Highwoods Properties Inc. (
, a real estate investment trust (REIT), recently penned a
long-term build-to-suit deal with a leading packaging and paper
products firm -
International Paper Company (
- for constructing a new office building in Memphis. The
transaction is in line with Highwoods' strategic move toward
strengthening its relationship with existing customers.
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Memphis, Tenn.-based, International Paper deals in industrial and
consumer packaging and uncoated papers, with manufacturing
operations in North America, Europe, Latin America, Russia, Asia
and North Africa.
Per the deal, Highwoods will build a 9-story Class A office
building spanning 241,000 square foot with structured parking on
Poplar Avenue corridor submarket - the best business district
('BBD') of Memphis. As a matter of fact, the new to-be-build
property will be positioned directly across the street from
International Place, International Paper's global headquarter and
Highwoods' projects to invest around $56.1 million for the
construction project, which includes land acquired by the company
exclusively for this development. The construction of the
property, which is 100% pre-leased to International Paper, is
anticipated to commence in the fourth quarter of 2013. Highwoods
expects the project to be completed by the second quarter of
Memphis is one of the chief markets of Highwoods, with Poplar
Avenue corridor submarket being the significant area of
operation. In particular, the company currently owns 1.3 million
square feet in Memphis' Poplar Avenue corridor submarket. As a
whole, Highwoods' Memphis portfolio comprises 2.0 million square
feet of office space, which was 86.5% occupied at the end of
We expect the abovementioned deal to boost Highwoods' presence in
the Poplar Avenue corridor submarket. Also, it is expected to
enhance the company's top-line growth and prove accretive to the
earnings going forward.
Highwoods currently holds a Zacks Rank #3 (Hold). Other REITs
that are performing better include
Omega Healthcare Investors, Inc.
carrying a Zacks Rank #1 (Strong Buy) and
Cousins Properties Inc.
with a Zacks Rank #2 (Buy).