4Q 2010 | Atlanta Central Perimeter Office | Market Report

Q3 2010 | CENTRAL PERIMETER

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS

Square Feet

NEW SUPPLY, ABSORPTION AND VACANCY RATES 200,000

22%

100,000

20%

0

18%

(100,000)

4Q09

1Q10

2Q10

3Q10

4Q10

16%

(200,000)

14%

(300,000)

12%

(400,000)

10% Absorption

Deliveries

Total SF

28,376,798

Vacancy Rate

20.4%

YTD Net Absorption

17,801

YTD Deliveries

0

Under Construction

0

Avg. Class A Rate

$22.29

Source: CoStar Property

Vacancy

MARKET INDICATORS Q4 2010 VACANCY

NEXT QTR

UPDATE Recent Transactions in the Market SALES ACTIVITY

—

PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

—

—

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

9000 Central Park

$31,955,979

204,632

$156.16

Cox Enterprises

41, 47, 53 Perimeter Ctr. E.

$14,864,999

279,788

$53.13

Atlanta Property Group

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

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

United Healthcare

Ashford Green

100,000

Class A Renewal

Munich American Reass.

56 Perimeter Center

63,500

Class A Renewal

Beecher Carlson

Concourse VI

24,375

Class A Lease

•

Despite leading the market in total leasing activity for the year, Central Perimeter only absorbed 17,801 SF in 2010. This is due to the transactions completed being in the form of renewals, some as contractions of space; and tenants moving within the submarket.

•

Cox Enterprises was the most active company in Central Perimeter in 2010. In addition to beginning construction of a 600,000 SF office complex, the company and its subsidiaries moved or expanded into several buildings including 9000 Central Park, 3003 Perimeter Summit and 223 Perimeter Center Pkwy. The company also invested $32 million for 9000 Central Park.

•

Central Perimeter has a long road ahead to recovery. Over 1 million sq. ft. of vacant space was added over the past three years. Because of this, rents and concessions will continue to remain competitive.

MARKET REPORT | Q4 2010 | 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

82.9%

94.8%

89.4%

50.6%

82.8%

48,868 SF

76,491 SF

51,205 SF

192,518 SF

48,000 SF

$23.50-$24.50

$24.50

$23.00-$25.00

$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

83.8%

74.9%

74%

85.1%

10.6%

18,340 SF

131,509 SF

47,204 SF

24,199 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 | Q4 2010 | 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 | Q4 2010 | ATLANTA OFFICE | CENTRAL PERIMETER

IN THE NEWS • Zurich

480 offices in 61 countries on 6 continents

• Revolving

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

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. The move was triggered by AutoTrader.com which signed a lease for the entire 3003 Perimeter building earlier in the year. deals for Central Perimeter: Central Perimeter saw its share of large deals in 2010, some of which resulted in net occupancy gains for the submarket. Most of the office leasing that occurred in the past year, however, was from existing companies in the area. The impact on the submarket’s absorption depended on whether the company contracted or expanded its space usage in the transaction.

Regardless, the bright spot to all of the intra-market activity shows that companies which locate to Central Perimeter tend to stay because of area amenities and transportation access. The negative aspect is that these intra-market moves do little to the vacant space available in the submarket.

• Access

Insurance inks lease at Three Ravinia: One of the largest deals this year was recently signed at Three Ravinia. Access Insurance Holdings will be leasing 80,000 SF in the 31-story office tower.

The company plans to relocate from its current offices in Brookhaven, moving into Three Ravinia in October. The transaction will boost occupancy in the building from 78% to 88%. It is a big win for Colonial Properties Trust which recently became sole owner of the property in November of last year.

AT A GLANCE | Hammond Half-Diamond Interchange

Bldgs. 200, 600, 1000, 1100 10,000-15,000 SF Sale Hugh Pafford / Jodi Selvey

www.colliers.com/atlanta

UNITED STATES: Colliers International 1349 West Peachtree Street Suite 1100 Atlanta, Georgia, 30309 TEL +1 404 888 9000 FAX +1 404 870 2845

•

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

Craig Mendel

Lee Evans

Scott O’Halloran

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

Russ Jobson

Fred Sheats

Nicole Kamen

Pete Shelton

Deming Fish

Hugh Pafford

Huston Green

Jodi Selvey

Jeff Kelley

Hayes Swann

Brett Kingman

Andrew Walker

Michael Lipton

Bob Ward

Bob Mathews

1455 LINCOLN PKWY. 4,392 SF Sublease Brett Kingman / Russ Jobson 6160 PEACHTREE DUNWOODY

8215 ROSWELL RD.

management • Over 15,000 professionals

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

COLLIERS INTERNATIONAL | ATLANTA OFFICE | CENTRAL PERIMETER LISTINGS

4,942-21,947 SF Sublease Bob Mathews / Fred Sheats

$2 billion in annual revenue

• Over 2 billion square feet under

•

•

219 PERIMETER CTR.

•

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.

2,217 SF Lease Fred Sheats 5620 GLENRIDGE 84,500 SF Lease/Sale Hugh Pafford

Accelerating success.