Highwoods Properties' Strategic Moves in Investment and Financing
Highwoods Properties' Strategic Initiatives in Investment and Growth
Highwoods Properties, Inc. (NYSE:HIW), a prominent player in the real estate investment trust sector, has recently undertaken key investment and financing activities in response to evolving market conditions. These transactions, which mark the company's proactive approach, have been significant both in their scale and strategic intent.
Dispositions and Reinvestment Strategy
The Company announced a series of transactions involving non-core buildings located in strategic markets, notably Raleigh and Tampa. These non-core assets were sold for an impressive total of $166.4 million. In the fourth quarter of 2024 alone, Highwoods realized gross proceeds of $21.4 million, with additional transactions completed early in 2025.
In detail, the sold properties included an office building in North Raleigh, totaling 170,000 square feet, alongside three buildings in Tampa's Westshore submarket, amounting to 616,000 square feet. Collectively, these properties had an occupancy rate of 88%, with projected GAAP net operating income and cash net operating income of approximately $13.6 million and $13.0 million, respectively, for 2025.
Navigating Market Trends with Tactical Sales
The decision to divest these properties reflects Highwoods' commitment to optimizing its portfolio. By shedding non-core assets that offer limited growth potential, the company is positioning itself to reinvest in higher-quality buildings, thus aligning with its long-term strategy.
Strategic Land Acquisition
In a further display of strategic foresight, Highwoods secured fee simple title to the land beneath its Century Center assets for $50.6 million. Previously, the company operated under a long-term ground lease, limiting its control over the development and use of these properties.
The Century Center, encompassing 1.7 million square feet across 12 buildings, now allows Highwoods to consolidate its ownership. This acquisition provides enhanced long-term flexibility and stability, essential for maximizing the potential of their existing assets.
Capital Raising Initiatives
In addition to property sales, Highwoods also successfully raised capital through the sale of 1.59 million shares of its common stock. This initiative, with an average gross sale price of $32.71 per share, yielded net proceeds of $51.3 million. Such capital raises are critical for corporate growth and expansion.
Strengthening Financial Position for Future Growth
Ted Klinck, the President and CEO of Highwoods, emphasized the significance of these activities, stating that the combined proceeds would further enhance the company’s already robust balance sheet. This financial backing will empower Highwoods to pursue external growth opportunities throughout 2025.
About Highwoods Properties
Highwoods Properties, Inc. is a publicly-traded, fully-integrated office REIT headquartered in Raleigh. The company specializes in the ownership, development, leasing, and management of properties across several major business districts, including Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa.
The firm is dedicated to creating exceptional workplace environments that promote innovation and collaboration among tenants. This vision allows Highwoods to deliver superior value to customers, partners, and stakeholders alike.
Contact Information
For further inquiries, please reach out to:
Brendan Maiorana
Executive Vice President and Chief Financial Officer
Email: Brendan.Maiorana@highwoods.com
Phone: 919-872-4924
Frequently Asked Questions
What transactions has Highwoods recently completed?
Highwoods recently completed the sale of non-core buildings in Raleigh and Tampa for $166.4 million and acquired land beneath its Century Center assets.
How much capital did Highwoods raise through stock sales?
The company raised net proceeds of $51.3 million by selling 1.59 million shares of its common stock.
What is the significance of the land acquisition at Century Center?
Acquiring the land consolidates ownership, enhancing control and flexibility for future developments.
What are Highwoods' future plans after these transactions?
The company aims to reinvest the proceeds from the sales into higher-quality buildings and seek growth opportunities in 2025.
Where is Highwoods Properties primarily operating?
Highwoods Properties operates in major business districts in cities like Atlanta, Charlotte, Dallas, Nashville, and more.
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