Highwoods Properties Inc. (HIW) recently announced that it has secured a contract from Life Point Hospitals Inc. (LPNT) to develop its new corporate headquarters in the Brentwood submarket of Nashville. As per the terms of the deal, Highwoods will build a Class A office building for Life Point, spanning 203,000 square foot for approximately $48.4 million. The company expects to complete the construction by the end of 2013.
The to-be constructed building will be 100% pre-leased by Life Point, which is currently leasing 146,000 square feet in two Highwoods-owned properties in Nashville. Life Point is a leading hospital company focused on providing quality healthcare services.
Highwoods boasts a significant presence in the Brentwood submarket, including Seven Springs Park , which consists of approximately 4.8 million square feet of office space that is currently 94.9% leased. Highwoods owns over 1.2 million square feet in this submarket and of those 97.4% are leased. The new Life Point center will expand the Seven Springs area and create new high-skill jobs.
Highwoods is a real estate investment trust that owns or has management interests in office, industrial, retail and service center properties, including development projects and apartment units across the U.S.
Highwoods is currently 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, which should exhibit above-average job growth given its long-term demographic trends. Consequently, Highwoods is relatively better equipped to edge out competitive pressure.
Highwoods currently retains a Zacks #2 Rank, which translates into a short-term Buy rating. We are also maintaining our long-term Neutral recommendation on the stock.
