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Commercial Real Estate
Business Observer Friday, Jul. 17, 2020 3 months ago

FBI renews lease with Highwoods in Tampa

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Agency will remain in build-to-suit that Raleigh, N.C.-based real estate investment trust delivered in 2005.
by: Kevin McQuaid Commercial Real Estate Editor

The FBI has signed a long-term commitment to remain in a Highwoods Properties Inc. office building in Tampa that the real estate investment trust (REIT) completed for it in 2005.

The lease renewal for the 138,093-square-foot building, which was developed as a build-to-suit, means the FBI’s Tampa Field Office will remain at 5525 W. Gray St. through at least 2040.

For Raleigh, N.C.-based Highwoods, which is among Tampa’s largest office landlords with more than five million square feet, the FBI’s lease for the entirety of the four-story building represented the company’s largest outstanding potential expiration of this year.

The agency’s lease was set to expire in November. The new commitment with the FBI runs for a minimum of 20 years, according to officials with the U.S. Government Services Administration (GSA), which oversees all federal agency real estate matters.

“This was the company’s largest 2020 expiration that remained outstanding, so we’re obviously very pleased to have signed them,” says Brendan Maiorana, Highwoods’ executive vice president of finance.

“And for us, it means we’ve been able to secure and retain a great customer for that building, which is always a good outcome,” Maiorana says.

FBI officials in Tampa referred inquiries to GSA representatives, who say the nation’s top law enforcement agency will pay $36 per square foot for its Class A space.

“GSA issued an open competitive solicitation for a new lease,” says Adam Rondeau, a GSA spokesman. “The only offer received was from the incumbent lessor, and the GSA determined their offer to be fair and reasonable.”

The FBI lease renewal marks the latest positive news for Highwoods, which owns about 27 million square feet of space in eight markets — Tampa, Raleigh, Orlando, Atlanta, Charlotte, Nashville, Pittsburgh and Richmond, Va. Last year, the company generated revenue of $771 million, according to documents filed with the U.S. Securities & Exchange Commission.

The company announced earlier this month that it has collected “99% of its contractually required rents” for April, May and June, despite the COVID-19 pandemic that has wreaked havoc on many office occupiers.

In Tampa, Highwoods controls two dozen properties, including the 36-story SunTrust Financial Centre; Highwoods Bay Center; Meridian complex; and the Highwoods Preserve complex.

The REIT also is developing the Midtown One office building, one of three office structures planned for the $500 million Midtown Tampa project in the Westshore Business District.

 

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