Highwoods Cleans House with $41M Sale of 500 KSF Nashville Office Portfolio

What Highwoods Properties Inc. views as non-core, another real estate company sees as a great opportunity. Continuing its asset repositioning program, Highwoods sold its 484,000-square-foot Highwoods Nashville Airport North Portfolio to The Lingerfelt Cos. in a $41 million transaction.

BNA Corporate Center

By Barbra Murray, Contributing Editor

What Highwoods Properties Inc. views as non-core, another real estate company sees as a great opportunity. Continuing its asset repositioning program, Highwoods sold its 484,000-square-foot Highwoods Nashville Airport North Portfolio to The Lingerfelt Cos. in a $41 million transaction.

Out with the old and in with the new. Highlands is in the midst of transforming its collection of assets to a group that encompasses predominantly premier, stabilized assets. Alas, the disposition of the Airport Portfolio, which has an average age of 22 years and occupancy level of approximately 86 percent, fit the company’s strategy like a glove.

The five office buildings are located in the BNA Corporate Center, Century City Office Park and Lakeview Ridge Office Park business complexes, all of which sit near Nashville’s central business district and, of course, Nashville International Airport. Class B though they may be, the properties offer an upside, given the changes in the local office market. According to a report by commercial real estate services firm Colliers International, vacancies have been on a steady decline, dropping from 10.1 percent in the second quarter of 2011 to roughly 8.2 percent in the second quarter of 2012, and going from negative absorption to 498,000 square feet of positive absorption.

“The Nashville office market is continuing to show a steady recovery from the recent economic recession,” the report noted. “The population is growing, employment is rising and companies are expanding. The city is still maintaining its reputation as a desirable place to live and relocate business.”

Highwoods’ disposition of the Airport Portfolio is no indication of a lack of interest in the Nashville market. The company’s office portfolio in the area now consists of 20 properties accounting for 2.6 million square feet of space with an average occupancy level of 96.1 percent.