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Section 1: 8-K (8-K)

8-K



 


SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549



FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934


Date of Report (Date of earliest event reported): March 1, 2016


HIGHWOODS PROPERTIES, INC.
(Exact name of registrant as specified in its charter)

 
Maryland
001-13100
56-1871668
 
 
(State or other jurisdiction
of incorporation or organization)
(Commission
File Number)
(I.R.S. Employer
Identification Number)
 


HIGHWOODS REALTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)

 
North Carolina
000-21731
56-1869557
 
 
(State or other jurisdiction
of incorporation or organization)
(Commission
File Number)
(I.R.S. Employer
Identification Number)
 


3100 Smoketree Court, Suite 600
Raleigh, North Carolina 27604
(Address of principal executive offices, zip code)

Registrants' telephone number, including area code: (919) 872-4924

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:
¨    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 







Item 2.01.
Completion of Acquisition or Disposition of Assets.

On March 1, 2016, we sold substantially all of our wholly-owned Country Club Plaza (the “Plaza”) assets in Kansas City for $660 million. The buyer is a joint venture between affiliates of Taubman Centers, Inc. (NYSE:TCO) and The Macerich Company (NYSE:MAC). The Plaza assets consist of 804,000 square feet of retail space and 468,000 square feet of office space. The parties entered into a series of definitive agreements, dated as of December 21, 2015, relating to the sale of the Plaza assets.

The sale proceeds were used as follows (in thousands):
 
Pay off unsecured bridge facility
$
350,000

Pay down unsecured revolving credit facility
70,000

Hold in escrow pending (1) reinvestment in 1031 exchanges qualifying for tax-deferred treatment,
(2) repayment of additional debt and/or (3) other general corporate purposes
230,000

Pay transaction expenses, including closing credits to the buyer for future tenant improvements
10,000

Sale proceeds
$
660,000


Item 9.01.
Financial Statements and Exhibits.

(b)    Pro Forma Financial Information

See Exhibit 99.1 which contains an Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2015. Such pro forma financial information is incorporated by reference herein. Operating results for the Plaza assets were reclassified as discontinued operations in the Consolidated Statements of Income for the years ended December 31, 2015, 2014 and 2013 in our 2015 Annual Report on Form 10-K. As such, Unaudited Pro Forma Consolidated Statements of Income for these periods are not presented in Exhibit 99.1 as the effect of this disposition on income from continuing operations was reflected in our 2015 Annual Report on Form 10-K.

(d)    Exhibits

No.    Description

10.17
Form of Agreement for Purchase and Sale of Real Estate, dated as of December 21, 2015, by and between Highwoods Realty Limited Partnership, Highwoods Services, Inc., Country Club Plaza KC Partners LLC, The Macerich Partnership, L.P. and The Taubman Realty Group Limited Partnership (filed as part of the Company's Annual Report on Form 10-K for the year ended December 31, 2015)

99.1
Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2015 including notes thereto









SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


 
 
HIGHWOODS PROPERTIES, INC.
 
 
By: 
/s/ Jeffrey D. Miller
 
 
 
Jeffrey D. Miller
 
 
 
Senior Vice President, General Counsel and Secretary
 
 
 
 

 
 
HIGHWOODS REALTY LIMITED PARTNERSHIP
 
 
By: Highwoods Properties, Inc., its general partner
 
 
By: 
/s/ Jeffrey D. Miller
 
 
 
Jeffrey D. Miller
 
 
 
Senior Vice President, General Counsel and Secretary
 
 
 
 


Dated: March 1, 2016




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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit


Exhibit 99.1



The accompanying Unaudited Pro Forma Consolidated Balance Sheet as of December 31, 2015 presents the sale of the Plaza assets as if the disposition occurred on December 31, 2015. We sold the Plaza assets on March 1, 2016.
This Unaudited Pro Forma Consolidated Balance Sheet should be read in conjunction with (i) our audited Consolidated Financial Statements as of December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014 and 2013 included in our 2015 Annual Report on Form 10-K, (ii) our Current Report on Form 8-K dated January 4, 2016 and (iii) the Notes to Unaudited Pro Forma Consolidated Balance Sheet included in this Current Report on Form 8-K. In management’s opinion, adjustments necessary to reflect the effects of the disposition have been made based on management’s best estimate.






Highwoods Properties, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
(in thousands, except share and per share data)

 
December 31, 2015
 
(A)
 
(B)
 
 
 
Historical
 
Sale of Plaza Assets
 
Pro Forma
Assets:
 
 
 
 
 
Real estate assets, at cost:
 
 
 
 
 
Land
$
443,705

 
$

 
$
443,705

Buildings and tenant improvements
4,063,328

 

 
4,063,328

Development in-process
194,050

 

 
194,050

Land held for development
68,244

 

 
68,244

 
4,769,327

 

 
4,769,327

Less-accumulated depreciation
(1,007,104
)
 

 
(1,007,104
)
Net real estate assets
3,762,223

 

 
3,762,223

Real estate and other assets, net, held for sale
240,948

 
(240,948
)
 

Cash and cash equivalents
5,036

 

 
5,036

Restricted cash
16,769

 
230,000

 
246,769

Accounts receivable, net of allowance of $928 and $1,314, respectively
29,077

 

 
29,077

Mortgages and notes receivable, net of allowance of $287 and $275, respectively
2,096

 

 
2,096

Accrued straight-line rents receivable, net of allowance of $257 and $316, respectively
150,392

 

 
150,392

Investments in and advances to unconsolidated affiliates
20,676

 

 
20,676

Deferred financing and leasing costs, net of accumulated amortization of $123,723 and $108,122, respectively
241,663

 

 
241,663

Prepaid expenses and other assets, net of accumulated amortization of $15,648 and $13,887,
respectively
24,552

 

 
24,552

Total Assets
$
4,493,432

 
$
(10,948
)
 
$
4,482,484

Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
 
 
 
Mortgages and notes payable
$
2,499,614

 
$
(420,000
)
 
$
2,079,614

Accounts payable, accrued expenses and other liabilities
233,988

 

 
233,988

Liabilities held for sale
14,119

 
(14,119
)
 

Total Liabilities
2,747,721

 
(434,119
)
 
2,313,602

Commitments and contingencies
 
 
 
 
 
Noncontrolling interests in the Operating Partnership
126,429

 

 
126,429

Equity:
 
 
 
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares;
 
 
 
 
 
8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 29,050 and 29,060 shares issued and outstanding, respectively
29,050

 

 
29,050

Common Stock, $.01 par value, 200,000,000 authorized shares;
 
 
 
 
 
96,091,932 and 92,907,310 shares issued and outstanding, respectively
961

 

 
961

Additional paid-in capital
2,598,242

 

 
2,598,242

Distributions in excess of net income available for common stockholders
(1,023,135
)
 
423,171

 
(599,964
)
Accumulated other comprehensive loss
(3,811
)
 

 
(3,811
)
Total Stockholders’ Equity
1,601,307

 
423,171

 
2,024,478

Noncontrolling interests in consolidated affiliates
17,975

 

 
17,975

Total Equity
1,619,282

 
423,171

 
2,042,453

Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
$
4,493,432

 
$
(10,948
)
 
$
4,482,484







Highwoods Properties, Inc.
Notes to Unaudited Pro Forma Consolidated Balance Sheet
December 31, 2015
(A)    Represents our Consolidated Balance Sheet as of December 31, 2015 as filed in our 2015 Annual Report on Form 10-K.
(B)    Represents the adjustments to reflect the sale of the Plaza assets, which includes (i) the sale of assets and liabilities with net book values of approximately $240.9 million and $14.1 million, respectively, resulting in estimated gains of $423.2 million, (ii) repayment of our $350.0 million six-month unsecured bridge facility, (iii) repayment of $70.0 million of borrowings on our revolving credit facility and (iv) net proceeds of approximately $230.0 million, which were placed in escrow accounts held by a qualified intermediary pending reinvestment in 1031 exchanges qualifying for tax-deferred treatment, repayment of additional debt and/or other general corporate purposes.




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