Highwoods reacquires its taste for acquisitions.

• Position: REGIONAL REPORT Triangle

Highwoods Properties Inc. went on a diet to get fit but seems to have its appetite back. The Raleigh-based real-estate investment trust's latest dish is nearly 500,000 square feet of office space in Cary that it's building for MetLife Inc. The New York-based insurer will move its Global Technology & Operations center there once the two buildings are complete in early 2015. The $110 million project joins a number of high-dollar portfolio additions Highwoods has recently completed or is planning.

Founded in 1978, it went public in the mid-'90s, as did many other REITs. Wall Street put pressure on them to increase cash flow, and the easiest way to accomplish that was to gobble up properties. What transpired was "a very active pie-eating contest," CEO Ed Fritsch says. Highwoods became bloated on ill-located, run-down properties. A year after taking over in 2004, Fritsch unveiled a plan to reshape the company. It divested its worst holdings and focused on those in the best part of a market. "I wouldn't say it was revolutionary," says Jed Reagan, an analyst with Green Street Advisors. "The aim is to do better in up cycles and do better in down cycles." The move proved prescient.

Between 2005 and 2007, as REITs bought up $464 billion of assets, Highwoods sold $741 million and added only $23.8 million. Analysts again clamored for the company to put its cash into buying or developing property, but this time it resisted. Fritsch says, "If we were getting really good pricing for assets that we thought were noncore...