Highwoods Properties Acquires Lincoln Plaza in CBD Orlando

RALEIGH, NC--(Marketwired - Dec 2, 2014) - Highwoods Properties, Inc. (NYSE: HIW) has acquired Lincoln Plaza, a 16-story, 246,000 square foot, Class A, multi-customer office building with embedded structured parking, in CBD Orlando. 

The Company now wholly owns 1.5 million square feet of office in CBD Orlando, the city's BBD (best business district). This includes the Company's July 2013 acquisition of its joint venture partner's 60% interest in five office buildings encompassing 1.3 million square feet. On a combined basis, the Company's total investment in its downtown Orlando buildings is $264 million, which equates to $173 per square foot, a 40% discount to estimated replacement cost.

The Company's total investment in Lincoln Plaza, which delivered in 2000, is expected to be $68.3 million. With known near-term move-outs, occupancy at Lincoln Plaza is 82%. Cash and GAAP net operating income are expected to be $4.1 million and $4.2 million, respectively, in 2015. The Company noted that $0.3 million of acquisition costs will be expensed in the fourth quarter.

Ed Fritsch, president and chief executive officer of Highwoods, stated, "In the heart of downtown and very close to the city's brand new $500 million performing arts center, Lincoln Plaza is an excellent addition to our portfolio and further strengthens our franchise in CBD Orlando. With meaningful occupancy upside, we expect this Class A asset to be a solid performer.

"We are very pleased with our material progress in raising occupancy in the 1.3 million square feet we acquired from our joint venture partner in July 2013. Our 'Highwoodtizing' program is enhancing the properties and our streamlined leasing process, a direct benefit of wholly-owning these five buildings, has led to an increase in occupancy from 82% at acquisition to 89% at quarter-end."

The Company funded the acquisition of Lincoln Plaza with proceeds from non-core dispositions, its ATM program and borrowings under its revolving credit facility. No debt was assumed in connection with this transaction. 

Lincoln Plaza Presentation
A brief presentation outlining this transaction can be accessed through the link below or on the Investor Relations section of the Company's web site at www.highwoods.com.

http://www.highwoods.com/investor/Lincoln-Plaza-Overview.pdf

ATM Program Update
Subsequent to its October 28^th third quarter earnings release, the Company has sold 1.55 million shares of its common stock at an average gross sales price of $42.38 per share, raising net proceeds of $64.7 million. At December 31, 2014, diluted shares outstanding will be approximately 95.8 million and the Company's leverage ratio, including preferred stock, is projected to be under 42%. The Company expects to continue to fund its external investment activity, including its $549 million, 1.8 million square feet, 89% pre-leased development pipeline, on a leverage-neutral basis.