Highwoods Properties Inc. is confident that it will execute the asset sales associated with its strategic market rotation plan at anticipated price levels, executives said Oct. 23.
All of the Phase 1 assets for sale in Greensboro, N.C., and Memphis, Tenn., are on the market at various stages of the sale process, President and CEO Ted Klinck said on the company's third-quarter earnings call.
"We've sort of trickled them out over the last 60 days, so it's still early. But I will tell you I think we feel pretty confident, just based on the broker opinions of value we got as we were analyzing this, and the initial feedback of the assets that were early out on the market," he said.
Klinck said he expects the majority of the sales associated with Phase 1 of the plan, which will effect the company's exit from the two markets and its entry into Charlotte, N.C., to close in the first quarter of 2020.
Asked about the rationale for the timing of the market rotation, Klinck identified the Charlotte tower opportunity, and the opportunity to sell industrial property in Greensboro in market conditions favorable to the segment, as the main drivers. The simultaneous exit of Greensboro and Memphis and entry into Charlotte also allowed the company to skirt the tax consequences that would attend a sales-only scenario.
"Again, Charlotte has been at the top of our new-market wishlist for a really long time," Klinck said. "We've spent a lot of time there and chased different opportunities. And we thought this was a ... bulls-eye, in terms of what we're looking for."
Klinck said the company intends to grow in Charlotte "as quick as it makes sense for us." The company is exploring both existing property and land for new development, and it has its sights on the Uptown, South End and SouthPark submarkets, in particular.