Slide 1

The State of the Atlanta Office Market Jim Bacchetta, VP Atlanta Division Manager

Slide 2

2008 2010 The Dark Days of the Recession In Atlantas Buckhead, Vacant Office Towers Set off Battle for Tenants. The owners of four new and largely vacant office towers are locked in a bruising battle for tenants Its an ugly time to be a landlord. Landlords are in a tough spot because Buckheads prime office market has a 35.3% vacancy rate By Maura Webber Sadovi The Wall Street Journal Ridiculous Concessions asked for lease space in Buckhead There is fear and loathing in Buckhead. Activity now is down two-thirds from what it was a year ago. By John Schaffner Reporter Newspapers

Slide 3

Commercial Real Estate Glut in Atlanta Cousins took a $39 million write-down on its 25-story Terminus 200 building. Bloodbath in Buckhead. Investor Village Atlanta Awash in Empty Office Struggles to Recover From Binge Atlanta has a large hole to dig out of. By John Helyar & Steve Matthews Bloomberg.com 2008 2010 The Dark Days of the Great Recession

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Source: Jones Lang LaSalle as of 9/30/12 Peaking phase Falling phase Rising phase Bottoming phase Market Cycle Clock Where is Atlanta on the cycle clock?

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Source: Jones Lang LaSalle as of 9/30/12 Baltimore, Detroit, New Jersey, Washington, DC Silicon Valley Peaking phase Falling phase Rising phase Bottoming phase Atlanta, Minneapolis, Oakland-East Bay, Philadelphia, Portland, San Antonio Jacksonville, Milwaukee, Phoenix, Westchester County Dallas Boston, Pittsburgh Indianapolis, Denver Charlotte, Chicago, Cincinnati, Cleveland, Columbus, Fairfield County, Hampton Roads, Raleigh-Durham, St. Louis, Tampa Houston, San Francisco, Seattle Austin, San Francisco Peninsula Source: JLL Q2 13 Fort Lauderdale, Orlando, West Palm Beach New York, Orange County, Richmond Miami, United States Los Angeles, Sacramento, San Diego Market Cycle Clock

Slide 6

What attracts CEOs and Entrepreneurs to Atlanta? Worlds largest airport, direct flights to 81 foreign cities 70 foreign consulates, doubled since the Olympic Games Convergence of three major interstates: I-75, I-85, I-20 Huge Industrial Sector: 600M SF, 4 th largest industrial market Abundant, well-educated, non-union workforce Mild Climate Affordable housing Strong Fiber Infrastructure

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2012-13 Atlanta Business Accolades #1 Top Moving Destination Source: Penske Truck Rental #4 City for Doing Business Source: CNBC #1 City for Young Entrepreneurs Source: Under 30 CEO Magazine #1 City for Lowest Cost of Doing Business Source: KPMG #1 Most Innovative City Source: Wall Street Journal #3 Most Fortune 500 Headquarters Source: FORTUNE Magazine #1 Best City for New College Grads Source: Forbes #1 Top US Airport for Business Travel Services and Connecting Flights Source: Travel Leaders Group #2 Most Tech-Friendly Cities Source: pcworld.com #2 Metro with the Fastest 3G/4G Wireless Combo and Most Publically Available Wi-Fi. Source: pcworld.com #1 Best Place in the U.S. to do Business Source: Entrepreneur Magazine

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Atlanta Submarkets Analysis North Fulton Alpharetta Cumberland/ Galleria Central Perimeter Buckhead Midtown Downtown South Atlanta/ Airport Northlake Northeast Atlanta

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Atlanta Class A Commercial Office Submarket Dynamics Spec Development? Not any time soon

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Absorption Analysis Projected New Jobs, Annually 50,000100,000 % Office 30% Office Jobs 15,00030,000 Space Absorbed Annually @ 3 persons /1K SF 5,000,00010,000,000 Total Current SF Vacancy in ATL (15.5%) 46,000,000 # Years to 10% Vacancy* 3.51.6 When will vacant space be absorbed? *Landlords are happy at 10% vacancy!

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3344 Peachtree Parkway Properties 483K SF / 97% Leased Terminus 100 Cousins Properties 655K SF / 99% Leased Coro ~250K SF Terminus 200 Cousins/Morgan Stanley Prop. 566K SF / 88% Leased Regent Partners ~500K SF One Alliance Center HIW 553K SF / 67% Leased Phipps Tower Manulife 472K SF / 93% Leased 3630 Peachtree Pope & Land/Duke Realty 436K SF / 75% Leased Three Alliance Tishman Speyer ~500K SF GA 400 MARTA Two Alliance Center HIW 492K SF / 92% Leased Competitive Set Development Sites PEACHTREE RD LENOX RD N BUCKHEAD: Dwindling Development Sites BH LOOP

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Highwoods Properties