In the newest activity, Capital Partners is buying 29 office and industrial buildings totaling 1.86 million sf in Tampa, Atlanta and Columbia, SC for $143 million or about an average $75 per sf. Area construction sources familiar with the properties tell GlobeSt.com the same assets couldn't be built today for less than $175 per sf.

Capital Partners has completed its due diligence and the deal is scheduled to close Jan. 4, confirms Highwoods president and CEO Ed Fritsch. Heistand and his funding partner, New York-based Lehman Brothers Inc., have deposited $2.5 million in non-refundable earnest money, Fritsch says.

Heistand couldn't be reached by GlobeSt.com's publication deadline for comment on why the deal was done at this time. However, area brokers who have worked with Heistand in the past on acquisitions tell GlobeSt.com the developer's strategy was motivated by the soaring construction cost of new class A office and industrial properties and the opportunity to acquire the assets a price "far below replacement cost."

The average age of the 29 properties is 18 years with an average occupancy of 69.5%. The properties generate yearly cash net operating income of about $9.8 million, Fritsch says. The five Tampa office buildings total 465,000 sf and have a 72.5% average occupancy. In Atlanta, 17 office buildings totaling 957,000 sf average 65.1% occupancy and four industrial properties totaling 271,000 sf have a 66% average occupancy. In Columbia, SC, three office building totaling 174,000 sf are 91.3% occupied.

In a prepared statement, Fritsch says the deal was done at this time to conform with Highwoods' long-range disposition strategy. "Our goal, as outlined our Strategic Management Plan, is to sell between $450 million to $550 million of non-core assets between 2005 and 2007," he says.

Fritsch says "exceeding the low end of this three-year goal at favorable cap rates in just over one year is a terrific achievement for our company and speaks to the hard work and concentrated effort of our entire team." Fritsch says the company will use a portion of the sales proceeds to retire additional high-coupon preferred stock "which will strengthen our balance sheet and to fund our expanding development pipeline." The company has $270 million of high coupon debt.

Assuming the deal closes as scheduled on Jan. 4, Highwoods will have completed 13 sales transactions in seven markets since January 2005, generating about $479 million of gross proceeds, Fritsch says.

Brokers Dennis Mitchell, Bick Cardwell and Steve Grable in the Atlanta office of Colliers Cauble & Co. negotiated for Highwoods. Heistand represented himself.