Highwoods Properties Inc announced yesterday that it has purchased EQT Plaza, a 616,000-square foot, 32-story, multi-tenant Class A office building situated at the heart of CBD Pittsburgh. The occupancy rate of EQT Plaza currently stands at 92.2% and together with executed leases in hand is expected to increase to 95.9% by the third quarter of next year.
It is anticipated that the firm’s investment will reach a total of $99.2 million, including $8 million for proposed improvements on the building. The building is expected to generate a full year cash and GAAP operating net income in 2013 of $7 and $8 million respectively, with the company noting that expensed acquisition costs of $0.5 million are to be recorded in the fourth quarter. EQT Plaza is also on a ground lease with a remaining term of 111 years and an annual rent of $1 million.
“We are thrilled to expand our footprint by 40% in downtown Pittsburgh with the acquisition of another Class A office building,” says the chief executive officer and president of Highwoods Properties Inc, Ed Fritsch. “EQT Plaza’s proximity to PPG Place, less than three blocks away, will enable us to garner a number of operating synergies and will heighten the Highwoods brand in downtown Pittsburgh. There are also opportunities to ‘Highwoodtize’ this property, further enhancing its appeal to current and prospective customers.”
Fritsch goes on to say that the company’s Pittsburgh investment has already succeeded in surpassing their expectations, with the downtown market thriving and competitive Class A office properties being leased by as much as 94%. Fritsch adds that the occupancy rate at PPG Place is expected to rise from 81.2% at purchase to more than 88% by the end of the year.