Highwoods Properties has been selected to develop Bridgestone Americas’ new 30-story headquarters in downtown Nashville, Tenn.
The $200 million project is one of the largest ever for Highwoods and continues an impressive run of new business for the Raleigh real estate investment trust.
“We were born as developers in 1978, it’s a core discipline of what we do, and now’s a good time to be doing it as these opportunities come around,” CEO Ed Fritsch said Tuesday. “We’ve been fortunate to win some.”
The Bridgestone deal means Highwoods‘ development pipeline now includes $549 million worth of projects in five markets. The projects contain a combined 1.83 million square feet.
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In the Triangle, the company is now constructing a new $110 million headquarters in Cary for the insurer MetLife as well as a new building at its GlenLake office park in Raleigh.
Bridgestone will lease all 506,000 square feet of office space in the high-rise, which will also include 8,000 square feet of retail. The building is expected to be completed by the third quarter of 2017.
Bridgestone is vacating office space it now occupies near the Nashville airport and relocating additional businesses to downtown Nashville.
The tire manufacturer is expected to bring more than 1,700 jobs to downtown Nashville, making it one of the most highly sought after economic development projects in the country. Local and state officials in Tennessee announced the move Tuesday afternoon at an event on the site of where the new building will be constructed.
Highwoods just recently acquired the 1-acre site, which is now a surface parking lot. The site is one block away from The Pinnacle at Symphony Place, a 520,000-square-foot, 29-story office tower that Highwoods acquired for $152.8 million last year.
Highwoods owns 23 buildings and 3.4 million square feet of space in Nashville.
It is also building a 203,000-square-foot building in the city that will be primarily leased to the insurer American International Group.
Fritsch said Highwoods’ success at landing build-to-suits in recent years can be attributed to a number of factors. One of those is the company’s strong balance sheet.
“We have a very good balance sheet so being able to self-fund this without having to bring in banks and other lenders makes it very clean and reliable,” he said.
Highwoods also has been able to make good use of its land holdings. The company still owns 420 acres in its markets where it could build more than $1 billion worth of office space.
Fritsch said the fact that most of Highwoods’ development projects are being built for specific tenants differentiates the company from some of its competitors.
Highwoods has pre-leased 89 percent of the office space it now has under development.
“That gives investors confidence we’re not doing a risky amount of speculative development,” Fritsch said.
Highwoods shares closed Tuesday at $42.68, down 20 cents. The stock is up 18 percent this year.