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Highwoods Properties, Inc. HIW has acquired the remaining 77 acres of development land at Ovation in the Cool Springs district of Franklin for $57.8 million. The buyout is in line with the company’s efforts to expand in the high-growth Best Business District markets.
Reflecting positive sentiments, shares of Highwoods Properties moved marginally up during Thursday’s trading session.
Ovation is the largest planned mixed-use project in Williamson County. It encompasses 145 acres and according to the 2015 plan, it was fully entitled for the development of 1.4 million square feet of office, more than 400,000 square feet of retail, 950 residential units, 450 hotel rooms and 56 acres of perpetually-dedicated green space.
Mixed-use developments reduce distances between housing, workplaces, retail businesses, and other amenities and destinations. Hence, the same enable companies to grab the attention of people who prefer to live, work and play in the same area.
Thus, the acquisition of this Nashville property offers Highwoods Properties the scope to work with high-quality retail, multi-family and hotel developers besides retaining full control of the office development sites.
The buyout also positions the company solidly to capitalize on the rising office demand. Amid the favorable migration trends and a pro-business environment, corporate relocations and expansions in the Sun Belt markets have been prominent, which is driving the demand for office spaces. With 1.2 million square feet of additional office development potential at Ovation, Highwoods Properties is well poised to capture healthy demand.
This Zacks Rank #2 (Buy) company has underperformed its industry over the past six months. Shares of Highwoods have appreciated 5.1%, while the industry has rallied 7.7% during this period.
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Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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