Sun Belt Office Deals Signal Buyer Return

Highwoods Properties bought major office buildings in Dallas and Raleigh for over $108M.
The REIT acquired 80% of The Terraces in Dallas and a minority stake in Bloc83 in Raleigh.
Deals align with Highwoods’ strategy to recycle capital into premium Sun Belt assets.
US office market shows signs of recovery, with recent leasing hitting post-2019 highs.

Key Takeaways

Active Sun Belt Investment

Highwoods Properties has started the year by acquiring office assets in two key Sun Belt cities, per CoStar. The REIT spent over $108M for interests in prominent buildings in Dallas, TX, and Raleigh, NC. These moves support its focus on high-quality, well-located office properties in growing markets.

Portfolio Upgrades and Partnerships

In Dallas, Highwoods bought an 80% stake in the 173-KSF, nearly fully leased The Terraces in Preston Center in partnership with Granite Properties. In Raleigh, it purchased a 10% stake in the 492-KSF Bloc83 office complex, working alongside the North Carolina Investment Authority, which now controls the majority of that asset. Both office buildings enjoy high occupancy rates, reflecting tenant demand in these Sun Belt locations.

Market Recovery and Momentum

These Sun Belt office deals are part of a larger trend as institutional buyers return to the office market. National US office vacancy has plateaued around 14%, while Q3 2025 saw the strongest leasing volume since before the pandemic. Highwoods, after other recent high-profile Sun Belt acquisitions, now manages about 2M SF in downtown Raleigh, positioning itself to meet changing tenant needs. Recent signs of momentum across Sun Belt office markets further reflect this rebound, as capital continues flowing into high-growth metros. Management cites improved capital market conditions and a growing pipeline of quality assets for sale.