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Atlanta / Office Highlights / Q2 2011

Atlanta investment activity continues to rise

At the midway point of 2011, completed leasing transaction volume is down from this time last year, when activity levels rose from early renewals as many occupiers sought to blend and extend their leases, while conditions were heavily tenant-favorable. Since then, Metro Atlanta leasing activity has been moderate, but steady, and the last six months have seen 3.8 million square feet of leasing commitments. After a slow start out of the gate, 2011 tour velocity picked up during second quarter as tenants, both large and small and from a variety of sectors, shopped the office market. Although the overall jobs recovery in Atlanta remains meager, legal and professional service firms, in particular, are beginning to expand in the urban core, while high-tech companies have been active in the outer submarkets. In many cases, these businesses have healthcare-focused practices or products that are driving the growth. With unemployment expected to be slow to erode, market conditions are likely to continue at much the same pace as they have been. Although some landlords have been able to increase asking prices and tighten concessions, metro-wide improvements should only be incremental until vacancies fall off by several percentage points. Office sales transactions rose for the third consecutive quarter as investment dollars are finally coming off the sidelines after a protracted period during which few buildings changed hands. Much of the recent activity has centered on distressed assets, but some middle market buildings have found buyer-seller agreement on pricing and those properties are starting to trade as well. Leasing activity Buckhead Citing double-digit growth, North Highland signed a new lease at Terminus 200 that will expand the consulting groups footprint to 70,000 square feet in an upgrade from Class B to Class A space. Accounting firm, Windham Brannon, is consolidating locations from Midtown and Central Perimeter to 3630 Peachtree and will give back 10,000 square feet by using its office space more efficiently. The new 36,000-square-foot lease allows for future expansion as the firms healthcare and IT practices are growing. At Lenox Towers South, credit bureau Transunion renewed for 25,000 square feet after giving back 2,500 square feet of data center space in the North tower. Downtown At Sun Trust Plaza, McKenna Long & Aldridge renewed for 163,000 square feet, committing to a long-term deal through 2028. Engineering group, Newcomb & Boyd, signed an extension for 35,000 square feet at Sun Trust Plaza Garden Offices.

Tour activity

Leasing volume

Rents

Concessions

Sales volume Construction deliveries Construction starts

Arrows represent change from prior quarter

Midtown Commercial printing services giant RR Donnelley signed two new Atlanta leases with Colony Realty Partners, one of which was for 23,000 square feet at 730 Midtown. At 999 Peachtree, law firm, Wargo & French, inked a new deal for 21,000 square feet in an expansion to a full floor that will accommodate its growing labor and employment and corporate practices. Global architecture group, Gensler, will be relocating its Atlanta office from Downtown to 999 Peachtree in a new lease for 15,000 square feet. Central Perimeter Community & Southern Bank continues to grow its Perimeter presence, expanding by 12,000 square feet at 4800 Ashford Dunwoody Road. At 7000 Central Park, TMP Worldwide Advertising & Communications committed to a new 12,000-square-foot lease in an expansion and move from Class B to Class A space. Moore Wallace North America, a division of RR Donnelley, took 11,000 square feet of new space at 1117 Perimeter Center West. North Fulton TitleMax is expanding and relocating its IT division to Brookside One Office Park, where the lender will lease 28,000 square feet with expectations to grow operations in the long term. At Northwinds I, ThyssenKrupp Group will locate a new IT headquarters division into 26,000 square feet, creating 110 high-tech jobs. The Scheduling Institute relocated and expanded into 19,000 square feet at 1805 Old Alabama Road. The consultancy moved from a neighboring Class B building. Northlake CCP Games newly leased 40,000 square feet at 250 East Ponce de Leon Avenue with plans to double its number of workers by 2013.

Jones Lang LaSalle Pulse Atlanta Office Highlights Q2 2011 2

Northeast At 250 Scientific Drive in Technology Park/Atlanta, an unnamed tenant inked a new deal for 14,000 square feet. Ability Services Network Inc. newly leased 10,000 square feet at 2397 Huntcrest Way. Northwest Manufacturer, Kemira Chemical, will relocate its North American headquarters from Kennesaw to Atlanta, leasing 46,000 square feet at 1000 Parkwood. At Three TownPark Commons, HCC Insurance renewed and expanded into 36,000 square feet. Sertec committed to 13,000 square feet at Powers Pointe Office Park in a relocation that will see the business services group give back a full floor of office space. Tenants in the market Buckhead Ameriprise Financial is considering expansion options by 60,000 square feet. Morgan Stanley is still in the market with a 60,000-square-foot requirement. Safe-Guard Products is shopping for 45,000 square feet. Avison Young is looking for 20,000 square feet in which to expand. Air Serv Security Inc. has an 18,000-square-foot requirement. Downtown EyeWonder remains in the market with a 30,000-square-foot requirement. Balfour Beatty Infrastructure is shopping for 20,000 square feet. Cox Curry has entered the market with a need for 16,000 square feet. Midtown AGL Resources remains in the market with a 175,000-square-foot requirement. Arnall Golden Gregory is still looking for 150,000 square feet. Morris Manning & Martin signed a letter of intent for 140,000 square feet at Campanile Plaza. The Coca-Cola Company has 125,000 square feet of temporary space under consideration. The FDIC is still in the market with an 80,000-square-foot requirement. Central Perimeter AmeriCold Logistics remains in the market with a 75,000-square-foot requirement and is also considering Buckhead and North Fulton. Beazer Homes is in the market for 60,000 square feet. GE is looking for 60,000 square feet. Amerisave has a 50,000-square-foot requirement. AJC International recently entered the market for 25,000 square feet. North Fulton ACE Insurance remains in the market with a 100,000-square-foot requirement. RedPrairie is still looking for 100,000 square feet. Verint Systems has a 90,000-square-foot requirement.

Oldcastle plans to consolidate its footprint and is looking for 90,000 square feet here and in Buckhead. South University has 60,000 square feet under consideration. Northlake Government agencies have several slow-moving requirements totaling more than 300,000 square feet. Prommis Solutions is in the market with a 30,000-square-foot requirement. Georgia Perimeter College has 20,000 square feet under consideration. Northeast Primerica recently entered the market with a 300,000-square-foot requirement. FleetCor has separate requirements for 45,000 square feet and 10,000 square feet. The Muscular Dystrophy Association is shopping for 35,000 square feet. The Sanford-Brown Institute is looking for 30,000 square feet. Northwest IBM will be consolidating its footprint and continues to look for up to 200,000 square feet. Looking for 150,000 square feet, Travelport is out in the market. Manhattan Associates is still in the market with a requirement for 120,000 square feet. Gentiva Health Services is looking for 100,000 square feet . Sales activity Downtown Teachers Retirement System of Illinois acquired 55 Allen Plaza (348,658 square feet, Class A) from Barry Real Estate Companies in April 2011 for $57.0 million ($163 per square foot) via a note purchase and property auction. Midtown Nix Mann & Associates sold 1382 Peachtree Street NE (26,000 square feet, Class B) for land value at $4.2 million ($162 per square foot) to Big Brothers Big Sisters of Metro Atlanta. Central Perimeter In April 2011, EOLA Capital sold 2 Ravinia Drive (437,826 square feet, Class A) to Parkway Properties as part of a six-building portfolio acquisition for $380 million ($154 per square foot). Northlake In May 2011, TPA Realty Services sold 100 Crescent Center Parkway (246,346 square feet, Class A) to Barry Levin and Associates for $20.8 million ($84 per square foot). Northwest Piedmont Office Realty Trust purchased 6120 Powers Ferry Road NW (137,818 square feet, Class A) from Carter in April 2011 for $20.5 million ($148 per square foot). Construction activity At the end of second quarter 2011, Atlanta had no new office product under construction.

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