RALEIGH, N.C., May 22, 2017 -- Highwoods Properties, Inc. (NYSE:HIW) announces that it has been selected by MetLife, Inc. (NYSE:MET), a Fortune 40 company and a global provider of life insurance, annuities, employee benefits and asset management, to develop a third office building for its global technology campus in Cary’s highly-desirable, mixed-use Weston PUD (planned unit development). Highwoods delivered the first two 100% pre-leased buildings for MetLife in 2015. With the addition of the third building, Highwoods total investment in this 655,000 square foot campus is expected to be approximately $172 million.
The newest 219,000 square foot building will seek LEED-certification and will include structured parking. It will be situated on the remaining 13.5 acres of a 40-acre Highwoods-owned site fronting the 520-acre Lake Crabtree, which is adjacent to I-40 and the Raleigh-Durham International Airport.
“MetLife is a long-term, highly regarded Highwoods customer, and we appreciate their continued confidence in our team and brand,” said Ed Fritsch, president and chief executive officer of Highwoods Properties. “We are very pleased MetLife has entrusted us to develop this third building in Weston and has committed to invest in the buildout of their innovative workspace. This expansion represents entirely new market absorption. The success and growth of MetLife in Weston since we delivered their initial buildings in 2015 illustrates the strong technology-oriented employment pool that continues to attract companies to the Triangle area.”
“Our expanded Global Technology Campus furthers our ability to drive the digital initiatives that are at the heart of our commitment to earning the right to be the customer’s first choice,” said Marty Lippert, Executive Vice President and Head of Global Technology & Operations, MetLife. “By bringing together a wide array of technologists, we are creating a culture of digital innovation that’s already delivering results.”
Highwoods expects to invest $63 million for this 100% pre-leased build-to-suit, including the value of Highwoods-owned land. Construction is scheduled to commence this summer, with completion in the first quarter of 2019 and stabilization in the first half of 2021.
Weston is an approximate 1,000-acre mixed-use planned unit development of which Highwoods is the declarant. The Company currently owns 11 in-service properties encompassing 1.3 million square feet in Weston that are, on average, 99% occupied.
With the addition of this project, Highwoods development pipeline has grown to 2.0 million square feet representing an expected investment of approximately $612 million that is 85% pre-leased on a dollar-weighted basis. MetLife has a one-time right to cancel development of the third building within approximately the next 60 days if shell building costs are expected to significantly exceed currently budgeted costs..
Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW) real estate investment trust (“REIT”) and a member of the S&P MidCap 400 Index. The Company is a fully-integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa.
Disclosure Regarding Forward-Looking Statements
Certain matters discussed in this press release are forward-looking statements within the meaning of the federal securities laws, such as the expected cost, timing and impact of Highwoods development activity. These statements are distinguished by use of the words "will", "expect", "intend" and words of similar meaning. Although Highwoods believes the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.
Factors that could cause actual results to differ materially from Highwoods current expectations include, among others, the following: development activity by competitors in existing markets could result in excessive supply of properties relative to customer demand; development, acquisition, reinvestment, disposition or joint venture projects may not be completed as quickly or on as favorable terms as anticipated; Highwoods may not be able to lease or re-lease second generation space quickly or on as favorable terms as old leases; Highwoods markets may suffer declines in economic growth; Highwoods may not be able to lease newly constructed buildings as quickly or on as favorable terms as originally anticipated; unanticipated increases in interest rates could increase debt service costs; unanticipated increases in operating expenses could negatively impact Highwoods net operating income; Highwoods may not be able to meet its liquidity requirements or obtain capital on favorable terms to fund its working capital needs and growth initiatives or to repay or refinance outstanding debt upon maturity; Highwoods could lose key executive officers; and others detailed in Highwoods 2016 Annual Report on Form 10-K and subsequent SEC reports.
MetLife, Inc. (NYSE:MET), through its subsidiaries and affiliates ("MetLife"), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.