Core Insights - Highwoods Properties (HIW) has updated its investment activities to support long-term growth by acquiring Bloc83 in Raleigh and The Terraces in Dallas [1][8] Investment Details - Highwoods holds a 10% interest in Bloc83, acquired through a joint venture with the North Carolina Investment Authority, with a total investment of approximately $210.5 million. The mixed-use asset covers 492,000 square feet and includes two 10-story office buildings, with 27,000 square feet of retail space. As of December 31, 2025, the property was 97% leased with a weighted average lease term of 6.5 years [2] - Highwoods owns an 80% interest in The Terraces, acquired in a joint venture with Granite, totaling around $109.3 million. The company also contributed $12.9 million in preferred equity. This 12-story office building spans 173,000 square feet and was 98% leased as of December 31, 2025, with a weighted average lease term of seven years [3] Funding Strategy - The acquisitions will be funded through the sale of select non-core assets, making them leverage-neutral. The buyouts are expected to be immediately accretive to cash flows and neutral to the near-term FFO run rate for the company [4][8] Financial Projections - For 2026, Highwoods anticipates generating a GAAP net operating income (NOI) of approximately $9 million and cash NOI of $7.5 million from these investments, along with an additional $0.8 million from the preferred equity investment in The Terraces [4][8] Strategic Positioning - Highwoods' disciplined capital-recycling strategy, which involves shedding non-core assets and reinvesting in premium properties, enhances portfolio quality and positions the company for sustained growth [5]

Core Insights - Highwoods Properties (HIW) has made significant acquisitions, including Bloc83 in Raleigh and The Terraces in Dallas, through joint ventures with strategic partners [1] Group 1: Acquisition Details - Bloc83 is a 492,000 square foot mixed-use asset in CBD Raleigh, featuring two 10-story office buildings and 27,000 square feet of retail space, with a 97% lease rate as of December 31, 2025 and a weighted average lease term of 6.5 years [1] - The joint venture for Bloc83 involves a total investment of $210.5 million, including $3.3 million for near-term improvements and $0.5 million in transaction costs, with Highwoods initially holding a 10% interest [1] - The Terraces is a 173,000 square foot office building in Dallas, 98% leased as of December 31, 2025, with a weighted average lease term of 7.0 years and rents approximately 30% below market [1] Group 2: Financial Projections - The combined investment in The Terraces and Bloc83 is expected to generate GAAP net operating income of $9.0 million and cash net operating income of $7.5 million during 2026 [1] - Highwoods anticipates generating approximately $0.8 million of income in 2026 from its net preferred equity investment in The Terraces joint venture [1]

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]