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.

Highwoods 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 building improvements and $8.1 million in tenant improvements 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.
 

On a conference call with analysts last week, Highwoods Properties CEO Ed Fritsch was asked what impact the pending acquisition of RBC Bank by PNC Financial Group would have on the Raleigh real estate investment trust's downtown office tower.

RBC occupies 131,000 square feet of space in its namesake tower on Fayetteville Street. The company signed a 20-year lease with Highwoods when the building opened in 2008.

The law firm Poyner Spruill, which does some work for RBC, also occupies about 75,000 square feet in the building.

Fritsch said Highwoods officials have not yet met with Jim Rohr, PNC's CEO.

But he said Poyner Spruill has indicated it doesn't expect the merger to cause it to reevaluate its space needs.

"They don't see any material impact to the way that they need and consume space," he said. "And in fact they continue to add head count to their firm."

As for PNC, Fritsch said PNC's public statements about the merger have indicated they like the presence of the RBC Tower. He also noted that PNC, which is based in Pittsburgh, does not have any existing infrastructure in the Southeast.

"There's no doubt that there's significant signage opportunities that are on display now," Fritsch said. "He [Rohr] has mentioned that that's an attraction to them."
 

Highwoods Properties boosted its outlook for 2011 after reporting second quarter earnings late today that narrowly beat Wall Street estimates.

The Raleigh real-estate investment trust's 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.

Highwoods reported funds from operations, a profitability measure for REITs, of 63 cents per share, compared to the 65 cents per share the company reported in the second quarter of 2010.

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

Highwoods Properties said today that it has renewed a lease for 137,000 square feet with the Federal Bureau of Investigation in Atlanta.

The Raleigh-based real estate investment trust also announced that retailer H&M has signed a lease for 22,000 square feet in Highwoods Country Club Plaza in Kansas City.

The FBI occupies space in Highwoods building at 2635 Century Center.

The General Service Administration leases a total of 663,000 square feet at Century Center for a number of federal agencies, including the Center for Disease Control and the Department of Veteran Affairs.

Highwoods owns 17 buildings and 1.7 million square feet in Century City. The portfolio was 93 percent occupied at the end of March.

Highwoods is set to release its second quarter earnings on July 27.

The company's stock closed at $34.34 today. The company's shares are up 29 percent over the last year.

These days, when a company is acquired and job cuts loom the question of incentives inevitably comes up.

As for RBC Bank, the company was to receive $750,000 from Raleigh and Wake County officials for moving its headquarters from Rocky Mount.

But that money was not contingent on jobs.

Highwoods Properties said today that DirectBuy, a home improvement and furniture club, has leased 75,000 square feet in one of the company's industrial properties in Greensboro.

The 125,000-square-foot warehouse on Burnt Poplar Road is now fully leased, the Highwoods said.

DirectBuy has more than 130 locations in North America.

Highwoods owns more than 4 million square feet of office and industrial space in the Triad, making it the Raleigh real estate investment trust's third largest market behind Atlanta and the Triangle.

The Triad portfolio was 89.4 percent occupied at the end of last year, according to regulatory filings.

Highwoods sold six industrial properties in the Triad in the second quarter of last year.

Pfizer plans to vacate 46,000 square feet of office space in Cary that it acquired as part of its purchase of King Pharmaceuticals earlier this year.

The move will affect about 60 employees, many of whom will be relocated to Pfizer’s offices in Durham or its vaccine facility in Sanford.

“We’re going to be consolidating as many of these functions as we can to those two sites,” said Rick Chambers, a company spokesman.

King occupies two floors of an office building on Highwoods Properties CentreGreen campus. The company’s lease doesn’t expire until late 2014.

Pfizer plans to close the office by the end of the year and sublease the space.
Chambers said there’s a possibility that some employees in Cary may be let go.

“It’s too soon to know how many positions may be eliminated,” he said.

Highwoods Properties reported first-quarter results late Monday that met Wall Street expectations.

The Raleigh real-estate investment trust’s 35-million-square-foot portfolio was 90.1 percent occupied at the end of March, up from 87.8 percent during the same period a year ago.

Highwoods reported funds from operations, a profitability measure for REITs, of 61 cents per share, equal to the 61 cents per share the company reported in the first quarter of 2010.

That also equaled the consensus of Wall Street analysts.

Highwoods leased 890,000 square feet of office space during the quarter at an average lease term of 5.1 years, CEO Ed Fritsch said in a release.

In the company’s top five markets, Highwoods occupancy levels outperformed the market by an average of 8 percent in the first quarter.
 

Highwoods Properties said Tuesday that the Center for Disease Control has renewed its lease with the Raleigh real estate investment trust for 100,800 square feet in Atlanta.

Highwoods developed the property at 1825 Century Center for the CDC, which occupies a total 328,000 square feet.

The new lease begins when the CDC's existing lease expires in July of next year.

Highwoods shares closed at $35.93 on Tuesday.

The stock has risen 22 percent since mid-December, and is up 11 percent over the last year.

Highwoods will release its first quarter earnings after the market closes on Monday.

Highwoods Properties expanded its medical-office empire, buying a three-story building near Rex Hospital in Raleigh.

The Raleigh real-estate company announced Wednesday that it paid Lake Boone Medical Properties $8.75 million for 4201 Lake Boone Trail, a 48,000-square-foot building.

The price was 53 percent higher than the assessed tax value of the building and the underlying land, according to county property records.

For Highwoods and other landlords, there some safety in medical offices, which tend to be less affected by the ups and downs of the economy.