The Atlanta office market ended 2009 with over 535,000 square feet of negative absorption and a vacancy rate of 18% or higher in most areas. Rental rates declined over 6% during the year. Three new buildings totaling over 1.6 million square feet will be delivered in early 2010. Landlords face over $3.7 billion in maturing commercial mortgage-backed securities by 2012, which could impact tenants through decreased services, reduced tenant improvements or potential evictions if buildings cannot be refinanced. CresaPartners monitors the market to advise tenants on building owners' financial health and make recommendations regarding leases.

1. Atlanta, Georgia
Te n a n t ’ s Guide North American Markets Fourth Quarter 2009
Overview Major Transactions
The Atlanta office market ended the year with negative net Tenant/Buyer Size Type Lease/Sale
absorption of more than 535,000 SF. With a vacancy rate of 18% NCR Corp. 182,956 Office Lease
or higher in most areas, the quoted asking rental rate declined Delta Dental Ins. 113,264 Office Lease
over 6% during the year, from $20.39 per SF at the beginning of Oracle Corp. 70,218 Office Lease
2009 to $19.14 at the end of the 4th quarter. In addition to more SunTrust Robinson Humphrey 69,783 Office Lease
favorable rental rates, tenants are also winning other concession
Clorox 51,850 Office Lease
from landlords, including increased months of free rent, larger
Corinthian College-Norcross 35,687 Office Lease
tenant improvement allowances, and discounted parking.
AssuranceAmerica Corp. 35,639 Office Lease
In Atlanta, the cumulative loss in office jobs over the past five Army Corp of Engineers 31,595 Office Lease
years is 8%, whereas office space inventory has increased 6.9%. CIGNA Corp 30,708 Office Lease
Since Georgia's unemployment rate continues to outpace the Federal Defender Pgm 30,008 Office Lease
national average at 10.2%, the outlook for office space will favor Corinthian College-Terrill Mill 24,714 Office Lease
tenants for the foreseeable future.
Vacancy Rate
Market Trends
Q2 2009 Q3 2009 Q4 2009
Ÿ Three new buildings will be delivered to the Atlanta market in
the 1st quarter 2010 - the 719,003 SF building known as 12th 25%
Street & Midtown, Phipps Tower with 486,000 SF, and 3630
20%
Peachtree Street with 436,585 SF.
Ÿ At year-end, class A space in Buckhead had the highest 15%
vacancy rate of the major submarkets at 22%, followed by
Downtown at 21.9%, Northeast at 19.8%, and Central 10%
Perimeter at 19.4%.
5%
Ÿ The Central Perimeter submarket suffered the largest negative
net absorption during 2009 at almost one million SF. The only 0%
major submarket with positive net absorption for the year was Class A Class B Class A Class B
the Midtown submarket. CBD CBD Suburban Suburban
Tenant's Perspective
According to the Federal Reserve, the US economy will soon be Average Rental Rates
saddled with more than $3.4 trillion of outstanding commercial real CBD Q2 2009 Q3 2009 Q4 2009
estate debt. In Atlanta, building owners face $3.7 billion in Class A Office $20.77 $20.02 $20.01
Class B Office $18.78 $16.20 $16.08
maturing commercial backed mortgage securities (CMBS), with
$630 million due in 2010, $1.6 billion due in 2011, and $1.5 billion
Suburban Q2 2009 Q3 2009 Q4 2009
due in 2012. This looming debt is an increasing concern for Class A Office $22.71 $22.42 $22.21
tenants. Buildings that cannot be refinanced may file for Class B Office $17.20 $17.02 $16.88
bankruptcy or be returned to the lender. Either way, tenants may
face a decreased level of service, inadequate funding for tenant
improvement allowances, or even eviction.
CresaPartners closely monitors the Atlanta market and can advise
tenants as to the financial health of landlords and buildings. Since
CresaPartners only represents tenants, our advisors provide Prepared By CresaPartners
unbiased information for sound management decisions regarding 5607 Glenridge Drive, Suite 400
lease renewal, relocation, or sublease. Atlanta, Georgia 30342
404.257.8866 www.cresapartners.com