Highwoods Properties buys Colonial Place I and II

BUYER: Highwoods Realty LP (principals: Jeffrey Miller, Edward Fritsch, Terry Stevens, Michael Harris, Daniel Woodward and Steven Garrity), Raleigh, N.C.
SELLER: DRA/CLP CP Tampa LLC
PROPERTY: 4300 and 4350 W. Cypress St., Tampa
PRICE: $52.75 million
PREVIOUS PRICE: $54.9 million, January 2005
LAW FIRM ON DEED: Blank Rome LLP, Philadelphia

PLANS, DESCRIPTION:
Public real estate investment trust Highwoods Properties Inc. purchased Colonial Place I and II in Westshore for $52.75 million.

The price equated to $142 per square foot. That figure is higher than the two-year average price per square foot for office space ($115) in the Tampa Bay area, according to the CoStar Group.

The two 10-story office buildings house a total of 372,000 square feet of rentable space. The properties are 86.8% leased and are expected to generate yearly net operating income of $4.9 million. The two buildings are adjacent to 4200 Cypress, a 220,000-square-foot, 94% leased office building Highwoods Properties acquired in 2009.

The company has announced plans to invest another $3.5 million in building improvements. Even with the additional investment, which should bring the total price per square foot to $151, the company estimates it is investing 30% less than the replacement cost for the two buildings.

Ed Fritsch, president and CEO of Highwoods Properties, says the purchase should strengthen the company's position in Westshore.

“We are also excited about 'Highwoodtizing' and repositioning these assets, as we did with 4200 Cypress, where we spent $2.4 million in building improvements...” Fritsch says.

The company will rebrand and rename the two Colonial Place assets and 4200 Cypress, as Meridian One, Two and Three.

Including the acquisition, the company owns 16 office buildings in the Westshore submarket encompassing 2.4 million square feet with 88.4% occupancy.

As of Dec. 31, Highwoods owned or had an interest in 333 office, industrial and retail properties with a total of 34.6 million square feet. It also owned 649 acres of development land.