4Q 2011 | Atlanta North Fulton Office | Market Report

Q4 2011 | NORTH FULTON

ATLANTA

SUBMARKET REPORT

TRENDS & HIGHLIGHTS NEW SUPPLY, ABSORPTION AND VACANCY RATES

Square Feet

300,000 250,000 200,000 150,000 100,000 50,000 0 (50,000) (100,000) (150,000) (200,000)

17%

Total SF

27,671,486

Vacancy Rate

14.8%

16% 15% 14% 13% 4Q10

1Q11

2Q11

3Q11

4Q11

12%

YTD Net Absorption

359,319

YTD Deliveries

0

Under Construction

0

11% 10% Absorption

Deliveries

Avg. Class A Rate

Vacancy

$20.00

Source: CoStar Property, Colliers Research

MARKET INDICATORS Projected

Q4 2011

UPDATE Recent Transactions in the Market

Q1 2012

SALES ACTIVITY VACANCY NET ABSORPTION CONSTRUCTION RENTAL RATE

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PROPERTY ADDRESS

SALE PRICE

SIZE SF

PRICE / SF

BUYER

Parkside Terrace

$25,200,000

252,960

$99.62

Granite Properties

11975 Morris Rd.

$16,864,000

62,904

$268.09

Health Care REIT

3300 Old Milton Pkwy.

$14,377,100

65,000

$221.19

Health Care REIT

Lakeview 400 - 100 & 200

$10,400,000

135,161

$76.95

OA Development

North Fulton

LEASING ACTIVITY

www.colliers.com/atlanta

TENANT

PROPERTY ADDRESS

SIZE SF

TYPE

Verint Systems

800 North Point Pkwy.

132,676

Class A Lease

Alcatel-Lucent

900 North Point Pkwy.

129,644

Class A Renewal & Expansion

Lonza

1200 Bluegrass Lakes Pky.

69,000

Class B Renewal

Cox Communications

3600 Mansell Rd.

44,172

Class A Renewal

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Thanks to a strong first half of 2011, North Fulton finished the year with the second highest amount of office space absorbed in the Atlanta market. Occupancy for the year increased by 359,319 SF. This resulted in the overall vacancy rate dropping 1.3% from the end of 2010.

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North Fulton leasing activity continues to center around technology companies. Growth in this industry over the past year was the main reason for the submarket leading all of Atlanta in office leasing. This activity remains strong as well, with Verint Systems and Veamm Software recently signing new leases to expand their North Fulton office spaces.

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Despite a few bumps along the way, the submarket is expected to see positive activity and a downwards trending vacancy rate continue in 2012.

MARKET REPORT | Q4 2011 | ATLANTA OFFICE | NORTH FULTON

IN THE NEWS • Verint

512 offices in 61 countries on 6 continents

• State

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

Systems relocating to 900 North Point: Verint Systems has signed a lease to expand into 132,000 SF at 900 North Point Parkway. The software developer will relocate from its existing office at Mansell Overlook where it currently leases 96,500 SF. The company recently acquired Global Management, an Atlanta-based workforce management software company, which resulted in the need for more space. Verint plans to occupy its new space by the end of December 2012.

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.

• Prospect

Park goes for $22.8 million: The former luxury retail and mixed-used development known as Prospect Park has a new owner and a new name. Wells Fargo sold the 101-acre property to North American Properties for $22.8 million ($225,742 an acre) following foreclosure on the property by developer Stan Thomas. North American Properties plans to rename the project “Avalon in Alpharetta” and 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.

AT A GLANCE | Prospect Park Goes For $22.8 Million

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

•

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

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

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LAKE @ NORTHPOINT 2,000-15,623 SF Lease Lee Evans / Scott O’Halloran

www.colliers.com/atlanta

$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

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 Huffman

Jodi Selvey

Russ Jobson

Fred Sheats

COLLIERS INTERNATIONAL | ATLANTA OFFICE | NORTH FULTON LISTINGS

ROYAL CENTRE 3,667-52,875 SF Lease Lee Evans / Scott O’Halloran

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

600 NORTHWINDS 11,656 SF Lease Jodi Selvey

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.

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