Highwoods Properties Acquires Two Alliance Center in Atlanta for $146.7M
Highwoods Properties (NYSE: HIW) today announced that it has acquired Two Alliance Center, a 29-story, 492,000 square foot, Class A office building with structured parking located in the heart of the Buckhead submarket of Atlanta.
The Company's all-in investment is expected to be $146.7 million, or $298 per square foot, which includes $0.8 million of planned near-term building improvements.
Ed Fritsch, president and chief executive officer of Highwoods, stated, "This investment garners us one of the best Class A office buildings in the southeast, a new building with a well-diversified rent roll that we acquired at a 10% discount to replacement cost. The building has an average remaining lease term of ten years and no lease expirations until 2017, when less than 24,000 square feet is scheduled to expire."
The Company's all-in investment is determined by deducting $6.4 million ($13 psf) of closing credits received from the seller, consisting of $5.3 million ($11 psf) for free rent and $1.1 million ($2 psf) for committed future tenant improvements under certain existing leases, from the $152.3 million ($310 psf) gross price stated in the contract. The Company noted that under GAAP, free rent credits from a seller are recorded as a reduction in the investment cost rather than as rental income. Two Alliance Center is 90% occupied and is expected to generate full year 2013 GAAP net operating income of $11.1 million. The Company also noted that approximately $0.6 million of expensed acquisition costs will be recorded in the third quarter.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.