Riparius to be acquired by N.C. firm in $93.7 million deal Highwoods Properties enters new market

December 24, 1997|By Bill Atkinson | Bill Atkinson,SUN STAFF

Riparius Development Corp. said yesterday that it has entered into an agreement to sell the company and its real estate holdings to a North Carolina real estate investment trust for $93.7 million in cash and stock.

The deal between Riparius and Raleigh-based Highwoods Properties Inc. is expected to close in the next several days, the companies said.

Mike McCarthy, chairman of Riparius, a Timonium-based real estate development company, said the merger gives it more financial muscle to grow "significantly."

"REITs are becoming much more dominant players in the marketplace," McCarthy said. "We feel that really is the future platform for real estate development."

McCarthy signed a three-year contract to manage Highwoods' Baltimore operations. Riparius will change its name to Highwoods Properties Inc.

Riparius' 11 employees also will take jobs with Highwoods, McCarthy said.

In addition to opening a new market for fast-growing Highwoods, the acquisition gives the company:

Five suburban office properties with 369,000 square feet for $41.2 million.

Two development projects in Owings Mills that have 235,000 square feet at an estimated cost of $26.2 million.

About 101 acres of land at Riparius Center in Owings Mills that the company plans to acquire over three years for $23.9 million.

Eleven acres of development land valued at $2.4 million also at Riparius Center.

The 112 acres is zoned with development approval and it will allow Highwoods to build 2 million square feet of more office space.

Highwoods picks up a portfolio that is 99 percent occupied. Tenants include BT Alex. Brown, Fireman's Fund, AirTouch Paging and Dun & Bradstreet.

"The merger represents the creation of what will be an extremely effective and financially potent real estate development firm," said David P. Scheffenacker, president of Baltimore-based Preston Partners Inc., which brokered the deal.

Ron Gibson, president and chief executive of Highwoods, said the companies began talking about six months ago.

In addition to acquiring Riparius, Highwoods said yesterday that it had entered into a contract to buy Garcia, an office management and brokerage company in Florida that has a large portfolio of land and suburban office properties in Tampa, for $111 million.

It also said that it plans to merge with J. C. Nichols Co., a real estate company in Kansas City, Mo., in a deal valued at $570 million.

The three transactions would increase Highwoods' market capitalization to about $4 billion.

Pub Date: 12/24/97

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.