Highwoods Properties, which has been seeking ways to take advantage of its strong balance sheet, announced today that it has invested $300 million to acquire properties in Pittsburgh and Atlanta.
The Pittsburgh acquisition is particularly noteworthy for the Raleigh real estate investment trust, as it represents the first new market Highwoods has entered since 1998, when it bought property in Kansas City.
Highwoods is among the largest office landlords in the Southeast.
The REIT paid $214.1 million for PPG Place in Pittsburgh, a six building complex that includes 1.54 million square feet of office space.
That price includes $17.1 million in planned building improvements and $8.1 million in tenant improvements that were promised under existing leases.
PPG Place is 81.2 percent leased.
In Atlanta, Highwoods bought Riverwood 100, a 24-story building with half a million square feet of office space, for $86.3 million.
That price includes $5.6 million in planned building improvements and $2.4 million in tenant improvements.
Riverwood 100 is 87 percent leased.
"We have dramatically improved the quality of our portfolio, primarily through the sale of non-core assets and the development of Class A office buildings," Highwoods CEO Ed Fritsch said in a release.
Fritsch told analysts this summer that Highwoods expected to spend as much as $300 million buying new buildings this year.
Under a 2005 strategic plan, the company shed many of its older assets at the peak of the market and thus entered the economic downturn with a healthier balance sheet than many other office landlords.
Since 2005, Highwoods has sold a billion dollars of older assets, the majority of them between 2005 and 2007.
The company used that money to finance $740 million in new development and to pay down debt.
Class A office buildings now make up 68 percent of Highwoods office portfolio, up from 38 percent in early 2005.
Highwoods 32.7-million-square-foot portfolio was 89.9 percent occupied at the end of June, up from 89.3 percent during the same period a year ago.