CUZ Cousins Properties Inc

Highwoods Properties Inc. (HIW), a real estate investment trust (REIT), has recently received a setback when law firm Polsinelli Shughart announced that would discard its plans for the proposed office building in the build-to-suit property in Country Club Plaza – an upscale shopping district and residential neighborhood in Kansas City.

Polsinelli had earlier signed a 20-year lease for the 192,000-square-foot Class A build-to-suit office building, which was scheduled for completion by 2013. However, the deal faced public resentment in view of the allegation that the proposed design would harm the aesthetics of the Kansas City shopping district.

Consequently, Highwoods was forced to repeatedly change the design of the building, with the latest motif preserving the so-called Balcony Building and the two-story tower located at the corner of the intersection. The modified structure would have set the building back 170 feet from the curb of Broadway to provide ample space for a courtyard carved out of the existing storefront to provide access to the law firm building.

Furthermore, the color of the building was also changed from light-gray to pale-brownish in keeping with the existing color code of Country Club Plaza. The proposed office building was planned to have seven stories instead of eight, as proposed in the original plan. The building was intended to house about 500 Polsinelli Shughart employees, including 175 relocated from its downtown office.

However, Polsinelli Shughart faced long delays to clear the imposed restrictions, leading to an uncertainty in the project. Consequently, the law firm decided to pursue other alternative options in the city as well as in Missouri. 

Based in Raleigh, North Carolina, Highwoods owns and operates its properties through its wholly-owned subsidiary, Highwoods Realty Limited Partnerships. The company has interests in office, industrial, retail and service center properties, including development projects and apartment units. It also provides customer-related and fee-based real estate management services for its properties and third-party clients.

As of December 31, 2010, Highwoods had interests in 330 in-service office, industrial holdings and retail properties, spanning across 32.4 million square feet of gross leasable space. In addition, it also owned 611 acres of developable land.

Currently, Highwoods carries a Zacks #2 Rank, which translates into a short-term ‘Buy’ recommendation and indicates that the stock is expected to perform well above the overall U.S. equity market for the next 1–3 months. We maintain our long-term ‘Neutral’ rating on Highwoods. We also have a ‘Neutral’ rating and a Zacks #3 Rank (short-term ‘Hold’) for Cousins Properties Inc. (CUZ), a competitor of Highwoods.

 
COUSIN PROP INC (CUZ): Free Stock Analysis Report
 
HIGHWOODS PPTYS (HIW): Free Stock Analysis Report
 
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