Office Market September 2004prepared for

Presented by

James PhillpottSenior Research AssociateCushman & Wakefield

Table of Contents

The Office Leasing Market– Historical Perspective– Current Market Conditions– Top Deals

The Office Investment Sales Market– Sales Activity and Future Pipeline

Four Year Market Forecast– Deliveries– Absorption– Occupancy

3rd Quarter 2004

Office Leasing Market

Metro Atlanta Office Map

Office Market Cycle

Overall Atlanta Deliveries and Occupancy

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004 YT

D

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

New Supply

Overall Occupancy Rate

0%

5%

10%

15%

20%

25%

1995 1996 1997 1998 1999 2000 2001 2002 2003 3Q04

SubleaseDirect

Atlanta Office Market

Historical Vacancy Rates

Source: Cushman & Wakefield Research Services

3%

19.5%

$10

$12

$14

$16

$18

$20

$22

$24

1995 1996 1997 1998 1999 2000 2001 2002 2003 3Q04

8%

12%

16%

20%

24%

Overall Vacancy Rate v. Overall Weighted Average Asking Rent

Asking Rent

Vacancy RateVacancy Rate

Atlanta Office Market

Source: Cushman & Wakefield Research Services

1.49 1.6 1.78 2.25 2.11 1.74

4.965.78

4.99 4.79

12.4

9.310.0

12.812.0

9.6

18.2

22.6

25.1 25.5

0.0

5.0

10.0

15.0

20.0

25.0

1995 1996 1997 1998 1999 2000 2001 2002 2003 2q04

Atlanta Office Market

Direct v. Sublease Available Square Feet (in millions)

Source: Cushman & Wakefield Research Services

44

77

172

395

0 50 100 150 200 250 300 350 400 450

100,000 +

50,000 - 99,999

25,000 - 49,999

10,000 - 24,999

Number of Spaces

Atlanta Office Leasing Opportunities

Number of Spaces Available by Size

Source: Cushman & Wakefield Research Services

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

2Q03 3Q03 4Q03 Q1/2004 Q2/2004 3Q04

SF

CBD Midtown

Buckhead Central Perimeter

Georgia 400 Northwest

Northeast Northlake / Decatur

Airport / South Atlanta

Quarterly Comparison

Source: Cushman & Wakefield Research Services

Atlanta Office Market Leasing Activity

Q4/2003Q1/2004

Q2/2004Q3/2004

Class C

Class B

Class A

15%

17%

19%

21%

23%

25%

Class CClass BClass A

Atlanta Office Market

Historical Vacancy Rates by Class

Source: Cushman & Wakefield Research Services

Current Market Dynamics SummaryLeasing Market

Vacancy Rates have Stabilized

New Supply Pipeline Is In Check…for now

Subleases Are Slowly Disappearing

Leasing Activity Currently on the Decline– mortgaged against future activity with early renewals

Diversified Supply of New and Re-let Space

Flight to Quality as Tenants Take Advantage of Market Conditions

Investment Sales

Office Sales Trend Through Mid-Year 2003In Millions

$561

$377

$161

9

17

13

100

300

500

700

2001 2002 Mid-Year 2003

0

2

4

6

8

10

12

14

16

18

Volume # Deals

Office Sales TrendIn Millions

$561 $377 $635$929

1817

13

23

100

300

500

700

900

2001 2002 2003 2004-YTD

0

5

10

15

20

25

Volume # Deals

Current Market Dynamics SummaryOffice Sales

2004 Sales Total $929 Million YTD

Year End 2004 Will Top Atlanta’s 1998 record of $1.3 Billion

Four Year Forecast

Office Market Forecast

Overall Atlanta Deliveries and Occupancy

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

70.0%

75.0%

80.0%

85.0%

90.0%

95.0%

New Supply

Overall Occupancy Rate

12.3 Million SF Absorption

19.5 Million SF Absorption4.7% Increase in Occupancy

9.5% Increase in Occupancy

Conclusion

Things are finally looking up!