Highwoods Properties' Q3 FFO Beats Estimates, '24 View Raised

Core Viewpoint - Highwoods Properties Inc. (HIW) reported third-quarter 2024 funds from operations (FFO) per share of 90 cents, exceeding the Zacks Consensus Estimate of 88 cents but lower than the previous year's 93 cents, reflecting strong leasing activity and rent growth despite higher interest expenses [1] Financial Performance - Rental and other revenues totaled $204.3 million, a decrease of 1.3% year over year, narrowly missing the Zacks Consensus Estimate of $205.3 million [1] - Average in-place cash rent increased by 3.9% per square foot compared to the prior-year quarter [2] - Same-property cash net operating income (NOI) rose by 2.4% year over year to $140.5 million [2] - Total rental property and other expenses were $65.7 million, down 2.2% year over year, while interest expenses increased by 9.4% to $37.5 million [3] Development and Leasing Activity - The current development pipeline amounts to $514 million (at HIW share) and is 49.2% pre-leased [3] - Second-generation leasing activity included 906,000 square feet in the third quarter, with 530,000 square feet of new leases signed [2] Balance Sheet Position - The company ended the third quarter with total available liquidity of $788 million, an increase from $777 million as of June 30, 2024 [4] - The net debt-to-adjusted EBITDAre ratio was reported at 6.1, up from 5.8 at the end of June 30, 2024 [4] 2024 Guidance - HIW raised its 2024 guidance for FFO per share to a range of $3.59-$3.63, up from the previous range of $3.54-$3.62, with the midpoint being 6 cents higher than the initial outlook [5] - Expected growth in same-property cash NOI is now between 1% and 2%, an increase from the prior range of 0.5%-2% [5] - Average occupancy is anticipated to remain between 87% and 89%, unchanged from previous guidance [5]