"Given the volatility of the capital markets and its resulting impact on the marketability of portfolios of this size, we have decided to delay the sale of our Winston-Salem portfolio," Highwoods Properties president and CEO Ed Fritsch says in a released statement. "Delaying this sale has no impact on funds from operations and our ability to fund the growth initiatives under our strategic plan. We continue to believe that exiting Winston-Salem is the appropriate move for the company long term."
Citing "limited opportunities" in the Winston-Salem market, the company announced plans earlier in the year to sell approximately 1.3 million sf of office space, 300,000 sf of industrial space and 14 acres of land. The company had originally anticipated that the sale would close in the fourth quarter. No price tag was attached to the sale, but the company tapped CB Richard Ellis as the listing agent.
Highwoods Properties vice president, investor relations Tabitha Zane tells GlobeSt.com that the portfolio is still on the market for sale, but no timetable has been set for when it may be sold. The company will wait until market conditions yield the targeted price for the assets, rather than sell the portfolio at an unfavorable price. In the meantime, operations in Winston-Salem have not been scaled back. "It's business as usual," Zane says. "This was a strategic decision, not a financial one."
For 2007, the company has already met its publicly stated goal of selling $100 million to $150 million of non-core assets. Year-to-date, the company has disposed of $119 million of non-core assets, and since January 2005 it has disposed of $716 million of non-core assets at a 6.7% average cap rate. As of Sept. 30, the company owned or had an interest in 378 office, industrial and retail properties with approximately 33.6 million sf and 22 development properties with three million sf.
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