Highwoods Properties Inc.
), a real estate investment trust (REIT), has recently acquired Two
Alliance Center - a Class A office property with structured parking
space in the Buckhead submarket of Atlanta. Highwoods invested an
aggregate of $146.7 million for the 29-storey, 492,000 square feet
building, including $0.8 million of planned near-term renovations.
The acquired property is located in close proximity to two upscale
malls titled Phipps Plaza and Lenox Square Mall, and luxury hotels
such as the Ritz-Carlton and the Mandarin Oriental. At the same
time, the building provides easy access to several public
transportation facilities - one of the pre-requisites of an office
property that is likely to employ a significant chunk of workers.
Besides its strategic location, the property offers a host of
amenities that include a fitness center, conference facilities, and
a full-service bistro.
Highwoods funded the transaction from the proceeds of its
at-the-market (ATM) stock offering programs, borrowings under its
revolving credit facility, and available cash. Since July 26, the
company has reportedly sold nearly 2.4 million shares under its ATM
programs, raising net proceeds of $77.5 million. The acquisition is
expected to be accretive to earnings with a strong occupancy and no
near-term lease expirations until 2017.
Highwoods is presently repositioning its portfolio to focus on
stronger long-term markets and newer assets. A large part of the
company's portfolio is now concentrated in the high-growth Sun Belt
markets, which provide above-average job growth owing to its
long-term demographic trends.
Based in Raleigh, North Carolina, Highwoods owns and operates its
properties through its wholly-owned subsidiary, Highwoods Realty
Limited Partnerships. Highwoods owns or has management interests in
office, industrial, retail, and service center properties,
including development projects and apartment units across the U.S.
It also provides customer-related and fee-based real estate
management services for its properties as well as for third-party
Highwoods is one of the biggest owners and operators of suburban
office, industrial and retail properties in the Southeastern and
Midwestern U.S., providing a complete line of real estate services
to its customers and third parties through a fully-integrated
organization. The core markets include Florida, Georgia, Iowa,
Maryland, Missouri, Mississippi, North Carolina, South Carolina,
Tennessee and Virginia.
We maintain our long-term Neutral recommendation on Highwoods,
which currently retains a Zacks #3 Rank that translates into a
short-term Hold rating. We also have a Neutral recommendation and a
Zacks #3 Rank for
Cousins Properties Inc.
), one of the competitors of Highwoods.
COUSIN PROP INC (CUZ): Free Stock Analysis
HIGHWOODS PPTYS (HIW): Free Stock Analysis
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