Highwoods Agrees To Buy Certain Office Assets From Preferred Apartment Communities

North Carolina -based real estate investment trust Highwoods Properties, Inc. (HIW) announced Monday its agreement to acquire a portfolio of office assets from Preferred Apartment Communities, Inc. (APTS).

The company's total investment, including the estimated value of the non-core assets, is expected to be $769 million. This includes $28 million of near-term building improvements and $5 million of transaction costs.

The core portfolio to be acquired consists of four Class A office assets in Charlotte and Raleigh and one mixed-use redevelopment site in Atlanta.

Highwoods said it has also agreed to acquire two non-core assets: a mezzanine loan related to a recently constructed office building in Atlanta; and Armour Yards, a multi-building creative office project in Atlanta.

The transaction is expected to include, among other things, the assumption of four secured loans collateralized by the core office buildings estimated to be recorded at fair value of $403 million in total.

The acquisition, which is subject to customary closing conditions, is scheduled to close during the third quarter of 2021.

The company's plan is to ultimately fund the acquisition primarily by accelerating the sales of existing non-core assets. The company expects to return its balance sheet metrics to current levels by mid-2022.

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