Highwoods Changes Building Design - Analyst Blog

Amid widespread vocal opposition for the proposed office building of law firm Polsinelli Shughart, Highwoods Properties Inc. (HIW), a real estate investment trust (REIT), modified the design of the build-to-suit property in Country Club Plaza – an upscale shopping district and residential neighborhood in Kansas City.
 
Polsinelli had earlier signed a 20-year lease for the 192,000-square-foot Class A build-to-suit office building in Country Club Plaza, which is scheduled for completion by 2013. However, the deal faced public resentment in view of the allegation that the proposed design would harm the aesthetics of the Kansas City shopping district.
 
Consequently, Highwoods was forced to change the design of the building, and the new motif preserves the so-called Balcony Building and the two-story tower located at the corner of the intersection. The modified structure would set the building back 70 feet from the curb of Broadway to provide ample space for a courtyard cut out of the existing storefront to provide access to the law firm building.
 
Furthermore, the color of the building would also change from light-gray to pale-brownish in keeping with the existing color code of Country Club Plaza. The new design was hugely applauded by the Kansas City Council that oversees the administration of the city.
 
Based in Raleigh, North Carolina, Highwoods owns and operates its properties through its wholly-owned subsidiary, Highwoods Realty Limited Partnerships. The company has interests in office, industrial, retail and service center properties, including development projects and apartment units. It also provides customer-related and fee-based real estate management services for its properties and third-party clients.
 
As of June 30, 2010, Highwoods had interests in 330 in-service office, industrial holdings and retail properties, spanning across 32.0 million square feet of gross leasable space. In addition, it also owned 581 acres of developable land.
 
Currently, Highwoods carries a Zacks #2 Rank, which translates into a short-term Buy recommendation and indicates that the stock is expected to outperform the overall U.S. equity market for the next 1-3 months. We maintain our long-term Neutral rating on Highwoods.