Highwoods Pockets $69M for Atlanta Assets

November 9, 2021

The REIT expects to wrap additional office sales by the end of the year.

5405 Windward Parkway

Highwoods Properties has closed on the disposition of two office properties encompassing 393,000 square feet in Atlanta for a combined $68.6 million. 5405 Windward Parkway in the Alpharetta submarket traded for $48 million, while 50 Glenlake in the Central Perimeter brought in $20.6 million.

By the end of the year, the company also expects to close three additional transactions. Selling the trio of non-core office buildings totaling 366,000 square feet will bring an anticipated, combined sale price of $65.5 million.

In a prepared statement, Ted Klinck, president & CEO of Highwoods Properties, noted that the company closed nearly $300 million in dispositions since it committed $769 million for the acquisition of an office portfolio in the Charlotte, N.C., Raleigh, N.C., and Atlanta markets back in April. The transaction closed in July; Preferred Apartment Communities sold the assets for $683 million and two other properties that were part of the initial portfolio went to another buyer, Northwood Investors.

The 1997-built 5405 Windward Parkway totaling 248,000 square feet, last traded in 1998 for $35 million, according to CommercialEdge data. As of late September, the property was 93 percent occupied and had a weighted average lease term of 7.6 years, JLL data shows. Medical technology company Avanos is the anchor tenant of the low-rise office building, which hosts its U.S. headquarters.

50 Glenlake

As of early November, the 145,000-square-foot 50 Glenlake was 73 percent leased to a diverse tenant roster, according to the same source. The six-story property was also built in 1997 and last traded in the same year for $22.5 million, CommercialEdge data shows.

5405 Windward Parkway features 62,121 square feet floorplates and has ample parking, offering 1,011 parking spots. Both properties feature fitness and conference centers, cafés as well as bike storage.

The Atlanta office market

As of September, vacancy across the metro reached almost 20 percent, 500 basis points higher than the national average of 14.9 percent, according to CommercialEdge data. The change represented a year-over-year increase of 240 basis points.

Within Greater Atlanta, there was 4.3 million square feet of office space under construction as of September. In October, MetLife Investment Management and Granite Properties’ mixed-use office project in Midtown Atlanta reached a new construction milestone. The joint venture topped off the 612,000-square-foot Midtown Union tower, with plans to deliver the project by 2022.