Highwoods Properties Reports Strong Leasing Volumes and Portfolio Enhancements in Q3 2024

Highwoods Properties, Inc. (NYSE: HIW) has released its fourth quarter and full year 2024 results, providing investors with a comprehensive overview of the company's financial performance. The report highlights the company's strong leasing volumes, portfolio enhancements, and commitment to creating exceptional environments and experiences for its customers and stakeholders.

Throughout 2024, Highwoods Properties has reported robust new leasing volumes, with 1.3 million square feet of new second-gen leases signed through the first three quarters. This impressive performance can be attributed to several key factors, including the company's focus on the Sunbelt region, its concentration on the best business districts (BBDs) within these markets, and its high-quality asset base. Additionally, Highwoods' talented team has consistently delivered exceptional customer service and property management, fostering tenant loyalty and attracting new clients.

Highwoods' leasing pipeline continues to be robust, with a lease rate over 300 basis points higher than the in-service occupied rate of 88%. This indicates a sizable pipeline of leases that have been signed but where occupancy hasn't yet commenced, suggesting that the company's leasing performance in 2024 has been exceptional and is likely to drive strong organic growth in the future.

The company's development pipeline has also contributed significantly to its cash flow growth and is expected to continue driving future growth. As of the third quarter of 2024, the development pipeline was 49% leased, with a healthy pipeline of strong prospects to drive the leased rate higher. Upon stabilization, these projects are expected to provide approximately $40 million of incremental NOI and be a significant growth driver for the company's cash flows.

Highwoods' development pipeline includes projects such as GlenLake Three in Raleigh, which is now 34% leased and has healthy interest from additional prospects, and Granite Park Six in Dallas, which is 26% leased after signing a full floor user for 27,000 square feet. These developments, along with others in the pipeline, are expected to generate substantial cash flows for the company as they are completed and leased up.

Highwoods Properties' commitment to creating exceptional environments and experiences for its customers and stakeholders is evident in its strong leasing volumes, portfolio enhancements, and development pipeline. The company's focus on the Sunbelt region, BBD locations, and high-quality asset base, combined with its talented team, has driven its success in 2024 and positions it well for future growth.