Core Viewpoint - Office REITs are at a turning point as macroeconomic conditions improve, with demand recovering due to stronger employment and a shift towards higher-quality office spaces [2][4]. Group 1: Office REITs Overview - Several office REITs, including BXP Inc., Cousins Properties, SL Green, and Highwoods Properties, are set to report earnings soon, which will provide insights into leasing velocity and rent growth [3]. - The office real estate market is showing signs of recovery, with national net absorption turning positive and Class A absorption particularly strong [4]. Group 2: Market Fundamentals - Overall vacancy rates have stabilized near 20.5%, with a slight increase of 5 basis points from the previous quarter, marking the smallest annualized rise since 2020 [4]. - Asking rents have increased to approximately $38.37 per square foot, while sublease inventories have significantly declined, tightening available space in major markets [4][5]. Group 3: Construction Activity - Construction activity remains muted, with less than 20 million square feet under construction and a 35% decline in the construction pipeline in 2025 [5]. - The reduction in supply, combined with concentrated demand in gateway and Sun Belt markets, is supporting a firmer leasing environment [5][6]. Group 4: Company-Specific Insights - BXP Inc. is the largest publicly traded U.S. office REIT, managing a portfolio of 54.6 million square feet across 187 properties, and has completed asset dispositions worth over $1 billion [7][8]. - Cousins Properties is experiencing higher leasing activity in its Class A office assets due to tenant preferences for premium spaces, with a fourth-quarter revenue estimate of $248.65 million, indicating a 12.91% year-over-year increase [10][11]. - SL Green, focused on Manhattan office assets, is facing intense competition and is offering rent concessions, which may impact revenue growth; its fourth-quarter revenue estimate is $147.03 million, reflecting a 5.32% year-over-year rise [12][13]. - Highwoods Properties, with a strong focus on the Sun Belt, is well-positioned to benefit from tenant preferences for quality office spaces, with a fourth-quarter revenue estimate of $208.23 million, suggesting a 1.31% year-over-year rise [14][15].

Core Insights - Highwoods Properties (HIW) has updated its investment activities to support long-term growth by acquiring Bloc83 in Raleigh and The Terraces in Dallas [1][8] Investment Details - Highwoods holds a 10% interest in Bloc83, acquired through a joint venture with the North Carolina Investment Authority, with a total investment of approximately $210.5 million. The mixed-use asset covers 492,000 square feet and includes two 10-story office buildings, with 27,000 square feet of retail space. As of December 31, 2025, the property was 97% leased with a weighted average lease term of 6.5 years [2] - Highwoods owns an 80% interest in The Terraces, acquired in a joint venture with Granite, totaling around $109.3 million. The company also contributed $12.9 million in preferred equity. This 12-story office building spans 173,000 square feet and was 98% leased as of December 31, 2025, with a weighted average lease term of seven years [3] Funding Strategy - The acquisitions will be funded through the sale of select non-core assets, making them leverage-neutral. The buyouts are expected to be immediately accretive to cash flows and neutral to the near-term FFO run rate for the company [4][8] Financial Projections - For 2026, Highwoods anticipates generating a GAAP net operating income (NOI) of approximately $9 million and cash NOI of $7.5 million from these investments, along with an additional $0.8 million from the preferred equity investment in The Terraces [4][8] Strategic Positioning - Highwoods' disciplined capital-recycling strategy, which involves shedding non-core assets and reinvesting in premium properties, enhances portfolio quality and positions the company for sustained growth [5]

Core Insights - Highwoods Properties (HIW) has made significant acquisitions, including Bloc83 in Raleigh and The Terraces in Dallas, through joint ventures with strategic partners [1] Group 1: Acquisition Details - Bloc83 is a 492,000 square foot mixed-use asset in CBD Raleigh, featuring two 10-story office buildings and 27,000 square feet of retail space, with a 97% lease rate as of December 31, 2025 and a weighted average lease term of 6.5 years [1] - The joint venture for Bloc83 involves a total investment of $210.5 million, including $3.3 million for near-term improvements and $0.5 million in transaction costs, with Highwoods initially holding a 10% interest [1] - The Terraces is a 173,000 square foot office building in Dallas, 98% leased as of December 31, 2025, with a weighted average lease term of 7.0 years and rents approximately 30% below market [1] Group 2: Financial Projections - The combined investment in The Terraces and Bloc83 is expected to generate GAAP net operating income of $9.0 million and cash net operating income of $7.5 million during 2026 [1] - Highwoods anticipates generating approximately $0.8 million of income in 2026 from its net preferred equity investment in The Terraces joint venture [1]

Core Insights - Highwoods Properties, Inc. has made two significant acquisitions: Bloc83 in Raleigh and The Terraces in Dallas, through joint ventures, indicating a strategic expansion into high-growth markets [2][3][4] Acquisition Details - Bloc83 is a 492,000 square foot mixed-use asset in CBD Raleigh, acquired for a total investment of $21 million, with a 10% ownership stake by Highwoods [1][8] - The Terraces is a 173,000 square foot office building in Dallas, acquired for a total investment of $87.4 million, with an 80% ownership stake by Highwoods [1][10] Financial Impact - The acquisitions are expected to be immediately accretive to cash flows and neutral to the current FFO run rate, with long-term growth potential [2][5] - The combined investment in both properties is projected to generate GAAP net operating income of $9 million and cash net operating income of $7.5 million in 2026 [11] Funding Strategy - The acquisitions will primarily be funded through the sale of non-core assets, with a leverage-neutral rotation of capital expected by mid-2026 [5][12] - In the fourth quarter of 2025, the company sold non-core assets for gross proceeds of $65.9 million and plans to sell additional properties for $42.2 million [13] Market Positioning - The acquisition of The Terraces positions Highwoods in Preston Center, a supply-constrained area in Dallas, with significant long-term rent growth potential due to in-place rents being approximately 30% below market [3][9] - Bloc83, being 97% leased, is strategically located near the company's headquarters, enhancing its portfolio flexibility [4][6]

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Conference Call Wednesday, February 11th, at 11:00 A.M.RALEIGH, N.C., Jan. 06, 2026 (GLOBE NEWSWIRE) -- Highwoods Properties, Inc. (NYSE:HIW) will release its fourth quarter 2025 results on Tuesday, February 10th, after the market closes. A conference call will be held the next day, Wednesday, February 11th at 11:00 A.M. Eastern time. For US/Canada callers, dial (833) 470-1428 and enter access code 568513. International callers should dial (646) 844-6383 and enter the same passcode. A live, listen-only webc ...

Core Insights - The SCCM Small Cap Value Equity Strategy reported a strong performance in Q3 2025, with a return of 14.4% gross and 14.2% net, outperforming the Russell 2000 and Russell 2000 Value indices which returned 12.4% and 12.6% respectively [1] - The positive performance was attributed to Fed rate cuts, economic resilience, and increased investor risk appetite [1] Company Insights - Highwoods Properties, Inc. (NYSE:HIW) experienced a one-month return of -1.87% and a 52-week decline of 14.08%, closing at $27.88 with a market capitalization of $3.064 billion as of November 26, 2025 [2] - The SCCM Small Cap Value Equity Strategy noted that Highwoods Properties contributed positively to the portfolio, with a return of +4.1% due to stable occupancy and disciplined expense management [3] - Highwoods Properties is not among the 30 most popular stocks among hedge funds, with 20 hedge fund portfolios holding the stock at the end of Q2 2025, down from 22 in the previous quarter [4]

Core Insights - Highwoods Properties, Inc. has completed the acquisition of 6Hundred at Legacy Union, a 24-story Class AA office tower in Charlotte, for a total expected investment of $223 million [1][2] - The property is currently 84% leased with a weighted average lease term exceeding 12 years and encompasses 411,000 square feet [2] - The acquisition will be funded on a leverage-neutral basis over the next six months using proceeds from non-core asset sales, with $37 million in non-core assets sold since October 1, 2025 [3] Investment Details - The total investment includes $8.5 million for planned near-term building improvements and leasing capital expenditures, net of $15.7 million in free rent and other credits received from the seller [1] - The building is designed to achieve LEED gold certification and features in-building parking for 832 vehicles [2] Company Overview - Highwoods Properties, Inc. is a publicly-traded, fully-integrated office real estate investment trust (REIT) focused on owning, developing, acquiring, leasing, and managing properties in major business districts across several cities [5] - The company's mission emphasizes creating exceptional environments and experiences to deliver greater value to customers and shareholders [5]

Core Insights - Highwoods Properties (HIW) is planning to acquire the 6Hundred at Legacy Union, a 411,000-square-foot Class AA office tower in Charlotte, which is currently about 84% leased with a weighted average lease term exceeding 12 years [1][8] Investment Details - The acquisition is valued at approximately $223 million, positioning Highwoods to enhance its presence in Charlotte's strong BBD, with the property offering embedded upside and long-term cash-flow potential [2][8] - The deal is expected to close within the next 30 days [2] Strategic Fit in the Portfolio - The property is part of the Legacy Union mixed-use campus, where Highwoods already owns adjacent assets, including the Bank of America Tower and SIX50 South Tryon, expanding its footprint to roughly 1.6 million square feet of Class AA office space [3][8] - This concentrated campus in a high-demand urban location allows for operational efficiencies, shared amenities, and stronger leasing leverage [3] Financial Outlook & Growth Opportunity - Highwoods anticipates stabilized annual net operating income (NOI) of about $17.5-$18.5 million, with stabilization projected by 2027 on a GAAP basis and 2028 on a cash basis [4] - The 6Hundred at Legacy Union is expected to yield approximately $10 million of GAAP NOI in 2026 [4] Funding Strategy - The acquisition will be funded in a leverage-neutral manner through proceeds from non-core asset sales, preserving balance-sheet flexibility [5] - In-place rents are over 20% below market, indicating significant upside potential as leases roll and market rents reset [5] Bottom Line for Investors - The acquisition represents a strategic upgrade for investors focused on office-REIT credit and CRE transition plays, acquiring a high-quality asset in a top Sunbelt city with embedded rental growth potential [6] - Execution will be crucial, but the acquisition aligns with the company's strategy to invest in best-in-class business-district office assets while divesting less favorable non-core properties [6] Market Performance - Over the past three months, Highwoods shares have declined by 5.7%, contrasting with a 1.0% increase in the industry [7] - Despite this, Highwoods shares are currently considered undervalued, as indicated by a Value Score of B [7]

Core Insights - Highwoods Properties (HIW) is experiencing growth driven by a diversified tenant base, expansion in high-growth markets, a robust capital-recycling program, and a strong balance sheet [1][10] Acquisition and Leasing Activities - HIW recently acquired the 6Hundred at Legacy Union for $223 million, a 24-story Class AA office tower in Charlotte, which is currently 84% leased with an average lease term exceeding 12 years [1][10] - In Q3 2025, HIW's second-generation leasing activity reached 1.0 million square feet, including 326,000 square feet of new leases, indicating a recovery in demand for its office properties [5][10] Financial Performance and Projections - The Zacks Consensus Estimate for HIW's 2025 funds from operations (FFO) per share has increased to $3.43, reflecting positive analyst sentiment [2] - HIW's average in-place cash rent grew by 1.6% per square foot year over year during Q3 2025, supported by favorable demographic trends in its Sun Belt market portfolio [3] Capital Recycling and Development - HIW follows a disciplined capital-recycling strategy, having completed asset dispositions worth $161 million and $1.3 million in the first nine months of 2025 [6] - The company completed acquisitions totaling $249.5 million in the same period and has a development pipeline valued at $474.2 million, which is 71.9% pre-leased [7] Balance Sheet Strength - As of September 30, 2025, HIW maintains a healthy balance sheet with no consolidated debt maturities until Q1 2027, $26.3 million in available cash, and $529.9 million in unused capacity under its revolving credit facility [8] - The company generated 85.2% unencumbered NOI, allowing for potential access to additional secured debt capital if needed [8]