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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 1997
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
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DELAWARE
(State of Organization)
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1-13100 56-1869557
(Commission File Number) (IRS Employer Identification No.)
3100 SMOKETREE COURT, SUITE 600 27604
RALEIGH, NORTH CAROLINA (Zip Code)
(Address of principal executive offices)
(919) 872-4924
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
J.C. NICHOLS TRANSACTION
On December 22, 1997, Highwoods Properties, Inc. (the "Company"),
general partner of Highwoods/Forsyth Limited Partnership (the "Operating
Partnership"), entered into a merger agreement (the "Merger Agreement") with
J.C. Nichols Company ("J.C. Nichols") pursuant to which the Operating
Partnership will combine its property operations with J.C. Nichols (the
"J.C. Nichols Transaction"). While the J.C. Nichols Transaction is expected to
close in the second quarter of 1998, no assurance can be given that all or a
part of the transaction will be consummated.
J.C. Nichols owns or has an ownership interest in 27 office properties
encompassing approximately 1.5 million rentable square feet, 33 retail
properties encompassing approximately 2.5 million rentable square feet, 13
industrial properties encompassing approximately 337,000 rentable square feet
and 16 multifamily communities with 1,816 apartment units in Kansas City,
Missouri and Kansas. Additionally, J.C. Nichols has an ownership interest in 21
office properties and one industrial property encompassing approximately 1.5
million rentable square feet and one multifamily community with 418 apartment
units in Des Moines, Iowa.
The J.C. Nichols Transaction is subject to the approval of J.C. Nichols'
shareholders at a special meeting expected to be held in March 1998. Under the
terms of the Merger Agreement, as approved by each company's board of directors,
the Company will acquire all of the outstanding shares of the common stock, $.01
par value, of J.C. Nichols ("J.C. Nichols Common Stock"). J.C. Nichols
shareholders may elect to receive either 1.84 shares of the Company's common
stock, $.01 par value ("Highwoods Common Stock"), or $65 in cash for each share
of J.C. Nichols Common Stock. However, the cash payment to all J.C. Nichols
shareholders cannot exceed 40% of the consideration and the Company may limit
the amount of Highwoods Common Stock issued to J.C. Nichols shareholders to 75%
of the total consideration. The exchange ratio is fixed and reflects the average
closing price of Highwoods Common Stock stock over the 20 trading days preceding
the effective date of the Merger Agreement. The transaction is valued at
approximately $570 million, including assumed debt of approximately $250
million, net of cash of approximately $65 million.
The J.C. Nichols properties include the Country Club Plaza which covers
15 square blocks and includes 1.0 million square feet of retail space, 1.1
million square feet of office space and 462 apartment units. As of September
30, 1997, the Country Club Plaza was approximately 96% leased. The Country Club
Plaza is undergoing a $62 million expansion and restoration expected to add
800,000 square feet of retail, office, hotel and residential space. The
Operating Partnership plans to invest an additional $240 million to expand the
Country Club Plaza as previously planned by J.C. Nichols.
The Operating Partnership will succeed to interests of J.C. Nichols in a
strategic alliance with Kessinger/Hunter & Company, Inc. ("Kessinger/Hunter")
pursuant to which Kessinger/Hunter manages and leases the office, industrial and
retail properties presently owned by J.C. Nichols in the greater Kansas City
metropolitan area. J.C. Nichols has a 30% ownership interest in
Kessinger/Hunter. The Operating Partnership also will succeed to interests of
J.C. Nichols in a strategic alliance with R&R Investors, Ltd. pursuant to which
R&R Investors, Ltd. manages and leases the co-venture properties located in
Des Moines. J.C. Nichols has an ownership interest of 50% or more in each of a
series of nine co-ventures with R&R Investors, Ltd. or its principal.
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J.C. Nichols will retain its name and operate as a division of the
Operating Partnership. Barrett Brady, president of J.C. Nichols, will become
senior vice president of the Operating Partnership responsible for its Midwest
operations. In addition, the Company will expand its board of directors to
include one independent director to be designated by J.C. Nichols.
RIPARIUS AND GARCIA TRANSACTIONS
On December 23, 1997, the Operating Partnership entered into a business
combination with Riparius Development Corporation in Baltimore, Maryland and
acquired a portfolio of five office properties encompassing 369,000 square feet,
two office development projects encompassing 235,000 square feet, 11 acres of
development land and 101 additional acres of development land to be acquired
over the next three years (the "Riparius Transaction"). The development land
acquired in the Riparius Transaction is zoned and enables the Operating
Partnership to build an additional 2.0 million rentable square feet of office
space. As of September 30, 1997, the properties acquired in the Riparius
Transaction were 99% leased. The cost of the Riparius Transaction consists of
a cash payment of $43.6 million, the assumption of the development projects with
an anticipated cost of $26.2 million expected to be paid in 1998, and an
additional cash payment of $23.9 million to be paid out over the next three
years.
Additionally, the Operating Partnership has entered into an agreement to
acquire 14 office properties encompassing 874,000 rentable square feet, six
service center properties encompassing 359,000 square feet and 66 acres of
development land in Tampa, Florida (the "Garcia Transaction"). As of
September 30, 1997, the properties to be acquired in the Garcia Transaction were
92% leased. The cost of the Garcia Transaction consists of a cash payment of
$91.0 million and the assumption of $20 million in secured debt. While the
Garcia Transaction is expected to close in January 1998, no assurance can be
given that all or part of the transaction will be consummated.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Act of 1934, as amended. Those statements are
identified by words such as "expect," "should" and words of similar import.
Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which might not even
be anticipated. Although the Operating Partnership believes that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, it can give no assurance that its expectations will be
achieved. Factors that could cause actual results to differ materially from the
Operating Partnership's current expectations include general economic
conditions; risks associated with the development and acquisition of properties,
including risks that the development or acquisition may not be completed on
schedule; and risks associated with the consummation of the transactions
discussed above, including risks that the parties fail to secure required
consents or that the transactions otherwise fails to close.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
By: Highwoods Properties, Inc., its general partner
By: /S/ CARMAN J. LIUZZO
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Carman J. Liuzzo
Vice President and Chief
Financial Officer
Date: January 6, 1998
