Highwoods Properties Inc. (
, a real estate investment trust (REIT), recently acquired its
second Class A multi-tenant office building - EQT Plaza -
situated in Pittsburgh for $91.2 million. With the acquisition,
the company expanded its footprint in downtown Pittsburgh by 40%.
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HIGHWOODS PPTYS (HIW): Free Stock Analysis
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Highwoods funded the transaction with the proceeds of
at-the-market (ATM) stock offering programs, borrowings under its
revolving credit facility and non-core assets sale. The purchase
also represents an investment worth $99.2 million, including $8
million for further renovations. Highwoods expects the acquired
property to generate cash and net operating income (on a reported
basis) worth $7 million and $8.8 million, respectively, in 2013.
The 32-story and 616,000 square feet EQT Plaza, a major and
distinctive skyscraper in downtown Pittsburgh, is named for its
largest anchor tenant -
EQT Corporation (
. The property is positioned on Liberty Avenue in the center of
the Cultural District. EQT Plaza is currently 92.2% occupied and
boasts renowned tenants such as
American International Group, Inc. (
, Cohen & Grigsby, McGuireWoods and Fox Rothschild.
Highwoods expect occupancy at EQT Plaza to increase to 95.9% by
the third quarter of 2013, with the execution of leases in hand.
The company also expects EQT Plaza to complement its previously
acquired property in Pittsburgh - PPG Place. The company now has
roughly $300 million worth of property in Pittsburgh, its
fifth-largest office market.
Highwoods is currently 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
long-term demographic trends.
Highwoods is one of the biggest owners and operators of suburban
office, industrial and retail properties in Southeastern and
Midwestern U.S. The REIT provides a complete line of real estate
services to its customers and third parties through a
fully-integrated organization. As of September 30, 2012,
Highwoods owned 333 properties spanning around 34.1 million
square feet. The core markets include Mississippi, North
Carolina, South Carolina, Florida, Pennsylvania, Georgia,
Maryland, Missouri and Virginia.
We currently have long-term Neutral recommendation on Highwoods.
It carries a short-term Zacks #2 Rank (Buy).