Highwoods closes $683 million office asset purchase from Preferred Apartment Communities
On July 29, 2021, Highwoods Properties closed its acquisition of a portfolio of office assets from Preferred Apartment Communities, with a total expected investment of $683 million. The company funded the initial cash portion with restricted escrow cash and a $200 million six-month bridge facility, and plans to fund the deal mainly by selling $500 million to $600 million of non-core assets by mid-2022, though it gives no assurance those sales will occur on favorable terms.
- Total expected investment is $683 million, including $28 million of near-term building improvements and $4 million of transaction costs.
- Four secured loans assumed, estimated at fair value of $407 million, with a weighted average effective interest rate of 3.5%.
- Initial cash payment funded by restricted escrow cash and a $200 million, six-month unsecured bridge facility at LIBOR plus 85 basis points.
- Plan to sell $500 million to $600 million of non-core assets by mid-2022; about $250 million expected to qualify for Section 1031 tax-deferred treatment.