The following is a summary of the Highwoods Properties, Inc. (HIW) Q4 2024 Earnings Call Transcript:

Financial Performance:

• Highwoods achieved Q4 2024 FFO of $0.85 per share, consistent with guidance and excluding $0.01 of non-cash write-offs that were not in the outlook.

• FY 2024 FFO reached $3.61 per share, almost 2% higher than the mid-point of original outlook, despite $100 million in non-core property sales and persistently high interest rates.

• Net loss reported in Q4 was $3.7 million, including a $24.6 million impairment charge for one property, and non-cash write-off of $1 million.

Business Progress:

• Successful leasing activity highlighted, with a record 1.3 million square feet of second-generation space leased in Q4.

• Signed over $1.1 billion in potential rent through robust leasing, setting strong future financial foundation.

• Development pipeline progressing well, particularly notable are properties like GlenLake Three and Granite Park Six that are key to NOI growth. Two other development projects scheduled to deliver in 2025.

• Recent non-core asset sales in Tampa and Raleigh aimed to reshape the portfolio and boost liquidity.

Opportunities:

• Potential acquisitions in 2025 with $215 million raised through non-core dispositions and equity issuance to target high-quality assets with strong upside.

• Development projects upon stabilization could add over $30 million to annual NOI, significantly impacting future profitability.

Risks:

• Known large customer move-outs lead to an under-occupied state in some buildings, temporarily lowering NOI and affecting cash flow. However, significant progress in re-leasing is reported.

• Regulatory and compliance risks were controlled with careful management; no explicitly mentioned significant new compliance or regulatory challenges.

More details: Highwoods Properties Inc IR

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