Highwoods Properties, the Raleigh real estate investment trust, announced plans for a new Raleigh office building on Tuesday and raised its quarterly dividend for the first time in more than a decade.
The 435-employee company plans to build a 3-story, 90,000-square-foot office building on Corporate Center Drive in West Raleigh near Interstate 40 and N.C. 54. Construction is expected to start this year and finish in 2018. It is 35 percent pre-leased.
Highwoods reported that its funds from operations were 82 cents per share for the fourth quarter. Analysts polled by Bloomberg News expected 81.5 cents on average. Funds from operations, or FFO, is a profitability measure for Highwoods and other REITs.
Highwoods is the Triangle’s largest landlord and owns three office towers in downtown Raleigh. The company owns a total of 29 million square feet of office space in nine cities.
The company increased its quarterly dividend to 44 cents from 42.5 cents. The company made the change to reflect its financial health and also for tax reasons. REITs are required to pay out at least 90 percent of their taxable income as dividends to shareholders to maintain the REIT status.
For the same reason, the company announced a one-time special dividend of 80 cents per share, resulting from asset sales last year.
Highwoods reported an occupancy rate of 93.1 percent by year-end, considered healthy in the REIT field. The company is projecting an occupancy rate between 92.2 percent and 93.2 percent this year.
Highwoods’ shares closed at $49.78 Wednesday, down 13 cents. The shares are down about 2.4 percent this year.