Highwoods Properties Acquires One Alliance Center in Atlanta
Sister Building to Highwoods-Owned Two Alliance Center; Now
Wholly-Owns Over One Million Contiguous Square Feet in Buckhead
RALEIGH, NC -- (Marketwired) -- 06/24/13 -- Highwoods Properties,
Inc. (NYSE: HIW)
One Alliance Center
$143.4 Million Total Investment, $259 per Square
Leverage Ratio Remains Under 44%
$63.0 Million of Equity Raised
Since May 1st Earnings Call
Highwoods Properties, Inc. (NYSE: HIW) has acquired One Alliance
Center, the sister building to Two Alliance Center, which the Company
acquired in September 2012. The Company now wholly owns 1,045,000
contiguous square feet of Class A office space in the heart of the
Buckhead submarket of Atlanta. On a combined basis, the Company's
total investment in One and Two Alliance Center, including planned
building improvements, is $278 per square foot, a 15% discount to
estimated replacement cost.
The Company's total investment in One Alliance Center is expected to
be $143.4 million, or $259 per square foot, which consists of the
purchase price plus $2.9 million of planned near-term building
improvements and $0.4 million of future tenant improvements committed
under existing leases. One Alliance Center is currently 67% occupied
and is expected to generate first year cash net operating income from
existing customers of $6.2 million, before $1.1 million of free rent.
First year GAAP net operating income from existing customers is
expected to be $7.0 million. The Company also noted that
approximately $0.5 million of acquisition costs will be expensed in
the second quarter.
Ed Fritsch, president and chief executive officer of Highwoods,
stated, "We are excited to now own both One Alliance and Two
Alliance. Alliance Center is one of the most competitively-advantaged
locations in Buckhead given its controlled and easy access to Georgia
400 and Peachtree Road, walkability to the Buckhead Marta Rail
Station and close proximity to Phipps Plaza and Lenox Square Mall,
two upscale malls.
The acquisition of One Alliance more than doubles our presence in
Buckhead where we now wholly-own over one million square feet of
contiguous Class A office space. This is a rapidly tightening
submarket and we forecast leasing at One Alliance to exceed 93%
within three years. In addition, we see opportunities to
"Highwoodtize" the property and expect to garner operating and
leasing synergies by owning both Alliance Center towers through
shared parking, shared amenities, shared vendor agreements and
customer expansions to name a few."
The Company funded the acquisition of One Alliance Center with
proceeds from its ATM program, non-core dispositions and borrowings
under its revolving credit facility. No debt was assumed in
connection with this transaction. Following closing, the Company's
leverage ratio, including preferred stock, remains under 44%.
ATM Program Update
Subsequent to its May 1, 2013 earnings conference
call, the Company has sold 1,656,590 shares of common stock at an
average gross sales price of $38.60 per share, raising net proceeds
after sales commissions of $63.0 million.
Alliance Center Presentation
A brief presentation outlining this
transaction can be accessed through the link below or on the Investor
Relations section of the Company's web site at www.highwoods.com.
About Highwoods Properties
Highwoods Properties, headquartered in
Raleigh, North Carolina, is a publicly traded (NYSE: HIW) real estate
investment trust ("REIT") and a member of the S&P MidCap 400 Index.
The Company is a fully integrated, self-administered REIT that
provides leasing, management, development, construction and other
customer-related services for its properties and for third parties.
At March 31, 2013, Highwoods owned or had an interest in 334
in-service office, industrial and retail properties encompassing
approximately 35.0 million square feet and owned 649 acres of
development land. The Company's properties and development land are
located in Florida, Georgia, Missouri, North Carolina, Pennsylvania,
South Carolina, Tennessee and Virginia. For more information about
Highwoods Properties, please visit our website at www.highwoods.com.
Certain matters discussed in this press release and referenced
presentation, such as anticipated total investment, projected leasing
activity, estimated replacement cost and expected net operating
income of acquired properties, are forward-looking statements within
the meaning of the federal securities laws. These statements are
distinguished by use of the words "will", "expect", "intend" and
words of similar meaning. Although Highwoods believes that the
expectations reflected in such forward-looking statements are based
upon reasonable assumptions, it can give no assurance that its
expectations will be achieved.
Factors that could cause actual results to differ materially from
Highwoods' current expectations include, among others, the following:
the financial condition of our customers could deteriorate;
development activity by our competitors in our existing markets could
result in excessive supply of properties relative to customer demand;
development, acquisition, reinvestment, disposition or joint venture
projects may not be completed as quickly or on as favorable terms as
anticipated; we may not be able to lease or re-lease second
generation space quickly or on as favorable terms as old leases; our
markets may suffer declines in economic growth; we may not be able to
lease our newly constructed buildings as quickly or on as favorable
terms as originally anticipated; unanticipated increases in interest
rates could increase our debt service costs; unanticipated increases
in operating expenses could negatively impact our NOI; we may not be
able to meet our liquidity requirements or obtain capital on
favorable terms to fund our working capital needs and growth
initiatives or to repay or refinance outstanding debt upon maturity;
the Company could lose key executive officers; and others detailed in
the Company's 2012 Annual Report on Form 10-K and subsequent SEC
Vice President, Investor Relations
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