SOURCE: Highwoods Properties

Highwoods Properties

October 05, 2011 16:10 ET

Highwoods Properties Sells $21.5 Million of Assets

Non-Core Assets in Winston-Salem and 10% Equity Interest in Charlotte Joint Venture Investment

RALEIGH, NC--(Marketwire - Oct 5, 2011) - Highwoods Properties, Inc. (NYSE: HIW) today announced that on September 28 it sold a non-core, 80% leased office property in Winston-Salem and an adjacent, three-acre undeveloped site, for $15.0 million. The non-core building, located at 150 Stratford, is five-stories and encompasses 135,533 square feet. Prior to the sale, the building generated approximately $1.5 million of annual cash net operating income. The transaction valued the building at $13.7 million and the development land at $1.3 million.

Ed Fritsch, President and Chief Executive Officer of Highwoods Properties, said, "We are pleased to complete the sale of this non-core asset and use the proceeds to fund our continued focus on infill assets. Our efforts to methodically exit Winston-Salem are ongoing, and we have now reduced the square footage we own in this market from a peak of 2.8 million square feet to 773,000 square feet, a 72% reduction."

The Company also announced that USAA Real Estate Company exercised its option to purchase the Company's 10% unconsolidated equity interest in Highwoods Development B, LLC, a joint venture between the Company and USAA Real Estate. This joint venture developed a 171,000 square foot, five-story Class A office building for the GSA in Charlotte on behalf of the FBI. The Company received $6.5 million for this sale, which closed on September 30th. As a result, a merchant build gain of $2.3 million will be reflected in reported FFO for the third quarter of 2011.

"This development project for the GSA was a solid win for our Company, generating a 55% return on our equity investment. We also garnered an additional $1.3 million in development fees, which were recorded prior to the third quarter of 2011. USAA Real Estate has been a terrific, high-integrity partner and we look forward to teaming up with them in the future," stated Fritsch.

About Highwoods Properties
Highwoods Properties, headquartered in Raleigh, North Carolina, 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, self-administered REIT that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. Highwoods owns or has an interest in 337 in-service office, industrial and retail properties encompassing approximately 34.5 million square feet and 600 acres of development land. The Company's properties and development land are located in Florida, Georgia, Mississippi, Missouri, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our web site at www.highwoods.com.