RALEIGH, N.C., May 09, 2022 (GLOBE NEWSWIRE) — Highwoods Properties, Inc. (NYSE:HIW) announces two planned acquisitions that will further strengthen its Best Business District (“BBD”) presence and development prospects in the Charlotte market.
First, the Company has agreed to acquire 650 South Tryon at Legacy Union in Charlotte’s Uptown CBD submarket for a total expected investment of $203 million, including $3.9 million of anticipated leasing capital expenditures to bring the property to stabilization. 650 South Tryon, which delivered in late 2020 and is currently 78% leased, is a trophy, LEED gold-certified office building encompassing 367,000 square feet. 650 South Tryon is immediately adjacent and connected to Highwoods-owned Bank of America Tower at Legacy Union, a trophy, LEED gold-certified office building encompassing 841,000 square feet that delivered in 2019.
The Company’s total investment is net of $5.1 million of free rent and other rent-related credits anticipated to be received from the seller at closing. The Company noted that under GAAP, such credits are recorded as a reduction in the investment cost rather than as rental income. The Company estimates annual GAAP and cash net operating income to be approximately $11.2 million and $10.8 million, respectively, upon stabilization, which is projected to occur during 2024.
The acquisition of 650 South Tryon, which is subject to customary closing conditions, is scheduled to close in the third quarter. The Company is posting earnest money deposits in the amount of $22.5 million that are non-refundable except in limited circumstances.
Second, the Company has agreed to acquire a mixed-use development site located at 1426 South Tryon Street in the heart of Charlotte’s dynamic South End submarket for $27 million. 1426 South Tryon is tentatively planned for a mixed-use development consisting of approximately 300,000 square feet of future office and 250 apartment units. The site’s existing low-rise building totaling 24,000 square feet is 57% leased to customers on short-term leases.
The acquisition of 1426 South Tryon, which is also subject to customary closing conditions, is scheduled to close in the second quarter. The Company has posted earnest money deposits in the amount of $6.1 million that are non-refundable except in limited circumstances.
Ted Klinck, President and CEO, stated, “Less than three years ago, we announced our plan to enter the dynamic Charlotte market, which had been at the top of our list for future market expansion. With the acquisition of 650 South Tryon at Legacy Union, our high-quality Charlotte portfolio, which encompasses nearly 2.0 million square feet in two BBDs, Uptown and SouthPark, will account for more than 10% of our overall NOI. Plus, with a very well-located mixed-use development site in the heart of the South End BBD, we are now poised to use our proven development expertise to capitalize on further growth in Charlotte.”
About Highwoods
Highwoods Properties, Inc., headquartered in Raleigh, 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 office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. For more information about Highwoods, please visit our website at www.highwoods.com.
