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Offi ce Submarket Report | MIDTOWN Q1 2019

Key Takeaways Market Indicators Midtown Midtown > Midtown experienced positive offi ce space absorption for a second Relative to prior period Q1 2019 Q2 2019* consecutive quarter. A net total of 128,000 square feet was VACANCY occupied here in Q1. NET ABSORPTION > The submarket’s gains in the fi rst quarter were led by Tech which occupied 289,000 square feet in the newly delivered Coda CONSTRUCTION building. The large move-in helped soften the negative impact of RENTAL RATE AT&T phasing out more of their space at their Midtown tower. > Vacancy in Midtown increased the most of any other submarket *Projected in Atlanta this quarter. This is due solely to the highly anticipated Coda building delivering. > As anticipated, Midtown saw a couple of new projects break Summary Statistics All Midtown Offi ce Market Classes Class A Class B ground this quarter including The Interlock and Atlantic Yards. Even more are expected to start in the second quarter. Total Inventory (Millions Square Feet) 24.6 18.8 4.9 > Given the succesful leasing yet again in the submarket this quarter, there appears to be no slowing of positive activity in Midtown. It Vacancy Rate 11.4% 13.9% 3.6% continues to be Atlanta’s most popular offi ce submarket. Change From Q4 2018 1.9% 2.5% -0.2% Absorption, Deliveries and Vacancy Absorption YTD 800,000 12% 128 122 11 (Thousands Square Feet) 600,000 11% Construction Deliveries YTD 670 670 - 400,000 10% (Thousands Square Feet)

Square Feet Under Construction 200,000 9% 2.2 2.2 - (Millions Square Feet) 0 8% (200,000) 1Q18 2Q18 3Q18 4Q18 1Q19 7% Asking Rents Per Square Foot Per Year (400,000) 6% Average Quoted $36.84 $37.70 $27.39 Absorption Deliveries Vacancy Change From Q4 2018 0.7% 0.7% 0.3% UPDATE - Recent Transactions in the Market Notable Leasing Activity

TENANT PROPERTY LANDLORD SIZE (SF) TYPE

Norfolk Southern 1200 Peachtree Cousins Properties 366,196 Class A Sale-Leaseback Google 1105 West Peachtree Selig Enterprises 161,292 Class A Prelease Smith Gambrell & Russell 1105 West Peachtree Selig Enterprises 96,758 Class A Prelease McKinsey & Company 725 Ponce New City LLC 69,056 Class A Lease Notable Sales Activity

PROPERTY SALES DATE SALE PRICE SIZE (SF) PRICE / SF BUYER

1200 Peachtree St. 3/4/2019 $82,000,000 370,000 $221.62 Cousins Properties Atlanta Technology Center 9/18/2018 $38,000,000 199,863 $190.13 Georgia Tech Foundation 1280 W Peachtree St. 8/15/2018 $24,000,000 42,408 $565.93 Stockbridge Capital Group 859 Spring Street 4/3/2019 $7,500,000 15,092 $496.95 Gamma Real Estate

Sources: CoStar Property, Colliers Research Skyline Review

Space Available Direct Sublet

50

45

40

35

30

Floors 25

20

15

10

5

BUILDING One Atlantic 1075 Peachtree Promenade Center RBA 1,100,312 SF 670,443 SF 762,804 SF 774,535 SF 553,778 SF TYPICAL FLOOR SIZE 23,500 SF 22,13-0 SF 26,000 SF 24,630 SF 22,575 SF % LEASED 93.7% 93.7% 94% 92.3% 99.4% LARGEST SPACE AVAIL. 44,403 SF 34,714 SF 21,333 SF 93,332 SF 22,574 SF RENTAL RATE PER SF (Gross) $42.50-$43.50 $43.50-$44.50 $41.00-$43.00 $39.50-$40.50 $38.50 12345

7 10 3 5 8 5 3 2 6 9 6 8 4 11

1 2 9 10 12 3 1

4

1 5 2 4 7

2 Offi ce Submarket Report | Q1 2019 | Midtown | Colliers International - Atlanta Active Projects

1

Source: CoStar Property

14TH & SPRING 250,000 SF Offi ce Construction Pending Developer: Greenstone Properties 2

1105 W. PEACHTREE 664,184 SF Offi ce Space Under Construction Developer: Selig Enterprises 3 271 17th Street The Proscenium Regions Plaza Campanile

621,946 SF 541,789 SF 533,135 SF 502,846 SF 505,000 SF

22,995 SF 26,252 SF 25,000 SF 20,816 SF 23,857 SF 725 PONCE 370,931 SF Loft-Offi ce 90.9% 94.3% 96.9% 96.5% 38.3%% Under Construction 46,000 SF 26,678 SF 24,239 SF 22,454 SF 202,332 SF Developer: New City

$35.00-$39.00 $41.00-$43.00 $40.00-$42.00 $38.00-$44.00 $38.00-$42.00 4

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Aerial Legend Points of Interest

1 Georgia Tech 7 T3 WEST MIDTOWN 232,141 SF Creative Offi ce Under Construction 2 8 Federal Reserve Developer: Hines Buildings by Number (see opposite page) Center for 5 3 9 Puppetry Arts House & Museum MARTA Rail Line Savannah College Technology 4 10 New Construction of Art & Design Square

5 Ansley Park 11 The Fox Theater ATLANTA YARDS 500,000 SF Offi ce Brick-and-Mortar Loft-Offi ce Woodruff Arts 6 12 Under Construction Center Developer: Hines

3 Offi ce Submarket Report | Q1 2019 | Midtown | Colliers International - Atlanta In The News > Norfolk Southern sells Midtown building for $82 Million: 1200 Peachtree, the David R. Goode FOR MORE INFORMATION building and Norfolk Southern’s regional headquarters, has been sold to Cousins Properties. Cousins is Scott Amoson paying $222 a foot for the 12-story, 370,000 square foot building. Norfolk Southern is building a new VP, Director of Research | Atlanta $575 million headquarters in Midtown’s Technology Square that should deliver by 2021. The company +1 404 877 9286 will remain in their current building until their new campus is fi nished. [email protected] > 725 Ponce lands McKinsey & Co, eyes Blackrock: Consulting giant McKinsey & Co. is moving its regional offi ce to 725 Ponce on the Atlanta Beltline’s Eastside Trail. Built by Atlanta-based New City LLC, 725 Ponce is the fi rst new offi ce tower to rise on the Beltline. A network of trails (with plans for COLLIERS INTERNATIONAL transit) along a former railroad corridor encircling the city, the Beltline has quickly become one of the ATLANTA OFFICE SPECIALISTS most popular urban redevelopment projects in the nation. Across from the popular , McKinsey will lease 65,000 square feet, occupying two fl oors and moving hundreds of employees into Frank Cannon Morgan Reynolds the new building. They are not the only company to have their eyes on 725 Ponce either: BlackRock, Scott DeMyer Emily Richardson who chose Atlanta for a new innovation center, has entered fi nal negotiations to also lease multiple Jessica Doyle Jodi Selvey fl oors, and possibly up to 200,000 square feet in the 12 story Beltline-adjacent building. Called the Lee Evans Fred Sheats “iHub”, the Blackrock innovation center could grow to almost 1,000 new employees. Deming Fish Pete Shelton Josh Gregory Hayes Swann AT A GLANCE | CODA > Second phase of Technology Square to be Russ Jobson Will Tyler named “Coda” and include a new 21-story Jeff Kelley Andrew Waguespack offi ce/high performance computer center. Dany Koe Andrew Walker > To contain 760,000 sq. ft. of offi ce, anchored Drew Levine Bob Ward by Georgia Tech; 80,000 sq. ft. of high Michael Lipton Tiff any Wein performance computing space; 40,000 sq. Paul Reese Stewart Yates ft. of street level retail; and 20,000 sq. ft. of outdoor living space. > Portman Holdings will develop the complex located at Spring and W. Peachtree Streets. > Delivedred First Quarter 2019.

Colliers International | Atlanta Offi ce | Midtown Listings

1447 PEACHTREE 999 PEACHTREE 1,077-3,814 SF Lease 5,266 SF Sublease Will Tyler / 21,136 SF Sublease Scott DeMyer Fred Sheats / Paul Reese

75 5TH STREET ONE ATLANTIC CTR. 5,452-14,884 SF Lease 4,456 SF Sublease Paul Reese Drew Levine / Tiff any Wein

Colliers International | Atlanta Promenade | Suite 800 1230 Peachtree Street, NE Atlanta, Georgia, 30309 Copyright © 2019 Colliers International. +1 404 888 9000 The information contained herein has been obtained from sources deemed reliable. While colliers.com/atlanta every reasonable eff ort has been made to ensure its accuracy, we cannot guarantee it. No responsibility is assumed for any inaccuracies. Readers are encouraged to consult their professional4 advisorsNorth priorAmerican to acting onResearch any of the material & Forecast contained Report in this report. | Q4 2014 | Offi ce Market Outlook | Colliers International