Highwoods Properties Inc. (NYSE: NYSE:HIW) has received a reiterated Neutral rating from BTIG, following their third-quarter financial report.
The company posted funds from operations (FFO) per share of $0.90, which was $0.03 higher than BTIG's estimate and $0.02 above the consensus.
Consequently, Highwoods raised its full-year 2024 FFO per share guidance to $3.61 at the midpoint, a $0.03 increase.
The report highlighted a significant turnaround in leasing activity for Highwoods. After a period of concern about office demand in the Sunbelt markets, the company has seen a dramatic increase in leasing volume, reaching 906k square feet in the third quarter of 2024.
Of this, 530k square feet were new leases, marking the highest level since the second quarter of 2014. The company also reported its highest GAAP and cash leasing spreads since the Global Financial Crisis, at 22.4% and 10.4%, respectively.
Highwoods' active development pipeline has seen substantial growth, now 55.5% pre-leased, a notable rise from 18.8% in the third quarter of 2023. Despite these positive developments, occupancy has slightly declined by 50 basis points sequentially to 87.8% in the third quarter of 2024, with expectations of a further decline in 2025 due to known move-outs.
In other recent news, Highwoods Properties, a real estate investment trust, has reported an array of recent developments. The company reported a 4% year-over-year growth in Funds From Operations (FFO) per share in Q2 2024, reaching $0.98, and subsequently raised its full-year FFO outlook.
Highwoods also signed leases totaling 738,000 square feet in Q3 2024, with over 400,000 square feet of this total representing new leases. A significant transaction includes a long-term lease for 104,000 square feet at Two Alliance Center in Atlanta's Buckhead Business District, set to commence in 2026.
In addition to its financial and leasing performance, Highwoods announced that its Florida properties suffered no damage from recent hurricanes, a testament to the company's operational capabilities and disaster preparedness strategies. Analyst firms such as Citi, Truist Securities, and BofA Securities have also updated their outlooks for Highwoods.
Citi maintained a neutral rating with a price target of $31, while Truist Securities raised the company's price target to $33 from $29. BofA Securities increased its price target from $23 to $25, maintaining a neutral rating.
InvestingPro Insights
Highwoods Properties Inc. (NYSE: HIW) has shown remarkable resilience and growth potential, as evidenced by both its recent financial performance and market indicators. According to InvestingPro data, the company's stock has demonstrated impressive momentum, with a 111.64% price total return over the past year and a 45.07% return in the last six months. This aligns with the company's reported turnaround in leasing activity and improved FFO performance.
InvestingPro Tips highlight that Highwoods has maintained dividend payments for 31 consecutive years, underscoring its commitment to shareholder returns even during challenging times for the office real estate sector. This is particularly noteworthy given the company's current dividend yield of 5.62%, which may attract income-focused investors.
The company's liquidity position appears strong, with InvestingPro noting that liquid assets exceed short-term obligations. This financial stability could support Highwoods' ambitious development plans and potential new project starts, as discussed in the earnings report.
For investors seeking a deeper understanding of Highwoods Properties' potential, InvestingPro offers 5 additional tips that could provide valuable insights into the company's prospects and valuation.
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