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From CoStar Group
February 1, 2007

Written by CoStar Research - news@costar.com

MARKET TREND: Less Office Space On the Way in '07
Developers Expected to Deliver Slightly Less New Office
Space Than in 2006

Continuing to produce a steady supply of office space over the past two years, developers are expected to deliver only marginally less office space in the Atlanta region in 2007 than the year before.

According to CoStar Group's 2006 Year-End Office Report, approximately 3.25 million square feet of new office space is expected to reach completion this year, that's slightly less than the 3.5 million square feet delivered in 2006, but about the same amount that was added in 2005.

During the fourth quarter 2006, 39 buildings totaling 592,563 square feet were completed in the Atlanta market area. This compares to 42 buildings totaling 1,438,748 square feet that were completed in the third quarter 2006, 39 buildings totaling 497,371 square feet completed in the second quarter 2006, and 1,006,745 square feet in 27 buildings completed in the first quarter 2006.

Atlanta Office DeliveriesOffice Markets Ranked by 2006 DeliveriesSome of the notable 2006 deliveries include: 1180 Peachtree, a 670,000-square-foot facility that delivered in first quarter 2006 and is now 86% occupied, and Two Buckhead Plaza Bldg 1, a 192,985-square-foot building that delivered in third quarter 2006 and is now 62% occupied.

At the end of the fourth quarter, CoStar was tracking 4,416,073 square feet of office space under construction in the Atlanta office market.

The largest projects underway at the end of fourth quarter 2006 were Terminus 100, a 581,874-square-foot building with 74% of its space pre-leased, and 3344 Peachtree Rd NE, a 491,000-square-foot facility that more than 30% pre-leased.

Most of the new space under construction is concentrated in the Buckhead submarket where 1.1 million square feet is under way, and Midtown with 688,000 square feet underway.

The information in this news report was taken from CoStar’s Year-End 2006 Office Market Report, a 40+ page research report containing the most complete and verified statistics available from CoStar for you local market, down to the submarket level. Comprehensive charts, graphs and detailed narrative provide an in-depth, precise picture of absorption, vacancy rates, rental rates, existing inventory and buildings under construction, sales prices, and cap rates.