Highwoods Properties, Inc. (HIW - Analyst Report), a real estate investment trust (REIT), recently entered into long-term agreements with three new customers to lease a total of 69,000 square feet at PPG Place office complex located in Pittsburgh.
As per the transaction, the company leased office space spanning 35,000 square feet and 18,000 square feet at PPG Place I and another office space spanning 16,000 square foot at PPG Place VI.
Situated in the heart of downtown Pittsburgh, PPG Place is a six-building Class A office complex of approximately 1.54 million square feet. The building already boasts a number of renowned tenants like PPG Industries Inc. (PPG - Analyst Report), H. J. Heinz Company , Allegheny Technologies Incorporated (ATI - Analyst Report), Deloitte & Touche, Morgan Stanley Smith Barney and Ernst & Young.
With the acquisition of PPG Place in September 2011, Highwoods debuted in the vibrant diversified market of Pittsburgh. The city is well known for its developed medicine, higher education, tourism, banking, corporate headquarters and high technology sectors.
Since the acquisition of PPG Place, the occupancy of the company’s overall portfolio has increased 240 basis points to 83.6%. The company is on track to increase occupancy by an additional 290 basis points to 86.5% by end of 2012, including the impact of the new lease agreements.
Based in Raleigh, North Carolina, Highwoods is one of the biggest owners and operators of suburban office, industrial and retail properties in the Southeastern and Midwestern U.S., providing a complete line of real estate services to its customers and third parties through a fully-integrated organization. The core markets of the company include Florida, Georgia, Maryland, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Virginia.
Recently, Highwoods reported second quarter 2012 adjusted FFO (Funds from Operations) of 70 cents, in line with the Zacks Consensus Estimate and 11.1% higher than the year-ago adjusted FFO of 63 cents. We presently have a long-term Neutral recommendation on the stock. Also, the company carries a Zacks #3 Rank, which translates into a short-term Hold rating.
Note: FFO, a widely accepted and reported measure of the performance of REITs, is derived by adding depreciation, amortization and other non-cash expenses to net income.