Benzinga | Oct 4, 2021 06:46AM EDT

Highwoods Announces $120M Of Non-Core Asset Sales

Highwoods Properties, Inc. (NYSE:HIW) has sold two non-core office buildings encompassing 443,000 square feet for $119.7 million. The Company sold Stony Point VI, an 87,000 square foot single-customer building in Richmond, for $52.2 million and Crescent Center, a 356,000 square foot building in Memphis, for $67.5 million. The properties were a combined 80% occupied and projected to generate $6.5 million of annual cash net operating income and $7.5 million of annual GAAP net operating income in 2021.

The Company expects to record non-FFO gains of approximately $37.3 million in the third quarter of 2021 in connection with these sales.

Ted Klinck, President and Chief Executive Officer of Highwoods Properties, said, "We are pleased with the execution of these non-core asset dispositions, including the sale of our final asset in Memphis. We have now sold $163 million of non-core properties since we announced our plan to acquire a portfolio of assets from PAC, placing us well on our way to meeting our disposition goal for 2021."

As previously disclosed, the Company acquired a portfolio of office properties from Preferred Apartment Communities (PAC) on July 29, 2021 for a total investment of $683 million, including planned near-term building improvements and transaction costs. The Company's long-term plan is to fund the acquisition primarily by accelerating the sale of $500 to $600 million of existing non-core assets by mid-2022, approximately half of which is planned to close by year-end 2021. The Company expects to return its balance sheet metrics to March 31, 2021 levels by mid-2022.