Highwoods Properties Inc.
) recently inked a build-to-suit deal with
) for construction of offices for MetLife's global technology and
operations hub in the mixed-use Weston planned unit development
(PUD) in Cary, N.C. Weston spans 1,000 acres and is centrally
positioned in the Research Triangle, which houses several
The deal will strengthen Highwoods' cash flow position and its
ties with MetLife. Notably, Highwoods - the declarant of Weston
mixed-use PUD - currently owns 8 operating assets (95.7%
occupied) that span around 747,000 square feet in Weston.
Highwoods plans to invest about $110 million (which includes
the value of existing owned land), for development of this 100%
pre-leased project. As per the deal, the company will
construct 2 LEED-certified office buildings, spanning 213,500
square feet each, on 26.5 acres of a 40-acre Highwoods-owned
site. This site is located in proximity to I-40 and
Raleigh-Durham International Airport. The construction is
expected to commence in late 2013 and will be completed during
the first half of 2015.
Management remains upbeat about the long-term lease with a
high-end customer like MetLife. This will provide steady rental
revenues going forward. Moreover, the company expects to develop
a third building on the 13.5 acres of waterfront land located
Including this build-to-suit project with MetLife, Highwoods'
total development pipeline (96% pre-leased) now has 928,000
square feet of wholly-owned projects and 215 multi-family units,
in a 50% owned joint venture. The total investment now stands at
approximately $238 million.
We expect the above-mentioned deal to drive the company's
top-line growth and strengthen its position in one of the most
vibrant office markets of the U.S.
Highwoods currently carries a Zacks Rank #2 (Buy). Other
better performing REITs include
SL Green Realty Corp
). Both these stocks have the same Zacks Rank as
EASTGROUP PPTYS (EGP): Free Stock Analysis
HIGHWOODS PPTYS (HIW): Free Stock Analysis
METLIFE INC (MET): Free Stock Analysis Report
SL GREEN REALTY (SLG): Free Stock Analysis
To read this article on Zacks.com click here.