The CoStar Industrial Report

Transcription

1 The CoStar Industrial Report Y E A R - E N D

2 YEAR-END 2006 ATLANTA Table of Contents Table of Contents A Methodology B Terms & Definitions C Market Highlights & Overview CoStar Markets & Submarkets Employment & Tenant Analysis Employment & Unemployment Analysis Tenant Profiles Inventory & Development Analysis Construction Activity Map Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance Figures at a Glance by Building Type & Market Figures at a Glance by Building Type & Submarket Historical Figures at a Glance Leasing Activity Analysis Leasing Activity Map Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis Sales Activity Analysis Select Top Sales Transactions Select Same Building Sales Select Land Sales Analysis of Individual CoStar Markets Central Atlanta Market Chattahoochee Market I-20 W/Fulton Market North Central Atlanta Market Northeast Atlanta Market Northwest Atlanta Market Snapfinger/I-20 East Market South Atlanta Market Stone Mountain Market 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT A

3 ATLANTA YEAR-END 2006 Methodology The CoStar Industrial Report calculates Industrial statistics using CoStar Group's base of existing, under construction and under renovation Industrial buildings in each given metropolitan area. All Industrial building types are included, including warehouse, flex / research & development, distribution, manufacturing, industrial showroom, and service buildings, in both single-tenant and multi-tenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 33.6 billion square feet of coverage in 1.2 million properties. All rental rates reported in the CoStar Industrial Report are calculated using the quoted rental rate for each property. For information on subscribing to CoStar s Advisory reports, or for information on CoStar s other products and services, please contact us at COSTAR, or visit our web site at Copyright 2007 CoStar Group, Inc. All Rights Reserved. Although CoStar makes efforts to ensure the accuracy and reliability of the information contained herein, CoStar makes no guarantee, representation or warranty regarding the quality, accuracy, timeliness or completeness of the information. The publication is provided as is and CoStar expressly disclaims any guarantees, representations or warranties of any kind, including those of MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. CoStar Group, Inc. 2 Bethesda Metro Center Bethesda, MD USA (800) NASDAQ: CSGP B THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

4 YEAR-END 2006 ATLANTA Terms & Definitions Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet. Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date. Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space. Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset. Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price). CBD: Abbreviation for Central Business District. (See also: Central Business District) Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Class A: A classification used to describe buildings that generally qualify as extremely desirable investment-grade properties and command the highest rents or sale prices compared to other buildings in the same market. Such buildings are well located and provide efficient tenant layouts as well as high quality, and in some buildings, one-of-a-kind floor plans. They can be an architectural or historical landmark designed by prominent architects. These buildings contain a modern mechanical system, and have above-average maintenance and management as well as the best quality materials and workmanship in their trim and interior fittings. They are generally the most attractive and eagerly sought by investors willing to pay a premium for quality. Class B: A classification used to describe buildings that generally qualify as a more speculative investment, and as such, command lower rents or sale prices compared to Class A properties. Such buildings offer utilitarian space without special attractions, and have ordinary design, if new or fairly new; good to excellent design if an older non-landmark building. These buildings typically have average to good maintenance, management and tenants. They are less appealing to tenants than Class A properties, and may be deficient in a number of respects including floor plans, condition and facilities. They lack prestige and must depend chiefly on a lower price to attract tenants and investors. Class C: A classification used to describe buildings that generally qualify as no-frills, older buildings that offer basic space and command lower rents or sale prices compared to other buildings in the same market. Such buildings typically have below-average maintenance and management, and could have mixed or low tenant prestige, inferior elevators, and/or mechanical/electrical systems. These buildings lack prestige and must depend chiefly on a lower price to attract tenants and investors. Construction Starts: Buildings that began construction during a specific period of time. (See also: Deliveries) Contiguous Blocks of Space: Space within a building that is, or is able to be joined together into a single contiguous space. Deliveries: Buildings that complete construction during a specified period of time. In order for space to be considered delivered, a certificate of occupancy must have been issued for the property. Delivery Date: The date a building completes construction and receives a certificate of occupancy. Developer: The company, entity or individual that transforms raw land to improved property by use of labor, capital and entrepreneurial efforts. Direct Space: Space that is being offered for lease directly from the landlord or owner of a building, as opposed to space being offered in a building by another tenant (or broker of a tenant) trying to sublet a space that has already been leased. Existing Inventory: The square footage of buildings that have received a certificate of occupancy and are able to be occupied by tenants. It does not include space in buildings that are either planned, under construction or under renovation. Flex Building: A type of building designed to be versatile, which may be used in combination with office (corporate headquarters), research and development, quasi-retail sales, and including but not limited to industrial, warehouse, and distribution uses. A typical flex building will be one or two stories with at least half of the rentable area being used as office space, have ceiling heights of 16 feet or less, and have some type of drive-in door, even though the door may be glassed in or sealed off. Full Service Rental Rate: Rental rates that include all operating expenses such as utilities, electricity, janitorial services, taxes and insurance. Gross Absorption: The total change in occupied space over a given period of time, counting space that is occupied but not space that is vacated by tenants. Gross absorption differs from leasing Activity, which is the sum of all space leased over a certain period of time. Unless otherwise noted Gross Absorption includes direct and sublease space. Growth in Inventory: The change in size of the existing square footage in a given area over a given period of time, generally due to the construction of new buildings. Industrial Building: A type of building adapted for such uses as the assemblage, processing, and/or manufacturing of products from raw materials or fabricated parts. Additional uses include warehousing, distribution, and maintenance facilities. The primary purpose of the space is for storing, producing, assembling, or distributing product. Landlord Rep: (Landlord Representative) In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the owner/landlord is referred to as the Landlord Rep. Leased Space: All the space that has a financial lease obligation. It includes all leased space, regardless of whether the space is currently occupied by a tenant. Leased space also includes space being offered for sublease. Leasing Activity: The volume of square footage that is committed to and signed under a lease obligation for a specific building or market in a given period of time. It includes direct leases, subleases and renewals of existing leases. It also includes any pre-leasing activity in planned, under construction, or under renovation buildings. Market: Geographic boundaries that serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are buildingtype specific, and are non-overlapping contiguous geographic designations having a cumulative sum that matches the boundaries of the entire Region (See also: Region). Markets can be further subdivided into Submarkets. (See also: Submarkets) 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT C

5 ATLANTA YEAR-END 2006 Multi-Tenant: Buildings that house more than one tenant at a given time. Usually, multi-tenant buildings were designed and built to accommodate many different floor plans and designs for different tenant needs. (See also: Tenancy). Net Absorption: The net change in occupied space over a given period of time. Unless otherwise noted Net Absorption includes direct and sublease space. Net Rental Rate: A rental rate that excludes certain expenses that a tenant could incur in occupying office space. Such expenses are expected to be paid directly by the tenant and may include janitorial costs, electricity, utilities, taxes, insurance and other related costs. New Space: Sometimes called first generation space, refers to space that has never been occupied and/or leased by a tenant. Occupied Space: Space that is physically occupied by a tenant. It does not include leased space that is not currently occupied by a tenant. Office Building: A type of commercial building used exclusively or primarily for office use (business), as opposed to manufacturing, warehousing, or other uses. Office buildings may sometimes have other associated uses within part of the building, i.e., retail sales, financial, or restaurant, usually on the ground floor. Owner: The company, entity, or individual that holds title on a given building or property. Planned/Proposed: The status of a building that has been announced for future development but not yet started construction. Preleased Space: The amount of space in a building that has been leased prior to its construction completion date, or certificate of occupancy date. Price/SF: Calculated by dividing the price of a building (either sales price or asking sales price) by the Rentable Building Area (RBA). Property Manager: The company and/or person responsible for the day-to-day operations of a building, such as cleaning, trash removal, etc. The property manager also makes sure that the various systems within the building, such as the elevators, HVAC, and electrical systems, are functioning properly. Quoted Rental Rate: The asking rate per square foot for a particular building or unit of space by a broker or property owner. Quoted rental rates may differ from the actual rates paid by tenants following the negotiation of all terms and conditions in a specific lease. RBA: Abbreviation for Rentable Building Area. (See also: Rentable Building Area) Region: Core areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are further divided into market areas, called Markets. (See also: Markets) Relet Space: Sometimes called second generation or direct space, refers to existing space that has previously been occupied by another tenant. Rentable Building Area: (RBA) The total square footage of a building that can be occupied by, or assigned to a tenant for the purpose of determining a tenant s rental obligation. Generally RBA includes a percentage of common areas including all hallways, main lobbies, bathrooms, and telephone closets. Rental Rates: The annual costs of occupancy for a particular space quoted on a per square foot basis. Sales Price: The total dollar amount paid for a particular property at a particular point in time. Sales Volume: The sum of sales prices for a given group of buildings in a given time period. Seller: The individual, group, company, or entity that sells a particular commercial real estate asset. SF: Abbreviation for Square Feet. Single-Tenant: Buildings that are occupied, or intended to be occupied by a single tenant. (See also: Build-to-suit and Tenancy) Sublease Space: Space that has been leased by a tenant and is being offered for lease back to the market by the tenant with the lease obligation. Sublease space is sometimes referred to as sublet space. Submarkets: Specific geographic boundaries that serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted primary competitive set, or peer group. Submarkets are building type specific (office, industrial, retail, etc.), with distinct boundaries dependent on different factors relevant to each building type. Submarkets are non-overlapping, contiguous geographic designations having a cumulative sum that matches the boundaries of the Market they are located within (See also: Market). Suburban: The Suburban and Central Business District (CBD) designations refer to a particular geographic area within a metropolitan statistical area (MSA). Suburban is defined as including all office inventory not located in the CBD. (See also: CBD) Tenancy: A term used to indicate whether or not a building is occupied by multiple tenants (See also: Multi-tenant) or a single tenant. (See also: Single-tenant) Tenant Rep: Tenant Rep stands for Tenant Representative. In a typical lease transaction between an owner/landlord and tenant, the broker that represents the interests of the tenant is referred to as a Tenant Rep. Time On Market: A measure of how long a currently available space has been marketed for lease, regardless of whether it is vacant or occupied. Under Construction: The status of a building that is in the process of being developed, assembled, built or constructed. A building is considered to be under construction after it has begun construction and until it receives a certificate of occupancy. Vacancy Rate: A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount of existing inventory. Under construction space generally is not included in vacancy calculations. Vacant Space: Space that is not currently occupied by a tenant, regardless of any lease obligation that may be on the space. Vacant space could be space that is either available or not available. For example, sublease space that is currently being paid for by a tenant but not occupied by that tenant, would be considered vacant space. Likewise, space that has been leased but not yet occupied because of finish work being done, would also be considered vacant space. Weighted Average Rental Rate: Rental rates that are calculated by factoring in, or weighting, the square footage associated with each particular rental rate. This has the effect of causing rental rates on larger spaces to affect the average more than that of smaller spaces. The weighted average rental rate is calculated by taking the ratio of the square footage associated with the rental rate on each individual available space to the square footage associated with rental rates on all available spaces, multiplying the rental rate by that ratio, and then adding together all the resulting numbers. Unless specifically specified otherwise, rental rate averages include both Direct and Sublet available spaces. Year Built: The year in which a building completed construction and was issued a certificate of occupancy. YTD: Abbreviation for Year-to-Date. Describes statistics that are cumulative from the beginning of a calendar year through whatever time period is being studied. D THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

6 OVERVIEW YEAR-END 2006 ATLANTA Atlanta Net Absorption Positive 4.6 Million SF Vacancy Up Slightly After 6.1 Million SF in Deliveries The Atlanta Industrial market ended the fourth quarter 2006 with a vacancy rate of 11.6%. The vacancy rate was up over the previous quarter, with net absorption totaling positive 4,662,768 square feet in the fourth quarter. Vacant sublease space decreased in the quarter, ending the quarter at 2,678,884 square feet. Rental rates ended the fourth quarter at $4.20, a decrease over the previous quarter. A total of 24 buildings delivered to the market in the quarter totaling 6,103,734 square feet, with 8,703,322 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Atlanta Industrial market was positive 4,662,768 square feet in the fourth quarter That compares to positive 4,054,790 square feet in the third quarter 2006, positive 1,736,444 square feet in the second quarter 2006, and positive 2,751,303 square feet in the first quarter Tenants moving out of large blocks of space in 2006 include: The Quaker Oats Company moving out of (496,000) square feet at 6200 Fulton Industrial Blvd SW, Yokohama Tire Corp moving out of (252,092) square feet at 2800 Vista Ridge Dr, and Advantage Logistics Atkins moving out of (240,000) square feet at ProLogis Park Greenwood - Bldg 1. Tenants moving into large blocks of space in 2006 include: Kimberly-Clark Corporation moving into 1,298,700 square feet at SouthPort Logistics Center, The Quaker Oats Company moving into 913,000 square feet at Quaker Oats, and Spectrum Brands moving into 810,000 square feet at Walnut Fork Distribution Center. The Flex building market recorded net absorption of positive 581,760 square feet in the fourth quarter 2006, compared to positive 10,727 square feet in the third quarter 2006, positive 231,909 in the second quarter 2006, and negative (234,404) in the first quarter The Warehouse building market recorded net absorption of positive 4,081,008 square feet in the fourth quarter 2006 compared to positive 4,044,063 square feet in the third quarter 2006, positive 1,504,535 in the second quarter 2006, and positive 2,985,707 in the first quarter Vacancy The Industrial vacancy rate in the Atlanta market area increased to 11.6% at the end of the fourth quarter The vacancy rate was 11.5% at the end of the third quarter 2006, 11.4% at the end of the second quarter 2006, and 11.1% at the end of the first quarter Flex projects reported a vacancy rate of 12.4% at the end of the fourth quarter 2006, 13.3% at the end of the third quarter 2006, 12.8% at the end of the second quarter 2006, and 13.1% at the end of the first quarter Warehouse projects reported a vacancy rate of 11.6% at the end of the fourth quarter 2006, 11.3% at the end of third quarter 2006, 11.1% at the end of the second quarter 2006, and 10.8% at the end of the first quarter Largest Lease Signings The largest lease signings occurring in 2006 included: the 1,298,700-square-foot lease signed by Kimberly-Clark Corporation at SouthPort Logistics Center in the South Atlanta market; the 356,000-square-foot deal signed by Lund Vacancy Rates by Building Type % Flex Warehouse Total Market 16% 14% 12% Vacancy Rate 10% 8% 6% 4% 2% 0% q q q q q q q q q q q q 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 1

7 ATLANTA YEAR-END 2006 OVERVIEW International at 300 Horizon Dr in the Northeast Atlanta market; and the 350,514-square-foot lease signed by Keystone Automotive Distribution at Hartman III in the I-20 W/Douglasville market. Sublease Vacancy The amount of vacant sublease space in the Atlanta market decreased to 2,678,884 square feet by the end of the fourth quarter 2006, from 2,795,130 square feet at the end of the third quarter There was 2,619,554 square feet vacant at the end of the second quarter 2006 and 2,733,583 square feet at the end of the first quarter Atlanta s Flex projects reported vacant sublease space of 369,470 square feet at the end of fourth quarter 2006, down from the 471,604 square feet reported at the end of the third quarter There were 472,355 square feet of sublease space vacant at the end of the second quarter 2006, and 419,409 square feet at the end of the first quarter Warehouse projects reported decreased vacant sublease space from the third quarter 2006 to the fourth quarter Sublease vacancy went from 2,323,526 square feet to 2,309,414 square feet during that time. There was 2,147,199 square feet at the end of the second quarter 2006, and 2,314,174 square feet at the end of the first quarter Rental Rates The average quoted asking rental rate for available Industrial space was $4.20 per square foot per year at the end of the fourth quarter 2006 in the Atlanta market area. This represented a 0.5% decrease in quoted rental rates from the end of the third quarter 2006, when rents were reported at $4.22 per square foot. The average quoted rate within the Flex sector was $8.76 per square foot at the end of the fourth quarter 2006, while Warehouse rates stood at $3.77. At the end of the third quarter 2006, Flex rates were $9.07 per square foot, and Warehouse rates were $3.75. U.S. Vacancy Comparison Past 10 Quarters Vacancy Rate 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% q q Atlanta 3q q United States q 2006 Deliveries and Construction During the fourth quarter 2006, 24 buildings totaling 6,103,734 square feet were completed in the Atlanta market area. This compares to 33 buildings totaling 5,967,713 square feet that were completed in the third quarter 2006, 19 buildings totaling 3,615,296 square feet completed in the second quarter 2006, and 4,829,864 square feet in 22 buildings completed in the first quarter There were 8,703,322 square feet of Industrial space under construction at the end of the fourth quarter Some of the notable 2006 deliveries include: Solo Cup, a 1,300,716-square-foot facility that delivered in third quarter 2006 and is now 100% occupied, and SouthPort Logistics Center, a 1,298,700-square-foot building that delivered in fourth quarter 2006 and is now 100% occupied. The largest projects underway at the end of fourth quarter 2006 were Ridgeway Church Rd, a 962,280-square-foot building, and PetSmart, a 877,000-square-foot facility. Inventory Total Industrial inventory in the Atlanta market area amounted to 567,774,231 square feet in 10,398 buildings as of the end of the fourth quarter The Flex sector consisted of 54,957,833 square feet in 2,543 projects. The Warehouse sector consisted of 512,816,398 square feet in 7,855 buildings. Within the Industrial market there were 2,532 owner-occupied buildings accounting for 165,247,876 square feet of Industrial space. Sales Activity Tallying industrial building sales of 15,000 square feet or larger, Atlanta industrial sales figures fell during the third quarter 2006 in terms of dollar volume compared to the second quarter of In the third quarter, 109 industrial transactions closed with a total volume of $374,819,404. The 109 buildings totaled 7,445,035 square feet and the average price per square foot equated to $50.34 per square foot. That compares to 113 transactions totaling $695,956,927 in the second quarter. The total square footage was 15,770,452 for an average price per square foot of $ Total year-to-date industrial building sales activity in 2006 is up compared to the previous year. In the first nine months of 2006, the market saw 333 industrial sales transactions with a total volume of $1,532,475,792. The price per square foot has averaged $45.57 this year. In the first nine months of, the market posted 296 transactions with a total volume of $1,181,449,023. The price per square foot averaged $ Cap rates have been lower in 2006, averaging 7.84%, compared to the first nine months of last year when they averaged 8.81%. One of the largest transactions that has occurred within the last four quarters in the Atlanta market is the sale of 1 Nestle Ct in Source: CoStar Property 2 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

8 OVERVIEW YEAR-END 2006 ATLANTA McDonough. This 782,565-square-foot industrial building sold for $39,110,600, or $49.98 per square foot. The property sold on 11/1/. Reports compiled by: Darren Crowe, CoStar Property Senior Research Manager; Christiana Chiang, CoStar COMPS Senior Research Associate. Absorption & Deliveries Past 10 Quarters Net Absorption Deliveries q q 3q q q 2006 Source: CoStar Property 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 3

9 ATLANTA YEAR-END 2006 MARKETS CoStar Markets & Submarkets In analyzing metropolitan areas in the U.S., CoStar has developed geographic designations to help group properties together, called Regions, Markets and Submarkets. Regions are the equivalent of metropolitan areas, or areas containing a large population nucleus, that together with adjacent communities have a high degree of economic and social integration. Regions are then divided into Markets, which are core areas within a metropolitan area that are known to be competitive with each other in terms of attracting and keeping tenants. Markets are then further subdivided into smaller units called Submarkets, which serve to delineate a core group of buildings that are competitive with each other and constitute a generally accepted competitive set, or peer group. Markets Central Atlanta Ind Chattahoochee Ind Submarkets Central Atlanta Ind Chattahoochee Ind I-20 W/Fulton Ind Fulton District Ind Haralson County Ind Heard County Ind I-20 W/Douglasville Ind W Carroll County Ind North Central Atlanta Ind Northeast Atlanta Ind Northwest Atlanta Ind Snapfinger/I-20 East Ind South Atlanta Ind Stone Mountain Ind Central Perimeter Ind Dawson County Ind N Fulton/Forsyth Cnty Ind Braselton/W Jackson Ind Chamblee Ind Doraville Ind Duluth/Suwanee/Buford Ind E Jackson Ind GA-316/Lawrenceville Ind I-985/Gainesville Ind Norcross Ind Pickens County Ind S Barrow Ind Walton County Ind Kennesaw/Acworth Ind SE Cobb Cnty/Marietta Ind Woodstock/Canton Ind Rockdale/Newton Cnty Ind Snapfinger Ind Airport/North Clayton Ind Butts County Ind Fayette/Coweta County Ind Lamar County Ind Meriwether County Ind Pike County Ind S Clayton/Henry Cnty Ind Stone Mountain Ind 4 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

10 EMPLOYMENT AND TENANT YEAR-END 2006 ATLANTA Total Employment by Industry Percent of Total Employment by Industry Total Employment Growth Total Number of Jobs Added Per Year 6% 0% 7% Natural Resources & Mining Construction 4.0% Atlanta U.S. Average 4% 9% 13% 23% 4% Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Percent Growth 3.0% 2.0% 1.0% 0.0% -1.0% 7% Other Services -2.0% 10% 17% Government -3.0% Source: Department of Labor, Bureau of Labor Statistics Source: Department of Labor, Bureau of Labor Statistics Total Employment Growth Cumulative Growth in Jobs Over the Past 5 Years Market Employment Growth Inventory Growth Difference Atlanta 8.00% 8.30% -0.30% Chicago 5.80% 5.80% 0.00% Dallas/Ft Worth 8.60% 5.60% 3.00% Denver 8.90% 3.80% 5.10% Detroit -3.90% 2.40% -6.30% Houston 9.70% 4.90% 4.80% Inland Empire (California) 14.20% 24.70% % Los Angeles 3.00% 3.10% -0.10% Northern New Jersey 3.90% 2.80% 1.10% Pittsburgh 0.30% 2.20% -1.90% Source: Department of Labor, Bureau of Labor Statistics Historical Unemployment Rates Industrial* Employment Growth Number of Industrial* Jobs Added Per Year Percent Growth 4.0% Atlanta U.S. Average 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% Source: Department of Labor, Bureau of Labor Statistics. * Industrial employment is defined as jobs in the Manufacturing, and Trade, Transportation & Utilities industries 7.0% Atlanta U.S. Average 6.0% Percent Unemployment 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% q q q q q q q 3q q q Source: Department of Labor, Bureau of Labor Statistics 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 5

11 ATLANTA YEAR-END 2006 EMPLOYMENT AND TENANT Flex Tenants by Size Range Based on Total Number of Tenants Warehouse Tenants by Size Range Based on Total Number of Tenants 75,000 SF & Up 1.3% 75,000 SF & Up 13.7% 50,000-74,999 SF 1.7% 50,000-74,999 SF 6.8% 25,000-49,999 SF 5.3% 25,000-49,999 SF 15.3% 10,000-24,999 SF 19.5% 10,000-24,999 SF 29.1% 5,000-9,999 SF 25.3% 5,000-9,999 SF 15.9% 2,500-4,999 SF 28.9% 2,500-4,999 SF 11.8% Up to 2,499 SF 18.0% Up to 2,499 SF 7.6% 0% 5% 10% 15% 20% 25% 30% 35% Percentage of Tenants 0% 5% 10% 15% 20% 25% 30% 35% Percentage of Tenants Source: CoStar Tenant Flex Tenants by Lease Expiration Based on Total Square Footage of Tenants Source: CoStar Tenant Warehouse Lease Expiration Based on Total Square Footage of Tenants % % % % % % % % % % % % 0% 5% 10% 15% 20% 25% 30% Percentage of Tenants 0% 5% 10% 15% 20% Percentage of Tenants 6 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

12 INVENTORY & DEVELOPMENT YEAR-END 2006 ATLANTA Construction Highlights in Select CoStar Markets Color Coded by Under Construction Square Footage as a Percentage of Existing Inventory 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 7

13 ATLANTA YEAR-END 2006 INVENTORY & DEVELOPMENT Historical Deliveries Deliveries Average Delivered SF Millions of SF * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction RBA Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C Northeast Atlanta Ind 32 4,430,659 1,195, % 58, ,458 I-20 W/Fulton Ind 7 2,277, , % 75, ,379 South Atlanta Ind 7 1,700, , % 84, ,955 North Central Atlanta Ind 9 160,140 71, % 32,292 17,793 Northwest Atlanta Ind 1 68, % 37,384 68,675 Snapfinger/I-20 East Ind 3 65,506 1, % 49,616 21,835 Stone Mountain Ind % 35,513 0 Central Atlanta Ind % 38,306 0 Chattahoochee Ind % 36,531 0 Totals 59 8,703,322 2,336, % 54, ,514 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2002 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 25.0 Leased Un-Leased 4,500 Preleased Un-Leased 4, ,500 Millions of SF Thousands of SF 3,000 2,500 2,000 1,500 T 5.0 1, q q 8 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

14 INVENTORY & DEVELOPMENT YEAR-END 2006 ATLANTA Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 8.0 Construction Starts Deliveries Millions of SF q q q q q 3q q q 2006 Recent Deliveries by Project Size Breakdown of Year-to-Date Development Based on RBA of Project Building Size # Bldgs RBA SF Leased % Leased Avg Rate Single-Tenant Multi-Tenant < 50,000 SF , , % $ , ,517 50,000 SF - 99,999 SF 9 740,882 60, % $ , ,000 SF - 249,999 SF 21 3,405,988 1,218, % $4.35 1,535,979 1,870, ,000 SF - 499,999 SF 6 2,114,920 1,098, % $3.35 1,500, ,620 >= 500,000 SF 16 13,453,999 4,476, % $2.87 2,763,716 10,690,283 Recent Development by Tenancy Existing Inventory Comparison Based on RBA Developed for Single & Multi-Tenant Use Based on Total RBA 2006 Deliveries Currently Under Construction By Building Type By Tenancy Type 29% 19% 10% 50% 50% Multi 71% Single Multi 81% Single 90% Flex Warehouse Multi Single 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 9

15 ATLANTA YEAR-END 2006 INVENTORY & DEVELOPMENT 10 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

16 INVENTORY & DEVELOPMENT YEAR-END 2006 ATLANTA 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 11

17 ATLANTA YEAR-END 2006 FIGURES AT A GLANCE Flex Market Statistics Year-End 2006 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Central Atlanta Ind 164 2,788, , , % 55, $7.73 Chattahoochee Ind 193 3,433, , , % 94,487 31,500 0 $9.07 I-20 W/Fulton Ind 133 3,087, , , % 74, ,000 $6.26 North Central Atlanta Ind 234 6,690, , , % 14, ,783 0 $9.91 Northeast Atlanta Ind ,202,294 2,785,712 3,009, % 139, ,844 27,662 $8.46 Northwest Atlanta Ind ,246,343 1,336,380 1,456, % 116,159 31,221 0 $9.19 Snapfinger/I-20 East Ind 133 2,060, , , % (74,809) 0 20,272 $6.92 South Atlanta Ind 264 4,391, , , % (14,560) 0 0 $8.76 Stone Mountain Ind 250 4,058, , , % 184,682 8,600 0 $6.19 Totals 2,543 54,957,833 6,423,290 6,792, % 589, , ,934 $8.76 Warehouse Market Statistics Year-End 2006 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Central Atlanta Ind ,709, , , % 78, $4.48 Chattahoochee Ind ,261,646 1,858,090 1,883, % (397,485) 4,085 0 $4.93 I-20 W/Fulton Ind ,258,259 8,864,519 9,610, % 2,976,456 3,277,852 2,092,654 $3.09 North Central Atlanta Ind ,013,143 1,289,955 1,626, % 447, , ,140 $6.40 Northeast Atlanta Ind 2, ,318,650 14,030,636 14,658, % 6,014,298 4,702,940 4,402,997 $4.24 Northwest Atlanta Ind 1,057 45,568,703 2,989,888 3,138, % 1,051, ,680 68,675 $4.56 Snapfinger/I-20 East Ind ,900,533 2,682,834 2,744, % (484,455) 10,800 45,234 $3.75 South Atlanta Ind 1, ,966,907 23,262,107 23,525, % 2,636,860 11,215,239 1,700,688 $3.15 Stone Mountain Ind ,819,199 1,102,023 1,167, % 291, $4.04 Totals 7, ,816,398 56,946,373 59,255, % 12,615,313 20,027,659 8,470,388 $3.77 Total Industrial Market Statistics Year-End 2006 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Central Atlanta Ind ,497,795 1,024,927 1,059, % 133, $4.87 Chattahoochee Ind ,694,852 2,135,601 2,168, % (302,998) 35,585 0 $5.37 I-20 W/Fulton Ind 1,110 84,345,612 9,002,868 9,748, % 3,051,305 3,277,852 2,277,654 $3.11 North Central Atlanta Ind ,703,507 2,269,877 2,624, % 461, , ,140 $7.75 Northeast Atlanta Ind 2, ,520,944 16,816,348 17,667, % 6,153,895 4,943,784 4,430,659 $4.81 Northwest Atlanta Ind 1,493 55,815,046 4,326,268 4,594, % 1,168, ,901 68,675 $5.63 Snapfinger/I-20 East Ind ,960,621 2,867,387 2,928, % (559,264) 10,800 65,506 $3.81 South Atlanta Ind 1, ,358,072 23,496,444 23,759, % 2,622,300 11,215,239 1,700,688 $3.22 Stone Mountain Ind ,877,782 1,429,943 1,495, % 476,269 8,600 0 $4.21 Totals 10, ,774,231 63,369,663 66,048, % 13,205,305 20,516,607 8,703,322 $ THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

18 FIGURES AT A GLANCE YEAR-END 2006 ATLANTA Flex Submarket Statistics Year-End 2006 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Airport/North Clayton Ind 169 2,582, , , % (20,437) 0 0 $9.21 Braselton/W Jackson Ind 1 70, % $0.00 Butts County Ind % $0.00 Central Atlanta Ind 164 2,788, , , % 55, $7.73 Central Perimeter Ind ,799 43,459 43, % 9, $10.25 Chamblee Ind 115 2,199, , , % 32, $9.05 Chattahoochee Ind 193 3,433, , , % 94,487 31,500 0 $9.07 Dawson County Ind 1 22, % $0.00 Doraville Ind 121 2,978, , , % (18,521) 0 0 $7.88 Duluth/Suwanee/Buford Ind 123 3,381, , , % 14, ,319 20,362 $8.54 E Jackson Ind % $0.00 Fayette/Coweta County Ind ,317 31,670 31, % (14,000) 0 0 $8.82 Fulton District Ind 42 1,600,617 28,740 28, % 47, $6.29 GA-316/Lawrenceville Ind 76 1,225, , , % (16,740) 33,350 7,300 $8.43 Haralson County Ind % $0.00 Heard County Ind % $0.00 I-20 W/Douglasville Ind 89 1,437, , , % 27, ,000 $6.21 I-985/Gainesville Ind ,855 99,584 99, % 16,735 34,000 0 $9.25 Kennesaw/Acworth Ind 77 2,393, , , % 78, $9.90 Lamar County Ind % $0.00 Meriwether County Ind % $0.00 N Fulton/Forsyth Cnty Ind 212 5,981, , , % 4, ,783 0 $9.89 Norcross Ind 243 7,673,509 1,427,864 1,493, % 111,598 43,175 0 $8.56 Pickens County Ind 1 3, % $0.00 Pike County Ind % $0.00 Rockdale/Newton Cnty Ind ,026 49,909 49, % (13,000) 0 0 $6.97 S Barrow Ind 3 31, % $0.00 S Clayton/Henry Cnty Ind 56 1,221,742 47,873 47, % 19, $7.55 SE Cobb Cnty/Marietta Ind 239 6,640,487 1,108,314 1,210, % (2,303) 0 0 $9.18 Snapfinger Ind 62 1,276, , , % (61,809) 0 20,272 $6.89 Stone Mountain Ind 250 4,058, , , % 184,682 8,600 0 $6.19 W Carroll County Ind 2 49, % $0.00 Walton County Ind 1 12, % $0.00 Woodstock/Canton Ind 120 1,212,012 66,521 84, % 39,992 31,221 0 $8.20 Totals 2,543 54,957,833 6,423,290 6,792, % 589, , ,934 $ COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 13

19 ATLANTA YEAR-END 2006 FIGURES AT A GLANCE Warehouse Submarket Statistics Year-End 2006 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Airport/North Clayton Ind ,275,452 13,836,942 14,058, % 572,657 4,323, ,688 $3.12 Braselton/W Jackson Ind 35 6,254, , , % 1,551,123 32, ,500 $3.08 Butts County Ind 3 336, % $0.00 Central Atlanta Ind ,709, , , % 78, $4.48 Central Perimeter Ind 5 213, % 37, $0.00 Chamblee Ind ,163, , , % 378, $5.92 Chattahoochee Ind ,261,646 1,858,090 1,883, % (397,485) 4,085 0 $4.93 Dawson County Ind 6 120,213 23,800 23, % 21, $7.80 Doraville Ind ,184,615 1,847,536 1,884, % 240, $4.51 Duluth/Suwanee/Buford Ind ,125,837 4,777,776 5,310, % 1,739,977 1,591,763 2,028,258 $4.29 E Jackson Ind 19 1,905,118 1,083,641 1,083, % 52,440 1,111,702 1,421,414 $3.05 Fayette/Coweta County Ind ,119,148 1,222,116 1,222, % 554, , ,000 $3.40 Fulton District Ind ,645,578 5,447,886 5,920, % (53,060) 0 0 $2.99 GA-316/Lawrenceville Ind ,382,771 1,527,092 1,547, % (190,710) 298,900 0 $3.39 Haralson County Ind 7 238, % 119, $0.00 Heard County Ind 1 15, % $0.00 I-20 W/Douglasville Ind ,679,715 3,284,633 3,557, % 3,001,766 3,277,852 2,092,654 $3.20 I-985/Gainesville Ind ,976, , , % 726, , ,825 $4.72 Kennesaw/Acworth Ind ,792,235 1,601,062 1,718, % 386, ,480 68,675 $4.42 Lamar County Ind 2 375, , , % $0.00 Meriwether County Ind 3 171, % 77, $0.00 N Fulton/Forsyth Cnty Ind ,679,645 1,266,155 1,602, % 388, , ,140 $6.39 Norcross Ind ,084,704 3,143,025 3,173, % 154, $5.01 Pickens County Ind ,278 60,518 60, % 66,760 5,200 0 $0.00 Pike County Ind 1 76, % $0.00 Rockdale/Newton Cnty Ind ,302,464 1,877,508 1,939, % (663,995) 10,800 45,234 $3.71 S Barrow Ind 49 3,918,365 32,200 32, % 18, $5.21 S Clayton/Henry Cnty Ind ,612,983 7,906,049 7,948, % 1,432,905 6,505,159 0 $3.17 SE Cobb Cnty/Marietta Ind ,945, , , % 342, $4.96 Snapfinger Ind ,598, , , % 179, $3.80 Stone Mountain Ind ,819,199 1,102,023 1,167, % 291, $4.04 W Carroll County Ind 9 1,678, , , % (92,000) 0 0 $3.00 Walton County Ind 37 4,965,222 84,600 84, % 1,276,216 1,300,716 5,000 $2.66 Woodstock/Canton Ind 220 4,830, , , % 322,923 16,200 0 $4.41 Totals 7, ,816,398 56,946,373 59,255, % 12,615,313 20,027,659 8,470,388 $ THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

20 FIGURES AT A GLANCE YEAR-END 2006 ATLANTA Total Industrial Submarket Statistics Year-End 2006 Existing Inventory Vacancy YTD Net YTD Under Quoted Market # Bldgs Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Airport/North Clayton Ind ,857,558 13,991,736 14,213, % 552,220 4,323, ,688 $3.19 Braselton/W Jackson Ind 36 6,324, , , % 1,551,123 32, ,500 $3.08 Butts County Ind 3 336, % $0.00 Central Atlanta Ind ,497,795 1,024,927 1,059, % 133, $4.87 Central Perimeter Ind ,084 43,459 43, % 46, $10.25 Chamblee Ind ,362, , , % 410, $6.91 Chattahoochee Ind ,694,852 2,135,601 2,168, % (302,998) 35,585 0 $5.37 Dawson County Ind 7 142,613 23,800 23, % 21, $7.80 Doraville Ind ,162,652 2,408,411 2,445, % 222, $5.17 Duluth/Suwanee/Buford Ind ,507,151 5,187,483 5,871, % 1,753,990 1,722,082 2,048,620 $4.61 E Jackson Ind 19 1,905,118 1,083,641 1,083, % 52,440 1,111,702 1,421,414 $3.05 Fayette/Coweta County Ind ,706,465 1,253,786 1,253, % 540, , ,000 $3.46 Fulton District Ind ,246,195 5,476,626 5,949, % (5,264) 0 0 $3.03 GA-316/Lawrenceville Ind ,608,606 1,682,199 1,703, % (207,450) 332,250 7,300 $3.58 Haralson County Ind 7 238, % 119, $0.00 Heard County Ind 1 15, % $0.00 I-20 W/Douglasville Ind ,116,997 3,394,242 3,667, % 3,028,819 3,277,852 2,277,654 $3.22 I-985/Gainesville Ind ,603,391 1,008,912 1,016, % 742, , ,825 $4.81 Kennesaw/Acworth Ind ,186,079 1,762,607 1,879, % 464, ,480 68,675 $4.81 Lamar County Ind 2 375, , , % $0.00 Meriwether County Ind 3 171, % 77, $0.00 N Fulton/Forsyth Cnty Ind ,660,810 2,202,618 2,557, % 393, , ,140 $7.69 Norcross Ind ,758,213 4,570,889 4,666, % 266,187 43,175 0 $5.97 Pickens County Ind ,028 60,518 60, % 66,760 5,200 0 $0.00 Pike County Ind 1 76, % $0.00 Rockdale/Newton Cnty Ind ,086,490 1,927,417 1,988, % (676,995) 10,800 45,234 $3.75 S Barrow Ind 52 3,949,365 32,200 32, % 18, $5.21 S Clayton/Henry Cnty Ind ,834,725 7,953,922 7,995, % 1,452,782 6,505,159 0 $3.22 SE Cobb Cnty/Marietta Ind ,586,109 1,968,816 2,102, % 340, $6.88 Snapfinger Ind ,874, , , % 117, ,272 $3.89 Stone Mountain Ind ,877,782 1,429,943 1,495, % 476,269 8,600 0 $4.21 W Carroll County Ind 11 1,728, , , % (92,000) 0 0 $3.00 Walton County Ind 38 4,977,333 84,600 84, % 1,276,216 1,300,716 5,000 $2.66 Woodstock/Canton Ind 340 6,042, , , % 362,915 47,421 0 $5.01 Totals 10, ,774,231 63,369,663 66,048, % 13,205,305 20,516,607 8,703,322 $ COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 15

21 ATLANTA YEAR-END 2006 FIGURES AT A GLANCE Flex Market Statistics Year-End 2006 Existing Inventory Vacancy Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates ,543 54,957,833 6,423,290 6,792, % 581, , ,934 $ q 2,540 54,884,812 6,829,895 7,301, % 10, , ,683 $ ,528 54,528,735 6,483,794 6,956, % 231, , ,760 $ q 2,527 54,497,235 6,737,149 7,156, % (234,404) 2 28, ,577 $8.45 2,525 54,468,885 6,354,936 6,893, % 515, , ,930 $8.29 3q 2,524 54,313,975 6,740,857 7,254, % 402, , ,307 $8.15 2,523 54,303,475 7,129,532 7,645, % 74, , ,210 $8.20 1q 2,523 54,289,875 7,204,480 7,706, % (77,060) 3 37, ,450 $ ,520 54,252,575 7,072,751 7,592, % 504, , ,750 $ ,503 53,431,045 6,821,910 7,274, % (624,476) , ,330 $ ,480 53,168,727 5,787,861 6,388, % 1,219, , ,618 $ ,460 52,800,285 6,378,410 7,239, % (282,272) 54 1,455, ,506 $ ,414 51,480,050 5,125,998 5,636, % 1,318, ,842, ,958 $ ,353 49,648,213 4,640,749 5,124, % 1,392, ,964, ,451,726 $ ,296 47,713,436 4,581,402 4,581, % 1,355, ,412, ,376,000 $ ,250 46,300,993 4,523,971 4,523, % 1,831, ,566, ,167 $6.91 Quoted Warehouse Market Statistics Year-End 2006 Existing Inventory Vacancy Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates , ,816,398 56,946,373 59,255, % 4,081, ,030, ,470,388 $ q 7, ,785,685 54,982,556 57,306, % 4,044, ,611, ,144,500 $ , ,174,049 53,591,310 55,738, % 1,504, ,583, ,095,517 $ q 7, ,831,194 51,586,015 53,900, % 2,985, ,801, ,887,407 $3.69 7, ,324,784 49,656,619 52,379, % 4,193, ,220, ,931,493 $3.61 3q 7, ,104,156 50,350,986 53,352, % 2,097, ,080, ,298,278 $3.56 7, ,023,830 50,454,522 53,369, % 3,087, ,154, ,399,872 $3.52 1q 7, ,868,948 50,326,194 53,302, % 2,543, ,257, ,832,885 $ , ,692,677 51,758,149 54,670, % 13,615, ,707, ,914,216 $ , ,503,541 58,397,435 61,096, % 1,828, ,535, ,536,003 $ , ,354,895 54,705,039 59,776, % (2,332,515) 110 7,739, ,093,517 $ , ,981,780 45,847,322 50,070, % 4,035, ,409, ,575,952 $ , ,981,189 32,112,663 35,105, % 15,311, ,886, ,822,070 $ , ,415,866 32,105,210 34,851, % 14,574, ,599, ,245,474 $ , ,089,875 32,100,058 32,100, % 18,779, ,821, ,266,721 $ , ,295,811 35,085,029 35,085, % 17,959, ,792, ,911,926 $3.46 Quoted Total Industrial Market Statistics Year-End 2006 Existing Inventory Vacancy Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates , ,774,231 63,369,663 66,048, % 4,662, ,103, ,703,322 $ q 10, ,670,497 61,812,451 64,607, % 4,054, ,967, ,440,183 $ , ,702,784 60,075,104 62,694, % 1,736, ,615, ,737,277 $ q 10, ,328,429 58,323,164 61,056, % 2,751, ,829, ,459,984 $ , ,793,669 56,011,555 59,273, % 4,708, ,381, ,362,423 $4.17 3q 10, ,418,131 57,091,843 60,606, % 2,499, ,090, ,743,585 $ , ,327,305 57,584,054 61,015, % 3,162, ,172, ,547,082 $4.10 1q 10, ,158,823 57,530,674 61,008, % 2,466, ,294, ,889,335 $ , ,945,252 58,830,900 62,262, % 14,119, ,552, ,007,966 $ , ,934,586 65,219,345 68,371, % 1,203, ,826, ,256,333 $ , ,523,622 60,492,900 66,164, % (1,112,834) 131 8,137, ,255,135 $ , ,782,065 52,225,732 57,309, % 3,753, ,864, ,876,458 $ , ,461,239 37,238,661 40,742, % 16,630, ,728, ,771,028 $ , ,064,079 36,745,959 39,975, % 15,967, ,564, ,697,200 $ , ,803,311 36,681,460 36,681, % 20,134, ,233, ,642,721 $ , ,596,804 39,609,000 39,609, % 19,791, ,358, ,705,093 $3.83 Quoted 16 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

22 LEASING ACTIVITY YEAR-END 2006 ATLANTA Leasing Highlights in Select CoStar Markets Color Coded by Vacancy Rate 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 17

23 ATLANTA YEAR-END 2006 LEASING ACTIVITY Historical Rental Rates Based on Quoted Rental Rates $10.00 Flex Warehouse Total Market $9.00 $8.00 Dollars/SF/Year $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $ q q 3q q q 2006 Vacancy by Available Space Type Vacancy by Building Type Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Building Type Atlanta United States Atlanta United States 4% 5% 10% 83% 17% 96% 95% 90% Direct Sublet Direct Sublet Flex Warehouse Flex Warehouse U.S. Rental Rate Comparison Based on Average Quoted Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $7.00 $6.00 Atlanta United States Dollars/SF/Year $5.00 $4.00 $3.00 $2.00 Millions $ $ q q 3q q q q q q q * Includes Under Construction Space 18 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

24 LEASING ACTIVITY YEAR-END 2006 ATLANTA Select Top Industrial Leases Based on Leased Square Footage For Deals Signed in 2006 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 SouthPort Logistics Center S Clayton/Henry Cnty Ind 1,298,700 3rd Kimberly-Clark Corporation Colliers Spectrum Cauble, Inc. CB Richard Ellis 2 Horizon - Lund International Duluth/Suwanee/Buford Ind 356,000 1st Lund International King Realty, Inc. CB Richard Ellis 3 Hartman III I-20 W/Douglasville Ind 350,514 1st Keystone Automotive Distribution Colliers Spectrum Cauble, Inc. Colliers Spectrum Cauble, Inc. 4 Liberty Distribution Center III* S Clayton/Henry Cnty Ind 329,700 3rd GENCO Distribution System N/A Duke Realty Corporation 5 DMI Bldg Kennesaw/Acworth Ind 292,000 4th N/A N/A DMI Distribution 6 King Mill S Clayton/Henry Cnty Ind 287,400 2nd Snapper Products, Inc. Trammell Crow Company Cousins Properties Incorporated Canton Rd SE Cobb Cnty/Marietta Ind 266,250 2nd EPI Companies EPI Companies MDH Partners, LLC Westgate Pky SW Fulton District Ind 246,400 1st M & W Distribution Services Colliers Spectrum Cauble, Inc. Majestic Realty Co Greenwood Ct S Clayton/Henry Cnty Ind 240,000 1st The J.M. Smucker Co. Colliers Spectrum Cauble, Inc. Colliers Spectrum Cauble, Inc. 10 ProLogis Park Greenwood - Bldg 1 S Clayton/Henry Cnty Ind 240,000 4th Home Depot N/A ProLogis 11 Westgate Industrial Ctr - Bldg 5 Fulton District Ind 227,600 3rd Steelcase, Inc. N/A ProLogis Atlantic Blvd* Norcross Ind 217,497 3rd Cingular Wireless Meriwether Partners LLC Colliers Spectrum Cauble, Inc S Westpark Dr Fulton District Ind 216,074 2nd Aveno Window Fashions Trammell Crow Company Resource Real Estate Partners 14 Progress Dist Ctr I GA-316/Lawrenceville Ind 201,600 2nd Anderson Merchandising N/A Cushman & Wakefield of Georgia, Inc. 15 Conyers Logistics Center Rockdale/Newton Cnty Ind 201,403 4th N/A N/A Lavista Associates, Inc. 16 Southfield Corporate Center Airport/North Clayton Ind 200,000 2nd N/A N/A Seefried Properties, Inc Airport Industrial Dr Woodstock/Canton Ind 200,000 1st Meyn America, LLC N/A Stowers & Company Pelican Dr Airport/North Clayton Ind 192,752 1st Menlo N/A Seefried Properties, Inc. 19 Riverview Distr. Cntr. - Bldg 400 Fulton District Ind 171,600 2nd Chep Usa Equis Corporation Republic Property Company, Inc. 20 Newpoint Commons-Bldg 300 Duluth/Suwanee/Buford Ind 168,200 1st U-Line Distributors CB Richard Ellis Triad Development Properties 21 SouthPoint - Bldg B Airport/North Clayton Ind 165,000 3rd Sanofi-Aventis Carter IDI 22 Pacific Drive Distribution Center Norcross Ind 164,752 2nd Architectural Installation Atlanta, Inc. N/A CB Richard Ellis Old Norcross Rd* GA-316/Lawrenceville Ind 147,000 3rd Albany International Corp N/A N/A Park Central Blvd* Snapfinger Ind 145,152 4th Dart Container Corporation N/A Pattillo Construction Company 25 King Mill S Clayton/Henry Cnty Ind 130,000 4th Brigg and Stratton Yard Products Group N/A Cousins Properties Incorporated 26 Hamilton Mill Business - Bldg M Duluth/Suwanee/Buford Ind 129,600 2nd Global Industrial Equipment Cushman & Wakefield of Georgia, Inc. IDI 27 Former Yokohama Tire Duluth/Suwanee/Buford Ind 125,000 4th Embraco N/A Duke Realty Corporation Fulton Industrial Blvd SW Fulton District Ind 120,960 3rd Pitney Bowes Government Solutions, Inc. Cushman & Wakefield of Georgia, Inc. Colliers Spectrum Cauble, Inc. 29 Westfork Business Park - Bldg A-5* I-20 W/Douglasville Ind 115,595 4th AtomicBox Logistics N/A IDI Crescent Dr Doraville Ind 110,000 3rd Prime Choice Cabinet Direct Deal Grubb & Ellis 31 Monroe Drive Industrial Bldgs - Bldg 1 I-985/Gainesville Ind 109,184 3rd William Wrigley Jr. Company Industrial Properties Group Industrial Properties Group 32 Douglas Hill Business Center - Bldg 1 I-20 W/Douglasville Ind 107,525 2nd Cherry Man Industries CB Richard Ellis CB Richard Ellis 33 Douglas Hill Business Center - Bldg 1* I-20 W/Douglasville Ind 107,444 4th APL Logistics CB Richard Ellis ProLogis 34 CampCreek Distribution Center - Building D I-20 W/Douglasville Ind 105,945 1st The Lincoln Electric Company Resource Real Estate Partners IDI 35 Atlanta Telecom Center Central Atlanta Ind 105,000 3rd Czarnowski Carter McWhirter Realty Corp. 36 Horizon Creek Dist Center - Building 200 Duluth/Suwanee/Buford Ind 104,000 1st HCDC N/A Seefried Properties, Inc. 37 Southmeadow C Airport/North Clayton Ind 99,832 1st Public Special Commodities CB Richard Ellis Colliers Spectrum Cauble, Inc N Royal Atlanta Dr Stone Mountain Ind 98,854 2nd Guardian Distribution Services, Inc Ferrari & Associates, Inc. Wilson, Hull & Neal 39 Southmeadow C Airport/North Clayton Ind 98,483 1st Brunswick Corporation The Prudential Insurance Company of America Colliers Spectrum Cauble, Inc Westpark Dr Fulton District Ind 97,938 2nd Allied Aerofoam Products. N/A Resource Real Estate Partners * Renewal 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 19

25 ATLANTA YEAR-END 2006 SALES ACTIVITY The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 10.0% Cap Rate Price/SF $ % 8.0% $200 Cap Rate Percentage 7.0% 6.0% 5.0% 4.0% 3.0% $150 $100 Dollars/SF 2.0% $50 1.0% 0.0% q q q 3q q q $0 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Industrial Building Sales of 15,000 SF and Larger Based on Industrial Bldg Sales From Oct. - Sept Sales Volume Price/SF Bldg Size # RBA $ Volume Price/SF Cap Rate $800 $60 Millions of Sales Volume Dollars $700 $600 $500 $400 $300 $200 $100 $50 $40 $30 $20 $10 Price/SF < 25,000 SF 264 3,544,623 $ 269,554,060 $ % 25K-99K SF ,145,585 $ 485,777,487 $ % 100K-249K SF 66 10,273,681 $ 461,867,722 $ % $ $0 >250K SF 45 21,233,896 $ 884,443,501 $ % Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Industrial Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Industrial Building Sales of 15,000 SF and Larger $70 Atlanta US 14.0% Atlanta US $ % Dollars per SF $50 $40 $30 $20 Cap Rate Percentage 10.0% 8.0% 6.0% 4.0% $10 2.0% $ % Source: CoStar COMPS Source: CoStar COMPS 20 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.

26 SALES ACTIVITY YEAR-END 2006 ATLANTA 2007 COSTAR GROUP, INC. THE COSTAR INDUSTRIAL REPORT 21

27 ATLANTA YEAR-END 2006 SALES ACTIVITY Select Land Sales Based on Industrial Zoned Land Sales Occurring From Oct. - Sept Henry Camp Rd, Newnan Possum Creek Rd, Jefferson Cumming Hwy, Canton Sale Price: $20,786,120 Sale Price: $13,182,560 Sale Price: $10,481,250 Acres: 1, Acres: Acres: Price/SF: $0.36 Price/SF: $0.99 Price/SF: $4.48 Closing Date: 05/05/2006 Closing Date: 01/10/2006 Closing Date: 10/28/ Zoning: M, County Zoning: LI Zoning: M1, Canton Intended Use: Hold for Development Intended Use: Industrial Intended Use: Hold for Development Buyer: P&L Bridgeport I, LP Buyer: Cousins Properties Incorporated Buyer: Northside Hospital - Cherokee, Inc. Seller: HMS Investments, LLC Seller: All-Stitch Embroidery Co., Ltd. Seller: William G. Hasty, Jr. & Garry Haygood Bethlehem Rd, Locust Grove Highway 411, White 243 Toy Wright Rd, Jefferson Sale Price: $10,470,000 Sale Price: $7,900,000 Sale Price: $6,780,280 Acres: Acres: Acres: Price/SF: $1.60 Price/SF: $1.21 Price/SF: $1.35 Closing Date: 09/28/2006 Closing Date: 06/07/2006 Closing Date: 07/12/2006 Zoning: M1 Zoning: I2 Zoning: A2 Intended Use: Warehouse Intended Use: Hold for Development Intended Use: Industrial Buyer: FR/CAL Gateway 75, LLC Buyer: State of Georgia Buyer: ProLogis Seller: I. A. Khan Seller: Bartow-Cartersville Joint Development Au Seller: Ackerman Jackson, LLC Source: CoStar COMPS 22 THE COSTAR INDUSTRIAL REPORT 2007 COSTAR GROUP, INC.