The CoStar Office Report Y E A R - E N D 2 0 0 9 Atlanta Office Market
Atlanta Office Market YEAR-END 2009 ATLANTA Table of Contents Table of Contents.................................................................... A Methodology........................................................................ B Terms & Definitions.................................................................. C Market Highlights & Overview......................................................... 1 CoStar Markets & Submarkets......................................................... 4 Employment & Tenant Analysis........................................................ 5 Employment & Unemployment Analysis Tenant Profiles Inventory & Development Analysis...................................................... 7 Construction Activity Map Inventory & Development Analysis Select Top Deliveries Select Top Under Construction Properties Figures at a Glance.................................................................. 12 Figures at a Glance by Class & Market Figures at a Glance by Class & Submarket Figures at a Glance Grouped by CBD vs Suburban Historical Figures at a Glance Leasing Activity Analysis............................................................. 20 Leasing Activity Map Leasing Activity Analysis Select Top Lease Transactions Sales Activity Analysis............................................................... 23 Sales Activity Analysis Select Top Sales Transactions Select Same Building Sales Select Land Sales Analysis of Individual CoStar Markets.................................................. 26 Buckhead Market Central Perimeter Market Downtown Atlanta Market Midtown Atlanta Market North Fulton Market Northeast Atlanta Market Northlake Market Northwest Atlanta Market South Atlanta Market West Atlanta Market 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT A
ATLANTA YEAR-END 2009 Atlanta Office Market Methodology The CoStar Office Report, unless specifically stated otherwise, calculates office statistics using CoStar Group s entire database of existing and under construction office buildings in each metropolitan area. Included are office, office condominium, office loft, office medical, all classes and all sizes, and both multi-tenant and single-tenant buildings, including owner-occupied buildings. CoStar Group's national database includes approximately 69.1 billion square feet of coverage in 2.8 million properties. All rental rates reported in the CoStar Office Report have been converted to a Full Service equivalent rental rate. For information on subscribing to CoStar s other products and services, please contact us at 1-877-7COSTAR, or visit our web site at www.costar.com Copyright 2010 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 20814 (800) 204-5960 www.costar.com NASDAQ: CSGP B THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market YEAR-END 2009 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. : 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) 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT C
ATLANTA YEAR-END 2009 Atlanta Office Market 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. 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 OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market OVERVIEW YEAR-END 2009 ATLANTA Atlanta s Increases to 16.8% Net Absorption Negative (535,384) SF in the Quarter The Atlanta Office market ended the fourth quarter 2009 with a vacancy rate of 16.8%. The vacancy rate was up over the previous quarter, with net absorption totaling negative (535,384) square feet in the fourth quarter. Vacant sublease space decreased in the quarter, ending the quarter at 3,640,000 square feet. Rental rates ended the fourth quarter at $19.14, a decrease over the previous quarter. A total of three buildings delivered to the market in the quarter totaling 95,076 square feet, with 1,732,432 square feet still under construction at the end of the quarter. Absorption Net absorption for the overall Atlanta office market was negative (535,384) square feet in the fourth quarter 2009. That compares to negative (523,538) square feet in the third quarter 2009, negative (1,332,256) square feet in the second quarter 2009, and negative (501,806) square feet in the first quarter 2009. Tenants moving out of large blocks of space in 2009 include: Bryan Cave Powell Goldstein LLP moving out of 151,048 square feet at One Atlantic Center; Arris moving out of 144,647 square feet at Johns Creek - Bldg 11450; and AT&T moving out of 138,000 square feet at American Cancer Society Center. Tenants moving into large blocks of space in 2009 include: First Data Corporation moving into 181,831 square feet at Glenridge Highlands II; Verizon Communications, Inc. moving into 141,804 square feet at Stonebridge II; and Deloitte & Touche, LLP. moving into 123,964 square feet at One Ninety One Peachtree Tower. The Class-A office market recorded net absorption of negative (422,147) square feet in the fourth quarter 2009, compared to negative (20,363) square feet in the third quarter 2009, negative (122,133) in the second quarter 2009, and positive 5,965 in the first quarter 2009. The Class-B office market recorded net absorption of negative (18,095) square feet in the fourth quarter 2009, compared to negative (260,093) square feet in the third quarter 2009, negative (876,925) in the second quarter 2009, and negative (301,006) in the first quarter 2009. The Class-C office market recorded net absorption of negative (95,142) square feet in the fourth quarter 2009 compared to negative (243,082) square feet in the third quarter 2009, negative (333,198) in the second quarter 2009, and negative (206,765) in the first quarter 2009. Net absorption for Atlanta s central business district was negative (138,538) square feet in the fourth quarter 2009. That compares to negative (121,273) square feet in the third quarter 2009, negative (338,243) in the second quarter 2009, and negative (50,727) in the first quarter 2009. Net absorption for the suburban markets was negative (396,846) square feet in the fourth quarter 2009. That compares to negative (402,265) square feet in third quarter 2009, negative (994,013) in the second quarter 2009, and negative (451,079) in the first quarter 2009. The office vacancy rate in the Atlanta market area increased to 16.8% at the end of the fourth quarter 2009. The vacancy rate was 16.6% at the end of the third quarter 2009, 16.0% at the end of the second quarter 2009, and 15.1% at the end of the first quarter 2009. Class-A projects reported a vacancy rate of 18.6% at the Rates by Class 1986-2009 A B C Total Market 35% 30% 25% Rate 20% 15% 10% 5% 0% 1986 1987 1988 1989 1q 1989 1990 1991 1992 1q 1992 1993 1994 1995 1q 1995 1996 1997 1998 1q 1998 1999 2000 2001 1q 2001 2002 2003 2004 2004 1q 2005 2006 2007 2007 1q 2008 2009 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 1
ATLANTA YEAR-END 2009 Atlanta Office Market OVERVIEW end of the fourth quarter 2009, 18.2% at the end of the third quarter 2009, 17.2% at the end of the second quarter 2009, and 16.4% at the end of the first quarter 2009. Class-B projects reported a vacancy rate of 15.9% at the end of the fourth quarter 2009, 15.8% at the end of the third quarter 2009, 15.5% at the end of the second quarter 2009, and 14.6% at the end of the first quarter 2009. Class-C projects reported a vacancy rate of 14.9% at the end of the fourth quarter 2009, 14.7% at the end of third quarter 2009, 14.1% at the end of the second quarter 2009, and 13.4% at the end of the first quarter 2009. The overall vacancy rate in Atlanta s central business district at the end of the fourth quarter 2009 increased to 14.0%. The vacancy rate was 13.6% at the end of the third quarter 2009, 13.2% at the end of the second quarter 2009, and 12.3% at the end of the first quarter 2009. The vacancy rate in the suburban markets increased to 17.2% in the fourth quarter 2009. The vacancy rate was 17.0% at the end of the third quarter 2009, 16.4% at the end of the second quarter 2009, and 15.6% at the end of the first quarter 2009. Largest Lease Signings The largest lease signings occurring in 2009 included: the 254,619-square-foot lease signed by SunTrust Bank at Marquis Two Tower in the Downtown Atlanta market; the 190,000- square-foot deal signed by Primerica Financial Services, Inc. at 3120 Breckenridge Blvd in the Northeast Atlanta market; and the 182,956-square-foot lease signed by NCR Corporation at 2651 Satellite Blvd in the Northeast Atlanta market. Sublease The amount of vacant sublease space in the Atlanta market decreased to 3,640,000 square feet by the end of the fourth quarter 2009, from 3,683,766 square feet at the end of the third quarter 2009. There was 3,643,241 square feet vacant at the end U.S. Comparison Past 10 Quarters Rate 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 2007 2007 2008 1q Atlanta 2008 2008 2008 2009 1q United States 2009 2009 2009 of the second quarter 2009 and 3,179,722 square feet at the end of the first quarter 2009. Atlanta s Class-A projects reported vacant sublease space of 2,618,812 square feet at the end of fourth quarter 2009, down from the 2,667,576 square feet reported at the end of the third quarter 2009. There were 2,656,829 square feet of sublease space vacant at the end of the second quarter 2009, and 2,507,445 square feet at the end of the first quarter 2009. Class-B projects reported vacant sublease space of 948,413 square feet at the end of the fourth quarter 2009, down from the 951,300 square feet reported at the end of the third quarter 2009. At the end of the second quarter 2009 there were 940,301 square feet, and at the end of the first quarter 2009 there were 628,276 square feet vacant. Class-C projects reported increased vacant sublease space from the third quarter 2009 to the fourth quarter 2009. Sublease vacancy went from 64,890 square feet to 72,775 square feet during that time. There was 46,111 square feet at the end of the second quarter 2009, and 44,001 square feet at the end of the first quarter 2009. Sublease vacancy in Atlanta s central business district stood at 494,174 square feet at the end of the fourth quarter 2009. It was 523,589 square feet at the end of the third quarter 2009, 512,855 square feet at the end of the second quarter 2009, and 279,683 square feet at the end of the first quarter 2009. Sublease vacancy in the suburban markets ended the fourth quarter 2009 at 3,145,826 square feet. At the end of the third quarter 2009 sublease vacancy was 3,160,177 square feet, was 3,130,386 square feet at the end of the second quarter 2009, and was 2,900,039 square feet at the end of the first quarter 2009. Rental Rates The average quoted asking rental rate for available office space, all classes, was $19.14 per square foot per year at the end of the fourth quarter 2009 in the Atlanta market area. This represented a 0.4% decrease in quoted rental rates from the end of the third quarter 2009, when rents were reported at $19.21 per square foot. The average quoted rate within the Class-A sector was $21.91 at the end of the fourth quarter 2009, while Class-B rates stood at $16.84, and Class-C rates at $14.76. At the end of the third quarter 2009, Class-A rates were $22.10 per square foot, Class-B rates were $16.93, and Class-C rates were $15.23. The average quoted asking rental rate in Atlanta s CBD was $18.89 at the end of the fourth quarter 2009, and $19.16 in the suburban markets. In the third quarter 2009, quoted rates were $18.75 in the CBD and $19.26 in the suburbs. Deliveries and Construction During the fourth quarter 2009, three buildings totaling 95,076 square feet were completed in the Atlanta market area. This compares to 21 buildings totaling 1,432,685 square feet that Source: CoStar Property 2 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market OVERVIEW YEAR-END 2009 ATLANTA were completed in the third quarter 2009, 19 buildings totaling 1,037,883 square feet completed in the second quarter 2009, and 371,820 square feet in 31 buildings completed in the first quarter 2009. There were 1,732,432 square feet of office space under construction at the end of the fourth quarter 2009. Some of the notable 2009 deliveries include: Terminus 200, a 564,850-square-foot facility that delivered in third quarter 2009 and is now 9% occupied, and 271 17th Street, a 548,039-squarefoot building that delivered in second quarter 2009 and is now 34% occupied. The largest projects underway at the end of fourth quarter 2009 were 12th & Midtown, a 719,003-square-foot building with 12% of its space pre-leased, and Phipps Tower, a 486,000- square-foot facility that is 1% pre-leased. Inventory Total office inventory in the Atlanta market area amounted to 273,802,684 square feet in 11,897 buildings as of the end of the fourth quarter 2009. The Class-A office sector consisted of 109,995,060 square feet in 477 projects. There were 4,793 Class- B buildings totaling 118,580,904 square feet, and the Class-C sector consisted of 45,226,720 square feet in 6,627 buildings. Within the Office market there were 516 owner-occupied buildings accounting for 28,268,159 square feet of office space. Sales Activity Tallying office building sales of 15,000 square feet or larger, Atlanta office sales figures fell during the third quarter 2009 in terms of dollar volume compared to the second quarter of 2009. In the third quarter, 12 office transactions closed with a total volume of $36,986,852. The 12 buildings totaled 598,985 square feet and the average price per square foot equated to $61.75 per square foot. That compares to eight transactions totaling $54,586,000 in the second quarter 2009. The total square footage in the second quarter was 497,203 square feet for an average price per square foot of $109.79. Absorption & Deliveries Past 10 Quarters 2.0 1.5 1.0 0.5 0.0 (0.5) (1.0) (1.5) 1.50 1.01 2007 Source: CoStar Property 0.02 1.35 2007 Net Absorption 0.90 (0.17) 2008 1q 0.48 1.56 2008 Total office building sales activity in 2009 was down compared to 2008. In the first nine months of 2009, the market saw 27 office sales transactions with a total volume of $111,057,591. The price per square foot averaged $83.76. In the same first nine months of 2008, the market posted 83 transactions with a total volume of $1,682,827,967. The price per square foot averaged $166.91. Cap rates have been higher in 2009, averaging 8.07% compared to the same period in 2008 when they averaged 7.81%. One of the largest transactions that occurred within the last four quarters in the Atlanta market is the sale of Pershing Park Plaza in Atlanta. This 159,103 square foot office building sold for $32,650,000, or $205.21 per square foot. The property sold on 6/30/2009. Reports compiled by: Richard Poland and Corey Durant CoStar Research Managers. 0.61 (0.32) 2008 0.10 1.36 2008 0.37 (0.50) 2009 1q Deliveries 1.04 (1.33) 2009 1.43 0.10 (0.52) (0.54) 2009 2009 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 3
ATLANTA YEAR-END 2009 Atlanta Office Market 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 Submarkets Buckhead Lower Buckhead Upper Buckhead Central Perimeter Downtown Atlanta Central Perimeter Downtown Atlanta* Midtown Atlanta Midtown/Pershing Point Northside Dr/Georgia Tech North Fulton Dawson County N Fulton/Forsyth County Northeast Atlanta Barrow County Duluth/Suwanee/Buford Lawrenceville/Lilburn Norcross/Ptree Corners Walton County Northlake Chamblee/Dville/N D Hills Decatur I-20 East/Conyers Newton County Northlake/Lavista Stone Mountain Northwest Atlanta Bartow County Cherokee County Cumberland/Galleria East Cobb Kennesaw/Town Center Pickens County South Atlanta Butts County Fayette/Coweta County Jasper County Lamar County Meriwether County Monroe County North Clayton/Airport Pike County South Clayton/Henry Cnty Spalding County West Atlanta Douglasville/Lithia Sprng Haralson County Heard County Villa Rica/West Outlying W Carroll County West Atlanta * Submarkets comprising the CBD. For statistics reference the CBD vs Suburban Figures at a Glance Page. 4 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market EMPLOYMENT AND TENANT YEAR-END 2009 ATLANTA Total Employment by Industry Percent of Total Employment by Industry Total Employment Growth Total Number of Jobs Added Per Year 4% 15% 10% 4% 0% 6% 23% 6% 3% Natural Resources & Mining Construction Manufacturing Trade, Transportation & Utilities Information Financial Activities Professional & Business Services Education & Health Services Leisure & Hospitality Percent Growth 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% Atlanta U.S. Average 12% 17% Other Services Government -5.0% -6.0% -7.0% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Department of Labor, Bureau of Labor Statistics Office* Employment Growth Cumulative Growth in Office* Jobs Over the Past 5 Years Market Employment Growth Inventory Growth Difference Atlanta -8.00% 6.90% -14.90% Boston -1.10% 2.60% -3.70% Chicago -5.80% 4.30% -10.10% Dallas/Ft Worth 4.20% 7.10% -2.90% Denver -0.70% 5.10% -5.80% Los Angeles -6.20% 2.90% -9.10% New York City -0.10% 1.80% -1.90% Seattle/Puget Sound 1.70% 8.60% -6.90% Tampa/St Petersburg -10.50% 8.00% -18.50% Washington -0.80% 9.40% -10.20% Source: Department of Labor, Bureau of Labor Statistics Historical Unemployment Rates Source: Department of Labor, Bureau of Labor Statistics Office* Employment Growth Number of Office* Jobs Added Per Year Percent Growth 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% -9.0% -10.0% Atlanta U.S. Average 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: Department of Labor, Bureau of Labor Statistics. * Office employment is defined as jobs in the Information, Financial Activities, and Professional & Business Services industries 12.0% Atlanta U.S. Average 10.0% Percent Unemployment 8.0% 6.0% 4.0% 2.0% 0.0% 1999 1q 1999 2000 1q 2000 2001 1q 2001 2002 1q 2002 2003 1q 2003 2004 1q 2004 2005 1q 2005 2006 1q 2006 2007 1q 2007 2008 1q 2008 2009 1q 2009 Source: Department of Labor, Bureau of Labor Statistics. 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 5
ATLANTA YEAR-END 2009 Atlanta Office Market EMPLOYMENT AND TENANT Tenant by Size Range Based on Total Number of Tenants Tenants by Lease Expiration Based on Total Square Footage of Tenants 75,000 SF & Up 2.0% 2016 4.5% 50,000-74,999 SF 1.1% 2015 6.4% 25,000-49,999 SF 3.2% 2014 14.6% 10,000-24,999 SF 10.5% 2013 12.7% 5,000-9,999 SF 14.3% 2,500-4,999 SF 23.6% 2012 16.2% Up to 2,499 SF 45.3% 2011 14.5% 0% 10% 20% 30% 40% 50% 0% 5% 10% 15% 20% Percentage of Tenants Percentage of Tenants Source: CoStar Tenant Source: CoStar Tenant Tenants by Industry SF Per Employee by Industry Based on Total Square Footage of Tenants Based on All Tenants Finance/Ins/RE 19.8% Law Firms 436.4 Business-Service 12.6% Services 431.4 Manufacturing 11.4% Finance/Ins/RE 356.6 Services 10.9% Retailers/Wholes 335.3 Government 8.2% Manufacturing 332.6 Law Firms 8.0% Agri/Mining/Util 322.9 Medical 7.2% Medical 312.7 Communications 6.3% Government 309.9 Retailers/Wholes 4.6% Transportation 284.4 Agri/Mining/Util 3.4% Engineers/Archit 278.3 Engineers/Archit 3.1% Business-Service 265.0 Transportation 2.5% Communications 244.5 Accountants 1.9% Accountants 240.0 0% 5% 10% 15% 20% 25% 0 100 200 300 400 500 Percentage of Tenants SF Per Employee Source: CoStar Tenant Source: CoStar Tenant 6 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market INVENTORY & DEVELOPMENT YEAR-END 2009 ATLANTA Construction Highlights in Select CoStar Markets Color Coded by Under Construction Square Footage as a Percentage of 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 7
ATLANTA YEAR-END 2009 Atlanta Office Market INVENTORY & DEVELOPMENT Historical Deliveries 1982-2009 14.0 12.0 10.0 12.4 9.7 11.3 Deliveries 10.5 9.5 11.0 10.1 Average Delivered SF 11.4 Millions of SF 8.0 6.0 4.0 7.1 5.2 7.0 4.9 3.7 5.0 4.2 3.1 4.1 7.9 6.7 3.8 2.9 3.7 4.4 5.9 4.4 2.9 2.0 0.9 1.6 0.0 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 * Future deliveries based on current under construction buildings. Construction Activity Markets Ranked by Under Construction Square Footage Under Construction Inventory Average Bldg Size Market # Bldgs Total RBA Preleased SF Preleased % All Existing U/C Buckhead 2 922,585 4,860 0.5% 52,190 461,292 Midtown Atlanta 1 719,003 86,280 12.0% 67,354 719,003 Northwest Atlanta 3 56,710 4,500 7.9% 19,432 18,903 South Atlanta 1 21,000 0 0.0% 11,965 21,000 Northeast Atlanta 1 7,134 2,140 30.0% 13,904 7,134 Northlake 1 6,000 0 0.0% 14,050 6,000 West Atlanta 0 0 0 0.0% 11,591 0 Central Perimeter 0 0 0 0.0% 46,924 0 Downtown Atlanta 0 0 0 0.0% 101,205 0 North Fulton 0 0 0 0.0% 21,369 0 Totals 9 1,732,432 97,780 5.6% 23,014 192,492 Recent Deliveries Leased & Un-Leased SF in Deliveries Since 2005 Future Deliveries Preleased & Un-Leased SF in Properties Scheduled to Deliver 7.0 Leased Un-Leased 2,000 Preleased Un-Leased Millions of SF 6.0 5.0 4.0 3.0 2.0 1.0 Thousands of SF 1,800 1,600 1,400 1,200 1,000 800 600 400 200 T 0.0 2005 2006 2007 2008 2009 0 2010 1q 2010 2010 8 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market INVENTORY & DEVELOPMENT YEAR-END 2009 ATLANTA Historical Construction Starts & Deliveries Square Footage Per Quarter Starting and Completing Construction 3.5 Construction Starts 3.25 Deliveries 3.0 Millions of SF 2.5 2.0 1.5 1.0 0.5 0.0 2.16 1.59 1.50 1.56 1.45 1.32 1.34 1.36 1.35 1.36 1.15 1.03 1.05 1.01 1.08 0.90 0.74 0.64 0.61 0.61 0.49 0.22 0.26 1.43 1.04 0.37 0.13 0.12 0.00 0.10 0.00 2006 1q 2006 2006 2006 2007 1q 2007 2007 2007 2008 1q 2008 2008 2008 2009 1q 2009 2009 2009 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 65 771,290 349,713 45.3% $21.31 41,794 729,496 50,000 SF - 99,999 SF 3 222,992 130,862 58.7% $24.48 0 222,992 100,000 SF - 249,999 SF 3 337,092 96,739 28.7% $25.17 0 337,092 250,000 SF - 499,999 SF 1 493,201 133,164 27.0% $32.73 0 493,201 >= 500,000 SF 2 1,112,889 237,170 21.3% $27.24 0 1,112,889 Recent Development by Tenancy Comparison Based on RBA Developed for Single & Multi Tenant Use Based on Total RBA 2009 Deliveries Currently Under Construction By Class By Space Type 1% 0% 17% 18% 99% 100% 43% 40% 82% Multi Single Multi Single Class A Class B Class C Multi Single 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 9
ATLANTA YEAR-END 2009 Atlanta Office Market INVENTORY & DEVELOPMENT 10 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market INVENTORY & DEVELOPMENT YEAR-END 2009 ATLANTA 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 11
ATLANTA YEAR-END 2009 Atlanta Office Market FIGURES AT A GLANCE Class A Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Buckhead 49 13,892,105 2,911,165 3,056,132 22.0% 56,896 1,058,051 922,585 $26.12 Central Perimeter 79 20,516,436 3,470,415 3,978,838 19.4% (533,817) 0 0 $21.79 Downtown Atlanta 28 15,342,560 2,881,251 3,356,699 21.9% (537,259) 0 0 $20.01 Midtown Atlanta 38 15,532,066 2,268,067 2,720,943 17.5% 338,100 548,039 719,003 $22.84 North Fulton 108 16,177,876 2,091,695 2,541,957 15.7% 18,507 163,000 0 $19.99 Northeast Atlanta 62 7,234,562 1,340,927 1,433,888 19.8% (17,073) 108,696 0 $19.68 Northlake 16 2,242,320 209,287 226,014 10.1% (9,700) 0 0 $21.17 Northwest Atlanta 77 17,492,611 2,175,779 2,638,195 15.1% (42,446) 60,000 34,060 $20.96 South Atlanta 19 1,493,024 499,859 514,591 34.5% 168,104 301,547 21,000 $21.69 West Atlanta 1 71,500 5,580 5,580 7.8% 10 0 0 $25.34 Totals 477 109,995,060 17,854,025 20,472,837 18.6% (558,678) 2,239,333 1,696,648 $21.91 Class B Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Buckhead 79 4,796,504 664,134 706,499 14.7% (57,365) 13,914 0 $19.28 Central Perimeter 225 8,831,917 1,602,193 1,786,673 20.2% (372,158) 0 0 $18.95 Downtown Atlanta 121 14,688,587 604,909 620,435 4.2% (64,447) 0 0 $16.08 Midtown Atlanta 117 5,991,446 634,988 714,665 11.9% (184,187) 0 0 $17.88 North Fulton 798 15,038,097 2,918,726 3,128,777 20.8% (384,696) 181,681 0 $16.07 Northeast Atlanta 1,076 17,064,715 3,517,323 3,705,124 21.7% (54,254) 94,132 7,134 $15.48 Northlake 619 17,691,074 2,044,658 2,096,794 11.9% (228,345) 88,400 6,000 $17.41 Northwest Atlanta 972 20,603,122 3,956,369 4,117,589 20.0% (223,392) 203,506 22,650 $17.08 South Atlanta 641 11,885,766 1,575,462 1,586,900 13.4% 74,826 84,384 0 $16.90 West Atlanta 145 1,989,676 352,756 356,475 17.9% 37,899 31,234 0 $16.72 Totals 4,793 118,580,904 17,871,518 18,819,931 15.9% (1,456,119) 697,251 35,784 $16.84 12 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market FIGURES AT A GLANCE YEAR-END 2009 ATLANTA Class C Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Buckhead 267 1,926,578 143,052 153,802 8.0% (19,283) 0 0 $21.85 Central Perimeter 396 3,498,605 741,740 753,737 21.5% (68,859) 0 0 $13.98 Downtown Atlanta 199 5,188,325 944,013 947,213 18.3% (47,075) 0 0 $16.20 Midtown Atlanta 188 1,578,753 194,976 207,400 13.1% (80,967) 0 0 $14.53 North Fulton 731 3,765,314 418,351 437,930 11.6% (162,793) 0 0 $15.54 Northeast Atlanta 1,019 5,692,279 764,246 770,104 13.5% (156,601) 0 0 $13.89 Northlake 1,364 8,152,527 761,309 761,309 9.3% (156,026) 0 0 $14.76 Northwest Atlanta 1,287 7,296,638 948,246 953,250 13.1% (123,838) 880 0 $14.93 South Atlanta 930 5,645,344 880,120 884,083 15.7% (36,759) 0 0 $14.52 West Atlanta 246 2,482,357 865,644 865,644 34.9% (25,986) 0 0 $11.85 Totals 6,627 45,226,720 6,661,697 6,734,472 14.9% (878,187) 880 0 $14.76 Total Office Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Buckhead 395 20,615,187 3,718,351 3,916,433 19.0% (19,752) 1,071,965 922,585 $24.94 Central Perimeter 700 32,846,958 5,814,348 6,519,248 19.8% (974,834) 0 0 $20.51 Downtown Atlanta 348 35,219,472 4,430,173 4,924,347 14.0% (648,781) 0 0 $18.89 Midtown Atlanta 343 23,102,265 3,098,031 3,643,008 15.8% 72,946 548,039 719,003 $21.57 North Fulton 1,637 34,981,287 5,428,772 6,108,664 17.5% (528,982) 344,681 0 $17.86 Northeast Atlanta 2,157 29,991,556 5,622,496 5,909,116 19.7% (227,928) 202,828 7,134 $16.58 Northlake 1,999 28,085,921 3,015,254 3,084,117 11.0% (394,071) 88,400 6,000 $17.10 Northwest Atlanta 2,336 45,392,371 7,080,394 7,709,034 17.0% (389,676) 264,386 56,710 $18.25 South Atlanta 1,590 19,024,134 2,955,441 2,985,574 15.7% 206,171 385,931 21,000 $17.14 West Atlanta 392 4,543,533 1,223,980 1,227,699 27.0% 11,923 31,234 0 $14.62 Totals 11,897 273,802,684 42,387,240 46,027,240 16.8% (2,892,984) 2,937,464 1,732,432 $19.14 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 13
ATLANTA YEAR-END 2009 Atlanta Office Market FIGURES AT A GLANCE Class A Submarket Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Barrow County 0 0 0 0 0.0% 0 0 0 $0.00 Bartow County 0 0 0 0 0.0% 0 0 0 $0.00 Butts County 0 0 0 0 0.0% 0 0 0 $0.00 Central Perimeter 79 20,516,436 3,470,415 3,978,838 19.4% (533,817) 0 0 $21.79 Chamblee/Dville/N D Hills 6 781,092 14,266 21,750 2.8% 9,316 0 0 $18.26 Cherokee County 2 114,592 36,800 36,800 32.1% 25,100 60,000 34,060 $25.73 Cumberland/Galleria 62 15,975,859 1,907,348 2,360,291 14.8% (17,663) 0 0 $20.80 Dawson County 0 0 0 0 0.0% 0 0 0 $0.00 Decatur 6 911,859 46,696 46,696 5.1% 34,545 0 0 $22.24 Douglasville/Lithia Sprng 0 0 0 0 0.0% 0 0 0 $0.00 Downtown Atlanta 28 15,342,560 2,881,251 3,356,699 21.9% (537,259) 0 0 $20.01 Duluth/Suwanee/Buford 33 4,444,851 924,414 943,009 21.2% (33,066) 108,696 0 $20.13 East Cobb 0 0 0 0 0.0% 0 0 0 $0.00 Fayette/Coweta County 6 364,000 187,974 187,974 51.6% 36,043 26,000 0 $24.65 Haralson County 0 0 0 0 0.0% 0 0 0 $0.00 Heard County 0 0 0 0 0.0% 0 0 0 $0.00 I-20 East/Conyers 2 102,544 73,448 73,448 71.6% (48,206) 0 0 $23.35 Jasper County 0 0 0 0 0.0% 0 0 0 $0.00 Kennesaw/Town Center 13 1,402,160 231,631 241,104 17.2% (49,883) 0 0 $21.34 Lamar County 0 0 0 0 0.0% 0 0 0 $0.00 Lawrenceville/Lilburn 4 406,128 75,070 75,070 18.5% 41,643 0 0 $21.00 Lower Buckhead 0 0 0 0 0.0% 0 0 0 $0.00 Meriwether County 0 0 0 0 0.0% 0 0 0 $0.00 Midtown/Pershing Point 36 15,098,066 2,132,359 2,585,235 17.1% 269,535 548,039 719,003 $22.90 Monroe County 0 0 0 0 0.0% 0 0 0 $0.00 N Fulton/Forsyth County 108 16,177,876 2,091,695 2,541,957 15.7% 18,507 163,000 0 $19.99 Newton County 0 0 0 0 0.0% 0 0 0 $0.00 Norcross/Ptree Corners 25 2,383,583 341,443 415,809 17.4% (25,650) 0 0 $18.78 North Clayton/Airport 12 1,084,024 281,885 296,617 27.4% 132,061 275,547 21,000 $20.89 Northlake/Lavista 2 446,825 74,877 84,120 18.8% (5,355) 0 0 $19.14 Northside Dr/Georgia Tech 2 434,000 135,708 135,708 31.3% 68,565 0 0 $21.34 Pickens County 0 0 0 0 0.0% 0 0 0 $0.00 Pike County 0 0 0 0 0.0% 0 0 0 $0.00 South Clayton/Henry Cnty 1 45,000 30,000 30,000 66.7% 0 0 0 $16.00 Spalding County 0 0 0 0 0.0% 0 0 0 $0.00 Stone Mountain 0 0 0 0 0.0% 0 0 0 $0.00 Upper Buckhead 49 13,892,105 2,911,165 3,056,132 22.0% 56,896 1,058,051 922,585 $26.12 Villa Rica/West Outlying 1 71,500 5,580 5,580 7.8% 10 0 0 $25.34 W Carroll County 0 0 0 0 0.0% 0 0 0 $0.00 Walton County 0 0 0 0 0.0% 0 0 0 $0.00 West Atlanta 0 0 0 0 0.0% 0 0 0 $0.00 Totals 477 109,995,060 17,854,025 20,472,837 18.6% (558,678) 2,239,333 1,696,648 $21.91 14 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market FIGURES AT A GLANCE YEAR-END 2009 ATLANTA Class B Submarket Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Barrow County 18 93,002 19,383 19,383 20.8% (3,583) 0 0 $16.10 Bartow County 34 455,594 120,524 120,524 26.5% (29,627) 0 0 $18.70 Butts County 4 22,707 0 0 0.0% 0 0 0 $0.00 Central Perimeter 225 8,831,917 1,602,193 1,786,673 20.2% (372,158) 0 0 $18.95 Chamblee/Dville/N D Hills 201 8,079,273 824,490 867,126 10.7% (48,113) 82,400 0 $17.61 Cherokee County 189 1,751,178 355,864 358,551 20.5% (25,111) 95,442 0 $19.37 Cumberland/Galleria 254 11,290,024 2,100,461 2,210,608 19.6% (81,936) 0 6,000 $16.74 Dawson County 13 160,983 12,948 12,948 8.0% 13,075 0 0 $19.80 Decatur 109 3,221,682 193,002 202,502 6.3% (18,027) 0 0 $19.64 Douglasville/Lithia Sprng 97 1,224,221 212,234 213,826 17.5% 12,658 13,234 0 $17.07 Downtown Atlanta 121 14,688,587 604,909 620,435 4.2% (64,447) 0 0 $16.08 Duluth/Suwanee/Buford 514 7,343,123 1,283,693 1,338,455 18.2% 162,876 67,369 7,134 $16.52 East Cobb 131 1,784,180 240,949 251,549 14.1% 19,707 0 0 $16.28 Fayette/Coweta County 255 3,001,569 492,930 501,128 16.7% (33,023) 32,584 0 $18.23 Haralson County 1 1,500 0 0 0.0% 0 0 0 $0.00 Heard County 1 11,996 0 0 0.0% 0 0 0 $0.00 I-20 East/Conyers 158 1,904,173 302,569 302,569 15.9% 20,929 6,000 6,000 $17.32 Jasper County 0 0 0 0 0.0% 0 0 0 $0.00 Kennesaw/Town Center 346 5,183,493 1,119,745 1,157,531 22.3% (103,814) 108,064 16,650 $17.17 Lamar County 1 4,396 0 0 0.0% 0 0 0 $18.51 Lawrenceville/Lilburn 284 2,904,713 624,607 635,796 21.9% (9,234) 26,763 0 $17.04 Lower Buckhead 14 1,669,403 221,924 241,108 14.4% (27,495) 0 0 $18.81 Meriwether County 1 2,066 0 0 0.0% 0 0 0 $0.00 Midtown/Pershing Point 96 5,500,883 527,805 595,107 10.8% (135,495) 0 0 $17.81 Monroe County 0 0 0 0 0.0% 0 0 0 $0.00 N Fulton/Forsyth County 785 14,877,114 2,905,778 3,115,829 20.9% (397,771) 181,681 0 $16.02 Newton County 18 102,831 19,312 19,312 18.8% 5,810 0 0 $16.02 Norcross/Ptree Corners 209 6,412,871 1,538,313 1,660,163 25.9% (158,225) 0 0 $14.19 North Clayton/Airport 201 6,297,382 635,121 635,121 10.1% 82,575 36,800 0 $15.03 Northlake/Lavista 104 3,875,949 664,219 664,219 17.1% (220,812) 0 0 $16.87 Northside Dr/Georgia Tech 21 490,563 107,183 119,558 24.4% (48,692) 0 0 $18.72 Pickens County 18 138,653 18,826 18,826 13.6% (2,611) 0 0 $8.92 Pike County 0 0 0 0 0.0% 0 0 0 $0.00 South Clayton/Henry Cnty 163 2,441,422 413,995 417,235 17.1% 27,998 15,000 0 $18.61 Spalding County 16 116,224 33,416 33,416 28.8% (2,724) 0 0 $9.45 Stone Mountain 29 507,166 41,066 41,066 8.1% 31,868 0 0 $13.87 Upper Buckhead 65 3,127,101 442,210 465,391 14.9% (29,870) 13,914 0 $19.52 Villa Rica/West Outlying 20 209,663 26,948 26,948 12.9% (5,676) 0 0 $11.28 W Carroll County 7 40,347 5,407 5,407 13.4% (5,407) 0 0 $8.00 Walton County 51 311,006 51,327 51,327 16.5% (46,088) 0 0 $12.73 West Atlanta 19 501,949 108,167 110,294 22.0% 36,324 18,000 0 $18.87 Totals 4,793 118,580,904 17,871,518 18,819,931 15.9% (1,456,119) 697,251 35,784 $16.84 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 15
ATLANTA YEAR-END 2009 Atlanta Office Market FIGURES AT A GLANCE Class C Submarket Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Barrow County 21 60,231 15,120 15,120 25.1% (10,795) 0 0 $11.62 Bartow County 69 269,591 38,548 38,548 14.3% (8,820) 0 0 $13.79 Butts County 4 16,407 800 800 4.9% (800) 0 0 $14.57 Central Perimeter 396 3,498,605 741,740 753,737 21.5% (68,859) 0 0 $13.98 Chamblee/Dville/N D Hills 364 2,674,739 322,284 322,284 12.0% (76,330) 0 0 $14.81 Cherokee County 194 1,123,267 136,036 140,184 12.5% (49,225) 0 0 $15.06 Cumberland/Galleria 314 2,341,687 344,574 344,924 14.7% (41,713) 0 0 $13.25 Dawson County 11 107,971 4,001 4,001 3.7% (4,001) 0 0 $9.53 Decatur 280 2,079,932 120,313 120,313 5.8% (57,092) 0 0 $17.18 Douglasville/Lithia Sprng 146 809,465 169,296 169,296 20.9% (44,862) 0 0 $12.48 Downtown Atlanta 199 5,188,325 944,013 947,213 18.3% (47,075) 0 0 $16.20 Duluth/Suwanee/Buford 307 1,793,523 179,787 185,545 10.3% (45,279) 0 0 $14.60 East Cobb 164 915,795 136,580 136,580 14.9% (20,337) 0 0 $13.53 Fayette/Coweta County 296 1,570,443 172,589 172,589 11.0% (10,931) 0 0 $16.65 Haralson County 5 7,052 0 0 0.0% 0 0 0 $0.00 Heard County 1 3,703 3,703 3,703 100.0% 0 0 0 $15.32 I-20 East/Conyers 283 1,329,442 134,496 134,496 10.1% (13,003) 0 0 $14.50 Jasper County 1 6,000 6,000 6,000 100.0% 0 0 0 $0.00 Kennesaw/Town Center 529 2,542,153 245,762 246,268 9.7% 38,757 880 0 $15.97 Lamar County 1 7,500 0 0 0.0% 0 0 0 $0.00 Lawrenceville/Lilburn 433 2,073,329 270,299 270,299 13.0% (25,236) 0 0 $15.56 Lower Buckhead 26 261,243 20,263 22,363 8.6% (7,333) 0 0 $17.04 Meriwether County 4 13,516 3,264 3,264 24.1% 0 0 0 $0.00 Midtown/Pershing Point 143 1,142,321 138,985 151,409 13.3% (65,573) 0 0 $13.59 Monroe County 1 5,314 0 0 0.0% 0 0 0 $0.00 N Fulton/Forsyth County 720 3,657,343 414,350 433,929 11.9% (158,792) 0 0 $15.63 Newton County 40 249,868 18,193 18,193 7.3% 4,840 0 0 $17.34 Norcross/Ptree Corners 210 1,553,244 259,601 259,701 16.7% (57,852) 0 0 $11.92 North Clayton/Airport 391 2,757,008 529,916 533,879 19.4% 10,447 0 0 $13.35 Northlake/Lavista 206 933,226 91,817 91,817 9.8% (9,261) 0 0 $12.43 Northside Dr/Georgia Tech 45 436,432 55,991 55,991 12.8% (15,394) 0 0 $16.45 Pickens County 17 104,145 46,746 46,746 44.9% (42,500) 0 0 $28.61 Pike County 4 171,804 0 0 0.0% 0 0 0 $0.00 South Clayton/Henry Cnty 176 899,509 102,124 102,124 11.4% 5,181 0 0 $15.96 Spalding County 52 197,843 65,427 65,427 33.1% (40,656) 0 0 $13.59 Stone Mountain 191 885,320 74,206 74,206 8.4% (5,180) 0 0 $13.92 Upper Buckhead 241 1,665,335 122,789 131,439 7.9% (11,950) 0 0 $22.16 Villa Rica/West Outlying 40 208,415 49,950 49,950 24.0% 6,078 0 0 $13.56 W Carroll County 23 152,685 48,201 48,201 31.6% 6,024 0 0 $4.95 Walton County 48 211,952 39,439 39,439 18.6% (17,439) 0 0 $10.94 West Atlanta 31 1,301,037 594,494 594,494 45.7% 6,774 0 0 $12.87 Totals 6,627 45,226,720 6,661,697 6,734,472 14.9% (878,187) 880 0 $14.76 16 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market FIGURES AT A GLANCE YEAR-END 2009 ATLANTA Total Office Submarket Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates Barrow County 39 153,233 34,503 34,503 22.5% (14,378) 0 0 $13.53 Bartow County 103 725,185 159,072 159,072 21.9% (38,447) 0 0 $17.60 Butts County 8 39,114 800 800 2.0% (800) 0 0 $14.57 Central Perimeter 700 32,846,958 5,814,348 6,519,248 19.8% (974,834) 0 0 $20.51 Chamblee/Dville/N D Hills 571 11,535,104 1,161,040 1,211,160 10.5% (115,127) 82,400 0 $16.89 Cherokee County 385 2,989,037 528,700 535,535 17.9% (49,236) 155,442 34,060 $19.09 Cumberland/Galleria 630 29,607,570 4,352,383 4,915,823 16.6% (141,312) 0 6,000 $18.50 Dawson County 24 268,954 16,949 16,949 6.3% 9,074 0 0 $18.26 Decatur 395 6,213,473 360,011 369,511 5.9% (40,574) 0 0 $19.53 Douglasville/Lithia Sprng 243 2,033,686 381,530 383,122 18.8% (32,204) 13,234 0 $15.04 Downtown Atlanta 348 35,219,472 4,430,173 4,924,347 14.0% (648,781) 0 0 $18.89 Duluth/Suwanee/Buford 854 13,581,497 2,387,894 2,467,009 18.2% 84,531 176,065 7,134 $18.03 East Cobb 295 2,699,975 377,529 388,129 14.4% (630) 0 0 $15.35 Fayette/Coweta County 557 4,936,012 853,493 861,691 17.5% (7,911) 58,584 0 $19.04 Haralson County 6 8,552 0 0 0.0% 0 0 0 $0.00 Heard County 2 15,699 3,703 3,703 23.6% 0 0 0 $15.32 I-20 East/Conyers 443 3,336,159 510,513 510,513 15.3% (40,280) 6,000 6,000 $17.41 Jasper County 1 6,000 6,000 6,000 100.0% 0 0 0 $0.00 Kennesaw/Town Center 888 9,127,806 1,597,138 1,644,903 18.0% (114,940) 108,944 16,650 $17.69 Lamar County 2 11,896 0 0 0.0% 0 0 0 $18.51 Lawrenceville/Lilburn 721 5,384,170 969,976 981,165 18.2% 7,173 26,763 0 $16.89 Lower Buckhead 40 1,930,646 242,187 263,471 13.6% (34,828) 0 0 $18.76 Meriwether County 5 15,582 3,264 3,264 20.9% 0 0 0 $0.00 Midtown/Pershing Point 275 21,741,270 2,799,149 3,331,751 15.3% 68,467 548,039 719,003 $21.72 Monroe County 1 5,314 0 0 0.0% 0 0 0 $0.00 N Fulton/Forsyth County 1,613 34,712,333 5,411,823 6,091,715 17.5% (538,056) 344,681 0 $17.85 Newton County 58 352,699 37,505 37,505 10.6% 10,650 0 0 $16.74 Norcross/Ptree Corners 444 10,349,698 2,139,357 2,335,673 22.6% (241,727) 0 0 $15.21 North Clayton/Airport 604 10,138,414 1,446,922 1,465,617 14.5% 225,083 312,347 21,000 $15.93 Northlake/Lavista 312 5,256,000 830,913 840,156 16.0% (235,428) 0 0 $16.57 Northside Dr/Georgia Tech 68 1,360,995 298,882 311,257 22.9% 4,479 0 0 $19.48 Pickens County 35 242,798 65,572 65,572 27.0% (45,111) 0 0 $25.65 Pike County 4 171,804 0 0 0.0% 0 0 0 $0.00 South Clayton/Henry Cnty 340 3,385,931 546,119 549,359 16.2% 33,179 15,000 0 $17.86 Spalding County 68 314,067 98,843 98,843 31.5% (43,380) 0 0 $11.78 Stone Mountain 220 1,392,486 115,272 115,272 8.3% 26,688 0 0 $13.90 Upper Buckhead 355 18,684,541 3,476,164 3,652,962 19.6% 15,076 1,071,965 922,585 $25.30 Villa Rica/West Outlying 61 489,578 82,478 82,478 16.8% 412 0 0 $13.19 W Carroll County 30 193,032 53,608 53,608 27.8% 617 0 0 $5.07 Walton County 99 522,958 90,766 90,766 17.4% (63,527) 0 0 $11.74 West Atlanta 50 1,802,986 702,661 704,788 39.1% 43,098 18,000 0 $16.94 Totals 11,897 273,802,684 42,387,240 46,027,240 16.8% (2,892,984) 2,937,464 1,732,432 $19.14 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 17
ATLANTA YEAR-END 2009 Atlanta Office Market FIGURES AT A GLANCE Class A Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 28 15,342,560 2,881,251 3,356,699 21.9% (537,259) 0 0 $20.01 Suburban 449 94,652,500 14,972,774 17,116,138 18.1% (21,419) 2,239,333 1,696,648 $22.21 Totals 477 109,995,060 17,854,025 20,472,837 18.6% (558,678) 2,239,333 1,696,648 $21.91 Class B Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 121 14,688,587 604,909 620,435 4.2% (64,447) 0 0 $16.08 Suburban 4,672 103,892,317 17,266,609 18,199,496 17.5% (1,391,672) 697,251 35,784 $16.88 Totals 4,793 118,580,904 17,871,518 18,819,931 15.9% (1,456,119) 697,251 35,784 $16.84 Class C Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 199 5,188,325 944,013 947,213 18.3% (47,075) 0 0 $16.20 Suburban 6,428 40,038,395 5,717,684 5,787,259 14.5% (831,112) 880 0 $14.64 Totals 6,627 45,226,720 6,661,697 6,734,472 14.9% (878,187) 880 0 $14.76 Class A & B Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 149 30,031,147 3,486,160 3,977,134 13.2% (601,706) 0 0 $19.15 Suburban 5,121 198,544,817 32,239,383 35,315,634 17.8% (1,413,091) 2,936,584 1,732,432 $19.72 Totals 5,270 228,575,964 35,725,543 39,292,768 17.2% (2,014,797) 2,936,584 1,732,432 $19.67 Total Office Market Statistics Year-End 2009 YTD Net YTD Under Quoted Market # Blds Total RBA Direct SF Total SF Vac % Absorption Deliveries Const SF Rates CBD 348 35,219,472 4,430,173 4,924,347 14.0% (648,781) 0 0 $18.89 Suburban 11,549 238,583,212 37,957,067 41,102,893 17.2% (2,244,203) 2,937,464 1,732,432 $19.16 Totals 11,897 273,802,684 42,387,240 46,027,240 16.8% (2,892,984) 2,937,464 1,732,432 $19.14 18 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market FIGURES AT A GLANCE YEAR-END 2009 ATLANTA Class A Market Statistics Year-End 2009 Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates 2009 477 109,995,060 17,854,025 20,472,837 18.6% (422,147) 1 60,000 5 1,696,648 $21.91 2009 476 109,935,060 17,323,114 19,990,690 18.2% (20,363) 4 1,295,143 6 1,756,648 $22.10 2009 472 108,639,917 16,018,355 18,675,184 17.2% (122,133) 5 837,031 10 3,051,791 $22.43 2009 1q 467 107,802,886 15,208,575 17,716,020 16.4% 5,965 1 47,159 14 3,828,822 $22.91 2008 466 107,755,727 15,197,547 17,674,826 16.4% 382,826 6 906,199 13 3,820,921 $23.20 2008 460 106,849,528 14,988,869 17,151,453 16.1% (58,689) 4 413,399 18 4,598,724 $23.21 2008 456 106,436,129 14,649,840 16,679,365 15.7% 202,162 5 1,022,336 20 4,877,427 $23.26 2008 1q 451 105,413,793 13,908,821 15,859,191 15.0% (556,638) 5 332,239 22 5,689,612 $23.41 2007 446 105,081,554 13,468,590 14,970,314 14.2% 3,064,194 13 2,492,779 23 5,306,523 $23.14 2006 433 102,588,775 14,104,173 15,541,729 15.1% 2,246,211 9 1,592,685 16 3,586,888 $21.51 2005 425 101,076,844 14,463,252 16,276,009 16.1% 2,217,270 6 1,065,882 15 3,420,204 $20.99 2004 419 100,010,962 15,185,993 17,427,397 17.4% 3,153,883 5 709,835 7 1,813,527 $20.70 2003 414 99,301,127 16,603,155 19,871,445 20.0% 1,227,224 11 2,200,468 6 1,737,831 $20.67 2002 403 97,100,659 14,593,649 18,898,201 19.5% (351,691) 16 4,509,963 13 2,638,362 $21.43 2001 387 92,590,696 10,407,149 14,036,547 15.2% 1,530,475 38 8,063,351 22 6,174,596 $22.77 2000 349 84,527,345 5,834,566 7,503,671 8.9% 5,709,425 31 5,568,611 46 11,130,071 $23.19 Quoted Class B Market Statistics Year-End 2009 Net Deliveries Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates 2009 4,793 118,580,904 17,871,518 18,819,931 15.9% (18,095) 2 35,076 4 35,784 $16.84 2009 4,791 118,545,828 17,815,460 18,766,760 15.8% (260,093) 17 137,542 6 70,860 $16.93 2009 4,774 118,408,286 17,428,824 18,369,125 15.5% (876,925) 13 199,972 23 208,402 $17.18 2009 1q 4,761 118,208,314 16,663,952 17,292,228 14.6% (301,006) 30 324,661 31 350,055 $17.36 2008 4,731 117,883,653 15,940,969 16,666,561 14.1% (179,007) 30 456,888 57 596,985 $17.65 2008 4,701 117,426,765 15,304,625 16,030,666 13.7% (57,093) 29 200,533 72 926,703 $17.70 2008 4,672 117,226,232 15,141,000 15,773,040 13.5% 463,379 22 537,800 91 1,040,084 $17.64 2008 1q 4,650 116,688,432 14,968,198 15,698,619 13.5% 290,261 63 556,608 85 1,299,987 $17.56 2007 4,587 116,131,824 14,660,353 15,432,272 13.3% 1,217,726 272 3,360,946 120 1,494,642 $17.36 2006 4,325 113,185,729 13,198,984 13,703,903 12.1% 3,367,723 216 2,790,630 222 2,710,106 $16.44 2005 4,110 110,533,374 13,565,897 14,419,271 13.0% 2,758,652 188 2,485,858 177 2,377,563 $16.19 2004 3,925 108,331,150 13,888,864 14,975,699 13.8% 1,394,259 166 1,802,539 151 2,338,178 $16.00 2003 3,763 106,566,084 13,282,605 14,604,892 13.7% 266,908 112 1,352,262 117 1,297,922 $15.65 2002 3,652 105,242,393 11,882,879 13,548,109 12.9% 1,776,344 116 1,760,289 93 1,122,448 $16.39 2001 3,536 103,482,104 11,834,609 13,564,164 13.1% (767,868) 146 2,730,295 110 1,664,242 $17.19 2000 3,394 100,877,463 9,037,860 10,191,655 10.1% 3,228,660 150 3,565,207 133 2,658,253 $17.07 UC Inventory Quoted Total Office Market Statistics Year-End 2009 Net Deliveries UC Inventory Period # Blds Total RBA Direct SF Total SF Vac % Absorption # Blds Total RBA # Blds Total RBA Rates 2009 11,897 273,802,684 42,387,240 46,027,240 16.8% (535,384) 3 95,076 9 1,732,432 $19.14 2009 11,894 273,707,608 41,713,014 45,396,780 16.6% (523,538) 21 1,432,685 12 1,827,508 $19.21 2009 11,873 272,274,923 39,797,316 43,440,557 16.0% (1,332,256) 19 1,037,883 33 3,260,193 $19.51 2009 1q 11,854 271,237,040 37,890,696 41,070,418 15.1% (501,806) 31 371,820 46 4,179,757 $19.99 2008 11,824 270,878,689 36,952,630 40,210,261 14.8% 103,514 36 1,363,087 71 4,418,786 $20.30 2008 11,788 269,515,602 36,012,986 38,950,688 14.5% (316,222) 33 613,932 91 5,526,307 $20.42 2008 11,755 268,901,670 35,333,588 38,020,534 14.1% 475,572 27 1,560,136 111 5,917,511 $20.46 2008 1q 11,728 267,341,534 34,220,687 36,935,970 13.8% (168,388) 69 899,766 107 6,989,599 $20.54 2007 11,674 266,651,079 33,772,003 36,077,127 13.5% 3,501,222 287 5,859,199 144 6,812,084 $20.26 2006 11,399 261,277,731 32,223,107 34,205,001 13.1% 5,332,445 233 4,417,843 239 6,301,168 $18.77 2005 11,170 257,086,935 32,607,913 35,346,650 13.7% 5,476,256 221 3,697,588 198 5,825,850 $18.42 2004 10,957 253,746,991 34,055,317 37,482,962 14.8% 5,001,162 209 2,856,012 181 4,271,287 $18.02 2003 10,757 251,274,621 35,304,270 40,011,754 15.9% 1,810,068 160 3,799,639 148 3,267,206 $18.13 2002 10,600 247,582,788 31,991,012 38,129,989 15.4% 1,538,493 191 6,749,029 134 3,950,033 $19.00 2001 10,411 240,854,759 27,382,664 32,940,453 13.7% (287,002) 275 11,412,105 173 8,206,050 $19.90 2000 10,141 229,569,508 18,448,250 21,368,200 9.3% 9,551,497 338 10,067,151 247 14,289,645 $19.75 Quoted 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 19
ATLANTA YEAR-END 2009 Atlanta Office Market LEASING ACTIVITY Leasing Highlights in Select CoStar Markets Color Coded by Rate 20 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market LEASING ACTIVITY YEAR-END 2009 ATLANTA Historical Rental Rates Based on Full-Service Equivalent Rental Rates A B C Total Market $25.00 $20.00 Dollars/SF/Year $15.00 $10.00 $5.00 $0.00 1986 1987 1988 1989 1q 1989 1990 1991 1992 1q 1992 1993 1994 1995 1q 1995 1996 1997 1998 1q 1998 1999 2000 2001 1q 2001 2002 2003 2004 1q 2004 2005 2006 2007 1q 2007 2008 2009 by Available Space Type by Class Percent of All Vacant Space in Direct vs. Sublet Percent of All Vacant Space by Class Atlanta United States Atlanta United States 8% 7% 15% 14% 41% 44% 47% 39% 92% 93% Direct Sublet Direct Sublet Class A Class B Class C Class A Class B Class C U.S. Rental Rate Comparison Based on Full-Service Equivalent Rental Rates Future Space Available Space Scheduled to be Available for Occupancy* $30.00 Atlanta United States 3.0 2.77 $25.00 2.5 Dollars/SF/Year $20.00 $15.00 $10.00 Millions 2.0 1.5 1.0 1.37 $5.00 $0.00 2007 2007 2008 1q 2008 2008 2008 2009 1q 2009 2009 2009 0.5 0.0 0.15 0.00 0.00 0.00 2010 1q 2010 2010 2010 2011 1q 2011 * Includes Under Construction Spaces 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 21
ATLANTA YEAR-END 2009 Atlanta Office Market LEASING ACTIVITY Select Top Office Leases Based on Leased Square Footage For Deals Signed in 2009 Building Submarket SF Qtr Tenant Name Tenant Rep Company Landlord Rep Company 1 Marquis Two Tower Downtown Atlanta 254,619 2nd SunTrust Bank Cushman & Wakefield of Georgia, Inc CB Richard Ellis 2 3120 Breckenridge Blvd* Duluth/Suwanee/Buford 190,000 2nd Primerica Financial Services, Inc. N/A N/A 3 2651 Satellite Blvd* Duluth/Suwanee/Buford 182,956 4th NCR Corporation CB Richard Ellis Satellite Realty Holdings 4 River Ridge I* Central Perimeter 135,000 2nd Affiliated Computer Services, Inc Jones Lang LaSalle N/A 5 Perimeter Center Central Perimeter 127,823 3rd Atlanta Journal & Constitution CB Richard Ellis Colliers Spectrum Cauble, Inc. 6 Two Alliance Center Upper Buckhead 126,013 3rd Marsh & McLennan Companies Cushman & Wakefield of Georgia, Inc Tishman Speyer 7 One Deerfield Centre N Fulton/Forsyth County 115,810 2nd Philips Consumer Electronics CB Richard Ellis Hines 8 Stonebridge III* N Fulton/Forsyth County 113,264 4th Delta Dental Insurance Company ICON Commercial Interests, LLC Jones Lang LaSalle 9 Falls Pointe* Central Perimeter 106,680 2nd RBS Lynk Newmark Knight Frank Parkway Realty Services, Inc. 10 Satellite Place - Bldg 700 Duluth/Suwanee/Buford 104,787 3rd NCR Corporation N/A Crescent Resources, LLC 11 NetBank Office N Fulton/Forsyth County 96,900 2nd Kaplan Education N/A Grubb & Ellis 12 9000 Central Park W Central Perimeter 91,612 3rd Cox Enterprises CB Richard Ellis Ackerman & Co. 13 Marquis One Tower Downtown Atlanta 84,335 1st United States Nuclear Regulatory Commission General Services Administration CB Richard Ellis 14 9 Piedmont Center* Upper Buckhead 82,308 3rd Kaiser Permanente Jones Lang LaSalle PC Management Company 15 Sugarloaf - Service Center I* Duluth/Suwanee/Buford 70,980 1st IKON Office Solutions, Inc. N/A N/A 16 500 Northpark* Central Perimeter 70,218 4th Oracle Corporation CresaPartners of Georgia, LLC CB Richard Ellis 17 American Cancer Society Center* Downtown Atlanta 70,185 1st Global Crossing Ltd. Cushman & Wakefield, Inc. Cousins Real Estate Corporation 18 Atlanta Financial Center - South Tower* Upper Buckhead 69,783 4th SunTrust Robinson Humphrey Studley Inc. Hines 19 Satellite Place - Bldg 800 Duluth/Suwanee/Buford 69,312 3rd Stiefel Laboratories, Inc. Jones Lang LaSalle Colliers Spectrum Cauble, Inc. 20 10 Piedmont Center* Upper Buckhead 59,705 3rd Kaiser Permanente Jones Lang LaSalle PC Management Company 21 Concourse Corporate Center One* Central Perimeter 58,033 1st Simmons Bedding Company Jones Lang LaSalle Cousins Properties Incorporated 22 2651 Satellite Blvd Duluth/Suwanee/Buford 57,000 3rd NCR Corporation CB Richard Ellis Satellite Realty Holdings 23 Parkview I at Opus Woods* N Fulton/Forsyth County 56,472 3rd Spherion Corporation CB Richard Ellis Grubb & Ellis 24 Rosser International Building* Downtown Atlanta 55,412 1st Rosser International, Inc. N/A N/A 25 Marquis Two Tower* Downtown Atlanta 53,700 2nd Parker, Hudson, Rainer & Dobbs LLP Raney Real Estate CB Richard Ellis 26 One Midtown Plaza Midtown/Pershing Point 52,521 2nd AECOM CB Richard Ellis Tishman Speyer 27 Terminus 200 Upper Buckhead 49,879 2nd Firethorn Wm. Leonard & Company Cousins Properties Incorporated 28 Satellite Place - Bldg 800 Duluth/Suwanee/Buford 45,347 3rd NCR Corporation CB Richard Ellis Lavista Associates, Inc. 29 190 Technology Pky* Norcross/P tree Corners 37,762 2nd Financial Freedom N/A N/A 30 Brookside 800 N Fulton/Forsyth County 35,860 1st Coyote Logistics N/A The Alter Group 31 RiverEdge One* Cumberland/Galleria 35,639 4th AssuranceAmerica Corporation. The Stephen W. Wright Company Barry Real Estate Companies 32 SunTrust Plaza Garden Offices* Downtown Atlanta 34,826 1st Newcomb & Boyd Portman Management Company Portman Management Company 33 1957 Lakeside Centre* Northlake/Lavista 33,984 3rd Laboratory Corporation of America Cauley Properties TPA Realty Services, LLC 34 222 Chastain Kennesaw/Town Center 32,706 4th N/A N/A Resource Real Estate Partners 35 Johns Creek - Bldg 2 N Fulton/Forsyth County 32,000 1st Corporate Office Centers Corporate Office Centers Jackson Oats Shaw Corporate Real Es 36 4501 Northpoint Pky N Fulton/Forsyth County 31,841 2nd McAfee, Inc. Newmark Knight Frank NAI Brannen Goddard 37 Siemens Bldg* Fayette/Coweta County 31,595 4th Corps of Engineers - Army Reserve N/A N/A 38 Harris Tower* Downtown Atlanta 31,478 1st US Small Business Administration N/A N/A 39 Two Securities Centre* Upper Buckhead 30,708 4th CIGNA Corporation CB Richard Ellis Jones Lang LaSalle 40 Centennial Tower Downtown Atlanta 30,008 4th Federal Defender Program, Inc. N/A Jackson Oats Shaw Corporate Real Es * Renewal 22 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market SALES ACTIVITY YEAR-END 2009 ATLANTA The Optimist Sales Index Average of Two Highest Price/SF's and Two Lowest Cap Rates Per Quarter 10.0% Cap Rate Price/SF $400 Cap Rate Percentage 9.0% 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% $350 $300 $250 $200 $150 $100 $50 Dollars/SF 0.0% 2006 2007 1q 2007 2007 2007 2008 1q 2008 2008 2008 2009 1q 2009 2009 $0 Source: CoStar COMPS Sales Volume & Price Sales Analysis by Building Size Based on Office Building Sales of 15,000 SF and Larger Based on Office Building Sales From Oct. 2008 - Sept. 2009 Sales Volume Price/SF Bldg Size # RBA $ Volume Price/SF Cap Rate $2,500 $250 Millions of Sales Volume Dollars $2,000 $1,500 $1,000 $500 $200 $150 $100 $50 Price/SF < 50,000 SF 131 1,527,536 $ 180,105,404 $ 117.91 8.08% 50K-249K SF 13 1,380,342 $ 124,797,120 $ 90.41 7.73% 250K-499K SF - - - $ - - $0 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 $0 >500K SF - - - $ - - Source: CoStar COMPS Source: CoStar COMPS U.S. Price/SF Comparison Based on Office Building Sales of 15,000 SF and Larger U.S. Cap Rate Comparison Based on Office Building Sales of 15,000 SF and Larger $320 Atlanta US 10.0% Atlanta US $270 9.0% Dollars per SF $220 $170 $120 Cap Rate Percentage 8.0% 7.0% 6.0% 5.0% $70 4.0% $20 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 3.0% 2004 2005 2005 2006 2006 2007 2007 2008 2008 2009 Source: CoStar COMPS Source: CoStar COMPS 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 23
ATLANTA YEAR-END 2009 Atlanta Office Market SALES ACTIVITY 24 THE COSTAR OFFICE REPORT 2010 COSTAR GROUP, INC.
Atlanta Office Market SALES ACTIVITY YEAR-END 2009 ATLANTA Select Land Sales Based on Commercially Zoned Land Sales Occurring From Oct. 2008 - Dec. 2009 McIntosh Trl, Newnan Newnan Crossing Blvd, Newnan 0 North Point Pky, Alpharetta Sale Price: $25,000,000 Sale Price: $21,558,718 Sale Price: $13,600,000 Acres: 1,597.00 Acres: 203.91 Acres: 38.80 Price/SF: $0.36 Price/SF: $2.43 Price/SF: $8.05 Closing Date: 04/24/2009 Closing Date: 03/20/2009 Closing Date: 10/29/2008 Zoning: 1 Zoning: 1 Zoning: OI Intended Use: Planned Unit Development Intended Use: Hold for Development Intended Use: Office Buyer: Church of Jesus Christ of Latter Day SaintsBuyer: Fourth Quarter Properties Inc Buyer: Kimball Bridge Holdings LLC Seller: Reese Developers Seller: Agave Investments, Ltd Seller: Holder Properties 0 Jefferson Rd, Jefferson Awtrey Church Rd, Acworth 3624-3625 Providence Rd, Marietta Sale Price: $9,820,923 Sale Price: $9,243,025 Sale Price: $9,000,000 Acres: 304.23 Acres: 63.75 Acres: 23.00 Price/SF: $0.74 Price/SF: $3.33 Price/SF: $8.98 Closing Date: 11/07/2008 Closing Date: 11/23/2009 Closing Date: 07/02/2009 Zoning: C2 Zoning: LRO/R-20 Zoning: Unknown Intended Use: Hold for Development Intended Use: Commercial Intended Use: Medical Buyer: Walton International Group (USA), Inc Buyer: Johnson Ferry Baptist Church, Inc. Buyer: Wellstar Health System Inc Seller: Arcadebrand LLC Seller: Lanier Barbara L & Nancy K & Ronald A Seller: Drake W. Cauthorn and Thomas E. Cau Source: CoStar COMPS 2010 COSTAR GROUP, INC. THE COSTAR OFFICE REPORT 25