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Jefferies upgrades Highwoods to buy

Analysts at Jefferies have upgraded Highwoods Properites (HIW) to a buy rating, saying the Raleigh real estate investment trust should benefit from an improving jobs picture and the rolling over of leases that were signed during the recession.

Jefferies put a 12-month price target of $40 per share on the stock, up from $35 per share. Highwoods shares were trading at $34.50 this afternoon.

In addition to benefiting from an improving economy, Highwoods also should see increased acquisition and development opportunities, Jefferies said. The stock is also attractive because it offers a 5 percent dividend.

Many of the leases Highwoods signed in 2008 and 2008 were 5-year terms, Jefferies notes, meaning the company should benefit as those leases are renewed at higher rates in 2013 and 2014.

"We believe HIW stands to benefit the most out of its suburban peers given its high quality assets, clean balance sheet, and solid management team," the analysts wrote.

"While some challenges remain, particularly the backfill of the AT&T and PwC space in Atlanta and Tampa, respectively, we believe that positive outcomes for both of these spaces could be a significant positive catalyst for HIW stock."

Highwoods third quarter earnings beat Wall Street estimates

Highwoods Properties reported third-quarter earnings late Tuesday that beat Wall Street estimates as the company leased 1.1 million square feet of space in the quarter.

The Raleigh real estate investment trust reported funds from operations, a profitability measure for REITs, of 66 cents per share for the quarter, compared with the 59 cents per share the company reported in the third quarter of 2011.

That beat the consensus of Wall Street analysts by a penny.

Highwoods, the Triangle's largest office landlord, ended the quarter with an occupancy rate of 90.2 percent, up from 89.3 percent a year ago. The company made $177 million in acquisitions during the quarter while selling $134 million in assets.

The biggest of those acquisitions was Two Alliance Center, one of Atlanta's premier office towers, which Highwoods paid $146.7 million for in September.

Highwoods shares closed Friday at $31.58. The markets were closed Monday and Tuesday because of Hurricane Sandy.

The stock is up 6 percent this year.

Highwoods pays $146.7 million for Atlanta office tower

Raleigh-based Highwoods Properties announced Friday that it has acquired a 492,000-square-foot office tower in Atlanta's Buckhead neighborhood for $146.7 million.

Two Alliance Center, a 29-story building, is 90 percent occupied and is expected to generate $11.1 million in operating income in 2013.

"This investment garners us one of the best Class A office buildings in the southeast, a new building with a well-diversified rent roll that we acquired at a 10 percent discount to replacement cost," Highwoods CEO Ed Fritsch said in a statement.

"The building has an average remaining lease term of ten years and no lease expirations until 2017, when less than 24,000 square feet is scheduled to expire."

The purchase price includes $800,000 in planned improvements Highwoods will make to the building.

Highwoods has been extremely active in recent months, both selling older assets and acquiring newer ones. A number of the deals have involved assets in Atlanta, where Highwoods now owns 6.4 million square feet of office and industrial space.

Highwoods announced in July plans to sell two build-to-suit  properties in Atlanta that it constructed for the federal goverment.

A year ago, Highwoods paid $86.3 million for Riverwood 100, a 24-story building in Atlanta with a half-million square feet of office space.

Highwoods leases 69k square feet in PPG Place in Pittsburgh

Highwoods Properties announced Wednesday that it has leased 69,000 square feet in the PPG Place office complex in downtown Pittsburgh that the company acquired last year.

The leases are all new customers and bring the occupancy rate in PPG Place to 83.6 percent.

Highwoods paid $214.1 million in September for PPG Place, a six-building complex that includes 1.54 million square feet of office space. The price included $17.1 million in planned building improvements and $8.1 million in tenant improvements that were promised under existing leases.

The Pittsburgh properties represented the first new market that Highwoods, one of the largest office landlords in the Southeast, had entered in more than a decade. The complex was 81 percent leased at the time Highwoods acquired the properties.

Ed Fritsch, Highwoods CEO, said in a statement that the company expects occupancy levels in PPG Place to reach 86.5 percent by the end of the year.

Highwoods also announced Tuesday that it had sold a 3-story, 62,000-square-foot building in Kansas City for $6.5 million. Highwoods had been emptying out the building of tenants to accommodate the sale of the building to Country Club Bank, which will occupy the entire space.

The sale is the latest in a series of divestitures by Highwoods. The real estate investment trust sold $148 million in assets during the second quarter. 

Highwoods shares closed Tuesday at $32.90. The stock is up 11 percent this year.

Highwoods second quarter earnings beat Wall Street estimates

Highwoods Properties reported second-quarter earnings late Thursday that beat Wall Street estimates as the company ended the quarter with 90.7 percent of its portfolio occupied.

The Raleigh real estate investment trust reported funds from operations, a profitability measure for REITs, of 70 cents per share for the quarter, compared with the 60 cents per share the company reported in the second quarter of 2011.

That beat the consensus of Wall Street analysts by a penny.

Highwoods, the Triangle’s largest office landlord, leased 1 million square feet of space during the quarter. The company made $50.1 million in acquisitions during the quarter while selling $148 million in assets.

With the sales, Highwoods has reduced its ratio of debt plus preferred stock to gross assets to 43.7 percent, or about what it was before the company spent $300 million acquiring seven buildings in Atlanta and Pittsburgh.

The company's overall occupancy level was up from 89.8 percent during the second quarter of 2011.

Highwoods shares closed Thursday up 38 cents at $33.11. The stock is up 12 percent this year.

Highwoods sells three properties for $86.5 million

Highwoods Properties announced Wednesday that it has sold three properties in Atlanta and Mississippi for $86.5 million.

The properties were all build-to-suits that Highwoods constructed for the federal government. They are 100 percent leased and were projected to generate $6.1 million in income this year for the Raleigh-based real estate investment trust.

The properties include a 353,04-square-foot industrial property in Atlanta leased to the National Archives and Record Administration; a 90,688-square-foot office building in Atlanta leased by the Department of Homeland Security; and a 109,819-square-foot office building in Mississippi leased by the General Services Administration.

Highwoods CEO Ed Fritsch described the properties as noncore assets in a release.

"NARA was by far our largest industrial asset in Atlanta; DHS is located in downtown Atlanta, a non-core submarket for us; and the GSA field office was our only asset in the State of Mississippi,” he said in a statement.

Highwoods sells in Nashville and buys in Greensboro

Highwoods Properties announced Monday that it has sold five office buildings in Nashville and acquired three medical office buildings in Greensboro.

The deals are consistent with the Raleigh real estate investment trust’s long-term strategy of periodically pruning its portfolio of older, less desirable properties.

Highwoods sold the Nashville properties for $41 million. The 22-year-old buildings include 484,000 square feet and are 86 percent leased. They were projected to generate $3.5 million in net operating income this year.

Highwoods acquired the three medical office buildings in the Church Street Medical complex in Greensboro for $29.8 million. The investment includes $220,000 in planned building improvements.

The buildings total 149,000 square feet and include both surface and structured parking. They are across the street from the 518-bed Moses Cone Hospital.

Highwoods first quarter earnings beat Wall Street estimates

Highwoods Properties reported first-quarter earnings late Tuesday that narrowly beat Wall Street estimates.

The Raleigh real estate investment trust reported funds from operations, a profitability measure for REITs, of 70 cents per share for the quarter, compared with the 61 cents per share the company reported in the first quarter of 2011.

That beat the consensus of Wall Street analysts by two cents.

Highwoods leased 990,000 square feet of second-generation office space in the quarter, a 19 percent increase from the same period in 2011.

The company’s portfolio was 90.2 percent occupied, up from 89.4 percent in the same period a year ago.

Net income for the quarter was $16.7 million, or 23 cents per diluted share, compared to $10.1 million, or 14 cents per diluted share during the first quarter of 2011.

Highwoods, the Triangle’s largest office landlord, owns 5.1 million square feet of space in the region. Its entire portfolio includes 34.5 million square feet of office, industrial and retail.

Highwoods shares closed up 16 cents at $34.89 on Tuesday. The stock is up 18 percent this year.

Highwoods buys Cary office building for $26 million

Highwoods Properties has bought a 178,000-square-foot office building in Cary for $26 million, according to Wake County property records.

Highwoods was part of a joint venture that bought the 11000 Weston Parkway building in 1999 for $23.2 million.

The Raleigh-based real estate investment trust had a 22.8 percent ownership stake in the joint venture, said Tabitha Zane, Highwoods' vice president of investor relations, and now owns the building outright.

Last week, Highwoods announced that it had sold an 80,445-square-foot building in Pinellas County, Florida for $9.5 million.

Both deals reflect Highwood's strategy, in place since 2005, of pruning its portfolio of older assets and replacing them with higher-quality and better located buildings.

The 11000 Weston Parkway was built in 1998. It's 100 percent leased, Zane said.

Highwoods will report first quarter financial results after the market closes on Tuesday.

The company's shares, which closed at $34.61 on Friday, are up 16 percent this year.

Highwoods sells Kansas City apartment building for $11 million

Highwoods Properties announced Monday that it has sold a vacant, 96-unit apartment building in Kansas City for $11 million.

The property is in the city's Country Club Plaza.

It is part of a site where Highwoods once hoped to build a $58 million headquarters for the law firm Poisinelli Shughart.

That project, which would have required tearing down the apartment building, was scrapped in April 2011 after it ran into unexpected opposition from city officials and residents.

Highwoods will use the proceeds from the apartment sale to pay down its unsecured revolving credit line.

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