Key Takeaways HIW secured 750,000 square feet of Q2 leasing through June 2, including 300,000 square feet of new deals. HIW's portfolio focus on high-growth Sun Belt markets is aiding rent growth and leasing strength. HIW sold $146.3M in non-core assets and bought a Class AA tower in Raleigh in early 2025.Highwoods Properties (HIW) shares have rallied 8.3% in the past three months, against the industry’s fall of 0.2%.In early June, HIW announced that it has signed more than 750,000 square feet of second-g ...

Core Insights - Highwoods Properties, Inc. (HIW) has signed over 750,000 square feet of second-generation leases from the beginning of the second quarter through June 2, 2025, including more than 300,000 square feet of new leases [1][7] - The company is experiencing a recovery in demand for its office properties, driven by organizations emphasizing return-to-office mandates, which is propelling leasing activity [2][3] Company Performance - In the first quarter of 2025, HIW signed approximately 691,000 square feet of second-generation leases, with nearly 244,000 square feet being new leases [3] - The company has a well-diversified tenant base and is focusing on expansion in high-growth markets, which are key growth drivers [3] - Over the past three months, HIW's shares have gained 8.4%, contrasting with a 1.3% decline in the industry [4] Future Outlook - HIW expects occupancy growth in late 2025, supported by a strong leasing pipeline [2][7] - The healthy volume of leases executed in the first five months of the year positions the company for future growth in occupancy [2]

Core Insights - Highwoods Properties, Inc. has released its 2024 Corporate Resiliency Report, emphasizing its commitment to maintaining a resilient and high-quality office portfolio that can thrive across various economic cycles [1] Company Overview - Highwoods Properties, Inc. is a publicly-traded real estate investment trust (REIT) listed on NYSE under the ticker HIW, with its headquarters in Raleigh [1] - The company focuses on owning, developing, acquiring, leasing, and managing properties primarily located in the best business districts (BBDs) of major cities including Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa [1] - Highwoods aims to lead the evolution of commercial real estate, benefiting customers, communities, and investors [1] - The company's mission is to create inspiring environments and experiences that enhance collaboration among teammates and customers, ultimately delivering greater value to shareholders [1]

Group 1 - The earnings call for Highwoods Properties Q1 2025 was attended by key executives including the CFO, CEO, and COO [1][2] - The prepared remarks for the call were made available on the company's website for investor convenience [2] - The review included non-GAAP measures such as FFO, NOI, and EBITDAre, with reconciliations provided in the earnings release [3]

Core Viewpoint - Highwoods Properties Inc. (HIW) reported a first-quarter 2025 FFO per share of 83 cents, exceeding the Zacks Consensus Estimate of 82 cents but lower than the previous year's 89 cents, indicating mixed performance amid healthy leasing activity and rent growth [1][3] Financial Performance - Rental and other revenues totaled $200.4 million, falling short of the Zacks Consensus Estimate of $205.2 million and representing a 5.4% year-over-year decline [2] - The average in-place cash rent increased by 2.5% per square foot compared to the prior year, while same-property cash NOI decreased by 3.4% year over year to $132.3 million [3] Leasing Activity - Highwoods engaged in second-generation leasing activity covering 700,000 square feet, including 252,000 square feet of new leases, with a dollar-weighted average lease term of 5.3 years [4] - GAAP rent growth was reported at 12.8%, and net effective rents were 21% higher than the average of the previous five quarters [4] Portfolio Management - The company acquired the Advance Auto Parts Tower, a Class AA office building in Raleigh, for $138 million, and sold non-core office buildings in Tampa, FL, for $145 million [5] Balance Sheet and Liquidity - Highwoods reported total available liquidity exceeding $700 million, which includes cash, revolving credit facility availability, and undrawn joint venture construction loans [6] - The net debt-to-adjusted EBITDAre ratio was reported at 6.4, slightly up from 6.29 at the end of December 2024 [6] Guidance Revision - The company raised its 2025 FFO per share guidance to a range of $3.31-$3.47 from the previous $3.26-$3.44, with the Zacks Consensus Estimate currently at $3.35 [7] - Expected growth in same-property cash NOI is projected between -4.0% and -2.0%, with average occupancy anticipated to be between 85% and 86.5% [7]

Financial Data and Key Metrics Changes - The company reported net income of $97.4 million or $0.91 per share and FFO of $91.7 million or $0.83 per share for Q1 2025 [20] - The midpoint of the 2025 FFO outlook has been raised by $0.04 to a range of $3.31 to $3.47 per share [9][22] - The occupancy rate is expected to improve over the next few years due to a healthy backlog of signed but not yet commenced leases [9][21] Business Line Data and Key Metrics Changes - The company signed 97,000 square feet in first-generation leases in its development pipeline, which is now 63% leased, up 5% from the previous quarter [6] - Leasing economics were strong, with net effective rents more than 20% higher than the prior May average [6] - The company leased 700,000 square feet of second-generation office space, including over 250,000 square feet of new leases [6][14] Market Data and Key Metrics Changes - The Sunbelt region continues to show positive momentum, with Raleigh being named the number one best-performing large city in the U.S. [16] - The Tampa market has the lowest office vacancy among major U.S. CBDs at 9.8% [17] - The construction pipeline is reportedly empty for the first time since 2011, benefiting the company's recently delivered developments [17] Company Strategy and Development Direction - The company is focused on recycling non-core assets and investing in high-quality, high-growth properties [10][25] - There are no new development projects expected this year due to high construction costs and elevated vacancy levels [11] - The company aims to drive organic growth by signing long-term leases with strong customers [12] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about future growth despite macroeconomic uncertainties, citing strong leasing activity and a healthy pipeline [12][13] - The company has not seen any reluctance from tenants to engage on 2026 expirations, indicating confidence in the leasing market [30] - Management believes that the absence of new construction will lead to significant rent growth and high-quality second-generation products [11][80] Other Important Information - The company has $710 million of available liquidity and no debt maturities until May 2026 [21] - Since 2019, the company has sold over $1.5 billion of non-core properties and recycled the proceeds into higher quality office buildings [10][25] Q&A Session Summary Question: Will the company consider significant incremental dispositions without corresponding acquisitions? - The company plans to continue recycling non-core assets and has additional dispositions in preparation for the second half of 2025 [28][29] Question: Is there any reluctance from tenants regarding 2026 expirations due to economic uncertainty? - The company has not observed any reluctance from tenants, and deal flow remains strong [30][31] Question: What is the significance of CapEx and TIs for the leasing done thus far in April? - The CapEx and TIs are in line with market expectations, but higher leasing capital is anticipated for the remainder of the year [34] Question: How does the company view the cadence of occupancy and FFO growth? - The company expects lower occupancy and FFO in the first half of the year, with growth anticipated in the latter half [39][40] Question: What is the outlook for the capital markets and transaction activity? - The office capital markets are beginning to open up, with increased interest from lenders and investors [64][66] Question: Are there any changes in tenant behavior regarding relocation or expansion plans? - The company has not seen a significant shift towards short-term renewals, with expansions outpacing contractions [45][47] Question: How is the company managing its dividend level amid capital expenditures? - The company has generated over $150 million of free cash flow above its dividend since the pandemic, indicating comfort with its current dividend level [52][53] Question: What is the status of the company's acquisition and disposition strategy? - The company is actively underwriting new opportunities but has no significant updates on specific assets at this time [94]

分组1 - Highwoods Properties reported quarterly funds from operations (FFO) of $0.83 per share, exceeding the Zacks Consensus Estimate of $0.82 per share, but down from $0.89 per share a year ago, representing an FFO surprise of 1.22% [1] - The company posted revenues of $200.38 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 1.92%, compared to year-ago revenues of $211.28 million [2] - Highwoods Properties has surpassed consensus FFO estimates three times over the last four quarters, while it has topped consensus revenue estimates only once in the same period [2] 分组2 - The stock has underperformed the market, losing about 7.1% since the beginning of the year, compared to the S&P 500's decline of 6% [3] - The current consensus FFO estimate for the coming quarter is $0.85 on revenues of $204.19 million, and for the current fiscal year, it is $3.35 on revenues of $828.53 million [7] - The Zacks Industry Rank for REIT and Equity Trust - Other is currently in the bottom 38% of over 250 Zacks industries, indicating potential challenges for the sector [8]

Core Viewpoint - Highwoods Properties, Inc. has released its first quarter 2025 financial results, indicating ongoing performance in the office real estate sector [1]. Company Overview - Highwoods Properties, Inc. is a publicly-traded fully-integrated office real estate investment trust (REIT) based in Raleigh, focusing on owning, developing, acquiring, leasing, and managing properties in prime business districts across several major cities including Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa [2]. - The company's vision is to lead the evolution of commercial real estate, aiming to create environments that inspire collaboration and achievement among customers and stakeholders [2]. - Highwoods emphasizes the importance of exceptional environments and experiences in delivering value to customers and shareholders [2].

Occupancy and Leasing - Average occupancy in the office portfolio decreased from 87.1% as of December 31, 2024, to 85.5% as of March 31, 2025, with expectations to range from 85.0% to 86.0% for the remainder of 2025[118] - Annualized rental revenues from new and renewal leases signed in the first quarter were $35.88 per rentable square foot, 12.8% higher compared to previous leases in the same office spaces[121] - The average term for new leases signed in the first quarter was 6.1 years, while renewals had an average term of 4.7 years[119] Financial Performance - Consolidated same property net operating income (NOI) was $3.1 million, or 2.3%, lower in the first quarter of 2025 compared to 2024, with expectations for lower NOI for the remainder of 2025[124] - NOI was $5.5 million, or 3.9%, lower in the first quarter of 2025 compared to 2024, primarily due to lower consolidated same property NOI and lost NOI from property dispositions[125] - Rental and other revenues decreased by $10.9 million, or 5.2%, in Q1 2025 compared to Q1 2024, primarily due to lower same property revenues and lost revenue from property dispositions[138] - Operating expenses were $5.4 million, or 7.7%, lower in Q1 2025 compared to Q1 2024, mainly due to lower same property operating expenses and lost expenses from property dispositions[139] - Depreciation and amortization expense decreased by $2.3 million, or 3.1%, in Q1 2025 compared to Q1 2024, primarily due to property dispositions[140] - Interest expense increased by $0.1 million, or 0.2%, in Q1 2025 compared to Q1 2024, with expectations for higher interest expenses for the remainder of 2025[142] - Gains on disposition of property were $75.0 million higher in Q1 2025 compared to Q1 2024, primarily related to building dispositions in Tampa[144] - Diluted earnings per common share increased by $0.66 in Q1 2025 compared to Q1 2024 due to an increase in net income[146] - Net cash provided by operating activities was $46.3 million in Q1 2025, down $26.1 million from $72.4 million in Q1 2024[148] - Funds from operations (FFO) for the three months ended March 31, 2025, were $92.3 million, compared to $96.6 million for the same period in 2024, reflecting a decrease of approximately 4.5%[180] - FFO available for common stockholders per share was $0.83 for Q1 2025, down from $0.89 in Q1 2024, representing a decline of about 6.7%[180] Capitalization and Liquidity - As of March 31, 2025, the leverage ratio was 42.8%, with approximately $18 million of existing cash and $145.0 million drawn on a $750.0 million revolving credit facility[129] - The company expects to meet long-term liquidity needs through existing cash, borrowings under the revolving credit facility, and proceeds from the sale of non-core assets[133] - The company anticipates that available cash and cash equivalents will be adequate to meet short-term liquidity requirements, including operating expenses and capital expenditures[131] - As of March 31, 2025, the Company had $20.1 million in cash and cash equivalents, with an unused revolving credit facility capacity of $599.9 million[169] - The Company anticipates that existing cash and revenues will be sufficient to cover operating expenses, interest, and dividends[168] Property Transactions - The company acquired Advance Auto Parts Tower for $137.9 million during Q1 2025[153] - The company sold three buildings in Tampa and land in Pittsburgh for a total sales price of $146.3 million, recording net gains of $82.2 million[154] - The Company expects to sell up to $150 million of non-core properties during the remainder of 2025[172] Portfolio and Asset Management - The Company aims to continuously upgrade the quality of its office portfolio through acquisitions, dispositions, and development to deliver sustainable value for stockholders[134] - The company maintains a diverse customer base, with only Bank of America (3.9%) and Asurion (3.6%) accounting for more than 3% of annualized GAAP revenues as of March 31, 2025[122] - The same property portfolio consisted of 148 properties with 26.3 million rentable square feet as of March 31, 2025, down from 152 properties and 27.2 million square feet as of December 31, 2024[182] Dividends and Shareholder Returns - The Company declared a cash dividend of $0.50 per share of Common Stock, payable on June 10, 2025[166] - The Company has an effective automatic shelf registration statement allowing for the sale of an indefinite amount of common and preferred stock, as well as debt securities[170]

Core Viewpoint - Highwoods Properties, Inc. is set to release its first quarter 2025 results on April 29, followed by a conference call on April 30 at 11:00 A.M. Eastern time [1] Company Overview - Highwoods Properties, Inc. is a publicly-traded, fully-integrated office real estate investment trust (REIT) headquartered in Raleigh, focusing on owning, developing, acquiring, leasing, and managing properties in prime business districts across several major cities including Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa [3] - The company's vision is to lead the evolution of commercial real estate, aiming to create environments and experiences that inspire collaboration and achievement among its customers and stakeholders [3]