Continuing to reposition its portfolio by buying high-end office properties, Highwoods Properties, Inc. (NYSE:HIW
) closed on its acquisition of Two Alliance Center, a 29-story, LEED-Gold Certified office tower located in Atlanta's Upper Buckhead submarket.
Tishman Speyer sold the 491,888-square-foot office tower, which is currently 92% leased, for $146.7 million all-in, or about $298 per square foot, which includes $0.8 million for building improvements. The final price was offset by $6.4 million, which included the closing costs, free rent, as well as future tenant improvements from the contracted $152.3 million. Highwood Properties used its ATM programs to fund this acquisition.
"This investment garners us one of the best Class A office buildings in the southeast, a new building with a well-diversified rent roll that we acquired at a 10% discount to replacement cost," Highwoods President and CEO Ed Fritsch commented in a statement announcing the purchase.
According to Fritsch, current tenants in the building carry an average remaining lease term of 10 years with no lease expirations until 2017, when less than 24,000 square feet is scheduled to roll.
Located at 3560 Lenox Rd NE in Fulton County, Two Alliance Center was developed in 2009. Major tenants include Marsh, Novelis, Reznick Group, Thompson Hine, and Turner Construction.
The acquisition of Two Alliance Center in Atlanta comes one year after the Raleigh-based REIT acquired PPG Place in downtown Pittsburgh. For additional information, please refer to CoStar COMPS #2559405.