Highwoods Properties, Inc. (HIW) Q3 2025 Earnings Call Transcript
FFO (Funds From Operations) $0.86 per share, representing an increase of $0.08 from the initial outlook provided in February 2025. The increase is attributed to strong leasing volumes and improved pricing power.
Net Income $12.9 million or $0.12 per share for the quarter. No notable unusual items were reported.
Debt-to-EBITDAre 6.4x at quarter end. Expected to improve by 0.5x as signed leases commence and NOI grows.
Leasing Volume Over 1 million square feet of second-generation volume, including 326,000 square feet of new leases. Leasing volumes have been strong for 8 consecutive quarters, driving a 340 basis point increase in the leased rate compared to the occupancy rate.
Net Effective Rents 18% higher over the trailing 4 quarters compared to the 2019 average. This growth is attributed to improved pricing power and a dwindling supply of high-quality office space.
Development Pipeline Leasing 122,000 square feet of leases signed, increasing the lease percentage to 72% from 64% last quarter. This represents over 70% of the $30 million stabilized annual future NOI growth potential from 4 completed but not yet stabilized development properties.
Acquisitions and Dispositions Acquired the Legacy Union parking garage for $111.5 million and sold a noncore property in Richmond for $16 million. The acquisition was funded on a leverage-neutral basis through equity issuances, incremental borrowing, and proceeds from noncore asset sales.
Same-Property Cash NOI Midpoint of the outlook raised by 50 basis points, indicating strong performance in the operating portfolio.
Occupancy Rate 85.3% occupied and 88.7% leased at quarter end. Occupancy is expected to grow as signed leases commence.
Cash Flow Impacted by high leasing capital expenditures ahead of projected occupancy build. Expected to improve significantly as leasing volumes normalize and NOI grows.
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Highwoods Properties Declares Quarterly Dividend of $0.50
- Quarterly Dividend Declaration: Highwoods Properties has declared a quarterly dividend of $0.50 per share, consistent with previous payouts, indicating the company's stable cash flow and commitment to shareholder returns.
- Dividend Yield: The forward yield of 7.74% reflects the company's attractiveness in the current market environment, potentially drawing in more income-focused investors seeking reliable returns.
- Payment Schedule: The dividend is set to be paid on March 10, with a record date of February 17 and an ex-dividend date also on February 17, ensuring shareholders receive their earnings promptly.
- Bond Issuance: Highwoods has successfully priced $350 million of 5.35% notes due in 2033, which will strengthen the company's capital structure and support future growth strategies.
Highwoods Properties Schedules Q4 2025 Earnings Release and Conference Call
- Earnings Release Schedule: Highwoods Properties is set to release its Q4 2025 results on February 10, 2026, after market close, reflecting the company's latest performance in the office REIT sector.
- Conference Call Timing: Following the earnings release, a conference call will be held on February 11, 2026, at 11:00 A.M. Eastern Time, providing investors with a direct line of communication with management to enhance transparency.
- International Dial-in Information: U.S. and Canada callers can dial (833) 470-1428, while international callers should use (646) 844-6383, ensuring global investor participation and increasing the company's influence in international markets.
- Webcast and Replay Availability: The call will be accessible via a live webcast on the company's website, with a replay also available, broadening the channels for information dissemination and ensuring all stakeholders stay informed about company developments.
