Highwoods Properties, Inc. (HIW) Q2 2024 Earnings Call Transcript

In the recent earnings call, Highwoods Properties reported a strong Q2 2024 performance, highlighting a focus on strategic growth and operational excellence. The company's financial results showcase a steady increase in FFO per share, driven by robust leasing activity, strategic dispositions, and a disciplined approach to capital management.

Financial Highlights

Highwoods Properties reported FFO of $0.98 per share for Q2 2024, representing a 4% year-over-year growth. This growth is attributed to the company's strategic focus on improving its high-quality BBD portfolio and maintaining a resilient cash flow. The company's balance sheet remains strong, with a debt-to-EBITDA ratio of 5.8 times at quarter end.

Leasing Activity and Development

The company's leasing pipeline remains robust, with 909,000 square feet of second generation leases signed, including over 350,000 square feet of new leases. This strong leasing activity is a testament to the company's SunBelt markets, BBD locations, and high-quality asset base. Highwoods Properties also signed seven first generation leases, encompassing 61,000 square feet across its development pipeline. Upon stabilization, these projects are expected to provide approximately $40 million of incremental NOI, bolstering the company's cash flows and setting the stage for future growth.

Market Insights and Competitive Positioning

Highwoods Properties operates in six core states, with Virginia, North Carolina, Texas, Georgia, and Florida making up five of the top six states in CNBC's recent annual rankings of the best states for business. This strong market positioning, coupled with the company's focus on quality assets and tenant-centric approach, positions Highwoods Properties well in the competitive real estate landscape.

Future Outlook

Looking ahead, Highwoods Properties remains optimistic about its long-term outlook. The company's disciplined approach to capital deployment, coupled with its strong balance sheet and strategic development pipeline, sets the stage for continued growth and value creation. The company is actively seeking acquisition opportunities that meet its selective investment criteria and will further enhance its portfolio.

In conclusion, Highwoods Properties' Q2 2024 earnings call underscores the company's commitment to operational excellence, strategic growth, and shareholder value creation. With a strong financial foundation, a robust leasing pipeline, and a strategic development pipeline, Highwoods Properties is well-positioned to navigate the evolving real estate landscape and capitalize on emerging opportunities.