Highwoods Agrees to Acquire Advance Auto Parts Tower in Raleigh
Highwoods Properties (NYSE:HIW) has agreed to acquire Advance Auto Parts Tower, a 20-story Class AA office tower in Raleigh's North Hills Best Business District (BBD). The 346,000 square foot, LEED-gold certified building is currently 100% leased with an average lease term of 8.2 years.
The tower, delivered in 2020, is adjacent to Highwoods-owned CAPTRUST Tower, a 16-story, 300,000 square foot building that was 98.4% leased with a 6.3-year average lease term as of December 31, 2024. The acquisition will be funded using proceeds from recent non-core asset sales in Tampa, maintaining a leverage-neutral position.
The transaction is expected to close within 30 days, with Highwoods placing $20.0 million in non-refundable earnest money deposits. The company expects the capital rotation to be neutral to near-term FFO while being immediately accretive to cash flows and improving portfolio quality.
Highwoods Properties (NYSE:HIW) ha concordato di acquisire Advance Auto Parts Tower, un grattacielo per uffici di classe AA di 20 piani situato nel North Hills Best Business District (BBD) di Raleigh. L'edificio, certificato LEED oro e di 346.000 piedi quadrati, è attualmente interamente affittato con una durata media del contratto di locazione di 8,2 anni.
La torre, consegnata nel 2020, è adiacente al CAPTRUST Tower di proprietà di Highwoods, un edificio di 16 piani e 300.000 piedi quadrati che era affittato al 98,4% con una durata media del contratto di locazione di 6,3 anni al 31 dicembre 2024. L'acquisizione sarà finanziata utilizzando i proventi delle recenti vendite di attivi non core a Tampa, mantenendo una posizione neutrale in termini di leva finanziaria.
Si prevede che la transazione si chiuda entro 30 giorni, con Highwoods che deposita 20,0 milioni di dollari in depositi di garanzia non rimborsabili. L'azienda si aspetta che la rotazione del capitale sia neutra per il FFO a breve termine, pur essendo immediatamente accretiva ai flussi di cassa e migliorando la qualità del portafoglio.
Highwoods Properties (NYSE:HIW) ha acordado adquirir Advance Auto Parts Tower, una torre de oficinas de clase AA de 20 pisos en el distrito de negocios North Hills Best (BBD) de Raleigh. El edificio, certificado LEED oro y con 346,000 pies cuadrados, está actualmente 100% arrendado con un plazo de arrendamiento promedio de 8.2 años.
La torre, entregada en 2020, está adyacente a la CAPTRUST Tower de propiedad de Highwoods, un edificio de 16 pisos y 300,000 pies cuadrados que estaba arrendado al 98.4% con un plazo de arrendamiento promedio de 6.3 años a partir del 31 de diciembre de 2024. La adquisición se financiará utilizando los ingresos de recientes ventas de activos no esenciales en Tampa, manteniendo una posición neutral en términos de apalancamiento.
Se espera que la transacción se cierre en un plazo de 30 días, con Highwoods depositando 20.0 millones de dólares en depósitos de buena fe no reembolsables. La empresa espera que la rotación de capital sea neutral para el FFO a corto plazo, mientras que sea inmediatamente accretiva a los flujos de efectivo y mejore la calidad de la cartera.
Highwoods Properties (NYSE:HIW)는 Advance Auto Parts Tower를 인수하기로 합의했습니다. 이 건물은 랄리의 North Hills Best Business District (BBD)에 위치한 20층 AA 클래스 오피스 타워입니다. 346,000 평방피트의 LEED 골드 인증을 받은 이 건물은 현재 100% 임대 중이며 평균 임대 기간은 8.2년입니다.
2020년에 완공된 이 타워는 Highwoods 소유의 CAPTRUST Tower와 인접해 있으며, 이 건물은 16층, 300,000 평방피트로 2024년 12월 31일 기준으로 98.4% 임대 중이며 평균 임대 기간은 6.3년입니다. 인수는 최근 탬파에서 비핵심 자산 매각으로 얻은 수익으로 자금 조달되며, 레버리지 중립적 위치를 유지합니다.
이 거래는 30일 이내에 마무리될 것으로 예상되며, Highwoods는 비환불 보증금으로 2천만 달러를 예치합니다. 회사는 자본 회전이 단기 FFO에 중립적일 것으로 예상하며, 즉시 현금 흐름에 긍정적인 영향을 미치고 포트폴리오 품질을 향상시킬 것으로 기대하고 있습니다.
Highwoods Properties (NYSE:HIW) a accepté d'acquérir Advance Auto Parts Tower, une tour de bureaux de classe AA de 20 étages située dans le North Hills Best Business District (BBD) de Raleigh. Le bâtiment, certifié LEED or et d'une superficie de 346 000 pieds carrés, est actuellement entièrement loué avec une durée moyenne de bail de 8,2 ans.
La tour, livrée en 2020, est adjacente à la CAPTRUST Tower, propriété de Highwoods, un bâtiment de 16 étages et 300 000 pieds carrés qui était loué à 98,4 % avec une durée moyenne de bail de 6,3 ans au 31 décembre 2024. L'acquisition sera financée par les produits de récentes ventes d'actifs non essentiels à Tampa, maintenant une position neutre en matière de levier.
La transaction devrait être finalisée dans un délai de 30 jours, Highwoods déposant 20,0 millions de dollars en dépôts de garantie non remboursables. L'entreprise s'attend à ce que la rotation de capital soit neutre pour le FFO à court terme tout en étant immédiatement accretive aux flux de trésorerie et en améliorant la qualité du portefeuille.
Highwoods Properties (NYSE:HIW) hat zugestimmt, Advance Auto Parts Tower zu erwerben, einen 20-stöckigen Bürogebäude der Klasse AA im North Hills Best Business District (BBD) von Raleigh. Das 346.000 Quadratfuß große, LEED-gold-zertifizierte Gebäude ist derzeit zu 100 % vermietet, mit einer durchschnittlichen Mietdauer von 8,2 Jahren.
Der 2020 fertiggestellte Turm befindet sich neben dem CAPTRUST Tower, der Highwoods gehört, einem 16-stöckigen Gebäude mit 300.000 Quadratfuß, das zum 31. Dezember 2024 zu 98,4 % vermietet war und eine durchschnittliche Mietdauer von 6,3 Jahren aufwies. Die Akquisition wird aus den Erlösen aus kürzlichen Verkäufen von Nicht-Kernvermögen in Tampa finanziert, wobei eine hebelneutrale Position beibehalten wird.
Die Transaktion wird voraussichtlich innerhalb von 30 Tagen abgeschlossen, wobei Highwoods 20,0 Millionen Dollar in nicht erstattungsfähige Anzahlungen hinterlegt. Das Unternehmen erwartet, dass die Kapitalrotation neutral für das kurzfristige FFO sein wird, während sie sofort positiv zu den Cashflows beiträgt und die Qualität des Portfolios verbessert.
- 100% occupancy rate with 8.2-year weighted average lease term
- Immediately accretive to cash flows
- Leverage-neutral transaction
- Strategic expansion in prime location
- LEED-gold certified Class AA building
- Large $20M non-refundable deposit required
- Neutral to near-term FFO
Insights
Highwoods' acquisition of the Advance Auto Parts Tower represents a strategic consolidation play in Raleigh's North Hills district. By adding this 346,000 square foot Class AA office tower to their portfolio adjacent to their existing CAPTRUST Tower, Highwoods is creating a dominant 650,000 square foot office campus in one of Raleigh's premier mixed-use districts.
The property fundamentals are exceptionally strong: 100% occupancy, 8.2-year weighted average lease term, LEED-gold certification, and 2020 delivery date. This provides stable, long-term cash flow with minimal near-term capital expenditure requirements - particularly important in today's office market where quality and location differentiate winners from losers.
The transaction structure deserves attention. Highwoods is executing a capital recycling strategy, funding this acquisition with proceeds from recent non-core Tampa asset sales. This leverage-neutral approach maintains balance sheet discipline while upgrading portfolio quality and cash flow growth potential. Management expects the transaction to be FFO-neutral initially but immediately cash flow accretive - suggesting they're trading lower-quality assets with potentially higher cap rates for a premium asset with stronger long-term growth prospects.
The $20 million non-refundable earnest money deposit signals high closing certainty, with completion expected within 30 days. This acquisition reinforces Highwoods' strategy of focusing on "commute-worthy" office properties in high-growth Southeastern markets where they can build meaningful scale.
This acquisition demonstrates Highwoods' disciplined capital allocation strategy in action. The company is effectively trading out of non-core Tampa assets into a trophy property in Raleigh - one of their core growth markets. The leverage-neutral funding approach is particularly noteworthy in today's higher interest rate environment, allowing them to improve portfolio quality without increasing financial risk.
The property characteristics align perfectly with what institutional investors are seeking in office assets today: newer construction (2020 delivery), environmental certification (LEED-gold), full occupancy, and long-term leases (8.2 years). These attributes position the asset to outperform older, less efficient office buildings that are struggling with higher vacancy and shorter lease commitments.
Creating a 650,000 square foot campus by combining this acquisition with their adjacent CAPTRUST Tower produces meaningful operational synergies and enhances Highwoods' market position. This concentration of Class AA space gives them significant pricing power and tenant retention advantages in the North Hills submarket.
Management's statement that the deal will be "neutral to near-term FFO" but "immediately accretive to cash flows while increasing growth rate" suggests they're optimizing for long-term value creation rather than short-term earnings metrics. This approach aligns with best practices in REIT portfolio management - sacrificing potentially higher initial yields from lower-quality assets for properties with superior growth profiles and risk-adjusted returns.
346,000 Square Feet,
Adjacent to Highwoods-Owned CAPTRUST Tower in North Hills
Closing Scheduled for Next 30 Days
RALEIGH, N.C., March 03, 2025 (GLOBE NEWSWIRE) -- Highwoods Properties, Inc. (NYSE:HIW) today reported it has agreed to acquire Advance Auto Parts Tower, a 20-story, Class AA office tower located in the heart of Raleigh’s vibrant mixed-use North Hills Best Business District (BBD). This 346,000 square foot, LEED-gold certified tower, which delivered in 2020, was
The Company will fund the acquisition of Advance Auto Parts Tower on roughly a leverage-neutral basis using the proceeds from the recent sale of non-core assets in Tampa that closed earlier in the first quarter.
Ted Klinck, President and CEO, stated “We are excited to expand our presence in the vibrant North Hills mixed-use BBD with the addition of Advance Auto Tower, which is adjacent to our CAPTRUST Tower. Our nearly 650,000 square feet of commute-worthy office positions us to benefit from the strong demographics that have attracted so many businesses, residents and guests to North Hills specifically, and Raleigh overall. Importantly, we expect the rotation of capital from non-core properties in Tampa to Advance Auto Tower – a best in-class property with a location second-to-none – will be neutral to near-term FFO, immediately accretive to our cash flows while increasing our growth rate and improving our portfolio quality.”
The acquisition of Advance Auto Parts Tower, which is subject to customary closing conditions, is scheduled to close in the next 30 days. The Company is posting earnest money deposits in the amount of
About Highwoods
Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (“REIT”) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Our vision is to be a leader in the evolution of commercial real estate for the benefit of our customers, our communities and those who invest with us. Our mission is to create environments and experiences that inspire our teammates and our customers to achieve more together. We are in the work-placemaking business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates and, in turn, our shareholders. For more information about Highwoods, please visit our website at www.highwoods.com.
Forward-Looking Statements
Some of the information in this press release may contain forward-looking statements. Such statements include, in particular, statements about our plans, strategies and prospects such as the following: closing of the planned acquisition may not occur on the terms described in this press release or at all; the expected financial and operational results and the related assumptions underlying our expected results; the planned sales of non-core assets and expected pricing and impact with respect to such sales, including the tax impact of such sales; the anticipated total investment, projected leasing activity, estimated replacement cost and expected net operating income of acquired properties and properties to be developed; and expected future leverage of the Company. You can identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that our plans, intentions or expectations will be achieved.
Factors that could cause our actual results to differ materially from Highwoods’ current expectations include, among others, the following: the financial condition of our customers could deteriorate; our assumptions regarding potential losses related to customer financial difficulties could prove incorrect; counterparties under our debt instruments, particularly our revolving credit facility, may attempt to avoid their obligations thereunder, which, if successful, would reduce our available liquidity; we may not be able to lease or re-lease second generation space, defined as previously occupied space that becomes available for lease, quickly or on as favorable terms as old leases; we may not be able to lease newly constructed buildings as quickly or on as favorable terms as originally anticipated; we may not be able to complete development, acquisition, reinvestment, disposition or joint venture projects as quickly or on as favorable terms as anticipated; development activity in our existing markets could result in an excessive supply relative to customer demand; our markets may suffer declines in economic and/or office employment growth; increases in interest rates could increase our debt service costs; increases in operating expenses could negatively impact our operating results; natural disasters and climate change could have an adverse impact on our cash flow and operating results; we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or repay or refinance outstanding debt upon maturity; and the Company could lose key executive officers.
This list of risks and uncertainties, however, is not intended to be exhaustive. You should also review the other cautionary statements we make in “Risk Factors” set forth in our 2024 Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on forward-looking statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements to reflect any future events or circumstances or to reflect the occurrence of unanticipated events.
| Contact: | Brendan Maiorana |
| Executive Vice President and Chief Financial Officer | |
| brendan.maiorana@highwoods.com | |
| 919-872-4924 |
FAQ
What is the size and occupancy rate of the Advance Auto Parts Tower being acquired by HIW?
How is Highwoods Properties (HIW) financing the Advance Auto Parts Tower acquisition?
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