3Q 2011 | Atlanta North Fulton Office | Market Report

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Q3 2011 | NORTH FULTON

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES 18%

300,000

16%

Square Feet

27,772,991

Vacancy Rate

15.4%

17%

200,000 100,000

YTD Net Absorption

338,467

15%

0

(100,000)

Total SF

14% 3Q10

4Q10

1Q11

2Q11

3Q11

12%

(200,000)

11%

(300,000)

10% Absorption

Deliveries

YTD Deliveries

0

Under Construction

0

13%

Avg. Class A Rate

$19.99

Vacancy

Source: CoStar Property, Colliers Research

MARKET INDICATORS Projected

Q3 2011

UPDATE Recent Transactions in the Market

Q4 2011

SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE

PROPERTY ADDRESS

SALE PRICE

SIZE SF

PRICE / SF

BUYER

6455 E. Johns Crossing

$11,135,223

98,851

$112.65

Rosemont Realty

1200 Bluegrass Lakes Pky.

$9,600,000

93,963

$102.17

OA Development

4100 Old Milton Pky.

$5,775,000

41,358

$139.63

Wilson & Nolan

7310 McGinnis Ferry Rd.

$3,329,000

35,835

$92.91

Hisense USA Corp.

North Fulton

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

GE Consumer Finance

Windward Plaza 300

203,248

Class A Renewal

Ace Insurance

Royal Centre Two

95,255

Class A Lease

Total System

4501 Northpoint Pkwy.

59,501

Class A Lease

W.W. Grainger

Brookside 300

29,246

Class B Renewal

After three quarters of leading the Atlanta market in positive space absorption, North Fulton saw its overall occupancy decrease in the third quarter. This is due to AT&T’s consolidation from the submarket to its Midtown campus.

Despite the negative quarter, North Fulton’s vacancy rate is still down 1.6% from this time last year. Over the past year, a total of 439,000 square feet of vacant space has been filled.

Leasing activity in North Fulton remains steady. Tech companies continue to be the most active prospects in the submarket. Small business growth has also picked up in the area.

North Fulton should finish the year on a positive note; marking the second consecutive year with an increase in occupancy levels.


MARKET REPORT | Q3 2011 | ATLANTA OFFICE | NORTH FULTON

IN THE NEWS • State

512 offices in 61 countries on 6 continents

• Prospect

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

Farm bringing up to 400 new jobs: State Farm, the nation’s largest property and casualty insurance company, is currently in the process of centralizing its regional auto insurance and fire underwriting operations to its Johns Creek campus. The company is consolidating its offices in other southeastern states and moving approximately 400 white-collar jobs to North Fulton. This strategy helps State Farm lower its operating costs in the challenging economy.

Park goes for $22.8 million: The former luxury retail and mixed-used development known as Prospect Park has a new owner. Wells Fargo sold the 101-acre property to North American Properties for $22.8 million ($225,742 an acre). The property was previously owned by developer Stan Thomas. The bank took control of the land when loan obligations were not met; a common theme among large developments under construction prior to the economic downturn. North American Properties plans to scale down the next version of the project from 850,000 SF of retail to around 400,000 SF. The development will still include some elements of office and for-sale residential units. The new owner hopes to have the first phase completed by October 2013, prior to the holiday season. UPDATE: AVALON IN ALPHARETTA - North American Properties has changed the name of Prospect Park to Avalon. The developer hopes to associate the new name with affluent baby boomers which are the major demographic target in the Alpharetta area; and also disassociate itself from the old name.

AT A GLANCE | Prospect Park Goes For $22.8 Million

$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

Former luxury retail and mixed-use development proposed by developer Stan Thomas.

Foreclosed on by Wells Fargo as a result of the economic downturn.

North American Properties will scale down development from 850,000 SF of retail to about 400,000 SF.

COLLIERS INTERNATIONAL ATLANTA OFFICE SPECIALISTS: Bob Allen

Bob Mathews

Will include a mix of office and forsale residential in addition to retail.

Lee Evans

Craig Mendel

Deming Fish

Scott O’Halloran

First phase completion planned for October 2013.

Huston Green

Hugh Pafford

Tim Hoffman

Jodi Selvey

Russ Jobson

Fred Sheats

Nicole Kamen

Pete Shelton

COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTH FULTON LISTINGS

Jeff Kelley

Hayes Swann

Brett Kingman

Andrew Walker

Drew Levine

Bob Ward

Michael Lipton

ROYAL CENTRE 1,723-51,634 SF Lease Lee Evans / Scott O’Halloran

100 WINDWARD FOREST 13,643 SF Lease Lee Evans / Scott O’Halloran

LAKE @ NORTHPOINT 1,501-15,623 SF Lease Lee Evans / Scott O’Halloran

www.colliers.com/atlanta

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.

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