Highwoods Properties (HIW) Q3 2025 earnings summary

Executive summary

• Focused on securing NOI growth through robust leasing, stabilizing development assets, recycling non-core assets, and maintaining a strong balance sheet, with a strategy to own and operate high-quality office properties in key business districts.

• Achieved strong second-gen leasing volume, signing over 1 million sq ft, and maintained eight consecutive quarters of robust leasing.

• Raised FFO and same-property cash NOI outlooks, reflecting confidence in occupancy and earnings growth.

• Plans to sell $50–$500 million of assets and redeploy proceeds into high-quality office buildings, evaluating over $500 million in potential acquisitions.

• Portfolio occupancy at 85.3% as of September 30, 2025, with expected average occupancy of 85.0%–86.3% for the remainder of 2025.

Financial highlights

• Q3 2025 net income was $12.9 million ($0.12/share), FFO was $94.8 million ($0.86/share), and nine-month net income was $128.6 million ($1.19/share).

• Rental and other revenues for Q3 2025 were $201.8 million, down 1.2% year-over-year; nine-month revenues were $602.8 million, down 2.8%.

• Same property cash NOI declined 3.6% year-over-year in Q3 2025.

• Net effective rents reached a record high, averaging 18% above 2019 pre-pandemic levels.

• In-place cash rents increased 1.6% per SF year-over-year.

Outlook and guidance

• Raised 2025 FFO outlook to $3.41–$3.45 per share, up from $3.37–$3.45 previously.

• Same-property cash NOI outlook midpoint raised by 50 basis points.

• Year-end occupancy expected to rise by 70 basis points in Q4, with further 100–200 basis points growth targeted through 2026.

• Up to $500 million in acquisitions and dispositions anticipated over the next few quarters, all within existing markets.

• Expects to meet liquidity needs through cash flows, credit facility, debt/equity issuance, and asset dispositions.