Highwoods Properties to Move Raleigh HQ Downtown

Wells Fargo Capitol Tower

Highwoods Properties is moving on. The Raleigh, N.C.-based REIT is planning to relocate from its longtime home in a suburban office park to a space in the thick of it, right downtown. The Triangle Business Journal reports that Highwoods Properties has decided to make a 37,000-square-foot space at its Wells Fargo Capitol Center its new headquarters.

Highwoods’ will bid adieu to its current headquarters roughly 5 miles away at Smoketree Tower, an approximately 170,000-square-foot building that was new when Highwoods first set up shop there. The 11-story asset was also part of Highwoods’ portfolio at the time.

“We have been in our current office space at Smoketree Tower since 1986, and we recently sold Smoketree Tower, so it made sense to look across our Raleigh portfolio for space where we could relocate our headquarters,” Brendan Maiorana, executive vice president & CFO with Highwoods Properties, told Commercial Property Executive.

READ ALSO: Why Flex Office Space Is Flourishing Again

In December 2021, Highwoods sold Smoketree Tower and a small neighboring building, Cottonwood, in a $35.5 million transaction. As an owner and manager of properties in the country’s best business districts, the REIT considered the properties to be non-core assets. Highwoods acquired Wells Fargo Capitol Center as part of a $769 million, 1.8 million-square-foot portfolio purchase in mid-2021.

Going home

At Wells Fargo Capitol Center, Highwoods will certainly have more prominent accommodations. Located at 150 Fayetteville, the approximately 560,000-square-foot Art Deco building is a landmark high-rise that hovers 29 stories above a sea of highly coveted amenities.

“Downtown Raleigh is a dynamic submarket, so we’re excited to move our headquarters there and be part of the downtown environment,” Maiorana said.

Highwoods will have smaller digs—the company’s space at Smoketree Tower totals more than 50,000 square feet—however, they will be more efficient. As described in the Triangle Business Journal, the new office space will be created with a greater focus on collaboration, as opposed to the office-centric designs seen in the 1980s. Highwoods should be using its new address by year’s end.

The company’s lease of space, albeit at its own building, may serve as an indication of a trend in the Raleigh-Durham office market. As noted in a fourth quarter 2021 report by JLL, tenants are showcasing a desire for high-quality office space and “Downtown Durham and Downtown Raleigh continue to drive tenant and investor demand from across the country.”