Analysts at RBC Capital Markets downgraded Highwoods Properties from outperform to perform in a new report, saying the Raleigh real estate investment trust's core markets will recover slower and not provide as many opportunities to acquire distressed properties. 

"Our now lower outlook for 2011 and 2012 earnings is predicated on a slower fundamental recovery in HIW's core Southeastern markets as well as a limited opportunity to participate in distressed asset investing due to fewer offerings in its markets," the analysts said in a report.

"A lower level of incremental leasing activity, we believe, has reduced the Company's ability to take share while a lack of commitments has slowed our expectation for HIW to capture spreads through the monetization of its development pipeline by way of new build-to-suit commitments. Finally, while we are encouraged regarding HIW's solid balance sheet, we think it will do little to fuel FFO or NAV growth in the near term."

RBC analysts reduced their 12-month price target for Highwoods stock from $38 a share to $34 a share.

Highwoods shares, up 10 percent over the last year, were at $33.34 in trading this morning.

Of the 12 analysts that cover the company, 11 now have hold ratings on the stock and one has a buy rating.
 

Highwoods Properties, the largest suburban office landlord in the Southeast, reported third-quarter results late today that met Wall Street expectations.

The Raleigh real-estate investment trust's 35 million-square-foot portfolio was 88.9 percent occupied at the end of September, up from 87.8 percent during the same period a year ago.

Highwoods reported funds from operations, a profitability measure for REITs, of 57 cents per share, compared with 62 cents per share in the second quarter of 2009.

That was in line with the average estimate of analysts who follow the company.

Raleigh-based Highwoods Properties announced today it has signed a long-term lease with the U.S. General Services Administration for 60,005 square feet in Atlanta.

The GSA is taking space at Highwoods Center II at Tradeport in Atlanta.

The space will operate as a local office for the U.S. Customs and Border Protection agency to service the Hartsfield-Jackson Atlanta International Airport.

The real estate investment trust is spending $11.5 million to renovate and upgrade of the property, including adding security and operational features required by the federal government.

The building will also be renovated to LEED certified CI silver rating. The project is expected to be completed late next year.
 

Law firm Nexsen Pruet has moved its offices from Cary to Highwoods Properties Glen Lake Four building near Crabtree Valley Mall.

The firm is occupying 8,300 square feet, more than double the space it had at its old offices on Shannon Oaks Circle near the intersection of Kildare Farm Road and SE Cary Parkway.

Nexsen Pruet has eight attorneys in its Raleigh office, including former N.C. governor Jim Holshosuer and former state senator and utilities commissioner Larry Cobb.

Four buildings in the Highwoods Office Center that are owned by Craig Davis Properties are scheduled to be auctioned off on Sept. 17.

The buildings, part of the the 150-acre Highwoods Office Park in Raleigh, contain about 256,000 square feet.

Craig Davis Properties and New York-based First Point Partners bought the buildings in February 2007 from Raleigh-based Highwoods Properties for $30.4 million. The Cary developer and First Point borrowed $29 million from Column Financial Inc. as part of the deal, according to Wake County property records.

The properties were build between 1982 and 1999 and had been owned and managed by Raleigh-based Highwoods until Craig Davis bought them.

They were 80 percent leased at the end of June, according to a Grubb & Ellis Thomas Linderman Graham survey of Triangle properties.
 

Raleigh-based Highwoods Properties, which has seen its stock rise about 20 percent since early July, has been downgraded from a buy to a hold rating by analysts at Stifel Nicolaus.

Stifel's report takes issue with the real estate investment trust's current valuation in relation to competitors, not Highwoods underlying fundamentals.

The report says Highwood shares have recovered nicely after the first quarter "when we think HIW traded poorly as investors shifted to the Gateway City Office REITS."

Among those considered Gateway City REITs by Stifel are Boston Properties, Douglas Emmett, SL Green, Vornado and Brookfield Properties.

Stifel's target price for the stock remains at $35.

Highwood's shares were trading at just under $32 this morning. The stock is up about five percent over the last year.
 

Raleigh-based Highwoods Properties has been chosen to build a new $57 million headquarters for a Kansas City law firm.

Polsinelli Shughart PC said it would merge its existing offices into a new, eight-story, 192,000-square-foot building to be developed and owned by Highwoods.

The new headquarters will accommodate about 500 employees, including more than 300 attorneys.

It's expected to be completed in the fourth quarter of 2013.

"We are excited to have this build-to-suit opportunity to develop a headquarters building for such a well-respected law firm as Polsinelli Shughart," said Ed Fritsch, Highwoods president and CEO, in a statement.

"This new headquarters building is destined to further enhance their presence in Kansas City and will bolster the long-term success of our Country Club Plaza, which remains a premier destination throughout the Midwest."

Highwoods Properties, the largest suburban office landlord in the Southeast, reported second-quarter results late today that beat Wall Street estimates.

The Raleigh real estate investment trust's 35 million-square-foot portfolio was 89.3 percent occupied at the end of the June.

Highwoods reported funds from operations (FFO), a profitability measure for REITs, of 64 cents per share, compared with 70 cents per share in the second quarter of 2009.
That's four cents above the average estimate of analysts who follow the company.

The company also raised its FFO guidance for the year from $2.31 to $2.49 per share to $2.40 to $2.48 per share.

“We were pleased with our second quarter results and the solid volume of leasing activity in the majority of our markets," said Ed Fritsch, Highwoods CEO and president, in a statement.
 

Highwoods Properties is getting bigger in Memphis.

The Raleigh-based real-estate company spent about $52.6 million to buy Crescent Center, a 336,000 square-foot, nine-story office building on Poplar Avenue in the Tennessee city. The building is 89.5 percent occupied.

The deal gives Highwoods, one of the largest office landlords in the Southeast, 20 Memphis buildings with 2.1 million square feet.

Highwoods' shares, which are up 27 percent in the past year, rose 3 cents today to close at $30.55.

The company is scheduled to report its second-quarter financial results on Wednesday afternoon.

Highwoods Properties said today that it has sold about 1.3 million square feet of warehouse and office space in Greensboro and Winston-Salem for $24.9 million.

The sales are part of the Raleigh real estate investment trust's ongoing strategy of selling off older assets and exiting the Winston-Salem market.

“We are pleased to complete the sale of these non-core assets and further focus our resources on infill locations in core markets," Highwoods CEO Ed Fritsch said in a statement.

These latest transactions involved Madison Park in Winston-Salem and Chimney Rock in Greensboro.

Madison Park includes seven office buildings and 472,200 square feet, most of it about 25 years old. The park is 51 percent occupied and was expected to generate $1.2 million of income for full year 2010.

Chimney Rock's six industrial buildings contain 836,500 square feet and are about 25 years old.

The buildings are 58 percent occupied and were expected to generate $700,000 in income in 2010.

HIghwoods industrial holdings in Greensboro now includes 35 buildings and 2.5 million square feet. Those buildings are 92 percent occupied.