Highwoods Announces Investment Activity

Rhea-AI Summary

Highwoods (NYSE:HIW) announced two strategic joint‑venture acquisitions: Bloc83 in CBD Raleigh (492,000 sq ft; 97% leased) and The Terraces in Dallas’ Preston Center (173,000 sq ft; 98% leased). Total JV investments are expected at $210.5M (Bloc83, 100%) and $109.3M (The Terraces, 100%); Highwoods initially owns 10% of Bloc83 (option to 50%) and 80% of The Terraces. 2026 outlook: combined GAAP NOI of $9.0M and cash NOI of $7.5M, plus ~$0.8M net preferred equity income. Funding plan: accelerate sales of non‑core assets to achieve a leverage‑neutral capital rotation by mid‑2026.

Positive

• Bloc83 JV investment $210.5M (HIW initial 10% interest)
• The Terraces JV investment $109.3M (HIW 80% interest)
• 2026 combined GAAP NOI expected at $9.0M; cash NOI $7.5M

Negative

• HIW initial ownership in Bloc83 is only 10% (option to 50%)
• Plan depends on accelerated non‑core asset sales to mid‑2026
• In‑place rents at The Terraces are ~30% below market

News Market Reaction

-0.04%

1 alert

-0.04% News Effect

On the day this news was published, HIW declined 0.04%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

Key Figures

Bloc83 JV total investment: $210.5M The Terraces JV total investment: $109.3M 2026 GAAP NOI from JVs: $9.0M +5 more

8 metrics

Bloc83 JV total investment $210.5M 100% JV investment including improvements and transaction costs

The Terraces JV total investment $109.3M 100% JV investment including improvements and transaction costs

2026 GAAP NOI from JVs $9.0M Expected 2026 GAAP net operating income from Bloc83 and The Terraces

2026 cash NOI from JVs $7.5M Expected 2026 cash net operating income from the two joint ventures

2026 preferred equity income $0.8M Expected 2026 income from net preferred equity in The Terraces JV

6Hundred at Legacy Union acquisition $223.1M Acquisition closed in Q4 2025, to be funded via non-core sales

Q4 2025 non-core asset sales closed $65.9M Combined gross proceeds from non-core assets sold in Q4 2025

Expected additional non-core sales $42.2M Combined purchase price for three buildings expected to close within 45 days

Market Reality Check

Price: $27.54 Vol: Volume 1,000,220 is 0.82x...

normal vol

$27.54 Last Close

Volume Volume 1,000,220 is 0.82x the 20-day average of 1,213,987, indicating subdued trading before this news. normal

Technical Shares at $27.25 traded below the 200-day MA of $29.33 and about 16.82% under the $32.76 52-week high, despite management highlighting immediately accretive cash flows from these acquisitions.

Peers on Argus

Office REIT peers showed mixed moves: CDP +0.31%, SLG +0.57%, while DEI -0.98%, ...

Office REIT peers showed mixed moves: CDP +0.31%, SLG +0.57%, while DEI -0.98%, CUZ -2.30%, KRC -0.13%. With HIW down 0.87% pre-announcement and no peers in the momentum scanner, trading pointed to stock-specific factors rather than a coordinated sector rotation.

Historical Context

5 past events · Latest: Jan 06 (Neutral)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 06	Earnings call date	Neutral	-0.7%	Announced Q4 2025 results release and conference call scheduling details.
Nov 19	Acquisition close	Positive	-1.2%	Closed $223M 6Hundred at Legacy Union acquisition in Charlotte CBD.
Nov 17	Acquisition agreement	Positive	+1.0%	Agreed to acquire 6Hundred at Legacy Union with long WALT and NOI targets.
Nov 04	Debt offering	Neutral	+1.0%	Priced $350M 5.350% notes due 2033 to refinance debt and fund growth.
Oct 28	Earnings release	Neutral	-0.2%	Announced availability of Q3 2025 results on investor relations site.

Pattern Detected

Recent acquisition and financing news has not produced consistently positive price responses, with one major acquisition headline aligning positively but others seeing mild sell-offs.

Recent Company History

Over the past several months, Highwoods has focused on capital recycling and portfolio upgrades. In November 2025, it agreed to and then closed the acquisition of 6Hundred at Legacy Union in Charlotte with a $223M expected investment, funded on a leverage-neutral basis via non-core asset sales. It also priced and completed a $350M 5.350% notes offering due 2033 to repay debt and support acquisitions. Earnings releases and call-date announcements in Q3 2025 and early 2026 have been routine. Today’s JV investments in Dallas and Raleigh extend this same capital recycling and market-focus strategy.

Market Pulse Summary

This announcement details Highwoods’ strategy of rotating into higher-quality, joint-venture assets ...

Analysis

This announcement details Highwoods’ strategy of rotating into higher-quality, joint-venture assets in Dallas and Raleigh while funding purchases through sales of non-core properties. Management targets $9.0M GAAP NOI and $7.5M cash NOI in 2026 from these JVs, plus $0.8M from preferred equity, alongside a previously closed $223.1M acquisition in Charlotte. Investors may monitor progress on the planned leverage-neutral capital rotation, occupancy trends at Bloc83 and The Terraces, and pricing for the remaining $42.2M of expected non-core dispositions.

Key Terms

joint venture, preferred equity, gaap net operating income, cash net operating income, +3 more

7 terms

joint venture financial

"has acquired Bloc83 ... in a joint venture with the North Carolina Investment Authority"

A joint venture is when two or more companies team up to work on a specific project or business idea, sharing both the risks and the rewards. It’s like friends starting a lemonade stand together—each contributes resources and they split the profits, making it easier to succeed than going alone.

preferred equity financial

"The Company also contributed to the joint venture $12.9 million ... of preferred equity."

Preferred equity is a type of investment that sits between common stock and debt in a company's financial structure. It typically offers investors priority in receiving dividends and getting their money back if the company runs into trouble, making it somewhat safer than regular shares. Investors value preferred equity because it provides a steady income stream while still allowing some participation in the company's success.

gaap net operating income financial

"expected to generate GAAP net operating income of $9.0 million and cash net operating income"

GAAP net operating income is the profit a company generates from its core day-to-day business activities, calculated according to Generally Accepted Accounting Principles and shown before interest and taxes. It is like the money left after a store pays for goods, staff, and utilities but before paying lenders or taxes, so investors use it to judge how well the underlying business is performing independent of financing or tax effects.

cash net operating income financial

"generate GAAP net operating income of $9.0 million and cash net operating income of $7.5 million."

Cash net operating income is the money a business or property actually brings in from its core activities after paying the regular, cash operating expenses, excluding noncash charges like depreciation and one-time gains or losses. For investors it shows the real, recurring cash the asset generates—like a household’s monthly take-home from rent after paying utilities and maintenance—so it helps assess sustainability of income and ability to cover debt or pay dividends.

ffo financial

"Neutral to Current FFO Run Rate; Accretive over Long-Term"

Funds from operations (FFO) is a performance metric used mainly for real estate companies that measures the cash generated by their core rental and property-management activities, while removing accounting items such as building depreciation and one-time gains or losses from property sales. Investors rely on FFO to assess a real estate firm's ability to pay and sustain dividends and fund growth—similar to checking how much actual rent a landlord collects each month rather than paper profits.

noI financial

"there is significant NOI upside at The Terraces as leases roll during the next few years."

Net operating income (NOI) is the total profit a business makes from its core operations, after subtracting expenses directly related to running the business but before accounting for taxes, interest, or investments. It shows how well the company’s main activities generate earnings and helps investors assess its financial health and profitability without the influence of external factors. Think of it as the money a store earns from sales minus the costs to keep it open.

cbd technical

"Bloc83 in CBD Raleigh in Joint Venture with the North Carolina Investment Authority"

Cannabidiol (CBD) is a natural compound found in hemp and cannabis plants that does not produce the “high” associated with THC. Investors care because CBD is sold in a wide range of consumer products and medical treatments, so changes in regulation, clinical evidence, or consumer demand can quickly affect company sales, margins and legal risk — think of it as a product line whose value depends on shifting rules and public trust.

AI-generated analysis. Not financial advice.

_____________________________________

Acquires Bloc83 in CBD Raleigh in
Joint Venture with the North Carolina Investment Authority
$21.0M Total Investment (at HIW 10% Share)
492,000 Square Feet, 97% Leased
_____________________________________

Acquires The Terraces in Preston Center BBD in Dallas in
Joint Venture with Granite Properties
$87.4M Total Investment (at HIW 80% Share)
173,000 Square Feet, 98% Leased
_____________________________________

Acquisitions to be Funded Primarily Through
Sales of Non-Core Assets
Expect Leverage-Neutral Rotation of Capital by Mid-2026
_________________________________________

Plan Expected to Strengthen Long-Term Growth Trajectory 
Immediately Accretive to Cash Flows
Neutral to Current FFO Run Rate; Accretive over Long-Term
_________________________________________

RALEIGH, N.C., Jan. 12, 2026 (GLOBE NEWSWIRE) -- Highwoods Properties, Inc. (NYSE:HIW) has acquired Bloc83, a two-building, 492,000 square foot mixed-use asset in CBD Raleigh, in a joint venture with the North Carolina Investment Authority and The Terraces, a 173,000 square foot office building in the Preston Center BBD of Dallas, in a joint venture with Granite Properties.

Ted Klinck, President and CEO, stated, “We are excited to expand our presence in Dallas and Raleigh with the addition of two best-in-class properties at attractive risk-adjusted yields with good long-term growth potential. The acquisition of The Terraces deepens our relationship with our partner in Dallas, Granite, and marks our entry into Preston Center, a BBD we identified for future expansion when we entered Dallas in 2022. Preston Center is the most supply-constrained BBD in the Dallas market with a healthy outlook for long-term rent growth. With in-place rents approximately 30% below market, there is significant NOI upside at The Terraces as leases roll during the next few years. Our Dallas portfolio is now projected to be approximately 7% of our total NOI upon stabilization of our development properties, which would make it our 5^th largest market.

“Bloc83 is a property we have followed closely since it was first developed. Located in Raleigh’s CBD and just a few blocks from our corporate headquarters, Bloc83 is an excellent strategic fit within our portfolio. The property is 97% leased, 17% higher than the downtown competitive set. We now own 2.0 million square feet in CBD Raleigh, which gives us flexibility to accommodate the evolving space needs of our existing customers and prospects. Additionally, we have expanded our roster of strategic investment partners with the formation of a new joint venture with the North Carolina Investment Authority.

“Our plan is to effectively match-fund our purchase of these best-in-class assets in the high-growth markets of Dallas and Raleigh by selling a select portfolio of non-core assets or properties where we believe value has been maximized. Importantly, once completed, our plan is expected to be roughly leverage-neutral, accretive to cash flows and neutral to our near-term FFO run-rate, while improving the quality of our portfolio and providing higher growth in cash flows and FFO over time.”

Acquisition of Bloc83
Bloc83 is a 492,000 square foot mixed-use asset that includes two 10-story best-in-class office buildings with 27,000 square feet of ground floor amenity retail located in CBD Raleigh. The building includes a rooftop terrace, customer lounge, fitness center, and interactive sports room with a golf simulator, among other on-site customer amenities. Bloc83, which delivered between 2019 and 2021, was 97% leased on a combined basis at December 31, 2025 with a weighted average lease term of 6.5 years.

The Company initially owns a 10% interest in the joint venture that was formed to acquire Bloc83. The North Carolina Investment Authority, a new strategic investment partner for Highwoods, owns the remaining 90% interest. The Company retains the option to increase its ownership interest to 50%. The joint venture’s total investment (at 100%) is expected to be $210.5 million, which includes $3.3 million of planned near-term building improvements and $0.5 million of transaction costs.

Acquisition of The Terraces
The Terraces is a 12-story best-in-class office building encompassing 173,00 square feet located in the heart of Dallas’ Preston Center, a new BBD for Highwoods. The Terraces, which delivered in 2017, was 98% leased at December 31, 2025 with a weighted average lease term of 7.0 years. Rents are approximately 30% below market, which provides significant long-term upside potential.

The Company owns an 80% interest in the joint venture that was formed to acquire The Terraces. Granite, the Company’s longtime partner in Dallas, owns the remaining 20% interest. The Company also contributed to the joint venture $12.9 million (net of the Company’s 80% interest) of preferred equity. The joint venture’s total investment (at 100%) is expected to be $109.3 million, which includes $2.5 million of planned near-term building improvements and $0.5 million of transaction costs.

2026 NOI Outlook
During 2026, the Company’s combined investment in The Terraces and Bloc83 joint ventures is expected to generate GAAP net operating income of $9.0 million and cash net operating income of $7.5 million. In addition, the Company expects to generate approximately $0.8 million of income during 2026 from its net preferred equity investment in The Terraces joint venture.

Funding Plan
The Company’s plan is to ultimately fund these acquisitions, and the $223.1 million acquisition of 6Hundred at Legacy Union in Charlotte that closed during the fourth quarter of 2025, primarily by accelerating the sale of a select portfolio of non-core assets or properties where we believe value has been maximized. The Company expects to complete this leverage-neutral rotation of capital by mid-2026.

During the fourth quarter of 2025, the Company sold in a series of transactions non-core assets for combined gross proceeds of $65.9 million. The sold assets consist of: (1) a 42-year old office building encompassing 27,000 square feet at Century Center in Atlanta; (2) a 49-year old office building encompassing 57,000 square feet in Tampa’s Westshore BBD; (3) a 2.1-acre surface parking lot in CBD Orlando and a 0.7-acre surface parking lot in CBD Raleigh; (4) a 25-year old office building encompassing 35,000 square feet in the Research Triangle Park submarket of Raleigh; and (5) the Company’s 50% interest in a joint venture that owns three office buildings encompassing 354,000 square feet in the Innsbrook BBD of Richmond. Additionally, the Company expects to close on the sale of three additional non-core buildings for a combined purchase price of $42.2 million in the next 45 days.

Presentation
A presentation highlighting the planned acquisition and planned acceleration of non-core dispositions can be accessed through the link below and in the Investors section of the Company’s website at www.highwoods.com.

Highwoods Strategic Investments

About Highwoods
Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW), fully-integrated office real estate investment trust (“REIT”) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Our vision is to be a leader in the evolution of commercial real estate for the benefit of our customers, our communities and those who invest with us. Our mission is to create environments and experiences that inspire our teammates and our customers to achieve more together. We are in the work-placemaking business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates and, in turn, our shareholders. For more information about Highwoods, please visit our website at www.highwoods.com.

Forward-Looking Statements
Some of the information in this press release may contain forward-looking statements. Such statements include, in particular, statements about our plans, strategies and prospects such as the following: closing of the planned acquisition may not occur on the terms described in this press release or at all; the expected financial and operational results and the related assumptions underlying our expected results; the planned sales of non-core assets and expected pricing and impact with respect to such sales, including the tax impact of such sales; the anticipated total investment, projected leasing activity, estimated replacement cost and expected net operating income of acquired properties and properties to be developed; and expected future leverage of the Company. You can identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that our plans, intentions or expectations will be achieved.

Factors that could cause our actual results to differ materially from Highwoods’ current expectations include, among others, the following: buyers may not be available and pricing may not be adequate with respect to the planned dispositions of non-core assets; comparable sales data on which we based our expectations with respect to the sales price of the non-core assets may not reflect current market trends; the financial condition of our customers could deteriorate; our assumptions regarding potential losses related to customer financial difficulties could prove incorrect; counterparties under our debt instruments, particularly our revolving credit facility, may attempt to avoid their obligations thereunder, which, if successful, would reduce our available liquidity; we may not be able to lease or re-lease second generation space, defined as previously occupied space that becomes available for lease, quickly or on as favorable terms as old leases; we may not be able to lease newly constructed buildings as quickly or on as favorable terms as originally anticipated; we may not be able to complete development, acquisition, reinvestment, disposition or joint venture projects as quickly or on as favorable terms as anticipated; development activity in our existing markets could result in an excessive supply relative to customer demand; our markets may suffer declines in economic and/or office employment growth; increases in interest rates could increase our debt service costs; increases in operating expenses could negatively impact our operating results; natural disasters and climate change could have an adverse impact on our cash flow and operating results; we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or repay or refinance outstanding debt upon maturity; and the Company could lose key executive officers.

This list of risks and uncertainties, however, is not intended to be exhaustive. You should also review the other cautionary statements we make in “Risk Factors” set forth in our 2024 Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on forward-looking statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements to reflect any future events or circumstances or to reflect the occurrence of unanticipated events.

Contact:	Brendan Maiorana
	Executive Vice President and Chief Financial Officer
	brendan.maiorana@highwoods.com
	919-872-4924

FAQ

What did Highwoods (HIW) acquire on January 12, 2026?

Highwoods acquired Bloc83 in Raleigh (492,000 sq ft) and The Terraces in Dallas (173,000 sq ft) via joint ventures.

How much are the total joint venture investments for Bloc83 and The Terraces?

The joint ventures are expected at $210.5M for Bloc83 (100%) and $109.3M for The Terraces (100%).

What ownership stakes does HIW hold in the new joint ventures?

Highwoods initially holds 10% of the Bloc83 JV (option to increase to 50%) and 80% of The Terraces JV.

How will Highwoods fund the Bloc83 and The Terraces acquisitions?

The company plans to accelerate sales of non‑core assets and expects a leverage‑neutral rotation of capital by mid‑2026.

What is the near‑term income outlook for the new acquisitions in 2026?

Highwoods expects combined GAAP NOI of $9.0M, cash NOI of $7.5M, and about $0.8M of preferred equity income in 2026.

Why is The Terraces considered to have upside for HIW shareholders?

The Terraces is ~98% leased with in‑place rents roughly 30% below market, creating potential NOI upside as leases roll.