Highwoods Completes Creative Deal Close

MEMPHIS, TN-Cash isn’t the only way to close a deal in today’s struggling real estate environment. Highwoods Properties Inc. has acquired the 135,000-sf PennMarc Centre office building at 6401 Poplar Ave. in a tax-deferred exchange with Union Realty, an entity owned by locally based Belz Enterprises.

In exchange for the property, Highwoods issued 183,587 operating partnership units to Belz and assumed $7.8 million of 8.1% secured debt maturing in February 2016. Brokers throughout the country have been expressing the need for creativity in order to complete transactions in this market, and this deal is certainly an example, says Steve Guinn, Highwoods vice president and Memphis division manager.

“The seller has effectively taken their equity and converted it into units, which is convertible into stock,” Guinn tells GlobeSt.com. “They’ve diversified their equity from one building to a large portfolio of buildings, and now get a dividend coming in every quarter,” regardless of management or leasing.