Subscribe to Entrepreneur for $5
Subscribe

Highwoods Properties (HIW) Closes Portfolio Sale in Atlanta

The sale of office properties in Atlanta is in sync with Highwoods Properties' (HIW) strategy to redeploy its proceeds for growth endeavors.

By
This story originally appeared on Zacks

Highwoods Properties, Inc. HIW recently announced the sale of two office buildings in Atlanta. With such moves, the company prunes its portfolio, enhances the overall portfolio quality and funds growth initiatives.

- Zacks

The property sold encompasses a 248,000-square-foot office building, 5405 Windward Parkway, and a 145,000-square-foot office building, 50 Glenlake. While the first building was sold for $48 million, the second was disposed for $20.6 million.

In addition to these, Highwoods expects to close the sale of the three non-core buildings enclosing 366,000 square feet for $65.5 million before this year end.

These five office properties are 78% occupied on aggregate basis. All were projected to generate $7.8 million of GAAP net operating income and $7.3 million of cash net operating income in 2021.

Highwoods has been making efforts to expand its footprint in the high-growth markets and improve its portfolio quality. In sync with such initiatives, it is following a disciplined capital-recycling strategy that entails disposal of non-core assets while investing the proceeds in premium asset acquisitions and for undertaking accretive developmental projects.

InJuly, Highwoods acquired a portfolio of office properties from Preferred Apartment Communities APTS for $683 million. This acquisition offered the companya scope to enter two high-barrier-to-entry BBD’s of SouthPark in Charlotte and North Hills in Raleigh.

Per management, “With these sales, we will have closed on $297 million of dispositions since we first announced our $683 million acquisition of trophy office assets in the high-growth markets of Charlotte and Raleigh from Preferred Apartment Communities.”

The company plans to accelerate itsnon-core asset disposition amounting to $500-$600 million by mid-2022to match-fund the acquisition and expects half of its disposition to close by this year-end.

Highwoods also expects to return its balance-sheet metrics top re-acquisition levels within mid-2022 by improving its portfolio quality and providing a higher growth opportunity for its shareholders.

This presently Zacks Rank #2 (Buy) company has underperformed its industry over the past six months. Shares of Highwoods have appreciated 6% while the industry has rallied 9.8% during this period.

Zacks Investment ResearchImage Source: Zacks Investment Research

Other Stocks to Consider

The Zacks Consensus Estimate for CubeSmart’s CUBE 2021 FFO per share has moved marginally north to $2.05 in the past week. The company carries a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Extra Space Storage Inc. EXR carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised marginally upward to $6.62 over the past month.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

 



Infrastructure Stock Boom to Sweep America

A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.

The only question is “Will you get into the right stocks early when their growth potential is greatest?”

Zacks has released a Special Report to help you do just that, and today it’s free. Discover 7 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.

Download FREE: How to Profit from Trillions on Spending for Infrastructure >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

 

Highwoods Properties, Inc. (HIW): Free Stock Analysis Report

 

Extra Space Storage Inc (EXR): Free Stock Analysis Report

 

CubeSmart (CUBE): Free Stock Analysis Report

 

Preferred Apartment Communities, Inc. (APTS): Free Stock Analysis Report

 

To read this article on Zacks.com click here.

 

Zacks Investment Research