UPDATE (Dec. 10, 2012): HFF announced today it has acted as the financial advisor in the business transaction whereby Highwoods Properties, Inc. acquired control of EQT Plaza, the trophy office tower in downtown Pittsburgh. The HFF team representing the sellers included John Pelusi, Gerard Sansosti, and Kyle Prawdzik.
Story continues below.
Highwoods Properties (NYSE: HIW
) has acquired the EQT Plaza at 625 Liberty Ave. in Pittsburgh, PA for $99.2 million, or about $161 per square foot, from Pearson Partners, Inc.
The 32-story, 615,942-square-foot, class A office tower was built in 1987 on 1.6 acres in the downtown CBD. The property was reported to be 92.2 percent occupied at the time of sale, and is expected to increase to 95.9-percent occupancy by the third quarter of 2013 with executed leases in-hand. Additional tenants at the building include Cohen & Grigsby, McGuire Woods and Fox Rothschild. The building features a full-service health club, 5,000-square-foot conference center, underground parking garage and a Morton's of Chicago restaurant.
Ed Fritsch, president and chief executive officer of Highwoods, stated, "We are thrilled to expand our footprint by 40% in downtown Pittsburgh with the acquisition of another Class A office building
. EQT Plaza's proximity to PPG Place, less than three blocks away, will enable us to garner a number of operating synergies and will heighten the Highwoods brand in downtown Pittsburgh. There are also opportunities to 'Highwoodtize' this property, further enhancing its appeal to current and prospective customers."
According to a company release, the $99.2 million investment, at 45 percent below replacement cost, includes $8 million in planned building improvements. 2013 cash and GAAP net operating income will come in at $7 million and $8.8 million, respectively. Also, the property has an existing ground lease with 111 years remaining with an annual rent of $1 million. The acquisition was funded with proceeds from its ATM program, non-core dispositions and borrowing from its revolving credit facility; no debt was assumed in connection with the sale.
There were no brokers involved in the direct sale.
Please see CoStar COMPS #2612216 for additional information on this transaction.