AgentsErnie R. Baker, Thomas Barrow, Richard Bowers, SIOR, Rick Bowers Jr., Michael Cheney, CCIM, David Clappier, Lee Coleman, Barry Conway, Daniel Gannon, Enio

Guerra, Randy Hoye, Bill Johnson, CCIM, Greg Kindred, Chet Lacy, Anthony Lois, CCIM, Charles McDonald, Jeff Searcy, Jeff McMullen,Paul Mendel, Donnie Miller, Angela Moore, David Morgan, Ray Nestlehutt, Ash Parker, Trey Parrish, Jenna Schulten,

Tarkenton Thompson, Grahame Wood, Vernon L. Wright

ResearchTim Todd, Charlyn Prater

Metro Atlanta Office Market Analysis Vol. 26, No. 2Annual Absorption and Vacancy Rate by SubMarket

Richard E. Bowers, SIOR, President260 Peachtree Street, Suite 2400, Atlanta, Georgia 30303P: 404.816.1600 F: 404.880.0077 W: richardbowers.com

“Second quarter 2015 continues an ongoing positive trend... our seventeenth straight quarter of positive

absorption.”

RICHARD BOWERS & CO.

The Bowers Digest

AdministrativeSarah Barnes, Traci Cone, Sandra Bowers, Deborah Gleason, Hailey Grizzel, Dianne Harrie, Cynthia Lloyd,

Ginger Toothman, Katherine Wiesz

Providing self generated and proprietary office market data since 1989

Real Estate TrendsMid-Year 2015

Urban occupancy rate back near 85 percent

Fourteen straight quarters of increased rental rates

Urban Suburban

2Q 2011 2Q 2012 2Q 2013 2Q 2014 2Q 2015

Urban

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

DowntownMidtownBuckhead/Lenox

(173,409) 7,489

673,485

19.67%23.99%24.57%

(113,231) 612,818962,899

21.17%19.72%18.32%

(61,433) 30,560434,980

21.51%19.38%15.03%

(325,080) 152,968156,455

19.94%18.34%14.00%

36,245 898,057388,668

21.04%15.48%12.30%

Urban Totals 554,029 22.54% 1,462,486 19.79% 404,107 18.75% (183,057) 17.47% 1,322,970 16.37%

SuburbanAirport/SouthDecaturGA-400 NorthI-20W/Greenbriar

37,184 5,364

199,763 (18,883)

26.57%18.78%15.58%32.97%

132,268 54,150

(110,134) (2,183)

22.61%14.04%16.37%32.07%

(109,540) 62,136

765 (1,520)

25.28%9.51%

16.48%32.56%

(16,441) 1,427

442,754 11,982

25.07%9.38%

13.75%28.74%

(12,889) (3,130)

275,510 (2,214)

30.08%9.65%

13.38%29.44%

I-285/GA-400I-285/I-85/NorthlakeI-285E/Stone MountainI-75 Corridor

(729,283) (13,132)

7,855 (29,351)

20.77%15.04%12.88%13.12%

673,183 3,574 1,692

(49,314)

17.88%14.96%12.35%17.49%

267,090 (151,255)

7,746 (13,698)

17.08%18.95%22.56%18.71%

936,621 (178,579)

(8,283) 5,564

13.63%23.29%25.62%18.21%

560,599 128,906 (8,743) 82,069

13.34%20.40%28.84%10.93%

I-75/I-285I-75N/Marietta/JFNE Expressway-NorthNE Expressway-SouthPeachtree Corners

(48,587) (50,749)

(111,357) 110,427

21,352

18.90%22.79%25.56%9.52%

21.86%

(174,582) 86,992

(141,629) 42,951141,432

19.89%20.14%29.10%8.87%

19.69%

434,232 (3,589)

182,873 (109,751)

33,494

17.91%19.94%25.43%11.21%19.51%

(14,035) 114,756 (25,427) 112,561(86,589)

16.37%17.01%25.98%8.81%

20.62%

128,685 56,546

280,63397,169

160,625

15.68%15.22%22.66%6.73%

18.61%

Subrban Totals (619,397) 19.11% 658,400 18.42% 598,983 17.98% 1,296,311 16.36% 1,743,765 15.52%

Total With Averages (65,368) 20.30% 2,120,886 18.90% 1,003,090 18.25% 1,113,254 16.74% 3,101,331 15.50%

I285/GA-400 leads all submarkets in vacant space

The I-75 Corridor has the highest average rental rates among the suburban submarkets, at $24.63 per square foot, followed by the I-285/GA-400 submarket at $23.32 per square foot and the I-75/I-285 submarket at $21.02 per square foot. The Decatur and GA-400 North submarkets also have average rental rates above $20 per square foot, at $20.78 and $20.20, respectively. The I-285/GA-400 submarket, which is the largest Atlanta submarket with over 23.2 million square feet of existing office space, has been one of the most consistent top performers over the past three and a half years. With absorption of 483,493 square feet this year, this submarket’s occupancy rate has increased to 86.66 percent from 79.22 percent just fourteen quarters ago. Companies such as State Farm have contributed greatly to these numbers and helped push up the average rental rate to $23.32 per square foot, which is the fourth highest rental rate behind only Midtown, Buckhead, and the I-75 Corridor.

Overall Market

Overall, the Atlanta office market posted 1,323,487 square feet of positive absorption for second quarter 2015, bringing the mid-year absorption total to 1,522,757 square feet. These absorption numbers increased the overall occupancy rate to 84.50 percent with the urban and suburban submarket occupancy rates at 84.54 percent and 84.48 percent, respectively. This is the highest occupancy rate Atlanta has seen in over five years. The average rental rate for mid-year 2015 is $22.20 per square foot, which is the highest overall rate we have experienced since we began tracking the Atlanta office market in 1989. The Class “A” occupancy rate is currently 87.91 percent, which is 370 basis points better than the overall average and at a level we haven’t seen since well before the Great Recession. This statistic supports one of the major office trends in Atlanta, with companies upgrading to better space with more amenities while the rental rates are still favorable. As the Atlanta office market continues its recovery, we anticipate activity to pick up in the latter half of 2015, and we anticipate greater office market improvements in both rental rates and occupancy for the remainder of 2015 and beyond thanks to an improving economy, continued job growth, and an abundance oflarge corporate relocations to metropolitan Atlanta.

“...we anticipate activity to pick up in latter half of 2015..”

Class A Class B Class C

VacantSq. Ft.

OccupancyRate

AverageRental Rate

VacantSq. Ft.

OccupancyRate

AverageRental Rate

VacantSq. Ft.

OccupancyRate

AverageRental Rate

1,141,7491,590,5981,091,465

86.74%86.09%89.73%

$25.69$27.61$31.48

1,629,161657,961797,032

73.57%80.56%82.31%

$19.85$20.15$24.42

155,998146,454

0

84.98%77.64%100.00%

$14.59$17.15$21.31

3,823,812 87.53% $28.41 3,084,154 78.05% $21.39 784,196 67.90% $16.25

150,043 23,930

1,435,691-

86.18%94.09%87.98%

-

$19.29$23.57$21.87

-

344,818 87,466

697,110 5,512

73.03%88.32%82.44%87.90%

$16.41$19.27$15.23$22.60

481,831 - -

86,829

45.41%-

100.00%67.61%

$13.80-

$16.50$12.24

1,367,738 32,143 30,075 53,424

91.33%93.92%45.00%74.80%

$25.02$21.06$14.50$32.00

1,393,401 579,886

- 58,703

78.22%71.19%100.00%93.01%

$20.80$17.08$12.00$23.68

345,111 264,828 48,094 11,144

68.98%84.93%69.53%85.20%

$13.78$16.03$11.60 $14.50

1,637,691 186,889 738,128 14,080327,988

86.28%88.05%77.55%97.03%86.00%

$23.36$20.89$19.59$20.65$19.70

1,160,678 195,436 379,213 300,708928,675

81.17%84.84%76.51%91.96%81.38%

$17.06$18.06$14.98$18.86$15.55

116,37298,490

5090

224,744

75.93%67.89%98.40%100.00%64.46%

$13.69$13.93$16.00$15.99$12.17

5,997,820 87.91% $22.92 6,131,606 81.50% $17.67 1,677,952 72.93% $14.33

9,821,632 87.77% $25.02 9,215,760 80.47% $18.78 2,490,985 71.17% $14.78

Second quarter 2015 continued a favorable trend of positive absorption with 1,323,487 SF, the highest absorption since 2007. Four quarter cumulative absorption of 3,101,331 SF is also the highest since 3rd quarter 2007. The Atlanta market for 2015 is doing extremely well and is anticipated to continue at a robust pace with our favorable economy and strong job growth which over the next 15 years is expected to add 2.5 million people making Metropolitan Atlanta the fastest growing city in the country. Vacancy rates with no new deliveries for 2015 are continuing to go down and are currently at 15.50% for all submarkets. This is the lowest vacancy rate since 1st quarter 2008.

The leading submarkets in second quarter absorption are the I-285/ GA-400 market at 508,537 SF, followed by I-75 / I-285 at 295,690SF, Peachtree Corners at 126,866, GA 400 North at 115,524 SF and Buckhead /Lenox at 83,968 SF. The submarkets with the highest average rental rates are Buckhead /Lenox at $29.26, Midtown at $25.53, the I-75 corridor at $24.63, I-285/GA-400 at $23.32 and Downtown at $22.42. The submarkets with the greatest amount of square footage available are the I-285/GA 400 with 3,106,250 SF followed by Downtown at 2,962,909 SF, I-75/I-285 at 2,914,741 SF, Midtown at 2,395,013, and GA-400 North at 2,132,801 SF. With only one building under construction, a growing economy, and tenants expanding and growing, as well as a number of companies relocating to Atlanta to include: Mercedes-Benz, Sage, Hexaware, ScoutMob, Chime Solutions, Cricket Wireless, PulteGroup, and Twitter, absorption is expected to remain strong and occupancy levels are expected to rise further.

Infrastructure:

There are a number of significant infrastructural improvements which are either in progress or in the planning stages. One of the largest infrastructural developments is the I-75/I-285 interchange and overpasses with work being performed for the 2017 opening of the new Atlanta Braves stadium at Circle 75. Other major infrastructural improvements include the expansion of Hartsfield Jackson International Airport to include a possible 6th runway as well as a $400,000,000-$600,000,000 mixed-use development called “Airport City,” which will include a four star hotel with 300-400 rooms, a service station, office and retail space, and possibly even residential development.

The Atlanta Streetcar is up and operational and is serving segments of our Central Business District, particularly visitors, tourists, and others commuting from the Auburn Historic District to Centennial Olympic Park. MARTA is in the discussion stage for completing the North rail line to Alpharetta which would be a major addition in providing rail service from the outer suburbs to the urban core, Buckhead, Midtown and Downtown. With Clayton County joining the MARTA system and the possibility that Gwinnett County could be joining as well, additional rail lines could be a strong possibility in the not too distant future.

The Atlanta BeltLine is continuing to expand its network through developing the eastern line south of Inman Park with this new addition serving the Candler Park/Grant Park neighborhoods. Work is being performed on sections of the Atlanta BeltLine westside as well. The Atlanta BeltLine

TWO SEVEN

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

In Brief: The Atlanta Market

is clearly drawing significant development to our Intown communities particularly from millennials and empty nesters who are providing the majority of the population growth to our city. There is a growing segment of our adult population who are using alternative commuting methods other than the automobile either due to cost, personal preferences, saving time, and physical fitness considerations (walking or biking.)

The Atlanta Falcons stadium is well under construction and is expected to open in 2017. The new Atlanta Braves stadium in Cobb County is also expected to open in 2017 and is creating a very exciting mixed use complex with a hotel, office tower, significant retail and restaurants and even a music concert venue as additional amenities to their development.

Intown development for GA State is continuing to include their spectacular new law school building which will be opening this summer and a new student housing development with ground floor retail under construction at the corner of John Wesley Dobbs and Piedmont. There is another student housing development under construction across the street from the Sweet Auburn Market on Edgewood Avenue. Underground Atlanta is also expected to

close within the next sixty days with plans for high-rise residential, a full-service upscale grocery store, and additional retail on this historic site.

Outlook:The office market is extremely active and favorable. There is the possibility we could meet or even exceed absorption for the first half of 2015 with some of the recent announcements and large users in the marketplace. If this were to occur, vacancy levels would move down approximately a full percentage point to 14.5% vacancy, the lowest vacancy since first quarter 2003. There are plans and discussions on several office buildings breaking ground possibly this year to include an office loft development

by Hines Properties at Atlantic Station, Riverwood 200, Two Overton Park, and 4004 Perimeter Summit. There are also discussions of a Cousins/Ackerman joint venture at Abernathy and GA-400. Other new office developments include a new NCR campus headquarters adjacent to Georgia Tech, as well as a new Georgia Tech High Performance Computing Center and office development at 4th and Spring Streets.

Assuming the economy doesn’t suffer any major issues and there aren’t any major conflicts or world problems, the second half 2015 outlook is likely more favorable than it has been since the turn of the twenty-second century. The vast majority of the proposed new office developments are going to take place along the Urban corridor or developments either at or on I-285 and GA-400 or at the I-75/I-285 intersection, as both of these suburban submarkets are turning into denser submarkets with pedestrian qualities and surrounding amenities similar to the urban core.

We wish everyone great success for the remainder of 2015 and hope everyone’s business is dramatically improving with our economic resurgence and the tremendous growth of Metro Atlanta.

Market Overview

285

285

85

85

2020

78

75

75 400

5

4

3

2

1

7

8

151113

12 6

9

16 14

10

The Suburban SubmarketsAt mid-year 2015, the suburban submarkets, which consist of the remaining thirteen submarkets, have vastly outperformed their counterparts along the Urban Corridor. Second quarter 2015 was highlighted by the opening of the 200,000 square feet Porsche Cars North American Facility in the Airport/South submarket and the 578,000 square feet Cox Enterprise headquarters in the I-285/GA-400 submarket; both facilities will be owner-occupied. These two deliveries totaling 778,000 square feet contributed greatly to the 1,166,751 square feet of positive absorption experienced by the suburban submarkets in the second quarter of 2015 and brings the year to date absorption total for the suburban submarkets to 1,221,922 square feet. This positive absorption has also contributed to the suburban submarkets’ increased occupancy rate, which stands at 84.48% at mid-year 2015, an increase of 1.22% from mid-year 2014. In addition to improved occupancy, the average rental rate has increased for fifteen straight quarters and currently sits at $20.36 per square foot; 37 cents higher than at mid-year 2014.

In the suburban submarkets, the I-285/GA-400, I-75/I-285, Peachtree Corners, and GA-400 North submarkets all experienced over 100,000 square feet of absorption in the second quarter 2015 with 508,537 square feet, 295,690 square feet, 126,866 square feet, and 115,524 square feet respectively. The Northeast Expressway – South and Decatur submarkets both have occupancy rates over 90%, at 93.27% and 90.35% respectively. The I-75 Corridor has the third highest occupancy rate at 89.07%, an increase of 7.28 percent from mid-year 2014.

Urban Corridor Submarkets1. Downtown2. Midtown3. Buckhead/Lenox

Suburban Submarkets4. Airport/South5. Decatur6. GA-400 North7. I-20W/Greenbriar8. I-285E/Stone Mountain9. I-285/GA-400

10. I-285/I-85/Northlake11. I-75 Corridor12. I-75N/Marietta/Johnson Ferry13. I-75/I-28514. NE Expressway-North15. NE Expressway-South16. Peachtree Corners

The Bowers Digest was prepared by the Research Department & Assistants of Richard Bowers & Co. The numerical data summarized herein were obtained directly from the owners and managers of the buildings included in the Richard Bowers & Co. database. RichardBowers & Co. takes no responsibility for the accuracy of the information provided by others. Additional copies are available at $25.00 each. Copyright © 2015 by Richard Bowers & Co., Atlanta, Georgia. All rights reserved.

Atlanta’s Top Five Ranking Submarkets

Change from Mid-Year 2014: Increase Decrease No Change

Total Market

Urban

TotalSq. Ft.

Vacant Sq. Ft.

OccupancyRate

AbsorptionThis Qtr

AbsorptionYTD

AverageRental Rate

DowntownMidtownBuckhead/Lenox

16,338,41615,475,99715,352,667

3,437,489 2,395,0131,888,497

81.49%84.52%87.70%

34,59638,17283,968

(61,202)149,264212,773

$22.42$25.53$29.26

Urban Totals 47,167,080 7,720,999 84.54% 156,736 300,835 $25.67

Suburban

Airport/SouthDecaturGA-400 NorthI-20W/Greenbriar

3,246,939 1,154,049

15,945,261313,609

976,692 111,396

2,132,80192,341

69.92%90.35%86.62%70.56%

23,197 (3,089)

115,524 1,321

30,306 (9,464)

185,8363,636

$16.66$20.78$20.20$13.74

I-285/GA-400I-285/I-85/NorthlakeI-285E/Stone MtnI-75 Corridor

23,283,938 4,298,545

271,0071,127,333

3,106,250 876,85778,169

123,271

86.66%79.60%71.16%89.07%

508,537 23,7324,530

25,222

483,493 (1,753)

4,53087,370

$23.32$17.14$12.27$24.63

I-75/I-285I-75N/Marietta/JFNE Expressway-NorthNE Expressway-SouthPeachtree Corners

18,587,264 3,158,9774,934,2134,677,1257,961,726

2,914,741 480,815

1,117,850 314,788

1,481,407

84.32%84.78%77.34%93.27%81.39%

295,690 23,193

(44,857)66,885

126,866

204,727 75,77447,96254,53654,969

$21.02$19.06$18.06$18.76$16.50

Suburban Totals 88,959,986 13,807,378 84.48% 1,166,751 1,221,922 $20.36

Total/W. Averages 136,127,066 21,528,377 84.50% 1,323,487 1,522,757 $22.20

Absorption - 2nd Quarter 2015: Total Available Square Feet:I-285/GA-400 508,537 I-285/GA-400 3,106,250I-75/I-285 295,690 Downtown 2,962,909Peachtree Corners 126,866 I-75/I-285 2,914,741 GA-400 North 115,524 Midtown 2,395,013 Buckhead/Lenox 83,968 GA-400 North 2,132,801

Total Existing Square Feet: Submarket Occupancy Rate:I-285/GA-400 23,283,938 NE Expressway-South 93.27%I-75/I-285 18,587,264 Decatur 90.35%Downtown 16,338,416 I-75 Corridor 89.07%GA-400 North 15,945,261 Buckhead/Lenox 87.70%Midtown 15,475,997 I-285/GA-400 86.66%

Average Quoted Rental Rate: Average Class “A” Rental Rate:Buckhead/Lenox $29.26 I-75 Corridor $32.00 Midtown $25.53 Buckhead/Lenox $31.48I-75 Corridor $24.63 Midtown $27.61I-285/GA-400 $23.32 Downtown $25.69Downtown $22.42 I-285/GA-400 $25.02

Existing Space By Class

Class C:8,113,954

S IX THREE

Atlanta Office Market: Comparison by SubMarkets

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

“This is the highest occupancy rate Atlanta has seen since 2008 and the highest average rental rate recorded for the Atlanta office market.”

Mid-Year Absorption

2nd Quarter Absorption

Total Existing Square Feet

Total Available Square Feet

Percent Of Total Space Vacant

Average Quoted Rental Rate

Space Delivered YTD - Square Feet*

* Excludes Net Losses

2nd Quarter 2015

1,522,757

1,323,487

136,127,066

21,528,377

15.50%

$22.20

778,000

2nd Quarter 2014

580,188

508,614

134,104,122

22,447,651

16.74%

$21.55

0

The Atlanta Office Market

FOUR F IVE

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

Notable Lease Transactions Signed

Office Space by Building Classification

Atlanta Market Trends By QuarterNet Absorption

Lessee Property Size (SF)Spanx Buckhead Atlanta 124,998

Comcast 6200 The Corners Pkwy 87,776

Norfolk Southern Colony Square 81,075

RentPath Atlanta Plaza One 74,776

Veritiv 400 Northpark 68,315

Liberty Mutual Terraces at Suwanne Gateway 51,883

WorldPay Atlantic Station 50,428

Intercontinental Hotel Three Ravinia Drive 38,270

Gas South One Overton Park 27,008

FCCI Services, Inc. Huntcrest I 26,711

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

“Urban Corridor occupancy rates have jumped 2.01% from Mid-Year 2014”

Net Absorption Total

Sq. Ft.Vacant Sq. Ft.

Vacancy Rate

2ndQuarter

4 QtrTotal

AverageRental Rate

Urban CorridorClass A 30,670,658 3,823,812 12.47% 81,768 1,337,839 $28.41Class B 14,053,183 3,084,154 21.95% 68,497 13,968 $21.39Class C 2,443,239 813,033 33.28% -31,287 -28,837 $15.89Total 47,167,080 7,720,999 15.46% 156,736 1,322,970 $25.67SuburbanClass A 49,615,783 5,997,820 12.09% 1,219,866 1,688,461 $22.92Class B 33,145,939 6,131,606 18.50% 122,813 123,015 $17.67Class C 6,198,264 1,677,952 27.07% -175,928 -67,711 $14.33Total 88,959,986 13,807,378 15.52% 1,166,751 1,743,765 $20.36

Total MarketClass A 80,286,441 9,821,632 12.23% 1,301,634 3,026,300 $25.02Class B 47,199,122 9,215,760 19.53% 191,310 136,983 $18.78Class C 8,641,503 2,490,985 28.83% -207,215 -96,548 $14.77Total 136,127,066 21,528,377 15.50% 1,323,487 3,101,331 $22.20

The Urban CorridorThe Urban Corridor, which consists of the Downtown, Midtown, and Buckhead submarkets, experienced 156,736 square feet of positive absorption for second quarter 2015, bringing the mid-year absorption total to 300,835 square feet. These in-town numbers are an improvement from the 147,102 square feet of absorption the Urban Corridor experienced in through mid-year 2014, and this marks the eighteenth consecutive quarter of positive absorption for the Urban Corridor. As a direct result of the last four and half years of absorption, the vacancy rate has declined from 22.86 percent to 15.46 percent, a change of 740 basis points. This positive absorption and increased occupancy rates have led to an increase in rental rates along the Urban Corridor, which now average $25.67 per square foot.

Buckhead experienced positive absorption of 83,968 square feet this quarter, bringing the mid-year absorption total for the submarket to 212,773 square feet. This contributed to a continued rise in occupancy, which is up to 87.70%, an increase of 170 basis points from mid-year 2014. Buckhead also continues to experience increased average rental rates, up to $29.26 per square foot, an increase of 99 cents from last quarter and $2.36 year-over-year. Class “A” rental rates in Buckhead are continuing to rise as well, reaching $31.48 per square foot, which is the second highest Class “A” rental rate in Metro Atlanta behind the lone Class “A” property in the I-75 Corridor, The Forum.

The Midtown submarket continues to be attractive to businesses looking to move into the Urban Corridor: NCR Corp. has announced plans to move their corporate headquarters to Technology Square, which will bring close to 4,000 jobs to Midtown. Additionally, Georgia Tech has announced plans to expand Technology Square with a 750,000 square foot mixed-used development, including a 600,000 square foot office building anchored by Georgia Tech. The Midtown submarket experienced positive absorption in the second quarter with 38,172 square feet of absorption. Midtown’s year to date total is now at 149,264 square feet. In the last year, the Midtown submarket has increased its occupancy rate from 81.66 percent to 84.52 percent, a 2.86 percent increase.

The Downtown submarket experienced positive absorption of 34,596 square feet during second quarter 2015. We expect the remainder of 2015 to bring positive absorption to Downtown, as more businesses and individuals continue to move to this submarket with better infrastructure, less congestion, favorable pricing, closer proximity to the airport and the desirability of the Atlanta Beltline. Downtown currently has an occupancy rate of 81.49 percent, an increase of 1.43 percent from mid-year 2014. The Downtown submarket’s rental rates have also increased significantly since mid-year 2014, increasing $1.14 to $22.42 from $21.28. The Downtown submarket has the second highest occupancy rate for Class “A” space in the Urban Corridor, finishing the second quarter of 2015 at 86.74%, and and the fourth highest Class “A” rental rate overall, at $25.69. Numerous projects were completed Downtown in 2014, including the SkyView Ferris Wheel, the Atlanta Streetcar, the National Civil Rights Museum, and the new College Football Hall of Fame. Several other projects under construction include the new $1.4 billion Atlanta Falcons football stadium, the continued expansion of Georgia State University, including the Petit Science Center on Piedmont Avenue, and several residential and mixed-use projects expected to break ground in the near term.

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

QuarterTotal

Sq. Ft.VacantSq. Ft.

VacancyRate

DeliveredQtr:

DeliveredYtd

4 Qtr Total

Year To Date Quarter

Average Rental Rate

2Q20151Q2015

4Q20143Q20142Q20141Q2014

4Q20133Q20132Q20131Q2013

136,127,066135,349,066

135,349,066134,074,847133,979,605133,975,750

135,409,999135,391,218135,221,299135,256,002

21,528,37722,036,106

22,238,53822,225,43322,447,65122,952,410

23,833,93824,164,30924,678,08225,117,138

15.50%16.28%

16.43%16.58%16.75%17.13%

17.60%17.85%18.25%18.57%

778,0000

788,420000

0000

778,0000

788,420000

0000

3,101,3312,289,620

2,158,7621,842,4601,558,7621,454,501

1,897,5461,303,5841,003,0901,466,308

1,522,757202,243

2,158,7621,144,954827,494318,880

1,897,5461,278,394594,702190,349

1,323,487202,243

1,261,114317,460508,614318,880

619,152683,692404,353190,349

$22.20$21.87

$21.79$21.70$21.54$21.67

$21.50$21.35$21.24$21.14

4Q20123Q20122Q20121Q2012

4Q20113Q20112Q20111Q2011

4Q20103Q20102Q20101Q2010

135,465,599135,701,093135,574,050135,385,715

135,384,825135,402,440135,402,440135,402,440

135,357,440135,402,440135,402,440135,402,440

25,309,55725,362,69325,618,84826,295,493

26,686,72627,224,13027,521,66027,791,873

27,549,06527,408,48027,420,79326,917,016

18.68%18.69%18.90%19.42%

19.71%20.11%20.33%20.53%

20.35%20.24%20.25%19.88%

(8,835)127,043188,335

890

(17,615)000

000

1,640,626

307,433316,268189,225

890

(17,615)000

1,640,6261,640,6261,640,6261,640,626

1,742,0542,229,0712,120,8861,479,655

844,724184,350

(100,857)(874,857)

(626,015)(1,040,263)(1,364,227)(1,566,872)

1,742,0541,714,2731,331,075466,095

844,724324,935(27,405)(242,808)

(626,015)(485,430)(497,743)

6,034

25,190383,198864,980466,095

519,789297,530270,213

(242,808)

(140,585)12,313

(503,777)6,034

$21.03$20.91$20.67$20.61

$20.84$20.89$21.01$21.02

$21.20$21.26$21.39$21.44

133,761,814133,838,047

25,282,42424,803,824

18.90%18.53%

(76,233)1,295,143

1,518,7191,594,952

(1,947,045)(1,797,220)

(1,947,045)(1,392,212)

(554,833)(311,651)

$21.42$21.56

4Q20093Q2009

FOUR F IVE

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

Notable Lease Transactions Signed

Office Space by Building Classification

Atlanta Market Trends By QuarterNet Absorption

Lessee Property Size (SF)Spanx Buckhead Atlanta 124,998

Comcast 6200 The Corners Pkwy 87,776

Norfolk Southern Colony Square 81,075

RentPath Atlanta Plaza One 74,776

Veritiv 400 Northpark 68,315

Liberty Mutual Terraces at Suwanne Gateway 51,883

WorldPay Atlantic Station 50,428

Intercontinental Hotel Three Ravinia Drive 38,270

Gas South One Overton Park 27,008

FCCI Services, Inc. Huntcrest I 26,711

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

“Urban Corridor occupancy rates have jumped 2.01% from Mid-Year 2014”

Net Absorption Total

Sq. Ft.Vacant Sq. Ft.

Vacancy Rate

2ndQuarter

4 Qtr Total

AverageRental Rate

Urban CorridorClass A 30,670,658 3,823,812 12.47% 81,768 1,337,839 $28.41Class B 14,053,183 3,084,154 21.95% 68,497 13,968 $21.39Class C 2,443,239 813,033 33.28% -31,287 -28,837 $15.89Total 47,167,080 7,720,999 15.46% 156,736 1,322,970 $25.67SuburbanClass A 49,615,783 5,997,820 12.09% 1,219,866 1,688,461 $22.92Class B 33,145,939 6,131,606 18.50% 122,813 123,015 $17.67Class C 6,198,264 1,677,952 27.07% -175,928 -67,711 $14.33Total 88,959,986 13,807,378 15.52% 1,166,751 1,743,765 $20.36

Total MarketClass A 80,286,441 9,821,632 12.23% 1,301,634 3,026,300 $25.02Class B 47,199,122 9,215,760 19.53% 191,310 136,983 $18.78Class C 8,641,503 2,490,985 28.83% -207,215 -96,548 $14.77Total 136,127,066 21,528,377 15.50% 1,323,487 3,101,331 $22.20

The Urban CorridorThe Urban Corridor, which consists of the Downtown, Midtown, and Buckhead submarkets, experienced 156,736 square feet of positive absorption for second quarter 2015, bringing the mid-year absorption total to 300,835 square feet. These in-town numbers are an improvement from the 147,102 square feet of absorption the Urban Corridor experienced in through mid-year 2014, and this marks the eighteenth consecutive quarter of positive absorption for the Urban Corridor. As a direct result of the last four and half years of absorption, the vacancy rate has declined from 22.86 percent to 15.46 percent, a change of 740 basis points. This positive absorption and increased occupancy rates have led to an increase in rental rates along the Urban Corridor, which now average $25.67 per square foot.

Buckhead experienced positive absorption of 83,968 square feet this quarter, bringing the mid-year absorption total for the submarket to 212,773 square feet. This contributed to a continued rise in occupancy, which is up to 87.70%, an increase of 170 basis points from mid-year 2014. Buckhead also continues to experience increased average rental rates, up to $29.26 per square foot, an increase of 99 cents from last quarter and $2.36 year-over-year. Class “A” rental rates in Buckhead are continuing to rise as well, reaching $31.48 per square foot, which is the second highest Class “A” rental rate in Metro Atlanta behind the lone Class “A” property in the I-75 Corridor, The Forum.

The Midtown submarket continues to be attractive to businesses looking to move into the Urban Corridor: NCR Corp. has announced plans to move their corporate headquarters to Technology Square, which will bring close to 4,000 jobs to Midtown. Additionally, Georgia Tech has announced plans to expand Technology Square with a 750,000 square foot mixed-used development, including a 600,000 square foot office building anchored by Georgia Tech. The Midtown submarket experienced positive absorption in the second quarter with 38,172 square feet of absorption. Midtown’s year to date total is now at 149,264 square feet. In the last year, the Midtown submarket has increased its occupancy rate from 81.66 percent to 84.52 percent, a 2.86 percent increase.

The Downtown submarket experienced positive absorption of 34,596 square feet during second quarter 2015. We expect the remainder of 2015 to bring positive absorption to Downtown, as more businesses and individuals continue to move to this submarket with better infrastructure, less congestion, favorable pricing, closer proximity to the airport and the desirability of the Atlanta Beltline. Downtown currently has an occupancy rate of 81.49 percent, an increase of 1.43 percent from mid-year 2014. The Downtown submarket’s rental rates have also increased significantly since mid-year 2014, increasing $1.14 to $22.42 from $21.28. The Downtown submarket has the second highest occupancy rate for Class “A” space in the Urban Corridor, finishing the second quarter of 2015 at 86.74%, and and the fourth highest Class “A” rental rate overall, at $25.69. Numerous projects were completed Downtown in 2014, including the SkyView Ferris Wheel, the Atlanta Streetcar, the National Civil Rights Museum, and the new College Football Hall of Fame. Several other projects under construction include the new $1.4 billion Atlanta Falcons football stadium, the continued expansion of Georgia State University, including the Petit Science Center on Piedmont Avenue, and several residential and mixed-use projects expected to break ground in the near term.

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

QuarterTotal

Sq. Ft.VacantSq. Ft.

VacancyRate

DeliveredQtr:

DeliveredYtd

4 Qtr Total

Year To Date Quarter

Average Rental Rate

2Q20151Q2015

4Q20143Q20142Q20141Q2014

4Q20133Q20132Q20131Q2013

136,127,066135,349,066

135,349,066134,074,847133,979,605133,975,750

135,409,999135,391,218135,221,299135,256,002

21,528,37722,036,106

22,238,53822,225,43322,447,65122,952,410

23,833,93824,164,30924,678,08225,117,138

15.50%16.28%

16.43%16.58%16.75%17.13%

17.60%17.85%18.25%18.57%

778,0000

788,420000

0000

778,0000

788,420000

0000

3,101,3312,289,620

2,158,7621,842,4601,558,7621,454,501

1,897,5461,303,5841,003,0901,466,308

1,522,757202,243

2,158,7621,144,954827,494318,880

1,897,5461,278,394594,702190,349

1,323,487202,243

1,261,114317,460508,614318,880

619,152683,692404,353190,349

$22.20$21.87

$21.79$21.70$21.54$21.67

$21.50$21.35$21.24$21.14

4Q20123Q20122Q20121Q2012

4Q20113Q20112Q20111Q2011

4Q20103Q20102Q20101Q2010

135,465,599135,701,093135,574,050135,385,715

135,384,825135,402,440135,402,440135,402,440

135,357,440135,402,440135,402,440135,402,440

25,309,55725,362,69325,618,84826,295,493

26,686,72627,224,13027,521,66027,791,873

27,549,06527,408,48027,420,79326,917,016

18.68%18.69%18.90%19.42%

19.71%20.11%20.33%20.53%

20.35%20.24%20.25%19.88%

(8,835)127,043188,335

890

(17,615)000

000

1,640,626

307,433316,268189,225

890

(17,615)000

1,640,6261,640,6261,640,6261,640,626

1,742,0542,229,0712,120,8861,479,655

844,724184,350

(100,857)(874,857)

(626,015)(1,040,263)(1,364,227)(1,566,872)

1,742,0541,714,2731,331,075466,095

844,724324,935(27,405)(242,808)

(626,015)(485,430)(497,743)

6,034

25,190383,198864,980466,095

519,789297,530270,213

(242,808)

(140,585)12,313

(503,777)6,034

$21.03$20.91$20.67$20.61

$20.84$20.89$21.01$21.02

$21.20$21.26$21.39$21.44

133,761,814133,838,047

25,282,42424,803,824

18.90%18.53%

(76,233)1,295,143

1,518,7191,594,952

(1,947,045)(1,797,220)

(1,947,045)(1,392,212)

(554,833)(311,651)

$21.42$21.56

285

285

85

85

2020

78

75

75 400

5

4

3

2

1

7

8

151113

12 6

9

16 14

10

The Suburban SubmarketsAt mid-year 2015, the suburban submarkets, which consist of the remaining thirteen submarkets, have vastly outperformed their counterparts along the Urban Corridor. Second quarter 2015 was highlighted by the opening of the 200,000 square feet Porsche Cars North American Facility in the Airport/South submarket and the 578,000 square feet Cox Enterprise headquarters in the I-285/GA-400 submarket; both facilities will be owner-occupied. These two deliveries totaling 778,000 square feet contributed greatly to the 1,166,751 square feet of positive absorption experienced by the suburban submarkets in the second quarter of 2015 and brings the year to date absorption total for the suburban submarkets to 1,221,922 square feet. This positive absorption has also contributed to the suburban submarkets’ increased occupancy rate, which stands at 84.48% at mid-year 2015, an increase of 1.22% from mid-year 2014. In addition to improved occupancy, the average rental rate has increased for fifteen straight quarters and currently sits at $20.36 per square foot; 37 cents higher than at mid-year 2014.

In the suburban submarkets, the I-285/GA-400, I-75/I-285, Peachtree Corners, and GA-400 North submarkets all experienced over 100,000 square feet of absorption in the second quarter 2015 with 508,537 square feet, 295,690 square feet, 126,866 square feet, and 115,524 square feet respectively. The Northeast Expressway – South and Decatur submarkets both have occupancy rates over 90%, at 93.27% and 90.35% respectively. The I-75 Corridor has the third highest occupancy rate at 89.07%, an increase of 7.28 percent from mid-year 2014.

Urban Corridor Submarkets1. Downtown2. Midtown3. Buckhead/Lenox

Suburban Submarkets4. Airport/South5. Decatur6. GA-400 North7. I-20W/Greenbriar8. I-285E/Stone Mountain9. I-285/GA-400

10. I-285/I-85/Northlake11. I-75 Corridor12. I-75N/Marietta/Johnson Ferry13. I-75/I-28514. NE Expressway-North15. NE Expressway-South16. Peachtree Corners

The Bowers Digest was prepared by the Research Department & Assistants of Richard Bowers & Co. The numerical data summarized herein were obtained directly from the owners and managers of the buildings included in the Richard Bowers & Co. database. RichardBowers & Co. takes no responsibility for the accuracy of the information provided by others. Additional copies are available at $25.00 each. Copyright © 2015 by Richard Bowers & Co., Atlanta, Georgia. All rights reserved.

Atlanta’s Top Five Ranking Submarkets

Change from Mid-Year 2014: Increase Decrease No Change

Total Market

Urban

TotalSq. Ft.

Vacant Sq. Ft.

OccupancyRate

AbsorptionThis Qtr

AbsorptionYTD

AverageRental Rate

DowntownMidtownBuckhead/Lenox

16,338,41615,475,99715,352,667

3,437,489 2,395,0131,888,497

81.49%84.52%87.70%

34,59638,17283,968

(61,202)149,264212,773

$22.42$25.53$29.26

Urban Totals 47,167,080 7,720,999 84.54% 156,736 300,835 $25.67

Suburban

Airport/SouthDecaturGA-400 NorthI-20W/Greenbriar

3,246,939 1,154,049

15,945,261313,609

976,692 111,396

2,132,80192,341

69.92%90.35%86.62%70.56%

23,197 (3,089)

115,524 1,321

30,306 (9,464)

185,8363,636

$16.66$20.78$20.20$13.74

I-285/GA-400I-285/I-85/NorthlakeI-285E/Stone MtnI-75 Corridor

23,283,938 4,298,545

271,0071,127,333

3,106,250 876,85778,169

123,271

86.66%79.60%71.16%89.07%

508,537 23,7324,530

25,222

483,493 (1,753)

4,53087,370

$23.32$17.14$12.27$24.63

I-75/I-285I-75N/Marietta/JFNE Expressway-NorthNE Expressway-SouthPeachtree Corners

18,587,264 3,158,9774,934,2134,677,1257,961,726

2,914,741 480,815

1,117,850 314,788

1,481,407

84.32%84.78%77.34%93.27%81.39%

295,690 23,193

(44,857)66,885

126,866

204,727 75,77447,96254,53654,969

$21.02$19.06$18.06$18.76$16.50

Suburban Totals 88,959,986 13,807,378 84.48% 1,166,751 1,221,922 $20.36

Total/W. Averages 136,127,066 21,528,377 84.50% 1,323,487 1,522,757 $22.20

Absorption - 2nd Quarter 2015: Total Available Square Feet:I-285/GA-400 508,537 I-285/GA-400 3,106,250I-75/I-285 295,690 Downtown 2,962,909Peachtree Corners 126,866 I-75/I-285 2,914,741 GA-400 North 115,524 Midtown 2,395,013 Buckhead/Lenox 83,968 GA-400 North 2,132,801

Total Existing Square Feet: Submarket Occupancy Rate:I-285/GA-400 23,283,938 NE Expressway-South 93.27%I-75/I-285 18,587,264 Decatur 90.35%Downtown 16,338,416 I-75 Corridor 89.07%GA-400 North 15,945,261 Buckhead/Lenox 87.70%Midtown 15,475,997 I-285/GA-400 86.66%

Average Quoted Rental Rate: Average Class “A” Rental Rate:Buckhead/Lenox $29.26 I-75 Corridor $32.00 Midtown $25.53 Buckhead/Lenox $31.48I-75 Corridor $24.63 Midtown $27.61I-285/GA-400 $23.32 Downtown $25.69Downtown $22.42 I-285/GA-400 $25.02

Existing Space By Class

Class C:8,113,954

S IX THREE

Atlanta Office Market: Comparison by SubMarkets

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

“This is the highest occupancy rate Atlanta has seen since 2008 and the highest average rental rate recorded for the Atlanta office market.”

Mid-Year Absorption

2nd Quarter Absorption

Total Existing Square Feet

Total Available Square Feet

Percent Of Total Space Vacant

Average Quoted Rental Rate

Space Delivered YTD - Square Feet*

* Excludes Net Losses

2nd Quarter 2015

1,522,757

1,323,487

136,127,066

21,528,377

15.50%

$22.20

778,000

2nd Quarter 2014

580,188

508,614

134,104,122

22,447,651

16.74%

$21.55

0

The Atlanta Office Market

The I-75 Corridor has the highest average rental rates among the suburban submarkets, at $24.63 per square foot, followed by the I-285/GA-400 submarket at $23.32 per square foot and the I-75/I-285 submarket at $21.02 per square foot. The Decatur and GA-400 North submarkets also have average rental rates above $20 per square foot, at $20.78 and $20.20, respectively. The I-285/GA-400 submarket, which is the largest Atlanta submarket with over 23.2 million square feet of existing office space, has been one of the most consistent top performers over the past three and a half years. With absorption of 483,493 square feet this year, this submarket’s occupancy rate has increased to 86.66 percent from 79.22 percent just fourteen quarters ago. Companies such as State Farm have contributed greatly to these numbers and helped push up the average rental rate to $23.32 per square foot, which is the fourth highest rental rate behind only Midtown, Buckhead, and the I-75 Corridor.

Overall Market

Overall, the Atlanta office market posted 1,323,487 square feet of positive absorption for second quarter 2015, bringing the mid-year absorption total to 1,522,757 square feet. These absorption numbers increased the overall occupancy rate to 84.50 percent with the urban and suburban submarket occupancy rates at 84.54 percent and 84.48 percent, respectively. This is the highest occupancy rate Atlanta has seen in over five years. The average rental rate for mid-year 2015 is $22.20 per square foot, which is the highest overall rate we have experienced since we began tracking the Atlanta office market in 1989. The Class “A” occupancy rate is currently 87.91 percent, which is 370 basis points better than the overall average and at a level we haven’t seen since well before the Great Recession. This statistic supports one of the major office trends in Atlanta, with companies upgrading to better space with more amenities while the rental rates are still favorable. As the Atlanta office market continues its recovery, we anticipate activity to pick up in the latter half of 2015, and we anticipate greater office market improvements in both rental rates and occupancy for the remainder of 2015 and beyond thanks to an improving economy, continued job growth, and an abundance oflarge corporate relocations to metropolitan Atlanta.

“...we anticipate activity to pick up in latter half of 2015..”

Class A Class B Class C

VacantSq. Ft.

OccupancyRate

AverageRental Rate

VacantSq. Ft.

OccupancyRate

AverageRental Rate

VacantSq. Ft.

OccupancyRate

AverageRental Rate

1,141,7491,590,5981,091,465

86.74%86.09%89.73%

$25.69$27.61$31.48

1,629,161657,961797,032

73.57%80.56%82.31%

$19.85$20.15$24.42

155,998146,454

0

84.98%77.64%100.00%

$14.59$17.15$21.31

3,823,812 87.53% $28.41 3,084,154 78.05% $21.39 784,196 67.90% $16.25

150,043 23,930

1,435,691-

86.18%94.09%87.98%

-

$19.29$23.57$21.87

-

344,818 87,466

697,110 5,512

73.03%88.32%82.44%87.90%

$16.41$19.27$15.23$22.60

481,831 - -

86,829

45.41%-

100.00%67.61%

$13.80-

$16.50$12.24

1,367,738 32,143 30,075 53,424

91.33%93.92%45.00%74.80%

$25.02$21.06$14.50$32.00

1,393,401 579,886

- 58,703

78.22%71.19%100.00%93.01%

$20.80$17.08$12.00$23.68

345,111 264,828 48,094 11,144

68.98%84.93%69.53%85.20%

$13.78$16.03$11.60 $14.50

1,637,691 186,889 738,128 14,080327,988

86.28%88.05%77.55%97.03%86.00%

$23.36$20.89$19.59$20.65$19.70

1,160,678 195,436 379,213 300,708928,675

81.17%84.84%76.51%91.96%81.38%

$17.06$18.06$14.98$18.86$15.55

116,37298,490

5090

224,744

75.93%67.89%98.40%100.00%64.46%

$13.69$13.93$16.00$15.99$12.17

5,997,820 87.91% $22.92 6,131,606 81.50% $17.67 1,677,952 72.93% $14.33

9,821,632 87.77% $25.02 9,215,760 80.47% $18.78 2,490,985 71.17% $14.78

Second quarter 2015 continued a favorable trend of positive absorption with 1,323,487 SF, the highest absorption since 2007. Four quarter cumulative absorption of 3,101,331 SF is also the highest since 3rd quarter 2007. The Atlanta market for 2015 is doing extremely well and is anticipated to continue at a robust pace with our favorable economy and strong job growth which over the next 15 years is expected to add 2.5 million people making Metropolitan Atlanta the fastest growing city in the country. Vacancy rates with no new deliveries for 2015 are continuing to go down and are currently at 15.50% for all submarkets. This is the lowest vacancy rate since 1st quarter 2008.

The leading submarkets in second quarter absorption are the I-285/ GA-400 market at 508,537 SF, followed by I-75 / I-285 at 295,690SF, Peachtree Corners at 126,866, GA 400 North at 115,524 SF and Buckhead /Lenox at 83,968 SF. The submarkets with the highest average rental rates are Buckhead /Lenox at $29.26, Midtown at $25.53, the I-75 corridor at $24.63, I-285/GA-400 at $23.32 and Downtown at $22.42. The submarkets with the greatest amount of square footage available are the I-285/GA 400 with 3,106,250 SF followed by Downtown at 2,962,909 SF, I-75/I-285 at 2,914,741 SF, Midtown at 2,395,013, and GA-400 North at 2,132,801 SF. With only one building under construction, a growing economy, and tenants expanding and growing, as well as a number of companies relocating to Atlanta to include: Mercedes-Benz, Sage, Hexaware, ScoutMob, Chime Solutions, Cricket Wireless, PulteGroup, and Twitter, absorption is expected to remain strong and occupancy levels are expected to rise further.

Infrastructure:

There are a number of significant infrastructural improvements which are either in progress or in the planning stages. One of the largest infrastructural developments is the I-75/I-285 interchange and overpasses with work being performed for the 2017 opening of the new Atlanta Braves stadium at Circle 75. Other major infrastructural improvements include the expansion of Hartsfield Jackson International Airport to include a possible 6th runway as well as a $400,000,000-$600,000,000 mixed-use development called “Airport City,” which will include a four star hotel with 300-400 rooms, a service station, office and retail space, and possibly even residential development.

The Atlanta Streetcar is up and operational and is serving segments of our Central Business District, particularly visitors, tourists, and others commuting from the Auburn Historic District to Centennial Olympic Park. MARTA is in the discussion stage for completing the North rail line to Alpharetta which would be a major addition in providing rail service from the outer suburbs to the urban core, Buckhead, Midtown and Downtown. With Clayton County joining the MARTA system and the possibility that Gwinnett County could be joining as well, additional rail lines could be a strong possibility in the not too distant future.

The Atlanta BeltLine is continuing to expand its network through developing the eastern line south of Inman Park with this new addition serving the Candler Park/Grant Park neighborhoods. Work is being performed on sections of the Atlanta BeltLine westside as well. The Atlanta BeltLine

TWO SEVEN

RICHARD BOWERS & CO. RICHARD BOWERS & CO.

In Brief: The Atlanta Market

is clearly drawing significant development to our Intown communities particularly from millennials and empty nesters who are providing the majority of the population growth to our city. There is a growing segment of our adult population who are using alternative commuting methods other than the automobile either due to cost, personal preferences, saving time, and physical fitness considerations (walking or biking.)

The Atlanta Falcons stadium is well under construction and is expected to open in 2017. The new Atlanta Braves stadium in Cobb County is also expected to open in 2017 and is creating a very exciting mixed use complex with a hotel, office tower, significant retail and restaurants and even a music concert venue as additional amenities to their development.

Intown development for GA State is continuing to include their spectacular new law school building which will be opening this summer and a new student housing development with ground floor retail under construction at the corner of John Wesley Dobbs and Piedmont. There is another student housing development under construction across the street from the Sweet Auburn Market on Edgewood Avenue. Underground Atlanta is also expected to

close within the next sixty days with plans for high-rise residential, a full-service upscale grocery store, and additional retail on this historic site.

Outlook:The office market is extremely active and favorable. There is the possibility we could meet or even exceed absorption for the first half of 2015 with some of the recent announcements and large users in the marketplace. If this were to occur, vacancy levels would move down approximately a full percentage point to 14.5% vacancy, the lowest vacancy since first quarter 2003. There are plans and discussions on several office buildings breaking ground possibly this year to include an office loft development

by Hines Properties at Atlantic Station, Riverwood 200, Two Overton Park, and 4004 Perimeter Summit. There are also discussions of a Cousins/Ackerman joint venture at Abernathy and GA-400. Other new office developments include a new NCR campus headquarters adjacent to Georgia Tech, as well as a new Georgia Tech High Performance Computing Center and office development at 4th and Spring Streets.

Assuming the economy doesn’t suffer any major issues and there aren’t any major conflicts or world problems, the second half 2015 outlook is likely more favorable than it has been since the turn of the twenty-second century. The vast majority of the proposed new office developments are going to take place along the Urban corridor or developments either at or on I-285 and GA-400 or at the I-75/I-285 intersection, as both of these suburban submarkets are turning into denser submarkets with pedestrian qualities and surrounding amenities similar to the urban core.

We wish everyone great success for the remainder of 2015 and hope everyone’s business is dramatically improving with our economic resurgence and the tremendous growth of Metro Atlanta.

Market Overview

AgentsErnie R. Baker, Thomas Barrow, Richard Bowers, SIOR, Rick Bowers Jr., Michael Cheney, CCIM, David Clappier, Lee Coleman, Barry Conway, Daniel Gannon, Enio

Guerra, Randy Hoye, Bill Johnson, CCIM, Greg Kindred, Chet Lacy, Anthony Lois, CCIM, Charles McDonald, Jeff Searcy, Jeff McMullen,Paul Mendel, Donnie Miller, Angela Moore, David Morgan, Ray Nestlehutt, Ash Parker, Trey Parrish, Jenna Schulten,

Tarkenton Thompson, Grahame Wood, Vernon L. Wright

ResearchTim Todd, Charlyn Prater

Metro Atlanta Office Market Analysis Vol. 26, No. 2Annual Absorption and Vacancy Rate by SubMarket

Richard E. Bowers, SIOR, President260 Peachtree Street, Suite 2400, Atlanta, Georgia 30303P: 404.816.1600 F: 404.880.0077 W: richardbowers.com

“Second quarter 2015 continues an ongoing positive trend... our seventeenth straight quarter of positive

absorption.”

RICHARD BOWERS & CO.

The Bowers Digest

AdministrativeSarah Barnes, Traci Cone, Sandra Bowers, Deborah Gleason, Hailey Grizzel, Dianne Harrie, Cynthia Lloyd,

Ginger Toothman, Katherine Wiesz

Providing self generated and proprietary office market data since 1989

Real Estate TrendsMid-Year 2015

Urban occupancy rate back near 85 percent

Fourteen straight quarters of increased rental rates

Urban Suburban

2Q 2011 2Q 2012 2Q 2013 2Q 2014 2Q 2015

Urban

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

4 Qtrs.Absorption

VacancyRate

DowntownMidtownBuckhead/Lenox

(173,409) 7,489

673,485

19.67%23.99%24.57%

(113,231) 612,818962,899

21.17%19.72%18.32%

(61,433) 30,560434,980

21.51%19.38%15.03%

(325,080) 152,968156,455

19.94%18.34%14.00%

36,245 898,057388,668

21.04%15.48%12.30%

Urban Totals 554,029 22.54% 1,462,486 19.79% 404,107 18.75% (183,057) 17.47% 1,322,970 16.37%

SuburbanAirport/SouthDecaturGA-400 NorthI-20W/Greenbriar

37,184 5,364

199,763 (18,883)

26.57%18.78%15.58%32.97%

132,268 54,150

(110,134) (2,183)

22.61%14.04%16.37%32.07%

(109,540) 62,136

765 (1,520)

25.28%9.51%

16.48%32.56%

(16,441) 1,427

442,754 11,982

25.07%9.38%

13.75%28.74%

(12,889) (3,130)

275,510 (2,214)

30.08%9.65%

13.38%29.44%

I-285/GA-400I-285/I-85/NorthlakeI-285E/Stone MountainI-75 Corridor

(729,283) (13,132)

7,855 (29,351)

20.77%15.04%12.88%13.12%

673,183 3,574 1,692

(49,314)

17.88%14.96%12.35%17.49%

267,090 (151,255)

7,746 (13,698)

17.08%18.95%22.56%18.71%

936,621 (178,579)

(8,283) 5,564

13.63%23.29%25.62%18.21%

560,599 128,906 (8,743) 82,069

13.34%20.40%28.84%10.93%

I-75/I-285I-75N/Marietta/JFNE Expressway-NorthNE Expressway-SouthPeachtree Corners

(48,587) (50,749)

(111,357) 110,427

21,352

18.90%22.79%25.56%9.52%

21.86%

(174,582) 86,992

(141,629) 42,951141,432

19.89%20.14%29.10%8.87%

19.69%

434,232 (3,589)

182,873 (109,751)

33,494

17.91%19.94%25.43%11.21%19.51%

(14,035) 114,756 (25,427) 112,561(86,589)

16.37%17.01%25.98%8.81%

20.62%

128,685 56,546

280,63397,169

160,625

15.68%15.22%22.66%6.73%

18.61%

Subrban Totals (619,397) 19.11% 658,400 18.42% 598,983 17.98% 1,296,311 16.36% 1,743,765 15.52%

Total With Averages (65,368) 20.30% 2,120,886 18.90% 1,003,090 18.25% 1,113,254 16.74% 3,101,331 15.50%

I285/GA-400 leads all submarkets in vacant space