommodate the extra workers. The firm expects to occupy the expansion space by the summer of 2012. Its renewed lease term runs for 11 years.

United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117

• Complex

AT A GLANCE | Buckhead Atlanta •

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

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

Urban village concept to include 311,500 SF of retail and restaurants; 51,000 SF of boutique offices; and two 20-story apartment complexes.

Work on the project to resume around the end of first quarter 2012, with a target opening in 2013.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | BUCKHEAD LISTINGS

$1.5 billion in annual revenue

• Over 2.2 billion square feet under

management • Over 13,000 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

Lee Evans

Craig Mendel

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

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 512 offices throughout more than 61 countries worldwide.

PEACHTREE PALISADES

4153 ROSWELL RD.

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

2,520 SF Sale/Lease Andrew Walker

Accelerating success.

www.colliers.com/atlanta


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