Offi ce Submarket Report ATLANTA | MIDTOWN Q1 2018 Key Takeaways Market Indicators Midtown Midtown > Thanks to NCR’s relocation to the its new headquarters, Midtown Relative to prior period Q1 2018 Q2 2018* led the Atlanta offi ce market in offi ce space absorption in the fi rst VACANCY quarter. Almost 500,000 square feet of space was occupied in Q1. NET ABSORPTION > Midtown rents continue to post strong growth. Quarter-over- quarter the average asking rate increased 5.1%. The submarket CONSTRUCTION remains the priciest location to rent offi ce space in Atlanta. RENTAL RATE > Even with NCR’s HQ delivery, the submarket continues to have the highest amount of offi ce space under construction. Anthem’s *Projected new technology center of 352,00 square feet broke ground in the fi rst quarter. > Looking ahead, a number of projects have been announced for Summary Statistics All Midtown Offi ce Market Classes Class A Class B Midtown. Only two are likely to begin as speculative projects though. Total Inventory > Strong fundamentals continue to dominate the Midtown landscape. (Millions Square Feet) 23.4 16.9 5.6 Offi ce leasing remains steady in the submarket, and supply is in check. Absorption is expected to reach the +100,000 square foot Vacancy Rate 8.6% 9.1% 7.4% market in Q2. Change From Q4 2017 -0.1% -0.3% 0.1% Absorption, Deliveries and Vacancy Absorption YTD 600,000 10% 499 493 17 (Thousands Square Feet) 500,000 9% Construction Deliveries YTD 505 485 20 400,000 (Thousands Square Feet) 8% Square Feet 300,000 Under Construction 2.1 2.0 0.1 200,000 7% (Millions Square Feet) 100,000 6% Asking Rents 0 Per Square Foot Per Year (100,000) 1Q17 2Q17 3Q17 4Q17 1Q18 5% Average Quoted $34.65 $36.66 $26.93 Absorption Deliveries Vacancy Change From Q4 2017 5.1% 4.7% 4.9% UPDATE - Recent Transactions in the Market Notable Leasing Activity TENANT PROPERTY LANDLORD SIZE (SF) TYPE WeWork Coda Portman Holdings 51,719 Class A Lease Bain & Co. 1180 Peachtree Hines 26,002 Class A Lease Protiviti Regions Plaza PGIM, Inc. 21,570 Class A Lease Square, Inc. 271 17th Street Lionstone Investments 16,060 Class A Lease Notable Sales Activity PROPERTY SALES DATE SALE PRICE SIZE (SF) PRICE / SF BUYER 1375 Peachtree 3/2/2018 $75,000,000 409,579 $183.11 The Dilweg Co. Ellsworth Lofts 12/20/2017 $22,900,000 90,207 $253.86 Origin Investments 1389-1409 Peachtree St. 12/21/2017 $18,900,000 153,203 $122.06 Parkside Partners 712 W Peachtree St. 11/20/2017 $9,050,000 14,738 $614.06 Portman Holdings 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 1180 Peachtree 1075 Peachtree Promenade 1100 Peachtree Center RBA 1,100,312 SF 670,443 SF 762,804 SF 774,535 SF 553,778 SF TYPICAL FLOOR SIZE 23,500 SF 22,130 SF 20,021 SF 24,630 SF 22,575 SF % LEASED 92.9% 94.7% 92.3% 95.7% 92.2% LARGEST SPACE AVAIL. 44,403 SF 34,714 SF 15,795 SF 90,646 SF 22,575 SF RENTAL RATE PER SF (Gross) $39.50-$41.50 $43.50-$44.50 $40.00-$42.00 $39.00-$40.50 $34.00 12345 7 10 3 5 8 5 3 2 6 9 6 8 4 11 1 2 9 10 12 3 1 4 1 2 4 7 2 Offi ce Submarket Report | Q1 2018 | Midtown | Colliers International - Atlanta Active Projects 1 Source: CoStar Property 14TH & SPRING 250,000 SF Offi ce Construction Pending Developer: Greenstone Properties 2 CODA-771 SPRING 760,000 SF Offi ce Space 80,000 SF Data Center 40,000 SF Retail 999 Peachtree 271 17th Street The Proscenium Regions Plaza Campanile Under Construction 621,946 SF 541,789 SF 533,135 SF 502,846 SF 469,280 SF Developers: Portman Holdings 22,995 SF 26,252 SF 25,000 SF 20,816 SF 23,857 SF 3 85.4% 91.9% 96.6% 94.5% 43.9% 42,834 SF 13,095 SF 64,954 SF 31,078 SF 268,661 SF $35.00-$38.00 $40.00-$42.00 $37.00-$38.00 $35.50-$39.00 $37.00-$40.00 725 PONCE 360,000 SF Loft-Offi ce 678910Under Construction Developers: New City Points of Interest Aerial Legend 4 1 Georgia Tech 7 Colony Square 2 Atlantic Station 8 Federal Reserve Buildings by Number (see opposite page) Center for Margaret Mitchell 3 9 Puppetry Arts House & Museum T3 ATLANTIC STATION MARTA Rail Line 220,000 SF Creative Offi ce Savannah College Technology Construction Pending 4 10 New Construction of Art & Design Square Developer: Hines 5 Ansley Park 11 The Fox Theater Woodruff Arts 6 12 The Varsity Center 3 Offi ce Submarket Report | Q1 2018 | Midtown | Colliers International - Atlanta In The News > AT&T to vacate iconic 46-story Midtown tower in Atlanta offi ce consolidation: AT&T is scaling FOR MORE INFORMATION back its Atlanta footprint with plans to move its operations hub to Dallas, and its entertainment Scott Amoson division to Los Angeles. As part of the company’s consolidation, AT&T will be vacating its VP, Director of Research | Atlanta iconic offi ce tower located at 675 West Peachtree. The move will put 1.2 million square feet of +1 404 877 9286 vacant offi ce space in Midtown, and an additional 430,000 square feet of support center space. [email protected] Although this creates a signifi cant hole in the submarket, the site is well situated with direct access to the MARTA North Avenue station, and just blocks from the talent rich Georgia Tech campus. This provides an opportunity to land a large, signifi cant offi ce user such as Amazon. COLLIERS INTERNATIONAL AT&T will begin moving its employees by 2021. ATLANTA OFFICE SPECIALISTS > WeWork’s Atlanta land-grab continues with expansion at Midtown’s Coda tower: WeWork has agreed to lease 50,000 square feet of offi ce space at the Coda offi ce building currently under Scott DeMyer Bryce Metcalf construction. The co-working giant is making moves to shore up prime offi ce space in Atlanta’s Jessica Doyle Paul Reese most ideal submarket locations. The robust ecosystem of startups and Fortune 100 companies, Lee Evans Emily Richardson in addition to its proximity to Georgia Tech, make Coda an attractive option for shared-space Deming Fish Jodi Selvey provides such as WeWork according to the Atlanta Business Chronicle. Chuck Francis Fred Sheats Huston Green Pete Shelton AT A GLANCE | CODA > Second phase of Technology Square to be Josh Gregory Hayes Swann named “Coda” and include a new 21-story Russ Jobson Will Tyler offi ce/high performance computer center. Jeff Kelley Andrew Waguespack > To contain 760,000 sq. ft. of offi ce, anchored Dany Koe Andrew Walker by Georgia Tech; 80,000 sq. ft. of high performance computing space; 40,000 sq. Drew Levine Bob Ward ft. of street level retail; and 20,000 sq. ft. of Michael Lipton Stewart Yates outdoor living space. > Portman Holdings will develop the complex located at Spring and W. Peachtree Streets. > Under Construction Fourth Quarter 2016, with an anticipated delivery in January 2019. Colliers International | Atlanta Offi ce | Midtown Listings 1447 PEACHTREE 999 PEACHTREE 1,077-6,254 SF Lease 9,343 SF Sublease Will Tyler / Michael Lipton / Scott DeMyer Andrew Walker COLONY SQUARE 1230 PEACHTREE 14,697 SF Sublease 24,732 SF Sublease Paul Reese Pete Shelton / Bob Ward Colliers International | Atlanta Promenade | Suite 800 1230 Peachtree Street, NE Atlanta, Georgia, 30309 Copyright © 2017 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.