Back to top

Analyst Blog

Highwoods Properties Inc. (HIW - Analyst Report) declared the acquisition of its joint venture (JV) partner’s interests in 2 Atlanta-based Class Aoffice properties. Concurrently, the company revealed the divestiture of its Tampa-based non-core office asset. These moves are part of the company’s ongoing portfolio enhancement activity.

Acquisition Details

In particular, Highwoods bought its JV partner’s 57% interest in 10-story office buildings – Glenlake North and Glenlake South – positioned in Atlanta's Central Perimeter submarket. The 82% leased properties, spanning 505,000 square feet, were acquired for $45.4 million.

With the valuation at $80.6 million, including planned near-term building improvements worth $1.0 million, the assets have a value per square foot of $159, signifying a 30+% discount to the estimated replacement cost. Moreover, the total incremental investment is projected to be around $46.0 million. Management expects the acquired properties to generate full-year cash and GAAP net operating income of $5.1 million and $6.0 million, respectively.

The assumed secured debt portion for the property is projected to be around $37.6 million. The company funded the remaining equity portion, worth $24.0 million, of the purchase price with proceeds generated from its recent equity offering of shares, non-core divestitures and borrowings under its revolving credit facility. Notably, management projects about $0.2 million of acquisition costs to be expensed in the third quarter of 2013.

Divestiture Details

Highwoods divested a 2-story non-core office building – Anchor Plaza – in Tampa. The 56% leased asset, spanning 98,000 square feet, was sold for $11.6 million and generated a non-FFO gain of $1.2 million.


We expect Highwoods’ portfolio repositioning activity to boost the company’s occupancy growth and strengthen its position in one of the best office markets of the U.S. Year-to-date, Highwoods has vended non-core assets worth $80 million and acquired high-quality properties worth $396 million. Moreover, the company has another $129 million in its in-process development pipeline (93% pre-leased).

Highwoods currently carries a Zacks Rank #2 (Buy). Other better performing REITs include Winthrop Realty Trust (FUR - Snapshot Report), SL Green Realty Corp (SLG - Snapshot Report) and EastGroup Properties (EGP - Snapshot Report). While Winthrop carries a Zacks Rank #1 (Strong Buy), SL Green and EastGroup both have a Zacks Rank #2.  

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UTD THERAPE… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
RF MICRO DE… RFMD 12.47 +6.04%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%