4Q 2011 | Atlanta Central Perimeter Office | Market Report

Q4 2011 | CENTRAL PERIMETER

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Square Feet

4Q10

1Q11

2Q11

3Q11

29,070,889

Vacancy Rate

4Q11

100,000

22%

50,000

20%

0

Total SF

18%

(50,000) 16%

21.3%

YTD Net Absorption

(232,635)

YTD Deliveries

0

(100,000) 14%

(150,000) (200,000)

12%

(250,000)

10% Absorption

Deliveries

Under Construction Avg. Class A Rate

616,000 $21.72

Source: CoStar Property, Colliers Research

Vacancy

MARKET INDICATORS Projected

Q4 2011 VACANCY

UPDATE Recent Transactions in the Market

Q1 2012

SALES ACTIVITY

—

PROPERTY ADDRESS

NET ABSORPTION CONSTRUCTION

—

—

RENTAL RATE

SALE PRICE

SIZE SF

PRICE / SF

BUYER

1200 Ashwood Pkwy.

$9,800,000

183,619

$53.37

Atlanta Property Group

56 Perimeter Center East

$9,425,000

94,575

$99.66

The Simpson Org.

600 Morgan Falls Rd.

$6,000,000

106,678

$56.24

Resource Real Estate

4500 N Shallowford Rd.

$5,210,000

20,366

$255.82

Universal Health Serv.

Central Perimeter

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

City of Sandy Springs PD

Morgan Falls OP-Bldg. 300

26,081

Class B Lease

AJC International

400 Northpark

24,632

Class A Renewal

WellCare Health Plans

211 Perimeter Center Pky.

23,100

Class A Renewal

Morrison Hershfield Corp.

66 Perimeter Ctr. E

20,929

Class A Renewal

•

Following five consecutive quarters of negative absorption, Central Perimeter saw its office occupancy increase in the fourth quarter; though only by a moderate amount.

•

Central Perimeter was affected most by the flight to quality trend by tenants. Class B office product in the submarket finished the year with negative absorption totaling (216,728) SF. The phased out occupancies of AutoTrader at Peachtree Dunwoody Pavilion and Cotton States’s relocation to Class A property in North Fulton were the largest tenants of Class B properties vacating in 2011.

•

Despite the rough year, Central Perimeter’s activity is expected to show improvement going forward.

Leasing picked up in the second half of 2011 and this will translate into positive absorption in 2012.

In addition, a number of large prospects are currently scouting the submarket for office requirements.

MARKET REPORT | Q4 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

SKYLINE REVIEW Space Available Direct Sublet 35

Source: CoStar Property

30

Floors

25 20 15 10 5

BUILDING

Concourse VI

Concourse V

Three Ravinia

Glenridge Highlands II

7000 Central Park

RBA

697,400 SF

687,107 SF

813,145 SF

415,000 SF

415,324 SF

TYPICAL FLOOR SIZE

27,000 SF

26,719 SF

25,827 SF

20,750 SF

28,000 SF

% LEASED

85.4%

82.3%

94.7%

63.6%

89.3%

31,672 SF

76,455 SF

25,461 SF

123,997 SF

22,997 SF

$24.00-$25.00

$24.00-$25.00

$24.60

$22.50-$24.50

$23.50

1

2

3

4

5

2002 Summit Blvd.

400 Northpark

One Ravinia

Two Ravinia

64 Perimeter Ctr. E

RBA

390,139 SF

586,256 SF

386,239 SF

437,826 SF

381,432 SF

TYPICAL FLOOR SIZE

24,000 SF

24,000 SF

23,500 SF

23,400 SF

24,833 SF

% LEASED

82.8%

85.7%

79.2%

79.7%

12.1%

24,677 SF

79,018 SF

47,204 SF

24,312 SF

440,194 SF

$26.50

$25.00-$25.50

$20.00-$22.00

$21.50-$22.50

$20.00-$21.00

6

7

8

9

10

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 | Q4 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

7 2 4

5

5

1

8 9 3

10

1 1 2 6 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 2011 | ATLANTA OFFICE | CENTRAL PERIMETER

IN THE NEWS • Wendy’s

closing support center in Atlanta: Following a move of its HQ back to Ohio, Wendy’s Co. will completely close its restaurant support center at 1155 Perimeter Center West by the end of 2012.

Initially the company was to maintain some of its office space in the building, however, more lucrative incentives from Ohio resulted in Wendy’s deciding to close the Atlanta support office altogether.

Wendy’s previously occupied space with Arby’s when the two were jointly owned. Arby’s was sold earlier this year to Roark Capital Group. Wendy’s will vacate approximately 68,000 SF with the move. provider Internap relocates HQ to One Ravinia: Internap Network Services, whose headquarters is currently located Downtown, will relocate into 61,737 SF at One Ravinia. The information technology provider will move approximately 250 Atlanta employees to the new location. The move comes on the heels of Internap’s need to expand its data center in the 250 Williams Street building Downtown. Upon relocation to the One Ravinia building, the company will begin expanding its data center into the space vacated. The move to Central Perimeter is expected to occur Spring 2012.

512 offices in 61 countries on 6 continents United States: 125 Canada: 38 Latin America: 18 Asia Pacific: 214 EMEA: 117

• IT

• Ventyx

seeks bigger stage in ATL tech sector: Software company Ventyx will be leaving its current location in Marietta, and move to the Central Perimeter submarket. The company leased 55,257 SF in North Terraces and plans to relocate 300 jobs to the building in Spring 2012. Moving to Central Perimeter will put Ventyx closer to a larger amenity base and also provide it with a more prominent position in the city to recruit new talent.

AT A GLANCE | Hammond Half-Diamond Interchange Opens •

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

•

Expected to relieve congestion at GA 400 and I-285.

•

Hammond Drive bridge will be replaced and raised higher to make room for future expansion of GA 400 lanes.

•

Project cost an estimated $18 million to complete; completed Fall 2011.

COLLIERS INTERNATIONAL | ATLANTA OFFICE | CENTRAL PERIMETER LISTINGS

219 PERIMETER CTR. 4,942-21,947 SF Sublease Bob Mathews / Fred Sheats 185 ALLEN RD. 4,109 SF Andrew Walker 121 PERIMETER CTR. 1,772-16,822 SF Sublease Craig Mendel

www.colliers.com/atlanta

CENTER POINTE 3,861 SF; 1,500-9,700 SF Sublease Craig Mendel 6160 PEACHTREE DUNWOODY - B 2,217 SF Sublease Fred Sheats

•

$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 Huffman

Jodi Selvey

Russ Jobson

Fred Sheats

Jeff Kelley

Pete Shelton

Drew Lavine

Hayes Swann

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 512 offices throughout more than 61 countries worldwide.

5620 GLENRIDGE 84,500 SF Lease/Sale Hugh Pafford

Accelerating success.