JANUARY 2016

◦ MARKET DYNAMICS◦ Workforce ◦ Resources◦ Expectations

◦ CORPORATE SUCCESS FACTORS◦ Access to Talent◦ Recruitment and Retention◦ Corporate Culture◦ Aligning Company goals and objectives

◦ OPTIONS, ACTIONS, SCHEDULE◦ Governing Criteria◦ Location Options◦ Comparative Analysis◦ Political Implications◦ Schedule, Cost and Execution

STAYING RELEVANT IN THE INNOVATION ECONOMY

◦ WORK FORCE SHORTFALL◦ Workforce Participation rates are declining to historic lows.

◦ In 2014, the work force participation rate reached a 36 year low.

◦ The participation rate will not meet demand for the next two decades.

◦ RAPIDLY SHIFTING WORK FORCE DEMOGRAPHICS◦ Boomers account for half of the participation rate drop

◦ Educated 25-34 year olds is the target market for talented workers

◦ Talented workers are clustering in urban enclaves in large metro areas.

◦ MASS MIGRATION TO URBAN CENTERS◦ Migration – Domestic Relocation and New Foreign Immigrants

◦ Geographic Hot Spots– Large (3 million+) metropolitan areas.

◦ College Degree Concentrations.

PROFOUND CHANGES

WORK FORCE REALITY

By 2018, the demand for Talented workers will comprise 33% of all job openings.

By 2018, there will be 46.8 million U.S. job openings with only 30 million available workers.

By 2020:

◦ +70% of job applicants will lack the skills or talent necessary to fill open positions.

◦ The majority of new jobs will require educated workers with a bachelor degree or higher.

◦ 18% or more jobs will require an advanced degree.

◦ The shortfall is a mathematical certainty.

PACE OF CHANGE

◦ INNOVATION & TALENT◦ Success in the new economy is entirely dependent on an organizations ability to innovate.

◦ Innovation is directly tied to Talent.

◦ Talent is paid to use their cognitive skills.

◦ Talent solves complex problems involving independent judgement and technological understanding.

◦ Talent is highly educated and flocks to dense urban developments within metro areas.

◦ BETTER RECIPES, NOT JUST MORE COOKING◦ Talent clusters accelerate Innovation.

◦ Urban centers offer businesses the best opportunity to compete for, recruit and retain talent.

◦ The talent workforce population grows at twice the rate in urban mixed use communities than the rest of metro areas

◦ Places that attract talent are more productive, grow faster and have better economic outcomes

◦ Talented workers are 2.3% more productive than their counterparts.

INNOVATION ECONOMY

• Atlanta experienced a 30% increase in population over the last 12 years

• Atlanta continues to enjoy an increasing population of Talented Workers 25-34

• Atlanta ranks in the top 10 metro areas with the largest % share of talented workers

• Atlanta ranked #1 in job growth percentage increase in 2015 of all major metros

• Atlanta has the highest forecasted job growth (8.8%) for 2016 of all major metros

HOW ATLANTA STACKS UP

ATLANTA JOB GROWTH

TALENT IS MOVING TO ATLANTA

ATLANTA OFFICE SUPPLY & DEMAND

◦ GEOGRAPHY

◦ Geography is the dominant criteria for Talent choosing where to live.

◦ Location matters more than ever.

◦ Physical proximity to talented people fuels innovation and economic growth.

◦ Talent attracts more talent.

◦ PLACE

◦ Increasingly, talented people are moving to metro areas to realize their full economic value.

◦ A sense of PLACE attracts diverse talent accelerating the rate of economic success & evolution.

◦ As Talent clusters in urban communities and interact, profits accelerate.

ECONOMIC FUEL

BALANCED QUALITY OF LIFE & WORK ◦ Accessibility

◦ Close proximity to Walkable Live-Work-Play Communities

◦ Convenient access to Health Care, Wellness & Recreation

◦ Amenity rich environment

◦ Concentrated Activities

◦ Efficient & Attractive buildings

◦ To be “Alive after Five”

◦ Environmental Sustainability

◦ Pride of Place – Communities that elicit a sense of place and identity

TALENT EXPECTATIONS

◦ High Educational Attainment

◦ High capacity for exercising individual judgement

◦ Technologically Savvy

◦ Complex problem solvers

◦ Ambitious and Hard working

◦ Median Age 34.8

◦ Expect to Live in dense urban LWP communities or have non-vehicular access

◦ Physically Active

◦ Highly Diverse

◦ High work force participation

◦ Socially engaged with co-workers

TALENT CHARACTERISTICS

Workplace environment means everything to talent productivity and retention. Forget the rent and focus on company culture.

◦ Career Well-being

◦ Social Well-being

◦ Financial Well-being

◦ Physical Well-being

◦ Community Well-being

QUALITY OF LIFE PER SQUARE FOOT

◦ Dense suburban LWP communities are experiencing double the growth rate of Talented workforce compared to all

other alternatives in the top 0 metro areas.

◦ Light rail access ranks in the top 5 criteria for talent evaluating where they will live-work-play

◦ 25-34 year olds in metro areas with a drivers license is steadily declining

◦ 90% or more of the Talented workers will choose dense urban walkable communities over auto isolated alternatives.

◦ 41% of new jobs will require a bachelors degree

◦ 23% of new jobs will require advanced degrees

TALENT MATH

◦ Companies can anticipate +/- 3% increase in workforce productivity

◦ Companies can anticipate as much as a 50% increase in talent retention

◦ Companies can anticipate as much as a 36% increase in effective hours

◦ Companies can anticipate a 1-2% reduction in sick days

◦ Companies can anticipate an Earnings increase

LOCATING BUSINESSES IN TALENT COMMUNITIES

73% of American business leaders consider quality of life for employees their top priority

89% of corporate leaders have or are initiating changes in their physical environment to attract and retain talent.

74% believe that workplace changes are required to facilitate Social interaction among workers

69% have implemented health and wellness initiatives

57% believe that failure to improve employee quality of life will result in a negative impact on organizational

performance and profits

QUALITY OF LIFE – THE CEO PERSPECTIVE

PLACES are communities of people, activities and architecture that when thoughtfully combined create

a sense of belonging.

PLACES are experiential, active, accessible, safe and comfortable.

PLACES are crucibles of LIVING: Eating, Socializing, Working, Resting, Learning, Growing.

PLACES are sustainable, dense, walkable, personal, vibrant and connected to the world.

PLACES are ecosystems where creativity coalesces art, innovation, technology and culture.

WHERE BUSINESS NEEDS TO BE

Balance

QUALITY OF LIFE INNOVATION TALENT ENGAGEMENT DENSITY PRIDE OF

PLACE

Clusters, Collisions &

Collaboration

Geography, Migration &

Density

Amenities, Entertainment

& Access

Proximity, Connection & Community

WHY PLACEMAKING MEANS SO MUCH

89% rank the physical environment as the top determinant of Quality of Life

74% rank Social Interaction as the 2nd most important determinant

73% rank the quality of the workplace setting 3rd (Ease and efficiency of producing meaningful work)

69% place health and wellness as the 4th key factor

Personal Growth follows as the 5th most important determinant

Places + Spaces = Quality of life

QUALITY OF LIFE – THE TALENT PERSPECTIVE

Vacancy rates declined an average of 2.4% in 2015

Demand for office has remained stable averaging 600,000 square feet quarterly

Atlanta offers the best value for office in all major metro areas

Atlanta continues to be in a rising office market environment

Lowest volume of new construction in decades – less than 1% of class A inventory is under construction

ATLANTA OFFICE MARKET

Trade, Transportation & Utilities sector created 18,000 or 3.1% (U.S. average = 1.7%)

Hospitality created 13,100 jobs, Education & Health 9,200 jobs

Atlanta job growth exceeded the national average in every supersector tracked by BLS

Atlanta’s job growth was

Professional and Business services sector created 25,100 jobs or a 5.3% growth (U.S. average = 3.2%)

ATLANTA JOBS 11-14 to 11-15

KDC PROJECTS

SIZE602,000 SF

SCHEDULE36 Months

LOCATIONDunwoody, GA

STATE FARM AT PARK CENTER

SIZE186 Acres

DAYTIME POPULATION30,000

OFFICE5,000,000 SF

RETAIL & AMENITIES306,000 SF

SIZE2,100,000 SF

SCHEDULE23 Months (PI)24 Months (PII)

LOCATIONRichardson, TX

STATE FARM AT CITYLINE

SIZE489,000 SF

SCHEDULE15 Months

LOCATIONRichardson, TX

RAYTHEON

SIZE240 Acres

DAYTIME POPULATION25,000

OFFICE6,000,000 SF

RETAIL300,000 SF

SIZE2,100,000 SF

COMPLETION2017

LOCATIONPlano, TX

TOYOTA NORTH AMERICAN HEADQUARTERS

SIZE1,100,000 SF

COMPLETION2017

LOCATIONPlano, TX

LIBERTY MUTUAL INSURANCE

SIZE265,000 SF

SCHEDULE13 Months

LOCATIONPlano, TX

FEDEX OFFICE