The Triad will soon be in the rear-view mirror of Highwoods Properties Inc.
The Raleigh commercial real-estate firm has announced plans to exit the Greensboro market by mid-2020, while entering its presence in uptown Charlotte through a $456 million purchase of Bank of America Tower at Legacy Union by November.
Highwoods sold off 2.8 million square feet in Winston-Salem properties between 2007 and 2011 after determining it was a noncore market. Depressed demand for office space during the Great Recession of 2007-11 slowed the company’s departure.
The company plans to sell its Greensboro properties, as well as those in Memphis, Tenn., in two phases. It is closing offices in both markets during the first phase.
The Greensboro portfolio consists of 2.67 million square feet of industrial space, 1.15 million square feet of office space and 30 acres of development land.
Among the properties are 1501 Highwoods Blvd., 628 Green Valley Road and 661 Brigham Road.
Highwoods said its expectation is at least breaking even on the Bank of America tower purchase from selling certain Greensboro and Memphis properties in the first phase. The second phase will consist of the remaining assets in both markets with “no pre-determined timetable.”
The portfolio shuffling represents what Highwoods calls “a further strengthening of its Best Business District office focus.”
It calls the 841,000-square-foot Bank of America tower “a trophy, LEED gold-registered office building.”
“Our plan is to enter the dynamic Charlotte market and rotate out of Greensboro and Memphis is consistent with our long-term strategic plan of owning high-quality, trophy office buildings in the Best Business Districts of markets with favorable economic and demographic trends,” Ed Fritsch, Highwoods’ chief executive, said in a statement.
“With its strong, diverse and growing economy, Charlotte has been at the top of our list for future market expansion.
“Bank of America Tower at Legacy Union ... is a solid bull’s eye with regard to our long-stated acquisition criteria: prime infill location in a top tier submarket, limited or no near-term rollover exposure and a financially sound customer base,” Fritsch said.
Highwoods said it projects to take between $3 million and $4 million in retirement, severance and other one-time costs during the third and fourth quarters.
Highwoods is classifying all Greensboro and Memphis assets as non-core. It plan to record land impairment charges of between $2.5 million and $4 million relating to land held for office development in Greensboro.