Highwoods Properties(US:HIW) ZACKSยท2024-07-24 16:25Core Viewpoint - Highwoods Properties Inc. (HIW) reported a strong second quarter in 2024, with an increase in funds from operations (FFO) per share and an optimistic outlook for the remainder of the year, despite some challenges in rental revenues and rising interest expenses [19][10][6]. Financial Performance - HIW's FFO per share for the second quarter of 2024 was 98 cents, exceeding the Zacks Consensus Estimate of 90 cents and up from 94 cents in the prior year [19]. - The company raised its 2024 FFO per share guidance to a range of $3.54-$3.62, compared to the previous range of $3.46-$3.61 [10]. - Same-property cash net operating income (NOI) increased by 3.3% year-over-year to $140.8 million [7]. Leasing Activity - The development pipeline totals $506 million at HIW's share, with 45% pre-leased [1]. - During the second quarter, HIW signed 61,000 square feet of first-generation leases and completed 909,000 square feet of second-generation leasing activity, including 352,000 square feet of new leases [1][15]. - The average in-place cash rent increased by 4.8% per square foot compared to the prior year [7]. Balance Sheet and Expenses - HIW's rental property and other expenses were $64.6 million, down 2.6% year-over-year, while interest expenses rose to $35.9 million, an increase of 5.4% [8]. - The company ended the second quarter with $27 million in cash and cash equivalents, up from $16.4 million at the end of the first quarter [9]. - The net debt-to-adjusted EBITDAre ratio improved to 5.8 from 6.09 at the end of the first quarter [17]. Market Outlook - The average occupancy rate is expected to remain stable between 87% and 89% [3]. - HIW's balance sheet is described as being in excellent shape, with low leverage and no debt maturities until mid-2026, positioning the company for future growth opportunities [7].