RALEIGH, NC--(Marketwire - Dec 4, 2012) - Highwoods Properties, Inc. (
The Company's investment is expected to be $99.2 million, which includes $8.0 million of planned building improvements. The property is expected to generate full year 2013 cash and GAAP net operating income of $7.0 million and $8.8 million, respectively. The Company noted that $0.5 million of expensed acquisition costs will be recorded in the fourth quarter. Also, EQT Plaza is on a ground lease with 111 years of remaining term and annual rent of $1.0 million.
Ed Fritsch, president and chief executive officer of Highwoods, stated, "We are thrilled to expand our footprint by 40% in downtown Pittsburgh with the acquisition of another Class A office building. EQT Plaza's proximity to PPG Place, less than three blocks away, will enable us to garner a number of operating synergies and will heighten the Highwoods brand in downtown Pittsburgh. There are also opportunities to 'Highwoodtize' this property, further enhancing its appeal to current and prospective customers."
"Our investment in Pittsburgh has already exceeded our expectations. The downtown market is thriving, with competitive Class A office properties 94% leased. Occupancy at PPG Place is now expected to increase from 81.2% at acquisition to over 88% at year-end."
The Company funded this transaction with proceeds from its ATM program, non-core dispositions and borrowings under its revolving credit facility. No debt was assumed in connection with the transaction. Following closing, the Company's leverage ratio remains under 45%, well within its stated comfort zone.
The Company acquired 100% control of EQT Plaza as a result of its acquisition of Liberty Avenue Mezzanine, LLC in a business transaction that did not involve a deed transfer. Liberty Avenue Mezzanine, LLC was originally formed in January 2005.
A brief presentation highlighting 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 (
Certain matters discussed in this press release and referenced presentation, such as anticipated total investment, 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 2011 Annual Report on Form 10-K and subsequent SEC reports.