Highwoods Properties Inc. has signed a long-term build-to-suit lease with International Paper Co.
The agreement, announced by Highwoods Monday, March 25, involves Highwoods developing a 241,000-square-foot, nine-story Class A office building with structured parking in the Poplar Avenue corridor. That new building will sit directly across the street from International Paper’s world headquarters and main campus, and construction is expected to start in the fourth quarter, with completion by the end of the second quarter of 2015.
Highwoods is expecting to invest about $56.1 million into the project, which includes land Highwoods acquired for the development.
International Paper already had 100 percent pre-leased the building.
In a statement about the project, Highwoods president and CEO Ed Fritsch said the company is pleased to have been chosen by International Paper to accommodate their expansion needs.
“International Paper has been a long-term Highwoods customer, and we are grateful for their continued confidence in our development and management abilities,” he said.
International Paper senior vice president Tom Kadien said that after 25 years it’s always been the company’s preference to stay and grow in Memphis. And the company will be doing that, thanks to support from the governments of Memphis and Shelby County.
International Paper in February was approved for a 15-year payment-in-lieu-of-taxes (PILOT) benefit from the city-county Economic Development Growth Engine Board.
The company’s tax freeze will help it pursue a nearly $116 million expansion of its Memphis presence, which includes keeping 2,274 jobs here, creating 101 new jobs, keeping its headquarters here and building a new 10-story building along with a new 470-car garage and two pedestrian bridges.
Highwoods currently owns 1.3 million square feet in the Poplar corridor submarket. Highwoods' total Memphis portfolio comprises two million square feet of office space that was 86.5 percent occupied at the end of 2012.