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Highwoods Properties Inc., one of the largest office owners in the Tampa Bay area, has sold a 115,230-square-foot building within its Highwoods Preserve campus for $43 million.
The sale of Preserve VII marks the first in what is expected to be a series of dispositions by the Raleigh, North Carolina-based real estate investment trust to finance a planned $769 million office acquisition later this year from Preferred Apartment Communities Inc.
The deal with an affiliate of Sentinel Real Estate Corp., of New York, for the 18216 Crane Nest Drive property also is intended to help Highwoods shed “non-core” assets in its portfolio, which focuses on central business districts in cities like Charlotte, North Carolina, Pittsburgh and Tampa.
Highwoods, owner of the 36-story Truist Place office tower in downtown Tampa and developer of the Midtown West office building within the $500 million Midtown Tampa development, expects to receive a non-funds from operation gain of $22.8 million from the sale of the four-story building.
Preserve VII, part of a six-building campus that was completed in 2007, is fully occupied by MetLife and is slated to generate $2 million in net operating income this year.
“This sale is the first closing in our plan to substantially fund our planned portfolio acquisition from (Preferred Apartment Communities) with proceeds from non-core asset sales,” says Ted Klinck, Highwoods’ president and CEO, in a statement. “We are pleased with the execution of this sale and buyer interest in the non-core properties we currently have in the market. We’re looking forward to redeploying disposition proceeds into high growth (business districts) in Charlotte and Raleigh via our planned portfolio acquisition.”
Highwoods announced in April plans to buy four Class A office building in Charlotte and Raleigh, North Carolina from Preferred Apartment, as well as a redevelopment site, a loan tied to a recently completed office building and a multi-building office project, all in Atlanta.
Highwoods expects that acquisition to close in the third quarter. The REIT intends to sell non-core assets such as Preserve VII to raise between $500 million and $600 million by the middle of next year to finance the purchase.
Mike Davis, Rick Brugge, Rick Colon, Dominic Montazemi and Robert Elms of commercial real estate brokerage firm Cushman & Wakefield's Tampa-based capital markets and investment sales team represented Highwoods Properties in the transaction, with support from Zachary Eicholtz and Ryan Jenkins.
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