"Our focus remains on continuing to improve the overall quality of our portfolio through the disposition of older, non-core assets," says Ed Fritsch, president and chief executive officer of Highwoods. "In addition, by selling these older, capital-intensive retail centers, we are avoiding over $3 million in building improvements that would have been incurred over the next two years."

The name of the purchasing company was not released; but the buyer now owns three grocery store-anchored retail centers, totaling 416,000 square feet. The 55-year-old properties are roughly 94.5% leased. Highwoods executives estimate the portfolio accounted for $5.4 million of annual net operating income.

With the disposition of these assets, Highwoods now focuses on the Country Club Plaza area. ""Our 2.3 million square feet of office and retail properties in Kansas City are now exclusively located in and around the Country Club Plaza, a unique, upscale retail center that includes many high-end national retailers," Frisch says.

Real estate advisor Savills LLC assisted Highwoods in the disposition.

"This transaction demonstrates that, even in today's moribund sales environment, there are still buyers willing to buck the trend and seize high-quality properties when they become available," says Savills SVP Mark De Riemer, in a statement.

At the end of Q1 Highwoods owned or had a stake in 382 in-service office, industrial and retail properties totalling 35.4 million square feet. It's properties are located mostly in the Eastern half of the country in Florida, Georgia, Iowa, Kansas, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Virginia.

On Thursday, the company announced the pricing for a common stock offering. Highwoods will offer 6.1 million shares at $21.50 per share. Merrill Lynch & Co., Wachovia Securities and Morgan Stanley & Co. Inc. are acting as joint book-running managers. The underwriters have the optiong to purchase up to 915,000 additional shares.

The offering will close June 1. At the close, Highwoods hopes to have $125.1 million to repay debt and to use for general business purposes.

Instant Insights /

Highwoods Properties Sells $62M Retail Portfolio

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