Highwoods Acquires Two Alliance Center. Leverage Neutral

Transcription

1 Highwoods Acquires Two Alliance Center Leverage Neutral September 21, 2012

2 Safe Harbor Certain matters discussed in this presentation, such as expected financial and operational results and the impact of our investment activity, are forward-looking statements within the meaning of the federal securities laws. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be achieved. Factors that could cause actual results to differ materially from our current expectations include, among others, the following: the financial condition of our customers could deteriorate; competitive development activity could result in excessive supply of properties; investment projects may not be completed as quickly or on as favorable terms as anticipated; we may not be able to lease or re-lease second generation space quickly or on as favorable terms as old leases; our markets may suffer declines in economic growth; unanticipated increases in interest rates could increase our debt service costs; unanticipated increases in operating expenses could negatively impact our net operating income; we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or to repay or refinance outstanding debt upon maturity and others detailed in our 2011 Annual Report and subsequent SEC reports. DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 2

3 Elevator Speech $146.7M $298 PSF 10% Below Replacement Cost Diversified Rent Roll 10 Year Average Lease-Term 90% Occupancy 7.6% 2013 GAAP Cap Rate Competitively-Advantaged Site within Buckhead Easy & Controlled Access Points New Class AA LEED Gold Trophy Asset Leverage Neutral Under 44% Post-Closing DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 3

4 Transaction Overview Class AA Delivered 2009 Investment $146.7M / $298 PSF Occupancy 90% 2013 GAAP Cap Rate 7.6% Below Replacement Cost 10% Customer Base Average Lease Term Financial Leverage Diversified, High-Quality 10 Years Neutral Post-Closing Under 44% DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 4

5 Two Alliance Center Market Submarket Atlanta Buckhead SF 491,888 Floors 29 Exposure Sustainability Access Parking On-Site Amenities No Roll Until 2017 (24K SF) LEED Gold GA 400, Peachtree Road, MARTA Structured Parking Below Building 5,800 SF Conference Facility, Fitness Center, Full-Service Café DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 5

6 Buckhead Occupancy 2Q % 3Q % 4Q % 1Q % 2Q % 3Q % 4Q % 1Q % 2Q % Occupancy has Increased 630 bps in Past 2 Years Inventory of 21.8M SF Unchanged Since 1Q10 Net Absorption of 1.4M SF in Past 2 Years Source: Co-Star Group DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 6

7 Growth Trend of Average Replacement Costs Over Buckhead Development History $500 $ % Average Annual Growth $450 +/- $300 $325 +/- $200 $200 +/- $100 $125 +/- Source: Cushman & Wakefield Southeast Capital Markets Group Mid-1980s Late 1990s Current Projected +/ DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 7

8 Class AA Competitive Set 99% Terminus % Terminus % 3344 Peachtree % Two Alliance Center % Phipps Tower % 3630 Peachtree 2010 DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 8

9 DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 9

10 Walkable Amenities Two Upscale Malls Lenox Square Home to 250+ Specialty Stores Anchors: Neiman Marcus, Bloomingdale s, Macy s Phipps Plaza Home to 100+ Specialty Stores Anchors: Saks Fifth Avenue, Nordstrom, Belk Two Alliance Center Mandarin Oriental Hotel Phipps Plaza Ritz Carlton Luxury Hotels Ritz Carlton Mandarin Oriental 400 Westin Hotel Outstanding Accessibility Lenox Square Multiple Controlled Points of Ingress/Egress Direct Access to GA 400 & Peachtree Road Walking Distance to MARTA W Hotel DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 10

11 Stacking Plan Top 6 Customers Reznick Group 64,801 SF Marsh Mercer 123,480 SF Novelis 125,208 SF Prudential 16,244 SF Thompson Hine 30,048 SF Turner Construction 33,151 SF DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 11

12 Solid Accretive Investment Trophy Asset 10% Below Replacement Cost Key Takeaways Acquired on Leverage Neutral Basis Stable Long-Term Diversified Rent Roll 7.6% 2013 GAAP Cap Rate DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT NYSE: HIW / 12

13 Thank You Please Contact Us with Any Questions