Partnership. Performance.

Avison YoungAtlanta Retail Overview

Q3 2016 Review

Table of Contents

2

• Atlanta Overview

• Significant Retail Transactions by Market

• Atlanta Retail Market Overview

• Avison Young Overview

• Avison Young Capital Markets Group

Pg. 3

Pg. 6

Pg. 7

Pg. 19

Pg. 21

Atlanta Retail Market Overview

3

SummaryThe Atlanta retail market did not experience much change in market conditions in the third quarter 2016. The vacancy rate went from 6.6% in the previous quarter to 6.5% in the current quarter. Net absorption was positive 798,683 square feet, and vacant sublease space decreased by (181,187) square feet. Quoted rental rates increased from second quarter 2016 levels, ending at $12.95 per square foot per year. A total of 44 retail buildings with 411,407 square feet of retail space were delivered to the market in the quarter, with 2,877,043 square feet still under construction at the end of the quarter.

VacancyAtlanta’s retail vacancy rate decreased in the third quarter 2016, ending the quarter at 6.5%. Over the past four quarters, the market has seen an overall decrease in the vacancy rate, with the rate going from 6.8% in the fourth quarter 2015, to 6.8% at the end of the first quarter 2016, 6.6% at the end of the second quarter 2016, to 6.5% in the current quarter.

Source:

Atlanta Retail Market Overview

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AbsorptionRetail net absorption was moderate in Atlanta third quarter 2016, with positive 798,683 square feet absorbed in the quarter. In second quarter 2016, net absorption was positive 778,873 square feet, while in first quarter 2016; absorption came in at positive 392,652 square feet. In fourth quarter 2015, positive 1,601,396 square feet was absorbed in the market. Tenants moving out of large blocks of space in 2016 include: Kmart moving out of (69,756) square feet at 620 Bankhead Hwy, Farmers Market moving out of (50,060) square-feet at Merchants Square and Best Buy moving out of (45,775) square-feet at Turner Hill Marketplace. Tenants moving into large blocks of space in 2016 include: Von Maur moving into 172,000 square-feet at Mall of Georgia; Kroger moving into 114,356 square-feet at Glenwood Place - Kroger; and at home moving into 84,146 square-feet at 2420 Wisteria Blvd.

Rental RatesAverage quoted asking rental rates in the Atlanta retail market are up over previous quarter levels, and up from their levels four quarters ago. Quoted rents ended the third quarter 2016 at $12.95 per square foot per year. That compares to $12.72 per square foot in the second quarter 2016, and $12.57 per square foot at the end of the fourth quarter 2015. This represents a 1.8% increase in rental rates in the current quarter, and a 2.93% increase from four quarters ago.

Deliveries and ConstructionDuring the third quarter 2016, 44 buildings totaling 411,407 square feet were completed in the Atlanta retail market. Over the past four quarters, a total of 1,783,648 square feet of retail space has been built in Atlanta. In addition to the current quarter, 36 buildings with 386,407 square feet were completed in second quarter 2016, 25 buildings totaling 321,723 square feet completed in first quarter 2016, and 664,111 square feet in 24 buildings completed in fourth quarter 2015. There were 2,877,043 square feet of retail space under construction at the end of the third quarter 2016. Some of the notable 2016 deliveries include: Glenwood Place - Kroger, a 114,356-square-foot facility that delivered in second quarter 2016 and is now 100% occupied, and The Overlook, a 93,211-square-foot building that delivered in third quarter 2016 and is now 90% occupied. Total retail inventory in the Atlanta market area amounted to 355,233,093 square feet in 26,483 buildings and 3,419 centers as of the end of the third quarter 2016.

Source:

Source:

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Retail Market Statistics – Q3 2016

Existing Inventory Vacancy YTD Net YTD Under Quoted

Period # Bldgs. Total GLA Direct SF Total SF Vacancy % Absorption Deliveries Const. SF Rates

2016 3q 26,483 355,233,093 22,597,407 23,009,447 6.5% 798,683 411,407 2,877,043 $12.95

2016 2q 26,449 354,960,094 22,941,904 23,535,131 6.6% 778,873 386,407 3,245,020 $12.72

2016 1q 26,423 354,614,726 23,380,087 23,968,636 6.8% 392,652 321,723 3,066,424 $12.49

2015 4q 26,407 354,392,401 23,530,858 24,138,963 6.8% 1,601,396 664,111 1,507,706 $12.57

2015 3q 26,400 353,919,215 24,617,255 25,267,173 7.1% 708,433 315,097 1,525,762 $12.53

2015 2q 26,382 353,839,112 25,277,177 25,895,503 7.3% 966,657 209,725 1,381,599 $12.49

2015 1q 26,377 353,704,232 25,989,148 26,727,280 7.6% 560,149 219,946 1,159,220 $12.61

2014 26,379 354,235,446 27,105,572 27,818,643 7.9% 5,244,700 2,420,122 838,794 $12.84

2013 26,305 352,386,149 30,290,881 31,214,046 8.9% 4,151,696 1,497,054 2,031,767 $12.97

2012 26,263 351,355,057 33,509,148 34,334,650 9.8% 2,530,827 1,038,530 1,978,431 $12.84

2011 26,225 350,520,773 35,003,377 36,031,193 10.3% 1,010,769 1,174,107 1,354,584 $13.33

2010 26,144 349,446,184 34,819,855 35,967,373 10.3% 1,241,745 1,537,491 997,415 $13.67

2009 26,062 347,916,613 33,949,196 35,679,547 10.3% (1,712,050) 3,481,841 1,219,489 $14.73

2008 25,892 344,465,898 28,818,338 30,516,782 8.9% 4,267,590 9,309,942 3,212,705 $15.78

2007 25,429 335,187,938 24,355,227 25,506,412 7.6% 7,005,620 9,613,756 7,994,708 $15.67

2006 24,836 325,666,435 21,758,596 22,990,529 7.1% 9,330,955 12,138,021 8,123,663 $14.58

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Property Name Address City S.F.Year

BuiltSold Date Price in $ $ / S.F.

Cap

RateBuyer Seller

Occ.

%Anchor Tenants

Lakeland Plaza 501 Buford Hwy Cumming 301,711 1991 Jul-16 45,250,000 150New Market

Properties LLCState Teachers Retirement

System of Ohio94%

Belk, LA Fitness, Sprouts Farmers

Market

Windward Commons 12850 GA-9 Alpharetta 117,234 1999 Aug-16 27,650,000 236 5.1% InvenTrust Investco Financial Corp 99% Kroger

Douglasville Marketplace

6875 Douglas Blvd Douglasville 129,000 1999 Jul-16 19,900,000 154 Tabani Partners DDR 100%Babies "R" Us, Best

Buy

Village Place Brookhaven (1F)

1418 Dresden Dr NE Atlanta 34,789 2007 Jul-16 18,000,000 517 Westwood Financial Coro Realty Advisors 100% Kaleidescope, Verde

Gwinnett Prado & Gwinnett Station

2300 Pleasant Hill Dr Duluth 358,417 1986 Jul-16 17,000,000 47 Insignia Phillips Investments 100%Great Wall

Supermarket

Pleasant Hill Plaza 1630 Pleasant Hill Rd Duluth 99,025 1994 Sep-16 10,000,000 101Pleasant Hill Road

Plaza LLCFairway Capital Partners 85%

Assi Supermarket (Shadow/Not

Owned), Dollar Tree

Spalding Woods Village 4015 Holcomb Bridge Rd Norcross 83,292 1987 Sep-16 6,800,000 82Spalding Wood Retail

Center LLCRialto Capital Mgmt 66% Dollar Tree

Towne Centre Village 1971-2025 Jonesboro Rd McDonough 33,600 2003 Sep-16 6,400,000 190 8.1%Rivercrest Realty

AssociatesSoutheast Properties Inc 100%

TMobile, American Deli

2441 Cheshire Bridge Rd

2441 Cheshire Bridge Rd Atlanta 40,798 1985 Aug-16 6,305,000 155Ana Associates-VIII

LLCCollision Works Properties

LLC100%

Enterprise Car Rental

Village Shopping Center

1207 W Spring St Monroe 89,720 1975 Aug-16 5,800,000 65 Don J Harris Harold Breedlove 97% Big Lots, Goodys

Significant Sale Transactions – Atlanta MSA

Atlanta Retail Market

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Source:

Source:Source:

Source:

Unemployment Rate

8

0

2

4

6

8

10

12

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD

Percent

Historical Unemployment

US Atlanta

Monthly Job Change, Metro Atlanta

9

‐50.0

‐40.0

‐30.0

‐20.0

‐10.0

0.0

10.0

20.0

30.0

40.0

In Tho

usands, N

ot Seasonally Adjusted

Historical Monthly Job Change – 2014 ‐ 2016

New Single Family Home Sales

10

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD

In Tho

usands

Historical U.S. New Single Family Home Sales

Single Family Building Permits

11

0

10

20

30

40

50

60

70

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD

In Tho

usands

Historical Atlanta Single Family Building Permits

Employment – Job Change

12

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016YTD

In Tho

usands

Historical Atlanta Employment

Rental Rate Growth

13

$8.00

$13.00

$18.00

$23.00

$28.00

$33.00

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

Full Service

Historical Atlanta Average Asking Retail Rental Rates

Overall General Retail Malls Power Center Shopping Center Specialty Center

Consumer Price Index

14

‐3.0

‐2.0

‐1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Percent A

nnual Change

U.S. Consumer Price Index

All CoreYTD

Gross Domestic Product

15

‐5.0

‐4.0

‐3.0

‐2.0

‐1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Percent A

nnual Change

Gross Domestic Product

US GeorgiaYTD

Employment – Job Change

16

‐2 3 8 13 18 23 28

Government

Other Services

Leisure/Hospitality

Education/Health

Professional/Business Services

Financial

Information

Transportation/Utilities

Retail Trade

Wholesale Trade

Manufacturing

Construction

Mining

Atlanta Job Change by Sector(in thousands)

2016 2015 2014YTD

Metro Atlanta Retail Market

17

‐4,000,000

‐2,000,000

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

Historical Deliveries and Absorption

Net Absorption Deliveries

Leading Indicator of Demand - Employment

18

0.0

500.0

1000.0

1500.0

2000.0

2500.0

3000.0

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

In Tho

usands

Atlanta Employment

Atlanta averages 155 SF of office absorption per premium job added. Historically, premium jobs have accounted for appx. 35% of job growth.

Using this data, combined with Moody’s prediction of 2.3% annual job growth in Atlanta through 2020, absorption would progress as follows:

2016: 3,320,9282017: 3,397,3682018: 3,475,5242019: 3,555,396

About Avison Young

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Key Statistics:At-a-Glance:• Founded in 1978 as Graeme Young & Associates of

Edmonton; merged with Avison & Associates in 1996 to form Avison Young.

• In 2009, began international expansion and has since opened 53 offices in the U.S., five in Canada, nine in Europe and one in Mexico.

• Recognized for the last five years as one of Canada’s Best Managed Companies. Named #1 among Fastest-Growing Companies in commercial real estate by Real Estate Forum in 2015..

2008

300

11

15 msf

2016

2400

79

100 msf

Real Estate ProfessionalsAvison Young professionals include licensed brokers, property managers, financial analysts, research professionals and marketing specialists

Number of OfficesOverseas expansion began 2014

Property Under Management (million square feet)We service tenants, lease space, manage capital and operations, report financials and manage cash flow

Representative Retail Transactions

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$24.3 million 143,134 sfRetail Plaza

Crosstown PlazaWest Palm Beach, Florida

$82 million 210,000 sfRetail Mall

Hazelton LanesToronto, Ontario

$51 million 108,205 sfRetail Plaza

Namao SouthEdmonton, Alberta

$85 million 460,784 sfRetail Plaza

Taunton GardensWhitby, Ontario

$4.7 million 57,000 sfRetail

High Springs Winn-DixieHigh Springs, Florida

$6.775 million 380,982 sfRetail Mall

The Mall at WaycrossWaycross, Georgia

$23.65 million 62,000 sfRetail

Fraser Heights VillageSurrey, British Columbia

$28.5 million775,000 sfRetail / Secured Credit

Retail PortfolioNorthern Virginia

$104.8 million691,141 sfRetail / Structured Finance

Wal-Mart PortfolioVarious Locations, Ontario

$38 million120,000 sfRetail Plaza / Debt Financing

University ShoppesMiami, Florida

$5.9 million91,631 sfRetail

Perimeter SquareAtlanta, Georgia

$42.2 million 186,000 sfRetail Plaza

DefuniakSquareDefuniak Springs, Florida

$22.0 millionVaried sfRetail

CVS PortfolioAL, CA , CT, MA, MI, TX

$7.75 million175,000 sfRetail

Sebring SquareSebring, Florida

$8.5million63,650 sfRetail

Rozzelle CrossingCharlotte, North Carolina

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Avison Young Retail Capital Markets

1

4

THERESA JOHNSONSVP Retail Investment Sales, Atlanta, GA

Direct:Cell:Email:

(770) 916-6107(770) 329-9330Theresa.Johnson@avisonyoung.com

PROFESSIONAL EXPERIENCE

Theresa Johnson is Senior Vice President of Retail Investment Sales for Avison Young and is based out of theAtlanta office. Prior to joining AY, Theresa served as Senior Vice President in the Retail Capital MarketsGroup of Bull Realty, a commercial real estate firm in Atlanta, since 2008.

Theresa has over 15 years of experience in commercial real estate and has been recognized as a topproducer in her field. Her primary focus as a professional real estate advisor is representing buyers andsellers in the disposition and acquisition of larger anchored retail properties throughout the Southeast US.

In addition, Theresa has operated as a principal and managing partner in her own firm gaining transactionalexperience in all facets of the retail real estate space. Her professional relationships extend nationwide toinclude REITs, funds, and investment companies within the retail sector.

Theresa is an active member of the International Council of Shopping Centers (ICSC) and a CertifiedCommercial Investment Member (CCIM). She continually enhances her knowledge by attending nationalconferences and seminars. Theresa graduated from Georgia State University with a B.A. in Marketing. Sheenjoys volunteering in the community and has served on several non-profit boards and on the ExecutiveBoard of The Oglethorpe Museum in Atlanta.

+15 YEARSReal Estate Experience

Avison Young 30 Ivan Allen Jr. Blvd Suite 900Atlanta, GA 30308