Offi ce Submarket Report | Q2 2018

Key Takeaways Market Indicators Buckhead Buckhead > Occupancy levels in Buckhead increased by 50 basis points (0.5%) Relative to prior period Q2 2018 Q3 2018* this quarter after posting the third highest absorption in Atlanta for VACANCY the period. The submarket absorbed almost 100,000 sq. ft. in Q2. WeWork’s move into Terminus 100 accounted for 48% of the total. NET ABSORPTION > The positive activity led to the submarket’s third consecutive CONSTRUCTION -- quarter with a decrease in its vacancy rate. At 12.4%, Buckhead’s RENTAL RATE offi ce vacancy is back to its lowest level in over a year. > Leasing activity remains steady, however, most of the larger deals *Projected this quarter were renewals. > The submarket’s average rental rate increased yet again; however, most of this came from Class B properties which saw its overall Summary Statistics All Buckhead Offi ce Market Classes Class A Class B average jump to another record high. Total Inventory > Buckhead should continue to see positive occupancy gains through (Millions Square Feet) 21.8 17.1 3.8 the end of the year, remaining one of Atlanta’s strongest offi ce submarkets in 2018. Vacancy Rate 12.4% 14.4% 5.8%

Absorption, Deliveries and Vacancy Change From Q1 2018 -0.5% -0.5% 0.1%

800,000 15% Absorption YTD 269 251 7 14% (Thousands Square Feet) 600,000 13% Construction Deliveries YTD -- - 400,000 12% (Thousands Square Feet)

Square Feet 11% Under Construction 200,000 -- - 10% (Thousands Square Feet) 0 9% 2Q17 3Q17 4Q17 1Q18 2Q18 Asking Rents (200,000) 8% Per Square Foot Per Year

Absorption Deliveries Vacancy Average Quoted $32.87 $33.74 $25.02 Change From Q1 2018 2.1% -1.7% 4.8% UPDATE - Recent Transactions in the Market Notable Leasing Activity

TENANT PROPERTY LANDLORD SIZE (SF) TYPE

Baker, Donnelson, Bearman Monarch Plaza Highwoods Properties 50,248 Class A Renewal & Contraction Starr Companies North Hines 46,589 Class A Expansion Fifth Third Bank Cousins Properties 42,914 Class A Renewal Meeting Expectations Piedmont Center 5-8 Granite Properties 12,555 Class A Renewal Notable Sales Activity

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

Three 1/5/2018 $270,000,000 506,647 $532.92 State of Florida Retirement System Armour Yards 1/29/2018 $67,500,000 182,940 $368.97 Preferred Offi ce Properties 1718-1720 Peachtree Rd. 4/16/2018 $62,200,000 366,232 $169.84 Noro Management 3475 Lenox Rd. 12/29/2017 $50,075,000 201,488 $248.53 Sage Equities

Sources: CoStar Property, Colliers Research Skyline Review

Space Available Direct Sublet

50

45

40

35

30

Floors 25

20

15

10

5

BUILDING 3344 Peachtree 3630 Peachtree Two Alliance Center Tower Place 100

RBA 484,527 SF 629,884 SF 436,309 SF 491,888 SF 613,821 SF TYPICAL FLOOR SIZE 22,000 SF 23,000 SF 28,259 SF 25,000 SF 19,586 SF % LEASED 95.7% 80.7% 94.3% 94.2% 88.4% LARGEST SPACE AVAIL. 27,725 SF 43,137 SF 16,559 SF 62,918 SF 13,461 SF RENTAL RATE PER SF (Gross) $44.00 $34.50-$36.50 $40.00-$43.00 $39.75-$40.75 $36.00-$38.00 12345 3 3 2 7 9 3 8 4 8 5 10 7

1 5 1 1 2 4 9 11 10 6

6

2 12

2 Offi ce Submarket Report | Q2 2018 | Buckhead | Colliers International - Atlanta Proposed Projects

1 Source: CoStar Property

TWO CAPITAL CITY PLAZA Mixed-Use Project 550,000 SF Offi ce 9,500 SF Retail 300 Apartment Units 50 Condos Construction Pending Developer: Regent Partners

2

One Alliance Terminus 100 Three Alliance Monarch Tower Monarch Plaza Center 655,000 SF 506,647 SF 527,761 SF 555,243 SF 368,688 SF THE OFFICE AT 24,259 SF 25,500 SF 23,262 SF 24,619 SF 25,124 SF 315,000 SF Class A Offi ce 79.1% 90.3% 76.4% 83.1% 86.6% Construction Pending Developer: Oliver McMillan 166,694 SF 13,147 SF 106,024 SF 75,825 SF 18,396 SF 3 $40.00-$42.00 $45.00-$47.00 $37.00-$39.50 $39.50 $37.00-$39.50

67 8910

Aerial Legend Points of Interest UGA Terry College 1 Lenox Mall 7 of Business Campus 1 373,844 SF Class A Offi ce 2 Phipps Plaza 8 The Whitley Construction Pending Buildings by Number Developer: Simon Property Gr. (see opposite page) Lenox Intercontinental 3 9 Market Place Hotel MARTA Rail Line 4 Tower Walk 10 New Construction Grand Hyatt

5 11 JW Marriott

Atlanta History 6 12 Buckhead Atlanta Center

3 Offi ce Submarket Report | Q2 2018 | Buckhead | Colliers International - Atlanta In The News > Simon to start demolition for Phipps Plaza overhaul in August: Demolition work will begin FOR MORE INFORMATION for the new $200 million redevelopment of Phipps Plaza in August. Simon Property Group Scott Amoson fi led plans for the project earlier this year. The new project will encompass the backside of the VP, Director of Research | Atlanta mall, replacing the existing Belk department store. A new 13-story offi ce building is planned for +1 404 877 9286 the site, along with a 150-room Nobu Hotel and 90,000 square foot LifeTime Athletic facility. [email protected] Construction of the redevelopment is expected to begin later this year following demolition; however, it remains to be seen if Simon pursues spec construction on the offi ce tower. > Lennar breaks ground on Buckhead project: Lennar Multifamily Communities has broken COLLIERS INTERNATIONAL ground on its new 21-story, 290-unit luxury apartment building in the . The ATLANTA OFFICE SPECIALISTS location of the project is at the site of the former Rio Bravo Fresh Mex restaurant. In addition to multifamily units, the project will also include 6,000 square feet of street-level retail. The name Scott DeMyer Paul Reese of the complex will be Gentry. Rental units are expected to begin delivering by mid-2020. Jessica Doyle Emily Richardson > Buckhead’s park over GA400 receives funds to press forward: Following a $600K grant via the Lee Evans Jodi Selvey Transportation Infrastructure Bank, the park capping GA400 in Buckhead has received a Deming Fish Fred Sheats much needed boost to continue moving forward. Fund-raising eff orts for the complex project has Huston Green Pete Shelton been tough, though offi cials have announced a potential $1M donation from an unnamed investor. Josh Gregory Hayes Swann Russ Jobson Will Tyler AT A GLANCE | Buckhead GA 400 Park > Signature 9-acre park in the heart Jeff Kelley Andrew Waguespack of Buckhead. Dany Koe Andrew Walker > Over a half-mile long greenspace Drew Levine Bob Ward to span across GA 400, connecting Michael Lipton Tiff any Wein Lenox Road to Peachtree Road. Bryce Metcalf Stewart Yates > $250 million plan estimated to draw 2.6 million visitors per year. > Buckhead CID Board approved work necessary for the planning and design phase of the park. > Ground-breaking is hoped to begin in 2020, with completion in 2022.

Colliers International | Atlanta Offi ce | Buckhead Listings

THE OFFICE AT PEACHTREE PALISADES 1776 PEACHTREE BUCKHEAD ATLANTA 4,122-6,211 SF Lease 1,410-123,819 SF Lease 315,000 SF Offi ce Lee Evans Scott DeMyer/ Deming Fish / Scott DeMyer Emily Richardson

Colliers International | Atlanta Promenade | Suite 800 1230 , NE Atlanta, Georgia, 30309 Copyright © 2018 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