Highwoods Properties Q4 FFO Beats Estimates, Revenues Miss

Core Insights - Highwoods Properties Inc. (HIW) reported Q4 2025 funds from operations (FFO) per share of 90 cents, exceeding the Zacks Consensus Estimate of 84 cents and up from 85 cents in the prior-year quarter [1][10] - The company experienced healthy leasing activity with a GAAP rent growth of 15.4% and achieved record net effective rents, which were 19% higher than the previous peak in 2022 [4][10] - For full-year 2024, FFO per share was $3.48, lower than $3.61 in the prior year but above the consensus estimate of $3.42 [2] Financial Performance - Rental and other revenues for Q4 2025 were $203.4 million, below the consensus estimate of $208.3 million and down 1.1% year over year [1] - For the full year 2024, rental and other revenues decreased by 2.4% to $806.1 million, missing the consensus mark of $817.6 million [2] Leasing Activity - Highwoods' average in-place cash rent increased by 1.6% per square foot compared to the prior-year quarter, with an occupancy rate of 85.3% remaining unchanged from the previous quarter [3] - The company signed 526,000 square feet of second-generation leases in Q4, including 221,000 square feet of new leases, with a dollar-weighted average term of 5.6 years [4] Development Pipeline - The current development pipeline totals $474 million (at HIW share) and is 78% pre-leased, with 95,000 square feet of first-generation leases signed from late October 2025 through the end of Q4 [5] Portfolio Activity - Highwoods acquired a newly delivered 411,000-square-foot Class AA office tower, 6Hundred at Legacy Union, for approximately $223 million and sold non-core assets for gross proceeds of $65.9 million during Q4 [6] - Post-quarter, the company acquired Bloc83 in Raleigh and The Terraces in Dallas for $108.4 million [6] Balance Sheet Position - As of January 30, 2026, Highwoods had $46 million in cash and $580 million available on its revolving credit facility, with a net debt-to-adjusted EBITDAre ratio of 6.6, up from 6.4 in the previous quarter [7] 2026 Guidance - Highwoods expects 2026 FFO per share to be in the range of $3.40 to $3.68, with the Zacks Consensus Estimate at $3.55 [8] - The company anticipates same-property cash NOI growth between -1.0% and 1.0% and average occupancy of 86.5% to 88.5% [8]