Highwoods Properties Q4 2024: Discrepancies in Leasing Outlook and Acquisition Strategies

These are the key contradictions discussed in Highwoods Properties' latest 2024Q4 earnings call, specifically including: Leasing Expectations and Occupancy Recovery Timeline, and Acquisition Strategies:



occupied and Leasing Activity:
- Highwoods Properties reported 4 million square feet of second generation leasing for the full year, marking the highest volume in 10 years.
- This volume was supported by strong demand for prime locations and financially strong sponsorship, driven by businesses' commitment to their in-office workplace strategies.

Capitalizing on Development Pipeline:
- The development pipeline is 59% leased, with 161,000 square feet of new leases signed.
- This progress is attributed to a favorable market outlook with limited new supply and robust demand for quality spaces.

Financial Performance Challenges:
- For the fourth quarter, Highwoods reported a net loss of $3.7 million, including a $24.6 million impairment charge.
- This was mainly due to the non-core asset in Pittsburgh and temporary challenges from large customer move-outs in core properties.

Acquisition Strategy and Growth Opportunities:
- Highwoods raised $215 million with non-core dispositions to bolster dry powder for potential acquisitions.
- The company expects future growth from these acquisitions to improve portfolio quality and cash flows, as they target high-quality assets with strong cash flows and upside potential.