Highwoods Announces Recent Investment Activity
RALEIGH, N.C., Jan. 21, 2021 (GLOBE NEWSWIRE) -- Highwoods Properties, Inc. (NYSE:HIW) is today announcing investment transactions that have closed to date in early 2021.
First, the Company has sold a 100,000 square foot office building in Atlanta that is 100% leased to the Federal Aviation Administration (FAA) for $30.7 million. This property was projected to generate cash and GAAP net operating income of $2.4 million in 2021. Highwoods developed the property as a build-to-suit for the FAA in 2009 for approximately $18 million.
Second, the Company has acquired its joint venture partner’s 75% interest in Highwoods DLF Forum, LLC, which owns a five-building office complex called “The Forum” in Raleigh, for a purchase price of $131.3 million. The properties, which encompass 636,000 square feet, are valued at $184.5 million, including $9.5 million of planned near-term building improvements. This equates to a total asset value of $290 per square foot, an approximate 25% discount to estimated replacement cost. The Company’s total incremental investment is expected to be $138.4 million. The properties are a combined 91.0% occupied with a weighted average lease term of 6.0 years, and are expected to generate 2021 cash and GAAP net operating income of $11.5 million and $12.4 million, respectively.
Ted Klinck, President and CEO, stated, “These transactions, combined with our fourth quarter 2020 dispositions, demonstrate our strategy of selling non-core properties and reinvesting in high quality office properties in the BBDs (best business districts) of our markets. The Forum is a Class A portfolio with a proven track record of strong performance. With its diverse base of walkable amenities, proximity to housing and excellent access to major thoroughfares, The Forum is in a highly desirable office location in the north Raleigh submarket. We and our joint venture partner first acquired the Forum in 2008. As a result, we know the property well and believe the long-term return outlook is solid, which made this incremental investment a natural fit for us.”
Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW) real estate investment trust (“REIT”) and a member of the S&P MidCap 400 Index. The Company is a fully-integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. For more information about Highwoods, please visit our website at www.highwoods.com.