Highwoods Properties (HIW) Q1 2026 earnings summary

Executive summary

• Achieved strong leasing volume and financial performance, with robust activity in both in-service and development properties, supporting future NOI, cash flow, and FFO growth.

• Focused on high-quality office properties in major business districts, aiming for long-term sustainable returns through acquisitions, developments, and recycling of non-core assets.

• Portfolio occupancy ended at 85.0% as of March 31, 2026, with expected average occupancy between 85.5% and 86.5% for the remainder of 2026.

• Signed 958,000 sq ft of second-generation leases, including over 300,000 sq ft of new leases, and 107,000 sq ft of first-generation leases.

• Completed joint venture acquisitions in Dallas and Raleigh and sold non-core assets in Richmond, improving portfolio quality and cash flows.

Financial highlights

• Delivered FFO of $94.0 million ($0.84 per share) and net income of $31.4 million ($0.29 per share) in Q1 2026.

• Rental and other revenues rose 6.8% year-over-year to $214.0 million for Q1 2026, driven by acquisitions and higher same property revenues.

• GAAP rent growth was 19.4% and cash rent growth was 4.8% year-over-year on second-generation leases.

• Same property NOI declined 0.1% to $135.2 million, with cash same property NOI down 0.6% to $128.5 million.

• Net effective rents were the second highest in company history, 9% above the prior five-quarter average.

Outlook and guidance

• Maintains full-year 2026 FFO outlook of $3.40 to $3.68 per share.

• Year-end occupancy outlook reiterated at 86.5%-88.5%, implying a 250-basis point increase at midpoint.

• Expects $190 million to $210 million in planned building dispositions in the next three months.

• NOI growth expected from developments placed in service and those in the pipeline, with over $20 million annual NOI growth anticipated.

• Assumes same property cash NOI growth between -1.0% and +1.0% for 2026.