Highwoods Properties, Inc.

What they do

Highwoods owns, develops, acquires, leases and manages office properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. The Company operates as a REIT headquartered in Raleigh, North Carolina, and is structured around an Operating Partnership in which it owned 109.5 million Common Units, or 98.2%, as of December 31, 2025. It describes its business as work-placemaking: owning and operating high-quality, amenitized workplaces in dynamic urban and suburban BBD locations. Its primary business is the operation, acquisition and development of office properties, with no material inter-segment transactions.

Revenue drivers

• Office rental and other revenues — The company's operating results depend heavily on leasing and operating office space in its portfolio; rental and other revenues are affected by average occupancy, rental rates, cost recovery income, new developments placed in service, acquisitions and dispositions.
• Occupancy and rent levels — Average occupancy generally rises with improving economic growth when leasing outpaces expirations and falls in slower periods; occupancy fell from 87.1% at December 31, 2024 to 85.3% at December 31, 2025.
• Development and acquisitions — New developments placed in service and asset acquisitions directly increase rental revenues; the company's stated investment thesis is to develop, acquire and own differentiated office buildings in BBDs of its core markets.
• Dispositions and recycling — A core component of the strategy is recycling out of properties that no longer meet the company's criteria, and dispositions directly impact rental revenues and average occupancy.

Recent performance

Annual revenues were $834.0 million in 2023, $825.9 million in 2024 and $806.1 million in 2025. Net income was $151.3 million in 2023, $104.3 million in 2024 and $162.7 million in 2025, with diluted EPS of $1.39, $0.94 and $1.45, respectively. Operating cash flow was $387.0 million in 2023, $403.6 million in 2024 and $359.2 million in 2025. Quarterly revenues were $200.6 million at 2025-06-30, $201.8 million at 2025-09-30, $203.4 million at 2025-12-31 and $214.0 million at 2026-03-31. As of June 30, 2026, the company had $145.4 million of cash and cash equivalents and $749.9 million of unused revolving credit facility capacity.

Strategy

The stated strategy is to own and operate high-quality workplaces in the BBDs within its footprint, maintain a strong balance sheet to be opportunistic throughout economic cycles, employ a talented team and communicate transparently with stakeholders. The investment thesis is to generate attractive and sustainable long-term returns by developing, acquiring and owning a portfolio of high-quality, differentiated office buildings in its core markets. A core component is strengthening the financial and operational performance, resiliency and growth prospects of the in-service portfolio and recycling out of properties that no longer meet its criteria. The company has a currently effective automatic shelf registration statement on Form S-3 allowing it to sell common stock, preferred stock and depositary shares, and the Operating Partnership to sell debt securities. It also uses equity distribution agreements to sell common stock from time to time, including on a forward basis.

Risks

• Work-from-home demand — Continued social acceptance and perceived economic benefits of work-from-home arrangements could materially and negatively impact long-term demand for office space.
• Market economic weakness — Adverse economic conditions such as high unemployment in its markets may result in lower occupancy and rental rates, which would adversely affect results.
• Re-leasing risk — The company may not be able to lease or re-lease second generation space quickly or on as favorable terms as old leases.
• Customer credit deterioration — The financial condition of customers could deteriorate, and assumptions about potential losses from customer financial difficulties could prove incorrect.

Outlook

The company anticipates that available cash, cash flows from operating activities and other financing sources — including debt issuances, secured debt, bank term loans, revolver borrowings, equity issuances and dispositions of non-core assets — will be adequate to meet short-term liquidity requirements. It believes existing cash and rental and other revenues will continue to be sufficient to fund operating and general and administrative expenses, interest expense, its existing quarterly dividend and existing portfolio capital expenditures, including building improvements, tenant improvements and lease commissions. The company declared a cash dividend of $0.50 per share on July 22, 2026, payable September 9, 2026 to stockholders of record as of August 17, 2026.