$50.3M Combined Purchase Price
9.0 Acres (5.4-Acre and 3.6-Acre Parcels)
Zoned for Aggregate 1.2M Square Feet of Future Development
Plans to Develop Office Project in CBD Nashville
$252M Potential Total Highwoods Investment
479,000 Square Feet on Newly Acquired 5.4-Acre Parcel
RALEIGH, N.C., Feb. 06, 2018 (GLOBE NEWSWIRE) — Highwoods Properties, Inc. (NYSE:HIW) announced today it has acquired two development parcels totaling nine acres in the vibrant Gulch district in CBD Nashville, one of the city’s BBDs (Best Business Districts), for a combined purchase price of $50.3 million.
Highwoods used 1031 exchange funds held in escrow from dispositions closed in 2017 to acquire the two parcels, which are currently zoned and entitled for an aggregate of 1.2 million square feet of future office development.
Mr. Fritsch stated, “Having consumed a meaningful portion of our land inventory over the past several years with our robust development pipeline, we are pleased to reinvest these 1031 proceeds to bolster our land inventory.
“In downtown Nashville, with our Pinnacle at Symphony Place and recently delivered Bridgestone Tower, we currently own over one million square feet that is 100% occupied. These newly acquired land parcels in the vibrant Gulch district in CBD Nashville are well-situated amongst a strong and growing base of attractive amenities, have competitively-advantaged ingress and egress and provide efficient access to Nashville’s highway system.”
Highwoods plans to develop an office project encompassing approximately 479,000 square feet, including street level retail, on the recently acquired 5.4-acre parcel, which is located at Church Street and 11th Avenue North and is valued at $24.6 million. The anticipated total cost of this potential build-to-suit development project is $252 million. The project is designed to consist of two structures, one of 8 stories and the other 7 stories, and will sit atop a 6 level structured parking podium, half of which will be below grade.
Highwoods is excited to announce that Asurion, the leader in technology solutions services and a new customer for Highwoods, plans to be the primary occupant of the project. The development would enable Asurion to consolidate four existing facilities around Nashville into a single downtown location. Along with housing most of Asurion’s corporate personnel, the location would serve as a global product and technology hub for Asurion’s innovation and development.
Construction of the planned project, which is subject to execution of a definitive lease with Asurion, is proposed to begin in the first quarter of 2019 with a third quarter 2021 targeted completion date.
Ed Fritsch, President and Chief Executive Officer of Highwoods Properties, said, “This signature project, being designed by the very talented team at Hastings Architecture Associates, is intended to reflect Asurion’s vision and forward thinking culture, fostering collaboration and bringing many of its team members under one roof. We’re excited to work with Asurion on the visioning of this important project.”
“We have been looking across the Nashville area for the right spot that would allow us to bring our teams together in one location to further encourage collaboration, rich dialogue and diverse perspectives, which are at the heart of Asurion’s entrepreneurial spirit,” said Asurion Chief Executive Officer Tony Detter. “Asurion has been part of Nashville’s vibrant growth for almost two decades and our consolidation into a facility in the heart of Nashville, further cements our commitment to this great city for the foreseeable future.”
Asurion helps more than 300 million people around the world unlock their technology’s untapped potential. We create innovative technology solutions that help keep consumers connected, from comprehensive protection to smart tech help that redefines expertise. Partnering with leading wireless carriers, retailers and pay-tv providers, Asurion’s 16,000 employees deliver a seamless, award-winning customer experience, anticipating their needs and providing tailored services reachable within one touch.
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. Highwoods is a fully-integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa. For more information about Highwoods, please visit our website at www.highwoods.com.
Disclosure Regarding Forward-Looking Statements
Certain matters discussed in this press release are forward-looking statements within the meaning of the federal securities laws, such as the planned development of the two buildings described above and anticipated total investment, projected leasing activity and expected timing and impact of the buildings to be developed. These statements are distinguished by use of the words “will,” “plan,” “anticipate,” “expect,” “intend” and words of similar meaning. Although Highwoods believes 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: because development of the two buildings described above is subject to execution of a definitive lease with Asurion, the development may not occur on the terms described in this press release or at all; development activity by competitors in 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; Highwoods may not be able to lease or re-lease second generation space quickly or on as favorable terms as old leases; Highwoods markets may suffer declines in economic growth; Highwoods may not be able to lease newly constructed buildings as quickly or on as favorable terms as originally anticipated; unanticipated increases in interest rates could increase debt service costs; unanticipated increases in operating expenses could negatively impact Highwoods net operating income; Highwoods may not be able to meet its liquidity requirements or obtain capital on favorable terms to fund its working capital needs and growth initiatives or to repay or refinance outstanding debt upon maturity; Highwoods could lose key executive officers; and others detailed in Highwoods 2017 Annual Report on Form 10-K and subsequent SEC reports.
Senior Vice President, Finance and Investor Relations