State of Atlanta Office Market September 24, 2015

State of Atlanta Office Market September 24, 2015

I. Economic Drivers for Office Market

Atlanta Why? Metro Atlanta has the lowest relative cost of doing business among the nation s 10 largest metro areas (KPMG, Competitive Alternatives: Guide to International Business Location Costs, 2014) Home to 5 of the Nation s Top 100 Fintech Companies NCR, First Data, Equifax, NIIT Technologies. TransCentra American Banker/Bank Technology News/Financial Insights, 2014 FinTech 100 Atlanta is the top moving destination in the U.S. (Penske, 2014) Georgia #1 State for Business Climate (Site Selection, 2014) Georgia is #1 for workforce (CNBC, 2014) 5 th in the Nation for Inc. 5000 Companies (INC. Magazine, August 2014) Georgia #1 State for Doing Business (Area Development, 2014) State of Atlanta Office Market September 24, 2015 page 3

Atlanta Why? Source: Metro Atlanta Chamber of Commerce State of Atlanta Office Market September 24, 2015 page 4

Atlanta Office Market Euphoric Landlords & Developers State of Atlanta Office Market September 24, 2015 page 5

Atlanta Office-Using Employment Growth Outpacing U.S. 10.0% Office-Using Employment (Annual Growth Rate) - Atlanta & U.S. 8.41% 8.0% 6.0% 4.69% 4.0% 3.87% 3.21% 2.83% 2.62% 2.0% 0.0% -2.0% Jan-92 Sep-92 May-93 Jan-94 Sep-94 May-95 Jan-96 Sep-96 May-97 Jan-98 Sep-98 May-99 Jan-00 Sep-00 May-01 Jan-02 Sep-02 May-03 Jan-04 Sep-04 May-05 Jan-06 Sep-06 May-07 Jan-08 Sep-08 May-09 Jan-10 Sep-10 May-11 Jan-12 Sep-12 May-13 Jan-14 Sep-14 May-15-4.0% -2.68% -3.77% -6.0% Atlanta United States -5.67% -6.52% -8.0% State of Atlanta Office Market September 24, 2015 page 6

Atlanta Fulton County - High-Paying Professional/Tech Leading Growth 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 Finance and Insurance Professional and Technical Services Information Source: BLS State of Atlanta Office Market September 24, 2015 page 7

Atlanta Proliferation of Professional / Technical Services Establishments 1,400 Net Change in Number of Establishments by Sector (Year-End 2007 v. Year-End 2014) - Fulton County 1,200 1,000 800 1,178 establishments added 2007 to 2014 (+15.4%) 600 400 200 0 +240 (+16.7%) +184 (+16.8%) +12 (9.0%) -146 (-4.7%) -200 Professional and Technical (8,810 estabs) Legal (1,674 estabs.) Information (1,279 estabs.) Data Processing, Hosting (12 estabs.) Finance and Insurance (2,933 estabs) State of Atlanta Office Market September 24, 2015 page 8

Atlanta Industry Concentrations - FinTech Atlanta, along with the surrounding areas of Georgia, has evolved to become the epicenter of a growing segment of the financial services industry - a sector known as Financial Technologies, or FinTech. This sector encompasses the product and service companies that support the technology needs of the financial services industry and, ultimately, the payment-processing infrastructure of the economy. Georgia FinTech company revenues are more than $34 billion annually, which places the state third in the nation, behind only New York and California. Together, the banking, insurance, and capital markets consistently spend more on technology than any other industry grouping. Source: Technology Association of Georgia State of Atlanta Office Market September 24, 2015 page 9

Atlanta Industry Concentrations Health IT Source: Technology Association of Georgia Georgia is the nation s health IT capital Georgia health IT companies produce more than $5 billion in annual revenue More than 225 health IT companies operate in Georgia Georgia s health IT workers are projected to grow at an almost 20 percent rate Georgia health IT companies employ more than 15,000 people in technology positions State of Atlanta Office Market September 24, 2015 page 10

Atlanta Industry Concentrations Information Security Source: Technology Association of Georgia State of Atlanta Office Market September 24, 2015 page 11

II. Atlanta Office Market: Macro, Submarkets vs. U.S.

Atlanta Office Assets Priced Attractively, Out-of-Market Investors Return Average Price Per Square Foot - Last Four Quarters Washington, D.C. San Francisco Silicon Valley Los Angeles Boston Northern Virginia Seattle San Diego Chicago Houston Miami Orange County Raleigh/Durham Suburban Maryland Atlanta Philadelphia Phoenix Denver New Jersey Dallas/Fort Worth Tampa Bay $347 $324 $298 $296 $290 $270 $253 $238 $221 $219 $183 $181 $172 $170 $163 $160 $156 $151 $127 $561 $534 $0 $100 $200 $300 $400 $500 $600 SOLD KBS REIT purchase of 201 17 th Street in Midtown for $98.6 million SOLD Lincoln Property purchase of Midtown Plaza in Midtown for $96.3 million State of Atlanta Office Market September 24, 2015 page 13

Atlanta Office Assets Priced Attractively, Out-of-Market Investors Return SOLD Dilweg Companies purchase of Centennial Tower in Downtown for $69.1 million PENDING Brookdale Group purchase of Mansell Overlook 200 in North Fulton PENDING Tishman Speyer s Colony Square in Midtown Call for Offers PENDING Highwoods purchase of Monarch Centre in Buckhead SOLD Simpson Organization JV purchase of Sterling Pointe I & II in Central Perimeter for $53.4 million State of Atlanta Office Market September 24, 2015 page 14

Atlanta Seven Major Submarkets North Fulton Northwest Atlanta Northeast Atlanta Central Perimeter Buckhead Downtown Midtown State of Atlanta Office Market September 24, 2015 page 15

Atlanta Market Highlights 2 nd Quarter 2015 US Index Overall Rental Rate Comparison $33.15 Buckhead Availability Rate Comparison 13.3% Buckhead $27.56 US Index 17.0% Midtown $25.77 North Fulton 19.2% DT/MT/Buckhead $24.93 Central Perimeter 19.5% Central Perimeter $23.34 DT/MT/Buckhead 20.8% Downtown $22.52 Northlake 21.1% Atlanta Region $21.64 Northwest 21.4% North Fulton Northwest Suburban Atlanta Northlake South Atlanta Northeast $20.54 $20.45 $20.12 $18.29 $17.55 $17.29 ($/sf) $0 $10 $20 $30 Midtown Atlanta Region Suburban Atlanta Northeast Downtown South Atlanta 21.4% 21.6% 22.1% 28.4% 28.4% 32.8% (%) 0% 10% 20% 30% 40% Market defined as 20,000 SF+ office only buildings State of Atlanta Office Market September 24, 2015 page 16

Atlanta Market Inventory Comparison with Southeast Cities One of the largest markets in the Southeast but Millions 160 140 Class A Overall Square Feet in 120 100 80 60 40 20 0 Atlanta Birmingham Charlotte Greenville Nashville Raleigh South Florida State of Atlanta Office Market September 24, 2015 page 17

Atlanta Market Rent Comparison with Southeast Cities Second in overall and Class A rents to South Florida, and $40.00 Class A Overall $35.00 $30.00 $25.00 $20.00 $15.00 $10.00 $5.00 $0.00 Atlanta Birmingham Charlotte Greenville Nashville Raleigh South Florida State of Atlanta Office Market September 24, 2015 page 18

Atlanta Market Availability Rate Comparison with Southeast Cities Second highest overall availability rate 25.0% Class A Overall 20.0% 15.0% 10.0% 5.0% 0.0% Atlanta Birmingham Charlotte Greenville Nashville Raleigh South Florida State of Atlanta Office Market September 24, 2015 page 19

Atlanta Submarkets Central Perimeter Highlights Total Submarket Size: 22.9 Million SF Class A Size: 17.9 Million SF Class A Availability Rate: 16.5% Class A Quoted Rental Rate: $25.22 PSF State of Atlanta Office Market September 24, 2015 page 20

Atlanta Submarkets Buckhead Highlights Total Submarket Size: 18.6 Million SF Class A Size: 14.3 Million SF Class A Availability Rate: 12.3% Class A Quoted Rental Rate: $30.16 PSF State of Atlanta Office Market September 24, 2015 page 21

Atlanta Submarkets Midtown Highlights New Development Total Submarket Size: 14.5 Million SF Class A Size: 11.2 Million SF Class A Availability Rate: 19.2% Class A Quoted Rental Rate: $28.28 PSF State of Atlanta Office Market September 24, 2015 page 22

Atlanta Submarkets Downtown Highlights Total Submarket Size: 17.5 Million SF Class A Size: 9.8 Million SF Class A Availability Rate: 21.7% Class A Quoted Rental Rate: $26.22 PSF State of Atlanta Office Market September 24, 2015 page 23

III. High Impact Developments

Atlanta High Impact Developments State Farm Campus 2.2 million square foot employment hub along Perimeter Center Parkway in Central Perimeter. The 26-story tower will connect to the Dunwoody MARTA station. Occupancy set for mid-2016. Development will add additional 1.6 million square feet and house 8,000 employees. State of Atlanta Office Market September 24, 2015 page 25

Atlanta High Impact Developments Mercedes-Benz USA Campus Plans to create at least 800 new jobs and invest $74 million to build a new headquarters facility on a 12-acre site at Glenridge Hall, in Central Perimeter, expected to be operational in 2017 State of Atlanta Office Market September 24, 2015 page 26

Atlanta High Impact Developments NCR Headquarters Campus 22-story Midtown Headquarters 8 th & Spring Streets in Midtown Atlanta $200.0 Million 485,000 SF 3,600 Employees State of Atlanta Office Market September 24, 2015 page 27

Atlanta High Impact Developments High Performance Computing Center 20-Story, 620,000 SF building anchored by Georgia Tech (~300,000 SF) located at 4 th & Spring Streets in Midtown Atlanta 480,000 SF office, 100,000 SF data center, 46,000 SF retail Seeking tenants for 2018 opening, 300,000 SF available State of Atlanta Office Market September 24, 2015 page 28

Atlanta High Impact Developments Riverwood 200 299,125 SF / 12 Floors Class A building in Northwest Atlanta Ground breaking planed for October, 2015 with delivery in June, 2017 Signed tenants include: Delta Community Credit Union (~79,000 SF), Bennett Thrasher LLP (~62,500 SF) and Holder Construction Group, LLC (~55,900 SF) State of Atlanta Office Market September 24, 2015 page 29

Atlanta High Impact Developments Three Alliance Center 500,000 SF / 30 Floors Class A building in Buckhead Under construction, delivering October, 2016 Landlord Tishman Speyer broke ground for the building on a purely speculative basis no tenants were signed to start and to date, there are zero tenants committed to the building State of Atlanta Office Market September 24, 2015 page 30

Atlanta High Impact Developments Avalon Sustainably designed, 86.0-acre mixed-use development in Alpharetta North Fulton delivered in late, 2014 Development currently contains 500,000 SF retail, theater, residences and Class A buildings Phase II of development to include 90,000 SF retail, 250,000 SF Class A office over retail, residences over retail, 300,000 SF freestanding Class A building, full-service hotel and conference center State of Atlanta Office Market September 24, 2015 page 31

Atlanta High Impact Developments Atlantic Station 200,000 SF proposed creative office, Class A building at Atlantic Station in Midtown Ground breaking planed for 1 st quarter 2016 with expected delivery in the 2 nd quarter 2017 Significant design features include: bicycle lockers; a rooftop patio; collaborative lobby space and oversized, industrial-inspired windows Building would be located on a 1-acre parcel near the Millennium Gate on 17 th Street State of Atlanta Office Market September 24, 2015 page 32

Atlanta High Impact Developments Beltline The Atlanta BeltLine is the most comprehensive transportation and economic development effort ever undertaken in the City of Atlanta and among the largest, most wide-ranging urban redevelopment programs currently underway in the United States. The Atlanta BeltLine is a sustainable redevelopment project that will provide a network of public parks, multi-use trails and transit along a historic 22-mile railroad corridor circling downtown and connecting many neighborhoods directly to each other. Project Highlights These are the key elements that will be developed over the life of the Atlanta BeltLine Project: 22 miles of pedestrian friendly rail transit 33 miles of multi-use trails 1,300 acres of parks 5,600 units of affordable housing 1,100 acres of brownfields remediated $10-20 billion in economic development 30,000 permanent jobs 48,000 one-year construction jobs Public art Historic preservation Sustainability State of Atlanta Office Market September 24, 2015 page 33

About Savills Studley Savills Studley is a leading global real estate advisor dedicated to a conflict-free transaction model. Powered by experience, tenacity and analytical expertise, Savills Studley delivers innovative real estate solutions and exceptional service to every client. As a part of an end-to-end service offering, the Savills Studley Occupier Services Group is focused on corporate occupiers and is committed to: Achieving superior results; Developing a comprehensive approach to support business drivers; Modeling and engineering innovative solutions looking at more than just the real estate; and Maximizing value at every opportunity. To learn more about Savills Studley and its end-to-end service model, please contact: Chris White EVP & Market Leader cwhite@savills-studley.com (o) 404.504.0019 State of Atlanta Office Market September 24, 2015 page 34