Highwoods provides information on Laser Spine Institute

Highwoods Properties provided information on Laser Spine Institute, which leases a 176,000 square-foot, six-story building with structured parking in Tampa’s Westshore submarket, a best business district. The building, which was developed by Highwoods, has been used by Laser Spine Institute, a long-term customer of Highwoods, for its company headquarters and an ambulatory surgery center. After the market closed on March 1, 2019, Laser Spine Institute announced it would immediately discontinue its operations. This unexpected announcement affects all of its locations nationwide. As a result of Laser Spine Institute’s sudden closure, the company expects to write-off accounts and notes receivable, lease incentives and straight-line rents receivable associated with the building, which aggregated $11.8M at December 31, 2018 and approximately $12.2M at March 1, 2019, including non-cash items of approximately $6.8M as of both dates. The March 1, 2019 balance will be written-off in the first quarter of 2019. These charges, which will affect Funds from Operations, were not included in the company’s initial 2019 per share FFO outlook published on February 5, 2019. The company will provide an updated FFO outlook as part of its first quarter earnings release on April 23, 2019. During the first quarter of 2019, the company also expects to write-off deferred leasing costs associated with the building, which aggregated $11.8M at December 31, 2018 and approximately $11.6M at March 1, 2019. The write-off of deferred leasing costs will affect net income but not FFO.
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