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Highwoods' 'Big Relief'

Highwoods' 'Big Relief'


Highwoods Properties' Jim Bacchetta  calls finally getting One Alliance Center a "big relief." After much speculation, Highwoods revealed yesterday that it purchased the 22-story Buckhead tower for more than $140M, consolidating its holdings at the entire existing Alliance Center site. (You'll recall the company purchased Two Alliance from Tishman Speyer last year.) This makes the third significant Atlanta acquisition for Highwoods in as many years, including Riverwood 100.
"I'm glad we don't have  fractured ownership in Alliance Center," Jim says. Among the suitors for the tower, sources say the company competed against Parkway Properties, Piedmont Office Trust and MetLife. While Tishman Speyer (who lost One Alliance to Orix Capital in 2012) has a pad site for a third Alliance Center tower, Jim says he's confident that may be a  distant possibility with both inflation and construction costs putting the bar for rents at near $40/SF gross to justify development. "Somebody who is willing to pay that? Sure, it'll happen. But I'm not sure how soon," he says. Now comes the leasing (though it's already 70% occupied).