PPG Place's splashy water feature gushed Carolina blue Monday, a signal to tenants and visitors alike that a new regime had taken control of Pittsburgh's castle-like glass skyscraper.

Raleigh, N.C.-based Highwoods Properties paid $179.4 million to the Hillman Co. for the six-building complex in the heart of Downtown. The purchase price is $6.1 million less than Hillman paid for the property in 1999.

Highwoods, a real estate investment trust, formally introduced itself as the new owner of PPG Place Monday, pledging to make $17.1 million in improvements to the Downtown "jewel" while seeking to boost its occupancy, now at 81.2 percent.

The trust also intends to honor $8.1 million in tenant improvements promised under existing leases. With the sales price and improvements, it said its total investment in the property would be $214.1 million.

PG VIDEO: PPG PLACE NEW OWNERS

Highwoods also will keep intact two features perhaps as famous as the building itself -- the outdoor ice rink during winter months and the water feature in the summer, with an occasional change in the water color.

PPG Place represents Highwoods' first purchase in the Pittsburgh market and the largest office complex it owns among nearly 35 million square feet of holdings, mostly in the southeastern part of the country.

"There's clear recognition within our organization that we are now stewards for an asset that is a core component of what defines Pittsburgh. And we don't take that stewardship lightly," said Ed Fritsch, Highwoods president and CEO.

The transaction also will produce immediate tangible benefits to the city, the Pittsburgh School District and state. In closing on the property, Highwoods has paid $3.6 million in deed transfer taxes to the city and $1.8 million each to the school district and the state.

That stands in contrast to the $250 million sale of U.S. Steel Tower last spring. The new owner of that building, a group led by New York real estate investor Mark Karasick, paid no transfer taxes because of the way the deal was structured.

Among the improvements Highwoods intends to make to the complex are a new roof; new heating, ventilation and air conditioning systems; and elevator upgrades, Mr. Fritsch said.

It also intends to make cosmetic changes to PPG's food court, rest rooms and open spaces, and it may look for ways to "better leverage" the complex's Wintergarden space.

The trust will take over a complex that is only 81.2 percent occupied, far below the average for the premier Class A office space in Downtown Pittsburgh, which hovers around 93 to 94 percent.

Mr. Fritsch said Highwoods hopes to address that through the capital improvements, more highly defined marketing efforts and by making sure real estate brokers are paid quickly for the tenants they bring into the complex.

"One of the things we often do is maybe akin to what Domino's does with 30 minutes or less, you'll get your pizza. We're five days or less, you'll get your commission check," he said.

Highwoods spent a year studying the Pittsburgh market before deciding to invest here. Mr. Fritsch said the trust was drawn to the region by the low unemployment rate, the diversity of the local economy and the work ethic of its people.

He believes PPG will be the first of a number of investments in the Pittsburgh market. Highwoods, he said, has an interest in other office properties, which constitute nearly 90 percent of the trust's total revenues.

"Clearly this is a platform of growth for us. We didn't come into this market to simply acquire PPG Place," he said, adding that any additional investment would be "measured."

Highwoods was one of 12 to 15 entities that had an interest in the PPG Place, according to sources. The broker for the Hillman Co., CB Richard Ellis, ultimately identified Highwoods as the "best potential buyer," said Jeffrey Ackerman, executive vice president of CBRE's investment properties group.

"They were the horse that we selected and we sought, and we rode them from start to finish," said Mr. Ackerman, whose team marketed the property. "We definitely saw them as the best all-around buyer for this property."

The $179.4 million paid for the property averages about $119 a square foot. Though Highwoods got the property for less than what Hillman paid, it "sounds like a fair price negotiated between a willing buyer and a willing seller," said Peter Sukernek, vice president and general manager of Howard Hanna Commercial Real Estate Services.

Likewise, Mr. Fritsch described the deal as a "very fair trade."

"We had to buy at a price where we were able to come in and do the things we needed to do," he said.

Publicly traded Highwoods, founded in 1978, owns or has an interest in 339 properties, including the RBC Plaza in Raleigh, corporate headquarters of RBC Bank, and Country Club Plaza, a retail, dining an entertainment complex in Kansas City, Mo.

Its stock closed at $30.49 a share Monday, down 2.65 percent.

The 1.5 million-square-foot PPG campus consists of one 40-story skyscraper, four six-story buildings and a 14-story building on 5.5 acres bordered by Market Square and Boulevard of the Allies.

Major tenants include PPG Industries; H.J. Heinz Co.; Grubb & Ellis; Dickie, McCamey & Chilcote; and Deloitte & Touche.