Highwoods Properties Acquires Charter Square in CBD Raleigh

RALEIGH, NC--(Marketwired - Sep 27, 2016) - Highwoods Properties, Inc. (NYSE: HIW)

• $83.5 Million Total Investment
• CBD Raleigh Portfolio Now 913,000 Square Feet
• $80.5 Million of Equity Raised Since August 3^rd Update
• $52.79 per Share Average Gross Sales Price

Highwoods Properties, Inc. (NYSE: HIW) has acquired Charter Square, an 11-story, Class A, LEED platinum certified, office tower in CBD Raleigh encompassing 243,000 square feet. 

The Company's total investment in Charter Square, which delivered in 2015, is expected to be $83.5 million, including $5.1 million of planned near-term building improvements and anticipated leasing capital expenditures to bring the property to stabilization. The building is currently 70% leased. The Company estimates annual cash and GAAP net operating income to be approximately $6.0 million upon stabilization, which is projected to occur during 2018. The Company noted that $0.3 million of acquisition costs will be expensed in the third quarter. No debt was assumed in connection with this transaction.

The Company now wholly owns 913,000 square feet of office in CBD Raleigh, one of the city's BBDs (best business districts), and a development site that can support up to 300,000 square feet of Class A office. The Company's CBD Raleigh portfolio is concentrated within three city blocks and includes a combined parking ratio of 2.5 per 1,000 square feet, well above the competitive set at approximately 1.5 per 1,000 square feet. On a combined basis, the Company's total investment in its CBD Raleigh buildings is $251 million, which equates to $275 per square foot, an approximate 30% discount to estimated replacement cost. 

Ed Fritsch, president and chief executive officer of Highwoods, stated, "In the heart of downtown and very close to our existing buildings, Charter Square is an excellent addition to our portfolio that further strengthens our franchise in CBD Raleigh. Our three building, downtown portfolio is 100% wholly owned and 100% unencumbered. 

"In addition, we are very pleased with the leasing velocity next door to Charter Square at our One City Plaza property (formerly One Bank of America Plaza), and we expect to capitalize on that strong leasing momentum at Charter Square. Lastly, we are 100% occupied at PNC Plaza."