NAI MEMBER NAME NAI BRANNEN GoddARd

MEMBER NAME
NAI Brannen
Goddard
Atlanta
Industrial
Report
| Fourth
Office Report
| First
Quarter
2007Quarter 2008
Brannen Goddard
Commercial Real Estate Services, Worldwide.
Atlanta Industrial Market
Fourth Quarter 2008
Leasing Highlights in Select CoStar Markets
Color Coded by Vacancy Rate
Leasing Highlights
Market Overview
Select Markets by Vacancy Rate
Northwest Atlanta Ind
North Central Atl Ind
Vacancy:
11.6%
YTD Abs:
(947)K SF
Leasing Activity: 1,752,128 SF
Vacancy:
12.2%
YTD Abs:
(232)K SF
Leasing Activity: 622,082 SF
The Atlanta Industrial market ended 2008
with a vacancy rate of 12.1%. This vacancy rate represents a slight increase over
the previous quarter of 11.4%. Rental
rates are down slightly from last quarter,
net absorption of (2,370,661) square feet
was reported, over 1.6 million square feet
of new projects were delivered to the
market and there is currently 975,279
square feet of new construction.
2008 proved to be a challenging year for
Atlanta. Vacancy rates climbed, rental
rates held steady, the market recorded a
year-end negative net abosorption of
(2,960,710) and delivered over 5 million
square feet of new product to the market.
Atlanta’s inventory of Industrial properties
consisted of 6,885 buildings with over
557 million square feet.
Northeast Atlanta Ind
Vacancy:
10.7%
YTD Abs:
(453)K SF
Leasing Activity: 4,018,527 SF
Chattahoochee Ind
Vacancy:
7.6%
YTD Abs:
(293)K SF
Leasing Activity: 237,887 SF
I-20 W/Fulton Ind
Central Atlanta Ind
Vacancy:
13.4%
YTD Abs:
(698)K SF
Leasing Activity: 1,868,958 SF
Vacancy:
5.8%
YTD Abs:
(57)K SF
Leasing Activity: 156,687 SF
Stone Mountain Ind
Vacancy:
9.9%
YTD Abs:
(737)K SF
Leasing Activity: 818,663 SF
Economic Overview
Unemployment Rate
Snapfinger/I-20E Ind
Vacancy:
11.1%
YTD Abs:
(359)K SF
Leasing Activity: 329,811 SF
South Atlanta Ind
Vacancy:
YTD Abs:
14.9%
814K SF
Leasing Activity: 4,040,722 SF
Vacancy Rate:
Less than 5%
5% to 10%
10% to 15%
Brannen Goddard
Commercial Real Estate Services, Worldwide.
15% to 20%
Over 20%
National
Georgia
Atlanta MSA
7.2%
8.1%
7.6%
With the close of 2008, unemployment is
at its highest levels in 14 years. Job
losses are widespread, reflecting from a
trio of crises — housing, credit and
financial. All those losses more than
swamped some gains elsewhere, including in the government, as well as in
education and health care.
MARKET INDICATORS
Vacancy
Rate
Net
Absorption
Construction
Rental
Rates
4%
4%
Vacancy Rates by Building Type
Flex
Flex
1993-2008 4Q
Shallow‐Bay
Shallow-BayWarehouse
Total
Warehouse
Total
96%
96%
20.0%
Direct
Sublet
15.0%
10.0%
5.0%
0.0%
1994
1995
1996
1997
1998
1999
2000
Vacancy
The overall vacancy rate in the Atlanta Industrial market
ending the fourth quarter 2008 is 12.1%. This rate
represents over 67 million square feet of vacant space
throughout the Metropolitan Atlanta Industrial market. Vacancy rates were highest in the Flex Market sector of the
Chattahoochee and Snapfinger/I-20 East submarkets.
The amount of vacant sublease space is reported over
2.8 million square feet, down slightly from the third
quarter 2008. The largest amount of sublease vacancy
was found in the Northeast Atlanta submarket.
2001
2002
2003
2004
2005
2006
2007
2008
Absorption & Deliveries
Absorption
& Deliveries
Past 12 Quarters
Net Absorption
Deliveries
7,000
6,000
5,000
Millions SF
1993
4,000
3,000
2,000
1,000
0
Net Absorption
(1,000)
In the fourth quarter 2008, the Atlanta Industrial market
had a negative net absorption of (2,370,661) square feet
compared to a negative net absorption of (139,201)
square feet in the previous quarter, and positive
1,919,515 square feet this time last year. The year-to-date
net absorption for all sectors is (2,960,710).
(2,000)
(3,000)
2006
1Q
2Q
2006
3Q
4Q
2007 2007
1Q
2Q
2007 2007
3Q
2008
4Q
1Q
2008 2008
2Q
3Q
2008
4Q
Deliveries, Absorption & Vacancy
Delivered SF
7,000,000
2006 2006
Absorption SF
Vacancy
12.50%
6,000,000
12.00%
5,000,000
4,000,000
11.50%
3,000,000
2,000,000
11.00%
1,000,000
10.50%
0
(1,000,000)
10.00%
(2,000,000)
(3,000,000)
9.50%
2005 4Q
2006 1Q
2006 2Q
2006 3Q
Brannen Goddard
Commercial Real Estate Services, Worldwide.
2006 4Q
2007 1Q
2007 2Q
2007 3Q
2007 4Q
2008 1Q
2008 2Q
2008 3Q
2008 4Q
All data for text, charts & graphs provided by ©CoStar Property.
All Construction Activity
Markets Ranked by Under Construction Square Footage
Under Construction Inventory
Market
Northwest Atlanta Ind
North Central Atlanta Ind
South Atlanta Ind
Snapfinger/I-20 East Ind
Northeast Atlanta Ind
Stone Mountain Ind
Chattahoochee Ind
Central Atlanta Ind
I-20 W/Fulton Ind
Totals
# Blds
Total RBA
10
8
1
1
4
0
0
0
0
24
Preleased SF
716,938
124,550
50,000
45,234
38,557
0
0
0
0
975,279
Flex
All Existing
35,313
29,179
76,713
46,064
49,924
31,660
35,597
35,634
70,664
49,526
30.8%
0.0%
100.0%
0.0%
9.0%
0.0%
0.0%
0.0%
0.0%
28.1%
U/C
71,694
15,569
50,000
45,234
9,639
0
0
0
0
40,637
Based on Full-Service Equivalent Rental Rates
Warehouse
Flex
Preleased %
220,500
0
50,000
0
3,476
0
0
0
0
273,976
Historical Rental Rates
Average Bldg Size
Warehouse
Total
Total
$11.00
$10.00
Dollars/SF/Year
$9.00
Construction Activity
The Atlanta Industrial market saw
over 1.6 million square feet in new
buildings deliver to the market in the
fourth quarter 2008. One of the largest
deliveries in the fourth quarter was
Hartman V, a 568,934 square foot
building located in the I-20 W/Fulton
submarket.
Currently there is over 975,279 square
feet of space under construction, down
from the third quarter number of 2.3
million. The largest project underway
currently is the Highwoods River Point
IV, a 200,000 square foot facility
located in the Northwest Atlanta
submarket.
$8.00
$7.00
Future Deliveries
$6.00
$5.00
$4.00
900,000
$3.00
$1.00
$0.00
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
1Q
2007
2Q
2007
3Q
2007
4Q
2008
1Q
2008
2Q
2008
3Q
2008
4Q
Market Highlights
Thousands of SF
800,000
$2.00
700,000
600,000
500,000
400,000
300,000
200,000
100,000
‐
Significant Fourth Quarter 2008 New Lease Transactions
Building
Submarket
Newpoint Commons - Bldg 300
815 Allgood Road
4411 Bibb Blvd
8005 Second Flags Drive
Duluth/Suwanee/Buford
SE Cobb County/Marietta
Stone Mountain
I-20 W/Douglasville
2009
1Q
Square Feet
168,200
148,753
119,000
97,185
Uline Distributors
Tug Technologies
McJunkin Corporation
Southeast Pet
Significant Fourth Quarter 2008 Construction Deliveries
Building
Submarket
Hartman V
Cherokee Commerce Ctr - Phase I, Bldg 4
Chastain Meadows - Bldg 300
Tech Center Parkway
I-20 W/Fulton
Northwest Atlanta
Northwest Atlanta
Northeast Atlanta
Square Feet
568,934
188,000
159,133
137,793
Occupied
0%
0%
0%
0%
Significant Fourth Quarter 2008 Properties Under Construction
Building
Submarket
Highwoods River Point IV
680 14th Street, NW
Cobb Place Blvd
AirTran Airways
Northwest Atlanta
Chattahoochee
Northwest Atlanta
South Atlanta
Square Feet
200,000
91,170
80,000
50,000
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2009
2Q
Tenant Name
Delivery
1st Qtr 2009
1st Qtr 2009
2nd Qtr 2009
1st Qtr 2009
Quoted Rental Rates
The average quoted asking rental rate
for available Distribution space was
$3-$4.50 per square foot per year at
the end of the fourth quarter 2008.
The average quoted rate within the Flex
sector was $6-$9 per square foot
while Bulk Warehouse rates were
reported at $2.40-$3.35 per square
foot.
Total Atlanta Industrial Market Statistics
Existing Inventory
Market
# Blds
Total RBA
Fourth Quarter 2008
Vacancy
Direct SF
Sublease SF
Total SF
Vac %
YTD Net
YTD
Under
Leasing
Absorption
Deliveries
Const SF
Activity
Central Atlanta Ind
277
17,128,826
958,879
35,000
993,879
5.8%
(57,088)
0
0
Chattahoochee Ind
421
22,149,558
1,674,212
10,291
1,684,503
7.6%
(293,133)
0
0
237,887
I-20 W/Fulton Ind
873
88,259,111
11,389,924
450,520
11,840,444
13.4%
(697,526)
1,617,712
0
1,868,958
North Central Atlanta Ind
Northeast Atlanta Ind
156,687
453
23,372,116
2,671,174
182,750
2,853,924
12.2%
(231,853)
395,675
60,000
622,082
1,950
153,384,523
15,259,727
1,148,263
16,407,990
10.7%
(452,881)
548,637
0
4,018,527
1,752,128
Northwest Atlanta Ind
885
54,477,101
6,192,287
128,842
6,321,129
11.6%
(946,742)
1,101,221
711,938
Snapfinger/I-20 East Ind
412
32,229,636
3,560,183
16,000
3,576,183
11.1%
(358,987)
170,000
45,234
329,811
1,139
140,579,010
20,184,190
804,097
20,988,287
14.9%
814,465
1,219,759
50,000
4,040,722
South Atlanta Ind
Stone Mountain Ind
475
6,885
Totals
26,401,599
2,567,355
56,788
2,624,143
9.9%
(736,965)
20,496
0
818,663
557,981,480
64,457,931
2,832,551
67,290,482
12.1%
(2,960,710)
5,073,500
867,172
13,845,465
Flex Market Statistics
Existing Inventory
# Blds
Market
Total RBA
Vacancy
Direct SF
Sublease SF
Total SF
Vac %
Central Atlanta Ind
54
2,275,726
193,560
0
193,560
8.5%
Chattahoochee Ind
78
3,737,117
795,806
0
795,806
21.3%
I-20 W/Fulton Ind
54
2,520,141
306,420
0
306,420
12.2%
140
6,909,058
1,038,773
11,560
1,050,333
Northeast Atlanta Ind
397
15,947,390
2,896,718
207,195
Northwest Atlanta Ind
193
8,674,932
1,212,796
69,217
52
1,733,655
366,243
0
366,243
21.1%
100
3,219,697
169,155
0
169,155
96
3,409,379
456,835
31,765
48,427,095
7,436,306
319,737
North Central Atlanta Ind
Snapfinger/I-20 East Ind
South Atlanta Ind
Stone Mountain Ind
1,164
Totals
YTD Net
YTD
Under
Leasing
Absorption
Deliveries
Const SF
Activity
8,148
0
0
21,342
0
0
29,230
43,088
0
0
15,161
15.2%
18,810
64,320
0
192,323
3,103,913
19.5%
(51,134)
1,282,013
14.8%
29,910
(268,239)
0
0
743,283
15,000
80,000
348,289
(213,721)
0
0
12,000
5.3%
(61,126)
0
0
90,714
488,600
14.3%
(252,128)
0
0
92,839
7,756,043
16.0%
(746,392)
79,320
80,000
1,545,181
Warehouse Market Statistics
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Sublease SF
Total SF
Vac %
YTD Net
YTD
Under
Leasing
Absorption
Deliveries
Const SF
Activity
Central Atlanta Ind
157
11,800,072
507,609
35,000
542,609
4.6%
(80,761)
0
0
73,820
Chattahoochee Ind
307
16,964,736
797,536
10,291
807,827
4.8%
(24,894)
0
0
208,657
I-20 W/Fulton Ind
535
65,293,405
7,981,274
299,852
8,281,126
12.7%
(1,111,050)
873,381
0
979,913
North Central Atlanta Ind
198
10,518,348
1,065,443
156,940
1,222,383
11.6%
(344,266)
331,355
43,200
240,121
Northeast Atlanta Ind
1,007
105,393,536
8,021,919
657,246
8,679,165
8.2%
806,959
465,564
0
2,108,148
Northwest Atlanta Ind
466
33,428,004
4,152,597
28,170
4,180,767
12.5%
(815,937)
883,341
509,938
1,020,587
Snapfinger/I-20 East Ind
252
23,750,739
2,478,692
16,000
2,494,692
10.5%
(150,782)
150,000
45,234
193,746
South Atlanta Ind
769
111,735,300
15,984,507
607,572
16,592,079
14.8%
512,858
514,090
50,000
3,529,584
Stone Mountain Ind
204
3,895
Totals
14,822,849
1,164,196
25,023
1,189,219
8.0%
(434,988)
0
0
480,602
393,706,989
42,153,773
1,836,094
43,989,867
11.2%
(1,642,861)
3,217,731
648,372
8,835,178
Shallow-Bay Distribution Market Statistics
Existing Inventory
Market
# Blds
Total RBA
Vacancy
Direct SF
Sublease SF
Total SF
Vac %
YTD Net
YTD
Under
Leasing
Absorption
Deliveries
Const SF
Activity
Central Atlanta Ind
66
3,053,028
257,710
0
257,710
8.4%
15,525
0
0
Chattahoochee Ind
36
1,447,705
80,870
0
80,870
5.6%
0
0
0
0
284
20,445,565
3,102,230
150,668
3,252,898
15.9%
370,436
744,331
0
873,884
I-20 W/Fulton Ind
93,603
61,525
North Central Atlanta Ind
115
5,944,710
566,958
14,250
581,208
9.8%
0
16,800
189,638
Northeast Atlanta Ind
546
32,043,597
4,341,090
283,822
4,624,912
14.4%
(1,208,706)
83,073
0
1,167,096
(160,715)
383,252
Northwest Atlanta Ind
226
12,374,165
826,894
31,455
858,349
6.9%
202,880
122,000
Snapfinger/I-20 East Ind
108
6,745,242
715,248
0
715,248
10.6%
5,516
20,000
0
124,065
South Atlanta Ind
270
25,624,013
4,030,528
196,525
4,227,053
16.5%
362,733
705,669
0
420,424
Stone Mountain Ind
Totals
175
1,826
8,169,371
946,324
0
946,324
11.6%
(49,849)
20,496
0
245,222
115,847,396
14,867,852
676,720
15,544,572
13.4%
(571,457)
1,776,449
138,800
3,465,106
All data for text, charts & graphs provided by ©CoStar Property.
Brannen Goddard
Commercial Real Estate Services, Worldwide.
tel 404 812 4000
fax 404 816 3939
www.naibg.com
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5555 Glenridge Connector
Atlanta GA 30342