Highwoods Properties Inc. (HIW) inked a long-term build-to-suit lease deal with Laser Spine Institute for constructing a property in Westshore submarket in Tampa, FL. However, shares of Highwoods dipped 0.33% during the regular trading session on Sep 4, following this announcement, on broader market concerns.
As per the deal, Highwoods will build a six-story building, spanning 176,000-square-foot with structured parking, for total estimated investment of around $56 million. This 100% pre-leased asset will be located on four acres of land at Avion Park, which is owned by Highwoods. The development will begin later this year and is anticipated to finish in first-quarter 2016. As a matter of fact, Laser Spine Institute will use this property as its new headquarters and ambulatory surgery center.
We are encouraged with this new development plan of Highwoods in one of the best business districts (BBDs) of Tampa. Importantly, Highwoods' efficiency in pre leasing space in the Tampa office market, which is improving steadily with rising new leases, is notable. This will pave the way for bottom-line growth in the future.
With the new construction project in Tampa, Highwoods has an overall development pipeline spanning 1.4 million square feet (85.2% pre-leased), with an estimated investment of around $359 million.
As a matter of fact, Highwoods has been focusing on shifting its portfolio mix to high growth markets and offloading its asset base in non-core markets. Earlier this week, Highwoods successfully exited the Greenville market and disclosed its expansion plans in the Nashville market (read: Highwoods Exits Greenville Market, Expands in Nashville). Such moves bode well for Highwoods’ overall portfolio enhancement.
Highwoods currently carries a Zacks Rank #3 (Hold). Investors interested in REITs may consider other stocks like DCT Industrial Trust Inc. (DCT), DiamondRock Hospitality Co. (DRH) and Gladstone Commercial Corp. (GOOD). All stocks have a Zacks Rank #2 (Buy).
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