Highwoods Properties Q1 FFO Beats Estimates, Revenues Miss

Highwoods Properties Inc. HIW reported first-quarter 2025 funds from operations (FFO) per share of 83 cents, beating the Zacks Consensus Estimate of 82 cents. However, the figure was lower than the prior-year quarter’s 89 cents.Quarterly results reflect healthy leasing activity with rent growth. However, the decline in occupancy and same-property net operating income (NOI) undermines the results to an extent. HIW revised its outlook for 2025.Rental and other revenues came in at $200.4 million, missing the Zacks Consensus Estimate of $205.2 million. The figure fell by 5.4% year over year.HIW’s First Quarter in DetailHighwoods’ average in-place cash rent was up 2.5% per square foot from the prior-year quarter. At the end of the reported quarter, the in-service portfolio occupancy (at HIW share) declined 160 basis points from the prior quarter to 85.5%. The same-property cash NOI decreased 3.4% year over year to $132.3 million.Highwoods’ second-generation leasing activity encompassed 700,000 square feet of space in the first quarter, including 252,000 square feet of new leases. The dollar-weighted average term is 5.3 years. GAAP rent growth was 12.8%, while net effective rents were 21% higher than the previous five-quarter average.The present development pipeline aggregates $474 million (at HIW share) and is 62.8% pre-leased. During the first quarter, the company also signed 97,000 square feet of first-generation leases.Portfolio Activity of HIWDuring the first quarter, Highwoods purchased the Advance Auto Parts Tower, a Class AA office building in Raleigh spanning 346,000 square feet, for $138 million.During the quarter, Highwoods sold off non-core office buildings in Tampa, FL, encompassing 616,000 square feet, for $145 million.HIW’s Balance Sheet PositionThe company’s total available liquidity amounted to more than $700 million, including cash on hand, availability on the revolving credit facility and pro rata share of undrawn joint venture construction loans. The reported net debt-to-adjusted EBITDAre ratio was 6.4 compared with 6.29 at the end of Dec. 31, 2024.HIW’s 2025 Guidance RevisionHighwoods has raised its 2025 FFO per share guidance to the range of $3.31-$3.47 from the earlier guided range of $3.26-$3.44. The Zacks Consensus Estimate is currently pegged at $3.35, which lies within this range.HIW expects growth in same-property cash NOI between -4.0% and -2.0% and average occupancy of 85% to 86.5%.HIW's Zacks RankHighwoods currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Highwoods Properties, Inc. Price, Consensus and EPS Surprise Highwoods Properties, Inc. price-consensus-eps-surprise-chart | Highwoods Properties, Inc. QuotePerformance of Other Office REITsBXP Inc.’s BXP first-quarter 2025 FFO per share of $1.64 missed the Zacks Consensus Estimate of $1.65. BXP’s quarterly results reflected better-than-anticipated revenues on healthy leasing activity. However, lower occupancy during the quarter marred its year-over-year FFO per share growth. (See the Zacks Earnings Calendar to stay ahead of market-making news.)SL Green Realty Corp. SLG reported a first-quarter 2025 FFO per share of $1.40, which surpassed the Zacks Consensus Estimate of $1.27. Results reflected improved average rental rates on the signed Manhattan office leases in the period and higher same-store cash NOI. However, elevated interest expenses undermined the results to some extent.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Highwoods Properties, Inc. (HIW): Free Stock Analysis Report BXP, Inc. (BXP): Free Stock Analysis Report SL Green Realty Corporation (SLG): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks