Highwoods Properties Inc.
) disclosed the sale of 16 industrial buildings spanning 1.7
million square feet as well as 13 usable acres of
industrial-zoned land in Atlanta for $91.6 million. With this
sale, the company finally exited its Atlanta industrial
portfolio. The company would record a gain of around $37 million
in the third quarter from this disposition.
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Notably, Highwoods vended $140 million Atlanta industrial assets
spanning 2.7 million square feet and 28 usable acres of
industrial-zoned land, year-to-date, and gained around $50
As a matter of fact, Highwoods is actively repositioning its
portfolio and shedding off non-core assets. Amid a strong pricing
environment, the company exited the Atlanta industrial market in
order to shift its portfolio mix and build a high-quality office
assets portfolio by leveraging the growing office market
fundamentals in the region.
In its second-quarter 2013 conference call, management announced
that growth in jobs in the Atlanta market has resulted in almost
5 million square feet of office absorption in the past two years.
Therefore, along with asset divestitures, Highwoods acquired $376
million of trophy office assets in Atlanta over the past two
years, Alliance Center towers and Riverwood 100 being the
The Buckhead region, in particular, has witnessed a significant
recovery driven by organic growth as well as corporate
relocations from other states and other Atlanta submarkets. This
is leading to a rise in effective rents and Highwoods stands to
capitalize on it given its wholly-owned space of over 1 million
square feet there.
We expect these strategic dispositions and opportunistic buyouts
to help the company strengthen its position in vibrant office
markets of the U.S. and ride on the growth curves.
Highwoods currently carries a Zacks Rank #2 (Buy). Other
promising stocks include
Sotherly Hotels Inc.
Sovran Self Storage Inc.
SL Green Realty Corp
). While Sotherly carries a Zacks Rank #1 (Strong Buy), Sovran
Self Storage and SL Green Realty have a Zacks Rank #2 (Buy).