Highwoods Properties (HIW) Q1 2025 earnings summary

Executive summary

• Delivered strong Q1 results with net income per share rising to $0.91, driven by robust leasing, asset recycling, and Sunbelt market outperformance, despite macroeconomic uncertainty and lower occupancy.

• Acquired Advance Auto Parts Tower in Raleigh for $137.9M–$138M and sold $145M–$146.3M of non-core Tampa and Pittsburgh assets, generating significant net gains.

• Placed in service a major Atlanta development (2827 Peachtree, 93.7%–94% leased) and signed a 145,000 SF lease at Symphony Place in Nashville after quarter-end.

• Portfolio occupancy was 85.5%–88.1% as of March 31, 2025, with Sunbelt markets driving NOI and above-average employment and population growth.

• Strategic capital rotation since 2010: $3.6B acquisitions, $3.0B dispositions, and continuous reinvestment in existing assets and new developments.

Financial highlights

• Q1 2025 net income: $97.4M–$100.0M ($0.91/share); FFO: $91.7M ($0.83/share), down from $96.0M ($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 2.3%–3.3% year-over-year.

• Total available liquidity exceeded $700M at quarter-end; no major debt maturities until May/Q2 2026.

• Leverage ratio (debt and preferred stock to undepreciated assets) was 42.3%–42.8%; net debt to EBITDARE at 6.4x.

Outlook and guidance

• 2025 FFO per share outlook raised to $3.31–$3.47, 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%; year-end occupancy expected between 86%–87%.

• Plan to sell up to $150M of non-core assets during the remainder of 2025; no new development projects expected due to high construction costs.

• Most new leasing in 2025 will drive occupancy growth in 2026.