Highwoods Properties (HIW) Q1 2025 earnings summary

Executive summary

• Delivered strong Q1 results with net income per share rising to $0.91, FFO per share at $0.83, and robust leasing activity, including 700,000 sq ft of second-gen office leased and significant new leases signed.

• Executed $145M of non-core asset sales and a $138M acquisition of Advance Auto Parts Tower in Raleigh, immediately accretive to cash flow.

• Focused on Sunbelt markets, with 88.1% leased portfolio as of 3/31/2025 and 1.4M SF in development pipeline.

• Portfolio diversified by industry and customer, with top 10 customers accounting for 21.9% of annualized revenue and only two customers over 3% of GAAP revenues.

• Portfolio occupancy declined to 85.5% as of March 31, 2025, with expected average occupancy of 85.0%-86.5% for the remainder of 2025.

Financial highlights

• Q1 2025 net income: $97.4M–$100.0M ($0.91/share); FFO: $91.7M ($0.83/share), down from $0.89/share year-over-year.

• Rental and other revenues were $200.4M, down 5.2% year-over-year, mainly due to lower same property revenues and dispositions.

• Same property cash NOI declined by 2.3%–3.3% year-over-year.

• Large property sale gain in Tampa included in net income but not FFO.

• $710M+ available liquidity at quarter-end; no debt maturities until May 2026.

Outlook and guidance

• 2025 FFO per share guidance raised to $3.31–$3.47, a 4-cent increase at midpoint, excluding a $0.05/share prior year tax refund.

• Same property cash NOI growth projected between -4.0% and -2.0% for 2025.

• Average occupancy guidance for 2025 is 85.0%–88.0%.

• No new development projects expected in 2025 due to high construction costs and elevated vacancy.

• Plan to sell up to $150M of non-core assets during the remainder of 2025.