Highwoods Properties, Inc. (NYSE: HIW), the largest owner and operator of suburban office properties in the Southeast and NAIOP’s 2009 Developer of the Year, today announced that it has signed a long-term lease with a new customer, Duke Medicine, for 100% of its 60,000 square foot Riverbirch building. The Company will reposition this 23-year old traditional office property to a medical office building.
The Company noted that, given the scale of this conversion to a medical office building, including features such as the addition of a gurney-sized elevator, covered patient drop-off and a parking deck, Riverbirch will be removed from the Company’s in-service portfolio and be reclassified as a redevelopment project. The Company’s total investment is projected to be $12.7 million, including current net book value. The redevelopment project, which will be completed in the fourth quarter of 2010, is expected to generate a stabilized cash yield in excess of 10.5%.
Ed Fritsch, President and CEO of Highwoods, stated, “We are pleased to welcome Duke Medicine to Riverbirch and look forward to a long and mutually beneficial relationship with this very highly regarded healthcare provider. Congratulations as well to our leasing team for their hard work in forging this new customer relationship.”
“This long-term lease represents our Duke physicians’ commitment to improving access to Duke Medicine care for patients throughout the greater Triangle market,” said Carl Ravin, President of Duke Faculty Practice (PDC). “The Riverbirch facility is conveniently located at Page Road to better serve patients in Wake, Durham and Orange counties.”Private Diagnostic Clinic at Duke Medicine is a faculty practice associated with Duke University and Health System. Currently, the PDC has approximately 1,200 providers and practices in over 30 clinic sites in 10 counties across central North Carolina. About Highwoods Properties Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. At March 31, 2010, the Company owned or had an interest in 378 in-service office, industrial and retail properties encompassing approximately 35.7 million square feet. Highwoods also owned 581 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Missouri, Mississippi, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our Web site at www.highwoods.com. Certain matters discussed in this press release, such as the projected cost, impact and timing of our redevelopment activity, are forward-looking statements within the meaning of the federal securities laws. These statements are distinguished by use of the words "will", "expect", "intend" and words of similar meaning. Although Highwoods believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.