Highwoods Announces Investment Activity

Core Insights - Highwoods Properties, Inc. has made two significant acquisitions: Bloc83 in Raleigh and The Terraces in Dallas, through joint ventures, indicating a strategic expansion into high-growth markets [2][3][4] Acquisition Details - Bloc83 is a 492,000 square foot mixed-use asset in CBD Raleigh, acquired for a total investment of $21 million, with a 10% ownership stake by Highwoods [1][8] - The Terraces is a 173,000 square foot office building in Dallas, acquired for a total investment of $87.4 million, with an 80% ownership stake by Highwoods [1][10] Financial Impact - The acquisitions are expected to be immediately accretive to cash flows and neutral to the current FFO run rate, with long-term growth potential [2][5] - The combined investment in both properties is projected to generate GAAP net operating income of $9 million and cash net operating income of $7.5 million in 2026 [11] Funding Strategy - The acquisitions will primarily be funded through the sale of non-core assets, with a leverage-neutral rotation of capital expected by mid-2026 [5][12] - In the fourth quarter of 2025, the company sold non-core assets for gross proceeds of $65.9 million and plans to sell additional properties for $42.2 million [13] Market Positioning - The acquisition of The Terraces positions Highwoods in Preston Center, a supply-constrained area in Dallas, with significant long-term rent growth potential due to in-place rents being approximately 30% below market [3][9] - Bloc83, being 97% leased, is strategically located near the company's headquarters, enhancing its portfolio flexibility [4][6]