$94 Million Anticipated Total Investment
205,000 Square Feet of Office, 16% Pre-Leased
13,000 Square Feet of Amenity Retail
RALEIGH, N.C., Nov. 08, 2021 (GLOBE NEWSWIRE) — Highwoods Properties, Inc. (NYSE:HIW) will begin construction of GlenLake III in Raleigh, a LEED and Fitwel-certified, multi-customer development that will encompass 218,000 square feet, including 205,000 square feet of office space and 13,000 square feet of retail and restaurant space.
The Company’s projected investment is $94.4 million, including the value of existing Company-owned land. Construction is scheduled to begin in the fourth quarter of 2021, with targeted completion in the third quarter of 2023 and projected stabilization in the first quarter of 2026. Highwoods has pre-leased 16% of the office portion to McKim & Creed, a national engineering and surveying firm based in Raleigh, for its corporate headquarters. This mixed-use project is the latest example of Highwoods work-placemaking strategy.
Highwoods has developed five office buildings from 2001 through 2020 in GlenLake encompassing 732,000 square feet that are a combined 98% occupied. The most recent project, GlenLake VII, is a 125,000 square foot, 100% occupied office building that was placed in service in the first quarter of 2021, three quarters ahead of the original projected stabilization date.
Ted Klinck, President and CEO of Highwoods, stated “Our GlenLake development in Raleigh’s Glenwood BBD is a well-established and highly-desirable infill location with significant demand for high-quality office space, as demonstrated by the 98% occupancy rate across our existing 732,000 square foot in-service portfolio. Our two most recent developments in GlenLake were both started with partial pre-leasing from anchor customers and are now 100% occupied.
We are excited McKim & Creed, a long-standing and thriving Raleigh company and new customer for Highwoods, has chosen GlenLake III for its corporate headquarters, and we look forward to building a long-lasting relationship with them. Our Raleigh team has done an excellent job with our GlenLake properties and this new lease illustrates the healthy demand we’re seeing at GlenLake and across the Raleigh market.”
John Lucey, PE, CEO and Board Chair of McKim and Creed, said “Working with the Highwoods team has made this an easy and seamless process for our firm. This new location will provide all of our employee-owners with a modern and collaborative working environment. It will offer us a pleasant workspace to enhance our enjoyable work culture, help us attract new talent and accommodate our surveying team’s unique storage and access needs.”
About McKim & Creed
McKim & Creed is an employee-owned engineering and surveying firm with more 700 staff members in offices throughout the U.S. McKim & Creed is ranked among the top 150 design firms and environmental firms in the U.S. by Engineering News-Record. McKim & Creed specializes in airborne and mobile LiDAR/scanning; unmanned aerial systems; subsurface utility engineering; hydrographic and conventional surveying services; civil, environmental, mechanical, instrumentation, plumbing, and structural engineering; and industrial design-build services for the energy, transportation, government, land development, healthcare, industrial and water industries. www.mckimcreed.com.
Highwoods Properties, Inc., headquartered in Raleigh, 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 office REIT 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 about Highwoods, please visit our website at www.highwoods.com.
Some of the information in this press release may contain forward-looking statements. Such statements include, in particular, statements about the planned development of the building described above and anticipated total investment, projected leasing activity and expected timing and impact of the building to be developed. You can identify forward-looking statements by our use of 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 in or suggested by such forward-looking statements are reasonable, we cannot assure you that our plans, intentions or expectations will be achieved.
When considering such forward-looking statements, you should keep in mind important factors that could cause our actual results to differ materially from those contained in any forward-looking statement, including the following: the extent to which the ongoing COVID-19 pandemic impacts our financial condition, results of operations and cash flows depends on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic and its impact on the U.S. economy and potential changes in customer behavior that could adversely affect the use of and demand for office space; the financial condition of our customers could deteriorate or further worsen, which could be further exacerbated by the COVID-19 pandemic; our assumptions regarding potential losses related to customer financial difficulties due to the COVID-19 pandemic could prove incorrect; counterparties under our debt instruments, particularly our revolving credit facility, may attempt to avoid their obligations thereunder, which, if successful, would reduce our available liquidity; we may not be able to lease or re-lease second generation space, defined as previously occupied space that becomes available for lease, quickly or on as favorable terms as old leases; we may not be able to lease newly constructed buildings as quickly or on as favorable terms as originally anticipated; we may not be able to complete development, acquisition, reinvestment, disposition or joint venture projects as quickly or on as favorable terms as anticipated; development activity in our existing markets could result in an excessive supply relative to customer demand; our markets may suffer declines in economic and/or office employment growth; unanticipated increases in interest rates could increase our debt service costs; unanticipated increases in operating expenses could negatively impact our operating results; natural disasters and climate change could have an adverse impact on our cash flow and operating results; 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 repay or refinance outstanding debt upon maturity; and the Company could lose key executive officers.
This list of risks and uncertainties, however, is not intended to be exhaustive. You should also review the other cautionary statements we make in “Risk Factors” set forth in our 2020 Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on forward-looking statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements to reflect any future events or circumstances or to reflect the occurrence of unanticipated events.
|Executive Vice President of Finance and Treasurer|