SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): December 14, 2000
HIGHWOODS PROPERTIES, INC.
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(Exact name of registrant specified in its charter)
Maryland 1-13100 56-1871668
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(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
3100 Smoketree Court, Suite 600, Raleigh, North Carolina 27604
(Address of principal executive offices, zip code)
Registrant's telephone number, including area code: (919) 872-4924
Item 2. Acquisition or Disposition of Assets.
On December 20, 2000, we announced that we have partnered with Denver-based
Miller Global Properties, LLC in the formation of joint ventures valued at $412
million.
One joint venture (the "Operating Asset Venture") involves the contribution
of 21 in-service properties encompassing more than 3.0 million rentable square
feet valued at approximately $350 million. Miller Global has acquired an 80%
ownership interest in the Operating Asset Venture. We retained the remaining 20%
ownership interest. The Operating Asset Venture expects to borrow up to $276
million from GE Capital Real Estate, of which approximately $246 million will be
funded upon the closing of the 21 in-service office properties. The properties
included in the Operating Asset Venture are as follows:
Rentable Rentable
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Property Location Sq. Feet Property Location Sq. Feet
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Deerfield I Atlanta 49,580 4101 Research Commons Raleigh 73,003
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Deerfield II Atlanta 67,207 4201 Research Commons Raleigh 83,719
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Deerfield III(1) Atlanta 53,576 4301 Research Commons Raleigh 90,894
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Peachtree Corners II Atlanta 109,293 4501 Research Commons Raleigh 59,261
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Concourse Raleigh 132,175
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Capital Plaza I Orlando 241,190 Lake Plaza East Raleigh 71,339
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Capital Plaza II Orlando 302,709 Situs I Raleigh 59,255
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Landmark I Orlando 223,508 Situs II Raleigh 59,749
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Landmark II Orlando 221,414 Situs III(1) Raleigh 38,669
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Signature Plaza Orlando 273,571
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Anchor Glass Tampa 100,701
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Bayshore Place Tampa 83,452
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Tower Place Tampa 182,214
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(1) To date, we have closed on the contribution or sale of all of the
properties to the Operating Asset Venture other than Deerfield III and
Situs III, which are currently under development. These projects are valued
in the aggregate at $10.3 million and are anticipated to close in early
2001. The Operating Asset Venture expects to borrow approximately $7.2
million in connection with these two projects that will be funded upon
closing, resulting in a total of $246 million of debt relating to the
Operating Asset Venture.
The Agreement to Form Limited Liability Companies, entered into as of
August 9, 2000, by and among Miller Global Fund III, L.P., MGA Development
Associates, L.P., Highwoods Realty Limited Partnership and Highwoods/Florida
Holdings, L.P., which was filed as part of our Quarterly Report on Form 10-Q
for the quarter ended June 30, 2000, has been superceded and replaced in its
entirety by the Operating Agreement of MG-HIW, LLC, entered into as of December
1, 2000, by and among Miller Global HIW 20, LLC and Highwoods Realty Limited
Partnership, and various other ancillary agreements.
A second venture (the "Development Venture") is initially focused on
developing four properties, encompassing 435,000 rentable square feet with a
budgeted cost of approximately $62.0 million, on $7.5 million of development
land contributed by us. We each own 50% of the Development Venture.
We are the sole and exclusive manager and leasing agent for the properties
in both joint ventures, for which we will receive customary management fees and
leasing commissions. We expect to receive approximately $300 million in
aggregate net cash proceeds as a result of the formation of these joint
ventures. We intend to use such proceeds to fund development activity,
repurchase shares of our common stock under our ongoing share repurchase program
and retire outstanding debt, either through direct payments or repayment of
borrowings under our Revolving Loan (as defined below).
Certain matters discussed in this report, including but not limited to the
possibility of additional investments and property contributions and borrowing
expectations related to the joint ventures, are forward-looking statements
within the meaning of the federal securities laws. Although we believe that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, we can give no assurance that our expectations will be
achieved. We assume no obligation to update or supplement forward-looking
statements that become untrue because of subsequent events. Factors that could
cause actual results to differ materially from our current expectations include
general economic conditions, local real estate conditions, the timely
development and lease-up of properties, and the other risks detailed in our most
recent Quarterly Report on Form 10-Q.
Item 5. Other Events
On December 14, 2000, we obtained a new $300 million revolving line of
credit (the "Revolving Loan") from a group of 10 lender banks. The Revolving
Loan was arranged and syndicated by Banc of America Securities LLC. Bank of
America, N.A. is the administrative agent, Wells Fargo Bank, N.A. is the
syndication agent and Wachovia Bank, N.A. is the documentation agent. Other
lenders include: Managing Agent - Commerzbank; Co-Agents - AmSouth Bank, BB&T,
Centura Bank, PNC Bank, and South Trust Bank; and Lender - Erste Bank.
The Revolving Loan matures in December 2003 and replaces our previous $450
million revolving credit facility. The Revolving Loan carries an interest rate
based upon our senior unsecured credit rating. At our current BBB/Baa2 senior
unsecured rating, interest accrues on borrowings under the Revolving Loan at an
average rate of LIBOR plus 85 basis points. The Revolving Loan also includes a
$150 million competitive bid sub-facility.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
2 Operating Agreement of MG-HIW, LLC, entered into as of December 1,
2000, by and among Miller Global HIW 20, LLC and Highwoods Realty
Limited Partnership
10.1 Credit Agreement among Highwoods Realty Limited Partnership, Highwoods
Properties, Inc., the Subsidiaries named therein and the Lenders named
therein, dated as of December 13, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HIGHWOODS PROPERTIES, INC.
By: /s/ Carman J. Liuzzo
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Carman J. Liuzzo
Vice-President, Chief Executive Officer
and Treasurer
Dated: December 20, 2000