Highwoods announces $ 56 million in additional non-core assets

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RALEIGH, NC, December 29, 2021 (GLOBE NEWSWIRE) – Highwoods Properties, Inc. (NYSE: HIW) sold 4421 and 4401 Waterfront Drive, two 97,000 square foot non-core office buildings in Richmond, for $ 20.8 million. In addition, the Company sold Progress Center, which consists of two 147,000 square foot in-service non-core office buildings and an associated development parcel in Raleigh, for $ 35.0 million.

On a combined basis, the four office buildings in use were 76% occupied as at September 30, 2021 and are expected to generate $ 2.7 million in GAAP net operating income and $ 2.6 million in cash operating income in 2021. .

The company also closed the previously announced plan to sell three non-essential buildings for a combined purchase price of $ 65.9 million. These sales, initially announced on November 8, 2021, involved Smoketree and Cottonwood, two 191,000 square foot office buildings in Raleigh, for $ 35.5 million and Preserve V, a 175,000 square foot office building in Tampa, for $ 30.4 million.

During the fourth quarter of 2021, the Company expects to record total earnings of approximately $ 92.9 million, including non-FFO earnings of approximately $ 83.5 million and FFO earnings of approximately 9. , $ 4 million.

Since the Company first announced the acquisition of a portfolio of office assets from Preferred Apartment Communities, Inc. (“PAC”), the Company has sold 1,562,000 square feet of non-core assets. for a combined sale price of $ 353 million.

Ted Klinck, President and CEO of Highwoods Properties, said: “We are pleased to have already closed $ 353 million of non-core divestitures since we first announced our acquisition of $ 683 million of trophy office assets in the high growth markets of Charlotte and Raleigh from PAC. We are ahead of schedule, having forecast $ 250-300 million in non-core disposals by the end of 2021. Our asset recycling has improved the quality of our portfolio, reduced the risk of our leases expiring , strengthened our short-term cash flow and strengthened our long-term growth trajectory. As a result, we are also on track with our plan to return our balance sheet metrics to pre-acquisition levels by mid-2022, as we remain committed to maintaining a fortress balance sheet. “

About Highwoods

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly traded real estate investment trust (“REIT”) (NYSE: HIW) and a member of the S&P MidCap 400 Index. The Company is a fully office-based REIT. integrated company 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 on Highwoods, please visit our website at www.highwoods.com.

Forward-looking statements

Certain information contained in this press release may contain forward-looking statements. These statements include, in particular, statements about our plans, strategies and prospects such as the following: the expected sales of non-core assets and the expected prices and impact of such sales, including the tax impact of such sales ; expected financial and operating results and related assumptions underlying our expected results, including, but not limited to, potential losses related to customer hardship, intended use of buildings and expected economic activity in reason for COVID-19; the continued ability to borrow under the Company’s revolving credit facility; the total planned investment, the expected rental activity, the estimated replacement cost and the expected net operating income of the buildings acquired and buildings to be developed; and the expected future leverage effect of the Company. You can identify forward-looking statements by using forward-looking terminology such as “may”, “will”, “expect”, “anticipate”, “estimate”, “continue” or other similar words. Although we believe that our plans, intentions and expectations reflected or suggested by these forward-looking statements are reasonable, we cannot assure you that our plans, intentions or expectations will be realized.

When reviewing these forward-looking statements, you should be aware of important factors that could cause our actual results to differ materially from those contained in any forward-looking statement, including the following: buyers may not be available and prices may not be adequate with respect to planned disposals of non-core assets; the comparable selling data on which we have based our expectations regarding the selling price of non-core assets may not reflect current market trends; The extent to which the ongoing COVID-19 pandemic is affecting our financial condition, results of operations and cash flow depends on future developments, which are very uncertain and cannot be predicted with confidence, including the extent, the severity and duration of the pandemic and its impact on the US economy and potential changes in customer behavior that could negatively affect the use and demand for office space; the financial situation of our customers could deteriorate or deteriorate further, which could be further exacerbated by the COVID-19 pandemic; our assumptions regarding potential losses related to customer financial hardship due to the COVID-19 pandemic may prove to be incorrect; counterparties to our debt instruments, in particular our revolving credit facility, may attempt to evade their obligations under them which, if successful, would reduce our available liquidity; we may not be able to rent or re-let second generation space, defined as previously occupied space that becomes available for rent, quickly or on terms as favorable as old leases; we may not be able to lease newly constructed buildings as quickly or on such favorable terms as originally planned; we may not be able to complete development, acquisition, reinvestment, divestiture or joint venture projects as quickly or on terms as favorable as expected; development activity in our existing markets could result in excess supply relative to customer demand; our markets may experience declines in economic and / or office employment growth; unanticipated increases in interest rates could increase our debt service charges; unforeseen increases in operating expenses could have a negative impact on our operating results; natural disasters and climate change could negatively impact our cash flow and results of operations; we may not be able to meet our liquidity needs or obtain capital on favorable terms to fund our working capital needs and growth initiatives or to repay or refinance outstanding debt when due; and the Company could lose key executives.

However, this list of risks and uncertainties is not intended to be exhaustive. You should also review the other caveats we make in the “Risk Factors” set out in our 2020 Annual Report on Form 10-K. In view of these uncertainties, you should not place undue reliance on forward-looking statements. We assume no obligation to publish the results of any revision of these forward-looking statements to reflect future events or circumstances or to reflect the occurrence of unforeseen events.

Contact:
Brendan Maiorana
Executive Vice President of Finance and Treasurer
[email protected]
919-872-4924


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