Q1 2026 Highwoods Properties Inc Earnings Call Transcript
Key Points
- Highwoods Properties Inc (HIW) reported a strong leasing performance with a 50 basis point increase in lease rate for in-service properties and an 800 basis point increase for development properties.
- The company invested $108 million in high-quality properties in Dallas and Raleigh, enhancing its portfolio and potential for long-term growth.
- Highwoods Properties Inc (HIW) achieved a weighted average lease term of 7.5 years, indicating strong long-term commitments from tenants.
- The company reported a solid financial performance with FFO of $0.84 per share and maintained its outlook for the year.
- Highwoods Properties Inc (HIW) has a robust leasing pipeline and limited new supply in its markets, creating a favorable environment for occupancy gains and rent growth.
- There are uncertainties regarding the impact of AI on long-term office demand, which could affect future leasing dynamics.
- The company faces challenges with a significant spread between leased and occupied rates, indicating potential delays in occupancy gains.
- Highwoods Properties Inc (HIW) anticipates lower capitalized interest in the future, which may impact financial results.
- The company expects some dilution from planned noncore asset sales, which could affect short-term financial performance.
- Operating expenses were elevated in the first quarter due to higher utility costs, impacting same-store performance.
Good morning, and welcome to the Highwood Properties First Quarter 2026 Earnings Call. (Operator Instructions) As a reminder, this conference call is being recorded.
I would now like to turn the call over to Brendan Maiorana, Executive Vice President and Chief Financial Officer. Thank you. Please go ahead.
Thank you, operator, and good morning, everyone. Joining me on the call this morning are Ted Klinck, our Chief Executive Officer; and Brian Leary, our Chief Operating Officer.
For your convenience, today's prepared remarks have been posted on the web. If you have not received yesterday's earnings release or supplemental, they're both available on the Investors section of our website at highwoods.com.
On today's call, our review will include non-GAAP measures such as FFO, NOI and EBITDAre. The release and supplemental include a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial
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