VOL. 111 | NO. 17 | Monday, January 27, 1997
lj 10/5 cates
Construction will begin in February on Highwoods office
By LAURIE JOHNSON
The Daily News
Highwoods Properties Inc., a Raleigh, N.C.-based real estate investment trust with operations in Memphis, will begin construction in early February on a $7 million office building at 3400 Players Club Parkway in Southwind.
The 70,000-square-foot speculative office building, expected to be complete in November, will be Highwoods third property in the East Memphis mixed-use development.
Check Solutions, a check processing firm, has signed a lease for the top two floors, totaling 46,000 square feet, of the three-story, 70,000-square-foot building, which will overlook the first fairway of the Tournament Players Club golf course, said Michael Harris, vice president and division manager of Highwoods Properties in Memphis.
Check Solutions, which was established in the early 1990s through a joint venture between First Tennessee Bank and IBM, will be vacating 22,000 square feet in another Highwoods office building in Southwind at 8275 Tournament Drive.
Harris said the new building will be similar in quality and design to the companys other Southwind properties, which overlook the golf courses second fairway and feature all-brick exteriors.
Allen & Hoshall Architects, Engineers is the project architect, and Montgomery Martin Contractors Inc. has been selected as the general contractor.
"We think that the Southwind location is very good, what with the recent developments such as the Thomas & Betts and Varco-Pruden headquarters going up out there," Harris said. "It has really done well during the past couple of years. The whole market was kind of dead during the early 1990s, but now things are picking up very well."
Highwoods, considered the largest publicly held office and industrial REIT in the Southeast, currently owns 345 buildings in 16 markets totaling more than 21 million square feet. The company has nine regional offices.
The corporations Memphis division, formerly known as Towermarc, owns and manages seven properties with a total of 466,000 square feet of space in the Memphis office market and manages another 300,000 square feet of space for a third party. Highwoods also manages 50 additional acres in Southwind, with options to purchase it, for an investor.
The companys Memphis office also manages properties in Birmingham, Ala.
"We have big plans for Memphis," Harris said. "Its our western-most city, and we intend to use it as a platform to grow locally, as well as a jumping off point to look at other opportunities, whether theyre north, south or west of the area.
For future development, Highwoods has a 4-acre parcel on International Place Drive under contract and is looking into the possibility of building a four-story, 89,000-square-foot speculative office building on the site.
The property currently is owned by the Memphis Area Association of Realtors.
Harris said that although the project is still in the planning stages, one tenant already had committed to lease a full floor of the building.
"Weve gone through the rezoning process, and now were working with the adjacent homeowners to get the protective covenants approved," Harris said. "Once we can get that done, well be in a position to see if were going to go forward."
In addition to the Southwind buildings, local office properties owned by Highwoods include International Place, Kirby Center, Hickory Hill Medical Plaza and the Atrium Buildings I and II in Germantown.
Highwoods acquired the Atrium buildings in December through its purchase of the New Atmem Corp., the owner of the properties at the time, Harris said.
The Memphis properties in Highwoods portfolio currently are 100 percent leased, Harris said.
Although Highwoods has not officially released its 1996 figures, Harris said the REIT has been performing well since it went public in 1994. Highwoods market capitalization rate has increased from $100 million to more than $2 billion, primarily through a series of acquisitions, he said.