Highwoods Properties Enters DFW Market With $130M Deal
The REIT acquired a 50 percent interest in two developments.
Highwoods Properties Inc. has entered the Dallas-Fort Worth market by forming an approximately $130 million joint venture with Granite Properties to acquire a 50 percent interest in two of the developer’s underway office projects.
Through the recapitalization, Highwoods will become part owner of 23Springs, a 26-story tower totaling 642,000 square feet in Uptown Dallas, and of Granite Park Six, a multi-tenant, 422,000-square-foot office building taking shape within Granite Park, a 90-acre mixed-use development in Plano, Texas.
The REIT plans to fund its entrance in the Metroplex by divesting its Pittsburgh assets. The company’s portfolio of nearly 2.2 million square feet was 92.9 percent leased at the end of the first quarter of 2022.
Two upcoming office buildings
Granite kicked off construction on 23Springs in June and expects to deliver the Class AA building in the first quarter of 2025. As for the tallest building in Granite Park, the developer broke ground on Granite Park Six last December, with anticipated completion in the last quarter of 2023.
Designed by GFF Architects to achieve LEED Silver and Fitwel certifications, 23Springs is taking shape at 2323 Cedar Springs Road. Expected to be Uptown’s largest office building upon completion, the high-rise will include 16,000 square feet of retail space and a 6.5-level garage structure with a parking ratio of 2.5 spaces per 1,000 square feet. The property is set to feature 26,000-square-foot floorplates, a two-story lobby with a coffee and wine bar, a 4,500-square-foot fitness center and an outdoor lounge with a conference area, among other amenities.
Located at 5525 Granite Parkway, Granite Park Six also aims for both LEED and Fitwel ratings. The 19-story building will include 25,000-square-foot floorplates along with a lobby with a coffee bar, a 400-seat lecture hall, three conference rooms, an amenity terrace on the sixth floor, a fitness studio and a lounge.
Preleases in place
Both developments already benefit from preleasing contracts. In April, Bank OZK signed a 110,029-square-foot lease at 23Springs, intending to establish its new regional headquarters at the Uptown Dallas development. The lease only strengthened the relationship between the developer and the lender, as Bank OZK had provided a total of $445 million in construction financing for both projects in January and April, respectively.
On the other hand, the Granite Park Six prelease of 52,000 square feet involved an expansion at the mixed-use property. Stonebriar Commercial Finance agreed to occupy two floors within the office tower designed by BOKA Powell. The privately owned commercial finance and leasing company already had its headquarters at Granite Park Three.
