This week MetLife formally announced the site of its new campus in Charlotte the insurer will lease about 340,000 square feet in the citys Ballantyne Corporate Park.
The company hasnt put a timetable on when it will announce the location of its Cary campus, but there are strong indications that MetLife will end up in one or more Highwoods Properties buildings off Weston Parkway.
Both MetLife and Highwoods have declined to comment, but a Cary town official last month confirmed that MetLife was looking at Highwoods-owned property in that area of Cary.
Landing such a big fish would represent an enormous win for Highwoods, on par with computer maker Lenovo picking Duke Realty eight years ago to build a 500,000-square-foot campus in Morrisvilles Perimeter Park.
It would also deepen the already-strong relationship with Raleigh-based Highwoods and the insurance giant.
MetLife was Highwoods eighth-largest tenant at the end of last year, leasing nearly 300,000 square feet of space from the company. In 2005, MetLife bought two Highwoods buildings in Tampa, Fla., for $24.5 million. Less than a year later the company picked Highwoods for a build-to-suit project in Tampa.
Still, if MetLife ends up at Weston its probably more because the company is a big fan of the location.
These things are relatively binary in that MetLife either wants to be there and then Highwoods has a good chance or MetLife doesnt want to be there and Highwoods has no chance, said John W. Guinee III , an analyst with Stifel Nicolaus.
Guinee, a former chief investment officer for Duke Realty, was speaking generally about how companies make such relocation decisions. Given that MetLife plans to employ at least 1,200 people at its Cary campus, it needs a location that will appeal to the type of employees it is looking to attract.
The real-estate cost is secondary to the labor costs and the labor desirability ratio, Guinee said.
Highwoods owns eight properties with 747,000 square feet in Weston and has enough developable land to accommodate MetLifes needs. The company may need to free up some existing space to make room initially for MetLife as Highwoods Weston buildings were 96 percent occupied as of last May.
MetLife hasnt said how big its Cary campus will need to be.
Constructing a new 340,000-square-foot campus would require about 25 to 30 acres, Guinee estimated, and would probably be a $75 million to $100 million project. Those figures are in line with the more than $85 million that Cary officials say MetLife could invest in a campus by 2017.
Highwoods acquired about 400 acres in Weston in the late 1990s, and the MetLife deal could mean developing much of what remains. Real estate investment trusts such as Highwoods make money from rent-generating properties, which means companies must weigh the cost of keeping land on their books versus the potential profits should it be developed.
It is a balance, said Dave Rodgers, an analyst with Robert W. Baird & Co. Its not holding too much land, its being very strategic about what you hold.
Highwoods has reduced the amount of undeveloped land on its books over the past seven years from 898 acres at the end of 2005 to 649 acres at the end of last year. It has also turned over other parcels to developers for joint-venture projects. One of those projects was in Weston, where Highwoods partnered with Crosland to build the Weston Lakeside apartments.
Rodgers said most of these deals ultimately come down to several factors, with land, along with a developers reputation for quality projects and proven ability to access financing, being the most important.
In the case of MetLife, Highwoods appears to have had all three. Thats a tough hand to beat.