Highwoods Signs Long-Term Lease – Analyst Blog

Highwoods Properties Inc. (HIW), a real estate investment trust (REIT), has recently signed a long-term lease agreement with Duke Medicine for 60,000 square feet of space at Riverbirch building in Raleigh, North Carolina. With the lease, Highwoods would renovate the traditional office property to a medical office building.

 

In concurrence with the renovation of the leased property, Highwoods would construct a gurney-sized elevator, a covered patient drop-off, and a parking deck facility in the building. Consequently, the company would remove the property from its in-service portfolio and reclassify it as a redevelopment project.

 

The estimated total cost of the redevelopment project is $12.7 million. The project is expected to be complete by the fourth quarter of 2010, generating a stabilized cash yield of over 10.5%.

 

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 for third-party clients.

 

As of March 31, 2010, Highwoods had interests in 378 in-service office, industrial holdings and retail properties, spanning across 35.7 million square feet of gross leasable space. In addition, it also owned 581 acres of developable land.