Highwoods Properties Inc. (
- a hybrid real estate investment trust (REIT) - announced the
sale of two non-core office assets to an undisclosed buyer. The
properties - Metrowest Commerce Center and the Cambridge at
Metrowest - were sold for a combined cost of $14.6 million. This
strategic move is at par with the company's ongoing portfolio
The abovementioned properties span 134,000 square feet and are
fully occupied by Hilton Grand Vacations Company LLC. Highwoods,
which will continue to manage the properties, expect these to
generate net operating income of $1.3 million in 2013.
Highwoods is currently repositioning its portfolio to focus on
stronger long-term markets and newer assets. A large part of its
portfolio is now concentrated in the high-growth Sun Belt
markets, which provide above-average job growth owing to
long-term demographic trends.
Accordingly, in early January Highwoods acquired two new Class A
Greensboro-based office buildings for $32.8 million from a
CBL & Associates Properties Inc. (
- a retail REIT. Also, the purchase of EQT Plaza - a class A
multi-tenant office building - is worth mentioning as it expanded
the company's footprint in downtown Pittsburgh by 40%.
We expect the divesture to improve Highwoods' office portfolio in
Orlando and enable it to outperform competitive pressure. With
the aforesaid assets sale, the company now has around 15 office
properties in the city, comprising mainly of Class A CBD (Central
Business District) properties.
Highwoods is scheduled to release its fourth-quarter 2012 results
on Feb 12, after the market closes. The Zacks Consensus Estimate
for the company's fourth-quarter FFO is currently pegged at 68
cents per share.
Zacks Earnings ESP (Read:
Zacks Earnings ESP: A Better Method
) for Highwoods is 0.0% for the fourth quarter. This reduces the
chance for a positive earnings surprise, despite the fact that
the company carries a Zacks Rank #2 (Buy).
Other two real estate REITs -
Simon Property Group Inc. (
Ventas Inc. (
- carry the same Zacks Rank.
Note: FFO, a widely accepted and reported measure of the
performance of REITs is derived by adding depreciation,
amortization and other non-cash expenses to net income.
CBL&ASSOC PPTYS (CBL): Free Stock Analysis
HIGHWOODS PPTYS (HIW): Free Stock Analysis
SIMON PROPERTY (SPG): Free Stock Analysis
VENTAS INC (VTR): Free Stock Analysis Report
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