Brokerage Outlook: Georgia

• Atlanta Industrial

• Atlanta Office

• Atlanta Retail

• Savannah Retail

• Savannah Office

Atlanta Industrial Chambers Submitted by D. Michael Chambers, senior vice president with the Atlanta office of NAI Brannen Goddard. Posted 04/09/08. • Click here for chart What area is your expertise? • Atlanta industrial What trends do you see presently in industrial development in your area? • Spec developments has slowed given uncertain economic conditions. Spec space to be delivered this year is 4.9 million square feet, down about half from this time last year. Almost all new development is bulk warehouse of 400,000+ square feet. What type of industrial product is doing well in your area? • The bulk market has been active. Distribution is stable. Who are the active industrial developers in your area? • DCT Industrial, First Industrial Realty Trust, Duke Realty Corp., Majestic Realty Co., IDI, Raco, Panattoni Development Co., John W. Rooker and Associates, Robert Pattillo Properties, McDonald Development, Jadow Realty and M.D. Hodges. Please name one or two significant industrial developments in your area. What impact will these projects have on the market? • IDI’s newly planned Meridian 75 Logistics Center is a 200 acre park along Interstate 75 near Macon. The park will accommodate 3 million square feet when completed and Majestics Airport Center III where the developer has started 4 buildings including a 600,000-square-foot bulk warehouse. Where is the majority of development taking place?Why is this area doing well? • Northeast and Airport submarkets — Both submarkets are well located to the Interstate systems for full distribution coverage to the Southeast. What area do you expect to be the next big industrial development market? Why? • I-85 north to the South Carolina state line. Availability of sites, Interstate and infrastructure availability and a solid labor force. Please describe the industrial leasing activity in your area. • First quarter 2008 absorption was just over 900,000 square feet, which is modest compared to recent years. Please describe the industrial sales activity in your area. • Investment sales have slowed amid economic uncertainty and reluctance of lenders to commit to debt placement. Please give a measure of industrial vacancy rates and a measure of available sublease space. • Industrial vacancy is 15.2 percent with an additional 1.3 percent available for sublease. The metro-Atlanta Industrial Market is 450 million square feet. What impact do current interest rates have on the industrial market?What predictions do you have for interest rates and their effect on the industrial market in the next year? • The spread required by lenders over the government indexes have spread to a point that will slow investment activity. Interest rates should stabilize given the Fed’s recent reductions. What industries do you expect to expand in the next year to absorb a great deal of industrial space? • Retailers and those firms importing product through the port of Savannah will continue to expand their logistics network in Atlanta to serve the Southeast. Would you like to make any additional observations about the industrial market in your area? • We are cautiously optimistic that there will be positive absorption for the remainder of the year and that average rental rates will climb slightly as construction pricing continues to increase for new product.

Atlanta Office Submitted by Ryan Cone of Atlanta-based Richard Bowers & Co. Posted 4-18-07. What area is your expertise? • I specialize in office space leasing and acquisitions. I work in Downtown, Midtown, Central Perimeter, Peachtree Corners, Midtown West, I-85 inside 285, Cumberland, Alpharetta, and Buckhead. What trends do you see presently in office development in your area? • The major trend I see is the live/work/play developments. Since the success with Atlantic Station, there have been several more successful similar developments. Not just in the city but also in the suburbs. Who are the active office developers in your area? • The most noteworthy developers are Hines, Barry, Cousins Properties, Pope & Land, and Duke. Please name one or two significant office developments in your area. What impact will these projects have on the market? • In the downtown area, Hal Barry is developing Allen Plaza, which is a live/work/play development. It is going to add a lot to the downtown area and it is within walking distance to Centennial Park and the Aquarium. There is a lot happening downtown and it is becoming more touristy. With that, you get more police protection and lower crime rates. I have been working downtown for a few years now and I have seen a big difference just in the short time I have been here. Where is the majority of development taking place? Why is this area doing well? • Development is everywhere, in my opinion. I would say that Midtown, Downtown and Buckhead are three areas where there has been a lot of recent development. I think these areas are prime locations. Midtown has been the hot spot for the past couple of years, and people consider Buckhead to be a safe bet because historically the occupancy has always been pretty high there. Downtown is the market to make a good economical deal in the city and is a good spot for government agencies and non-profits. Also, Georgia State has been growing which means more development, and the aquarium has also given developers more confidence to bet on downtown. All three of these locations have good infrastructure and location. There is a demand to be in these locations. What area do you expect to be the next big development market? Why? • I think Sandy Springs and up the Georgia 400 corridor because of the recent incorporations. Please give a measure of office vacancy rates. Please give a measure of available sublease space. • There is higher vacancy in downtown that is why it is a good place to do a deal right now — rates are lower. What is the status of job growth/(un)employment rates and what bearing will it have on the office market? • I think that Atlanta is one of the top cities for entrepreneurs. With that, you get a lot of start-up companies going out of business shortly after they open. You also will get the companies that last, expand, and become the next strong office tenant down the road. This is one of the top cities to move to right now. It is an affordable place to live and that is good for the city overall. Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in the next year to absorb a great deal of office space? What areas will be affected? • I think the baby boomers are getting older and companies related to that market will grow — tourism, health, etc. — simply because they have some money to spend. Would you like to make any additional observations about the office market in your area? • Atlanta is supposed to double in size over the next 20 years. Real estate is the right industry to be in.

Atlanta Retail Lesley Submitted by Brett Lesley, vice president with the Atlanta office of Carter. Posted 12/07/07. What area is your expertise? • Atlanta retail market What trends do you see presently in retail development in your area? • Mixed-use, mixed-use, mixed use. Office combined with retail or residential, combined with retail has taken over the market. From Carter’s Lindbergh City Center to Sembler’s Town Brookhaven. These kinds of specialty projects are springing up throughout the market and are widely accepted among the patrons due to the convenience and unique shopping experience. What type of retail product is doing well in your area? • I cannot think of a segment of retail development that has not thrived over the past couple of years. Power centers, specialty centers, grocery centers and strip centers have all excelled in the metro-market for the most part. What retailers are new to your area? • Trader Joe’s moved into the market over a year ago, Ben Carter Properties is adding new high-end retailers in its new Streets of Buckhead project and Total Wine just opened its first store in Kennesaw, a northeast suburb of Atlanta. Also, H&M is scheduled to open April 2008 in Atlantic Station in midtown and Sur La Table opened its first store at Perimeter Mall recently.  Who are the active retail developers in your area? • Sembler is doing a lot of development — Town Brookhaven, Deerfield Place in Alpharetta and Canton Marketplace just to name a few. Selig and Daniel Corporation have taken on the midtown market and seem to be making good traction. Cousins is moving forward on at least two new Avenue projects and Faison has two new Power Centers in development. Please name one or two significant retail developments in your area. • Sembler’s The Park at Briarcliff located at the intersection of North Druid Hills and Briarcliff are currently in the developmental phase. This proposed development will define and revitalize the Emory and North Druid Hills submarket. No tenants have been announced, but I believe tenants are lining up to pounce at the opportunity to penetrate this submarket. Where is the majority of development taking place? Why is this area doing well? • Intown. Selig and Daniel Corp. are creating a great nucleus in midtown Atlanta. Sembler is changing the landscape in Brookhaven and North Druid Hills submarkets. Ben Carter’s The Streets of Buckhead will be a unique mixed-use opportunity in the heart of Buckhead. These areas are doing well because they have been somewhat underserved, retail wise, and the types of developments being built appeal to these affluent and dense markets. There is still a lot of development going on in the suburbs, but intown Atlanta has been grabbing a majority of the publicity.  What area do you expect to be the next big retail development market? Why? • I think you’ll see the GA 400 Corridor continue to flourish. The wealth and growth along GA 400 has been incredible and will offer multiple opportunities for years to come. Please describe the retail leasing activity in your area. • The leasing activity has been strong on both the anchor and shop tenant fronts. Numerous retailers are opening more stores and the market as a whole has been very competitive.  Please give a measure of retail vacancy rates and a measure of available sublease space. • Retail vacancy rates are probably between 5 and 7 percent in the Atlanta retail market. There are a few sublease opportunities in the market, but as a whole most are well situated and are quickly backfilled. What types of retailers should look into your market in the coming year? What type of retail is needed? • With the influx of “specialty projects” in Atlanta both fashion users and restaurant operators should continue to pour into the market. Entertainment users could find multiple opportunities over the next couple of years.

Savannah Retail Bryant Submitted by Jim Bryant, advisor with the Savannah, Ga., office of Sperry Van Ness. Posted 9-15-06. What area is your expertise? • Savannah, Ga. What trends do you see presently in retail development in your area? • Lifestyle centers are being developed throughout the market. The market is very vibrant with very few vacancies. What type of retail product is doing well in your area? • Recent lifestyle centers have been performing very well. What retailers are new to your area? • In the last 2-years, The Fresh Market, David's Bridal, Ross Dress for Less, World Market, Jos. A. Bank, Coldwater Creek, Steve & Barry's, White House/Black Market, American Apparel and Marc Jacobs (late 2006). Who are the active retail developers in your area? • Edens & Avant, Realty Corp., Melaver, The Feiler Company and American Commercial Developers. Many are looking and several have acquired properties for future development. Please name one or two significant retail developments in your area. What impact will these projects have on the market? • Abercorn Commons: This is a newly completed lifestyle center located on Savannah's main retail corridor, Abercorn Street. This is the first center in the area that was developed entirely to LEED specifications. Tenants include: Circuit City, Books-a-Million, Michaels, Home Goods, and Panera Bread Co. Abercorn Walk: This is a newly completed lifestyle center located along Abercorn Street near DeRenne Avenue. Tenants include: The Fresh Market, Coldwater Creek, Jos. A. Bank, and White House/Black Market. Where is the majority of development taking place? Why is this area doing well? • Most of the retail development is occurring in the westside of Savannah in the suburb of Pooler, Ga. This rapid growth is due to the availability of land and the accessibility of I-95 and I-16. Abercorn Street is Savannah's main retail corridor, but there is little or no land left to develop. What area do you expect to be the next big retail development market? Why? • Pooler, Ga., just west of Savannah, will continue to be where the new developments will occur due to the availability of land. Please describe the retail leasing activity in your area. • The market continues to be very strong with a lot of activity. What major leases have been closed recently? • Ross Dress for Less and World Market now occupy a former Wal-Mart facility that totaled approximately 40,000 square feet in Chatham Plaza along Abercorn Street. Fresh Market signed a 20,000 square foot lease at Abercorn Walk. Publix signed a 40,000 square foot lease at Berwick Plantation. Please give a measure of retail vacancy rates. Please give a measure of available sublease space. • Vacancy is between 8-10 percent throughout the market. Sublease space is minimal with only two major stores available: Former Rhodes Furniture 25,000 square feet on Abercorn Street and a former Food Lion store encompassing 35,000 square feet located along Abercorn Extension in Georgetown, Ga. What types of retailers should look into your market in the coming year? What type of retail is needed? • Sporting goods stores such as The Sports Authority and Dick's Sporting Goods.

Savannah Office Submitted by Jim Bryant, advisor with the Savannah, Ga., office of Sperry Van Ness. Posted 9-15-06. What area is your expertise? • Savannah, Ga. What trends do you see presently in office development in your area? • New office development in the area has been mainly single-story buildings totaling no more than 15,000 to 20,000 square feet. There have been three multi-story Class A buildings constructed. Each have experienced extended lease up periods. Who are the active office developers in your area? • Savannah Land Co., The Foxfield Company, The Medalist Group, Jack Hall Construction and Mock Construction. Please name one or two significant office developments in your area. What impact will these projects have on the market? • The Mulberry Building is a 54,000-square-foot Class A building that is being developed by The Foxfield Company. This is the first significant office building constructed in several years. The Mulberry is located in Godley Station directly across from the entrance of the Savannah-Hilton Head airport along I-95. The SEDA Office Building, a 40,000-square-foot, four-story Class A building, is being developed by the Savannah Economic Development Authority (SEDA). The building houses SEDA on the first floor. The SEDA Office Building is located on Hutchinson Island directly across the Savannah River from historic downtown Savannah. Where is the majority of development taking place? Why is this area doing well? • Most of the new development has been on Savannah's Westside along Chatham Parkway and the Pooler Parkway, with the exception of the new SEDA building. The majority of the development has been on the Westside due to the availability of land. What area do you expect to be the next big development market? Why? • The Westside along Chatham Parkway and along I-95 will continue to be growth areas due to the availability of land and ease of access. What areas are doing well in terms of office leasing? Which areas are struggling with office leasing? • Savannah's Southside market remains tight with leasing rates stable, but not on the rise. The CBD is experiencing renewed interest by tenants; however, parking remains a big deterrent and the lack thereof has limited the ability to raise rental rates. Westside Savannah has experienced steady leasing activity with rental rates steadily on the rise, driven by abundance of free parking and accessibility. Please give a measure of office vacancy rates. Please give a measure of available sublease space. • Vacancy for the first half of 2006 was at 10 percent with the total absorption of 85,000 square feet. What impact do current interest rates have on the office market? What predictions do you have for interest rates and their effect on the office market in 2006? • Current interest rates have directly affected the user who was hoping to build rather than rent more so than the developer. I do not predict that interest rates will rise to the point that development slows dramatically. What is the status of job growth/(un)employment rates and what bearing will it have on the office market? • Population growth in the Savannah metropolitan area has been steadily growing by approximately 9.5 percent every 5 years. Unemployment has been steady at 4 percent. Job growth in the area has been fueled by manufacturing and port-related activities. Is there any type of office tenant absorbing a majority of space? What industries do you expect to expand in 2006 to absorb a great deal of office space? What areas will be affected? • Financial and medical services continue to occupy large amounts of space in the area. In addition port-related companies, such as shipping companies and freight forwarding companies, have a significant amount of leased space.