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

Highwoods Properties Inc. HIW reported third-quarter 2024 funds from operations (FFO) per share of 90 cents, which beat the Zacks Consensus Estimate of 88 cents. However, the figure was lower than the prior-year quarter’s 93 cents.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Quarterly results reflect healthy leasing activity with rent growth amid rising demand for highly amenitized premium office spaces. However, higher interest expenses undermine the results to an extent. HIW raised its outlook for 2024.Rental and other revenues came in at $204.3 million, down 1.3% year over year. The figure also narrowly missed the Zacks Consensus Estimate of $205.3 million.According to Ted Klinck, the president and CEO of HIW, “Our high-quality portfolio continues to generate strong demand from customers and prospects.” He added, “The solid demand we’re seeing from current and future customers who are committing to long-term leases at healthy rents signifies the strength of high-quality office buildings owned by well-capitalized landlords across our BBD footprint.”Highwoods Properties, Inc. Price, Consensus and EPS Surprise Highwoods Properties, Inc. price-consensus-eps-surprise-chart | Highwoods Properties, Inc. QuoteHIW’s Third Quarter in DetailHighwoods’ average in-place cash rent was up 3.9% per square foot from the prior-year quarter. At the end of the reported quarter, the in-service portfolio occupancy (at HIW share) declined 70 basis points year over year to 88%. The same-property cash net operating income (NOI) increased 2.4% year over year to $140.5 million.Highwoods’ second-generation leasing activity included 906,000 square feet of space in the third quarter, including 530,000 square feet of new leases. The dollar-weighted average term is 10.4 years.The present development pipeline aggregates $514 million (at HIW share) and is 49.2% pre-leased. During the third quarter, the company also signed 61,000 square feet of first-generation leases.Rental property and other expenses were $65.7 million, down 2.2% on a year-over-year basis. However, interest expenses were $37.5 million, up 9.4% on a year-over-year basis.HIW’s Balance Sheet PositionThe company exited the third quarter with total available liquidity of $788 million, including cash on hand, availability on the revolving credit facility and pro rata share of undrawn joint venture construction loans. The figure rose from $777 million reported as of June 30, 2024.The reported net debt-to-adjusted EBITDAre ratio was 6.1 compared with 5.8 at the end of June 30, 2024.HIW’s 2024 GuidanceHighwoods raised its guidance for 2024. The company now expects FFO per share in the range of $3.59-$3.63, up from the prior guided range of $3.54-$3.62. The midpoint for FFO per share is 6 cents higher than its initial outlook. The Zacks Consensus Estimate is currently pegged at $3.60.HIW expects growth in same-property cash NOI between 1% and 2%, up from the previously guided range of 0.5%-2%. The average occupancy is anticipated between 87% and 89%, unchanged from the prior guided range.Highwoods currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Upcoming Earnings ReleasesWe now look forward to the earnings releases of other REITs like Cousins Properties CUZ and Healthpeak Properties, Inc. DOC, slated to report on Oct. 24.The Zacks Consensus Estimate for Cousins Properties’ third-quarter 2024 FFO per share stands at 67 cents, which indicates 3.1% growth year over year. CUZ currently has a Zacks Rank #3.The Zacks Consensus Estimate for Healthpeak Properties’ third-quarter 2024 FFO per share is pegged at 44 cents, which implies a 2.2% year-over-year decrease. DOC currently carries a Zacks Rank #3.Note: Anything related to earnings presented in this write-up represents FFO, a widely used metric to gauge the performance of REITs.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant 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 Cousins Properties Incorporated (CUZ): Free Stock Analysis Report Healthpeak Properties, Inc. (DOC): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks