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Highwoods Announces Investment Activity

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Granite PropertiesNorth Carolina Investment AuthorityNYSE:HIW
High Materiality8/10

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_____________________________________ Acquires Bloc83 in CBD Raleigh in Joint Venture with the North...

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AI Summary

HIW acquires Bloc83 in Raleigh, boosting its portfolio in high-growth markets. The Terraces acquisition positions HIW in Dallas’ constrained supply market. Both acquisitions expected to enhance long-term cash flows and NOI significantly. HIW plans to finance via non-core asset sales, maintaining leverage neutrality. Acquisitions align with HIW's growth strategy amidst a recovering office market.

Sentiment Rationale

The acquisitions are expected to enhance cash flows and NOI, positively influencing HIW’s valuation. Historical data shows similar acquisitions have led to stock appreciation in the real estate sector.

Trading Thesis

The positive cash flow impact will manifest as leases roll over several years, providing steady growth in revenue. This aligns with HIW's strategy of improving portfolio quality over time.

Market-Moving

  • HIW acquires Bloc83 in Raleigh, boosting its portfolio in high-growth markets.
  • The Terraces acquisition positions HIW in Dallas’ constrained supply market.
  • Both acquisitions expected to enhance long-term cash flows and NOI significantly.

Key Facts

  • HIW acquires Bloc83 in Raleigh, boosting its portfolio in high-growth markets.
  • The Terraces acquisition positions HIW in Dallas’ constrained supply market.
  • Both acquisitions expected to enhance long-term cash flows and NOI significantly.
  • HIW plans to finance via non-core asset sales, maintaining leverage neutrality.
  • Acquisitions align with HIW's growth strategy amidst a recovering office market.

Companies Mentioned

  • Granite Properties (Granite Properties)
  • North Carolina Investment Authority (North Carolina Investment Authority)
  • NYSE:HIW (NYSE:HIW)

Corporate Developments

The acquisitions strengthen HIW's market position in key locations, likely improving investor sentiment and stock performance. The sales of non-core assets enhance capital efficiency, critical for investor confidence.

Highwoods Properties (NYSE: HIW) Announces Significant Investment Activities in Raleigh and Dallas

Date: January 12, 2026 | Source: GlobeNewsWire

Overview of Recent Acquisitions

Highwoods Properties, Inc. (NYSE: HIW) has made two notable acquisitions aimed at enhancing its footprint in high-growth markets. The company has acquired Bloc83, a mixed-use asset in CBD Raleigh, and The Terraces, an office building located in Dallas's Preston Center. These transactions are part of a strategic initiative to strengthen the company’s portfolio.

Details of the Acquisitions

  • Bloc83 Acquisition:

    Highwoods has entered into a joint venture with the North Carolina Investment Authority to acquire Bloc83, comprising two buildings with a total of 492,000 square feet. The total investment for this venture is approximately $21.0 million, representing a 10% ownership share by HIW. Notably, the property is concurrently 97% leased.

  • The Terraces Acquisition:

    This acquisition involves The Terraces in Dallas, where Highwoods has partnered with Granite Properties. This joint venture includes 173,000 square feet of office space for a total investment of $87.4 million, with HIW retaining an 80% share. The building is currently 98% leased, with rental rates approximately 30% below market.

Investment Strategy and Funding Plan

Highwoods plans to fund these acquisitions primarily through the sale of non-core assets. This strategy aims to ensure a leverage-neutral rotation of capital by mid-2026, a critical factor for maintaining financial stability while enhancing growth opportunities.

Recent sales of non-core properties are expected to generate significant gross proceeds, with transactions totaling $65.9 million in the fourth quarter of 2025. In addition, further disposals are anticipated, including three additional properties expected to close in the next 45 days for an estimated value of $42.2 million.

Projected Financial Impact

In 2026, the joint ventures associated with The Terraces and Bloc83 are projected to produce a combined GAAP net operating income of $9.0 million. Cash net operating income is expected to reach $7.5 million, which reflects a robust performance amidst Highwoods' strategic growth initiatives.

Management Insights

Ted Klinck, President and CEO of Highwoods Properties, expressed excitement over the acquisitions: “We are thrilled to expand our presence in Dallas and Raleigh with the addition of two best-in-class properties at attractive risk-adjusted yields with good long-term growth potential." He highlighted the strategic fit of these acquisitions within the company’s expanding portfolio.

About Highwoods Properties, Inc.

Based in Raleigh, Highwoods Properties, Inc. (NYSE: HIW) is a fully-integrated office real estate investment trust (REIT) focused on owning, developing, and managing properties within the best business districts across key markets such as Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa. The company aims to lead in the evolution of commercial real estate, delivering exceptional value to customers and stakeholders.

For further details regarding Highwoods Properties, please visit www.highwoods.com.

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