Highwoods Properties (HIW) Sold Preserve VII for $43M

Highwoods Properties, Inc. (NYSE: HIW) has sold Preserve VII, a 115,000 square foot single customer building in north Tampa, for $43.0 million. This property is 100% occupied and is projected to generate $2.0 million of annual cash net operating income, including the impact of $0.4 million of free rent, and $2.4 million of annual GAAP net operating income in 2021.

The Company expects to record a non-FFO gain of approximately $22.8 million in the second quarter of 2021 in connection with this sale.

Ted Klinck, President and Chief Executive Officer of Highwoods Properties, said, “This sale is the first closing in our plan to substantially fund our planned portfolio acquisition from PAC with proceeds from non-core asset sales. We are pleased with the execution of this sale and buyer interest in the non-core properties we currently have in the market. We’re looking forward to redeploying disposition proceeds into high growth BBDs in Charlotte and Raleigh via our planned portfolio acquisition.”

As previously disclosed, the Company has agreed to acquire a portfolio of office properties from Preferred Apartment Communities (PAC) for a total investment of $769 million, including the estimated value of non-core assets, planned near-term building improvements and transaction costs. The acquisition is expected to close during the third quarter of 2021. The Company’s plan is to ultimately fund the acquisition primarily by accelerating the sale of $500 to $600 million of existing non-core assets by mid-2022, approximately half of which is planned to close by year-end 2021. The Company expects to return its balance sheet metrics to March 31, 2021 levels by mid-2022.

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