Highwoods Properties (HIW) investor relations material

Executive summary

• Achieved Q2 net income of $18.3M ($0.17/share) and FFO of $97.7M ($0.89/share), with robust second-generation leasing and a sequential 80 bps increase in leased rate.

• Focused on upgrading portfolio quality by recycling non-core, CapEx-intensive assets into higher-growth, capital-efficient properties and maintaining a strong balance sheet.

• Over 60% of $55M annual NOI upside secured via signed leases, with Sunbelt markets (Charlotte, Dallas, Nashville, Tampa) outperforming due to strong demographics and limited new supply.

• Annualized GAAP rents for new and renewal leases in Q2 2025 were $33.63 per sq. ft., up 17.6% from prior leases.

• Portfolio occupancy was 85.6% at quarter-end, with an in-service leased rate of 88.9%.

Financial highlights

• Q2 2025 net income was $18.3M ($0.17/share), FFO was $97.7M ($0.89/share); six-month FFO was $189.4M ($1.72/share).

• Rental and other revenues for Q2 2025 were $200.6M, down 2.0% year-over-year; six-month revenues were $401.0M, down 3.6%.

• Leasing volumes remained elevated with 923,000 sq. ft. signed, including 371,000 sq. ft. of new leases.

• Same property cash NOI declined 2.4% year-over-year; average in-place cash rents increased 1.4% per sq. ft.

• Q2 included $3M from a Florida DOT payment, $1M in term fees, and a $1M write-off of predevelopment costs.

Outlook and guidance

• 2025 FFO guidance raised to $3.37–$3.45/share, up $0.02 at midpoint; assumes same property cash NOI growth of -4.0% to -2.0% and average occupancy of 85.0%–86.5%.

• Year-end 2025 occupancy expected at low end of 86–87% range due to early lease terminations and timing of new lease commencements.

• Embedded growth drivers and signed but not commenced leases provide strong visibility for earnings and occupancy growth into 2026.

• Outlook excludes potential future acquisitions, dispositions, and development announcements.

• Expect lower rental and other revenues, NOI, and same property NOI for the remainder of 2025 due to lower anticipated occupancy and property dispositions.