Highwoods Offer a New Concept-Store - Analyst Blog

Highwoods Properties Inc. (HIW), a real estate investment trust (REIT), has recently announced the introduction of a new concept-store by Banana Republic, the flagship brand of Gap Inc. (GPS), in Country Club Plaza – an upscale shopping district and residential neighborhood in Kansas City.

The store is scheduled to open on September 30, and will offer an entirely new shopping concept that will invigorate the retail store format. Banana Republic has already successfully rolled out the newly developed format in California and Canada, and expects to meet with similar successes in Kansas City as well.

The new store features boutique-style shops that are designed like walk-in closets. The store’s apparel section showcases work and weekend clothes with a variety of accessories, as well as a professional stylist, hemming, fitting-room check-out, a Web kiosk that lets shoppers make online purchases without shipping charges.

Based in Raleigh, North Carolina, Highwoods owns and operates its properties through its wholly owned subsidiary, Highwoods Realty Limited Partnerships. The company has interests in office, industrial, retail and service center properties, including development projects and apartment units. It also provides customer-related and fee-based real estate management services for its properties and third-party clients.

As of June 30, 2010, Highwoods had interests in 330 in-service office, industrial holdings and retail properties, spanning across 32.0 million square feet of gross leasable space. In addition, it also owned 581 acres of developable land.

Highwoods is also in the process of repositioning its portfolio to focus on stronger long-term markets and newer assets. A large part of the company’s portfolio is now concentrated in high-growth Sun Belt markets, such as Atlanta, Nashville and Tampa, which should exhibit above-average job growth due to long-term demographic trends.

The rating on Highwoods is currently “Neutral” with a Zacks #2 Rank, which translates into a short-term ‘Buy’ recommendation and indicates that the stock is expected to perform well above the overall U.S. equity market for the next 1−3 months.