Highwoods Properties (HIW) Q4 2024 earnings summary

Executive summary

• Achieved record leasing activity in 2024, with 4 million sq ft of second-generation leases signed, robust lease economics, and a portfolio spanning 27.2M SF, 89.9% leased as of year-end, focused on Sunbelt markets.

• FFO for Q4 2024 was $0.85 per share (including a $0.01 per share write-off), and full-year FFO was $3.61 per share, nearly 2% above the original outlook despite asset sales and higher interest rates.

• Portfolio quality enhanced through strategic capital rotation: $3.6B acquisitions and $3.0B dispositions since 2010, including 2025 Advance Auto Parts Tower acquisition and non-core Tampa asset sales.

• Significant NOI upside expected from lease commencements and development stabilization, with over $25M in stabilized annual NOI upside from four core buildings and $30M+ projected NOI from development pipeline.

• Continuous reinvestment in the portfolio, with completed, in-progress, and planned projects supporting organic growth and occupancy stability.

Financial highlights

• Q4 2024 net loss of $3.7M ($0.03 per share) due to a $24.6M impairment charge on a Pittsburgh asset; full-year net income was $99.8M ($0.94 per share).

• Q4 FFO was $92.2M ($0.85 per share), and full-year FFO was $391.2M ($3.61 per share).

• Sold $166M of non-core properties at a 7.8% cash cap rate on projected 2025 NOI; proceeds used to reduce debt.

• Raised $52M in equity in late 2024 and acquired land under Century Center in Atlanta for $50.6M.

• Same property cash NOI growth was -0.5% in Q4; average in-place cash rents increased 3.1% year-over-year.

Outlook and guidance

• 2025 FFO per share outlook is $3.26–$3.44, including a $0.10 per share short-term dilutive effect from recent asset sales, equity issuance, and land purchase.

• Same-property cash NOI growth expected at -2% to -4% for 2025, with adjusted range (excluding certain properties) of 1.0%–3.0%.

• Occupancy projected to average 85%–86.5% in 2025, recovering to 86%–87% by year-end; adjusted occupancy (excluding certain properties) at 88.5%–90.0%.

• 2025 guidance assumes $145M completed dispositions, up to $300M in acquisitions, and no likely new development announcements.

• 2025 is anticipated to be a temporary trough before resuming consistent same-store growth.