Real estate investment trust -
Highwoods Properties Inc.
) - has been selected by Biologics, Inc., a privately-held
oncology services company, to construct the latter's new
headquarters in the mixed-use Weston planned unit development
(PUD) in Cary, N.C. A long-term build-to-suit lease deal has
already been penned by Highwoods with Biologics in this context.
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This 100% pre-leased development project is expected to be
accomplished in the second quarter of 2015. It will span 75,000
square foot and consists of a three-story Class A office building
with surface parking. Highwoods plans to make an investment of
around $14.9 million.
With Biologics expanding rapidly, we believe the deal is a
strategic fit for Highwoods to augment its top line. Highwoods
has a growing property portfolio in Weston and currently owns 8
buildings spanning 745,000 square feet in this area. On an
average, occupancy at these buildings stand at 95%.
Moreover, the company is constructing
) estimated $110 million, 100% pre-leased Global Technology &
Operations Hub in Weston. This includes 2 buildings comprising
427,000 square feet. An additional 94 acres of development land
in Weston is also owned by Highwoods.
Including the Biologics project, Highwoods' development pipeline
now comprises 1.0 million square feet. This reflects an
investment worth $227 million and this pipeline is 85.6%
pre-leased. Clearly, the strong pre-leasing activity reflects the
high demand for the company's properties.
Highwoods is scheduled to release its 2013 fourth-quarter results
on Feb 10, after the market closes. The Zacks Consensus Estimate
for fourth-quarter funds from operations (FFO) is currently
pegged at 73 cents per share, representing a year-over-year
increase of 7.35%.
The Earnings ESP for Highwoods is +1.37 %. This is because the
Most Accurate estimate stands at 74 cents while the Zacks
Consensus Estimate is lower at 73 cents. In addition, Highwoods'
Zacks Rank #3 (Hold) enhances the predictive power of ESP. This
combination of its Zacks Rank and Earnings ESP makes us confident
of an earnings surprise call in the to-be-reported quarter.
Investors interested in the REIT industry may also consider
Getty Realty Corp.
Pebblebrook Hotel Trust
). Both these stocks carry a Zacks Rank #1 (Strong Buy).