Highwoods Properties Q4 FFO Meets Estimates, Revenues Beat

Core Insights - Highwoods Properties Inc. (HIW) reported fourth-quarter 2024 funds from operations (FFO) per share of 85 cents, matching the Zacks Consensus Estimate but lower than the prior year's 99 cents [1] - The company experienced healthy leasing activity with rent growth, although higher interest expenses impacted results [2] Financial Performance - Rental and other revenues for the fourth quarter were $205.5 million, exceeding the Zacks Consensus Estimate of $204.2 million but slightly below the prior year's $206.9 million [2] - For full-year 2024, FFO per share was $3.61, down from $3.83 in the previous year but in line with the consensus estimate; rental and other revenues decreased by 1% to $825.9 million, below the consensus mark of $828.9 million [3] Leasing Activity - Highwoods' average in-place cash rent increased by 3.1% per square foot year-over-year; however, the in-service portfolio occupancy declined by 90 basis points to 87.1% [4] - The company reported second-generation leasing activity of 1.3 million square feet in the fourth quarter, with a dollar-weighted average lease term of 6.8 years and GAAP rent growth of 12.2% [5] Expenses and Interest - Rental property and other expenses rose to $71.5 million, a 2.8% increase year-over-year; interest expenses increased by 5.6% to $37.3 million [6] Portfolio Activity - During the quarter, Highwoods sold a 170,000-square-foot non-core office building for $21.4 million and acquired land in Atlanta for $50.6 million; post-quarter, the company sold 616,000 square feet of non-core office buildings for $145 million [7] Balance Sheet - The company's total available liquidity exceeded $900 million, with a net debt-to-adjusted EBITDAre ratio of 6.29, up from 6.13 at the end of 2023 [8] 2025 Guidance - Highwoods anticipates 2025 FFO per share between $3.26 and $3.44, with the consensus estimate at $3.43; same-property cash NOI is expected to decline between -4.0% and -2.0% [9]