North Carolina firm buys EQT Plaza in $99.2 million deal
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The North Carolina company that purchased PPG Place last year for $179.4 million has acquired its second major office building Downtown.
Raleigh-based Highwoods Properties Inc. has gained control of the 32-story EQT Plaza on Liberty Avenue in a $99.2 million transaction, including $8 million in capital improvements, that does not involve a deed transfer.
The company paid $91.2 million to acquire Liberty Avenue Mezzanine LLC, the entity that owned the skyscraper through a holding company. As a result, Highwoods will not have to pay any deed transfer taxes to the city, the Pittsburgh School District or the state.
Ed Fritsch, Highwoods CEO and president, said the firm had no choice but to buy Liberty Avenue Mezzanine rather than the property itself.
"The ownership of this was structured long before we stepped foot in Pittsburgh. Our only option was to buy the entity," he said.
The sale was not one of the so-called "89-11" transactions used to avoid deed transfer taxes that will be banned at the end of the year. In this case, Highwoods is acquiring full ownership, not 89 percent now and 11 percent later, but still will not have to pay the tax because no deed is involved.
Mr. Fritsch said Highwoods was excited about expanding its footprint in Pittsburgh. With the new acquisition, Pittsburgh will represent the firm's fifth largest office market in the country. Before acquiring PPG Place in September 2011, Highwoods had no presence locally.
"We're very enamored with Pittsburgh. We're definitely looking to see what else we might be able to acquire that would be of the quality that we want to own," he said.
Since acquiring PPG, Highwoods has been able to boost the occupancy from 81.2 percent to 88 percent. The occupancy at EQT Plaza is currently 92.2 percent but will jump to 95.9 percent by the third quarter of next year.
Highwoods plans to upgrade the elevators, common areas, restrooms and lighting as part of the $8 million in improvements planned for EQT Plaza.
First Published December 4, 2012 5:31 pm