Highwood Plans $25.2M Rehab for PPG Place
- Dec 21, 2011
Highwood Properties Inc. has revealed a $25.2 million upgrade plan for the PPG Place complex, which incorporates six class A buildings ranging from 37,000 to 900,000 sq. ft. Highwood Properties purchased PPG Place for $214.1 million.
According to the CityBizList, Christopher Lucas, a senior analyst for Milwaukee-based Robert W. Baird & Co. Inc., said that the feasibility of Highwood’s upgrade plan resides in the dynamism of the Pittsburgh market.
The plan entails a returns enhancement program that will drive the 2012 GAAP to 9.3 percent. In addition, Highwood intends to re-tenant and claim 18,000 square feet of street-level space, which has been used for storage. Currently, the complex is 81.2 percent leased in a Class A central business district with an occupancy rate of 95 percent. Furthermore, PPG is one of the only two central business district buildings that can accommodate more than 25,000 square feet of adjacent space.
Lucas added that the management has strategized over a plan that will focus on restaurant activity in an outward-facing location, offer high-quality retail on the outside of the property and increase the visibility of service-oriented tenants.
In related news, Highwood will close on a fully executed loan commitment for a seven-year unsecured term loan for up to $200 million, as reported by CityBizList.
The loan will mature in Q1 2019, and will be refundable without penalties in the first quarter of 2016. The net proceeds will reduce the balance of the company’s $475 million unsecured revolving credit facility, and will also target general corporate purposes.
Wells Fargo Securities LLC and PNC Capital Markets LLC are acting as lead arrangers for the term loan, which is expected to close within the next 30 days.