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HIW Q1 FFO Meets Estimates, Revenues Top on Rent Growth
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Key Takeaways
HIW Q1 2026 FFO was $0.84, up from $0.83, as revenues climbed 6.8% to $214.0M.
HIW signed 958k sq ft of second-gen leases; GAAP rent growth was 19.4% and cash rent growth 4.8%.
HIW pipeline is $271.5M, 85% leased; board approved up to $250M buybacks from non-core sales.
Highwoods Properties, Inc. (HIW - Free Report) reported first-quarter 2026 FFO of 84 cents per share, in line with the Zacks Consensus Estimate, and up 1.2% from 83 cents a year ago. Rental and other revenues rose 6.8% year over year to $214.0 million and beat the consensus mark of $208.0 million by 2.9%.
Results reflected solid leasing execution, with 958,000 square feet of second-generation leases signed in the quarter and GAAP rent growth of 19.4% on those deals.
Highwoods Shows Strong Leasing Economics
Highwoods ended the quarter with average in-place cash rents 2.2% higher per square foot year over year, underscoring continued pricing power in its BBDs. The company also achieved net effective rents that were 8.8% higher than its prior five-quarter average, pointing to improved deal economics.
Second-generation leasing of 958,000 square feet included 307,000 square feet of new leases, and the dollar-weighted average lease term was 7.5 years. Cash rent growth on second-generation deals was 4.8%, providing a tangible lift to future cash flows as leases roll.
HIW's Occupancy Holds, Same-Property Cash NOI Slips
At quarter-end, HIW’s in-service occupancy stood at 85%, while the in-service leased rate was 89.7%. Management noted the leased rate improved by 60 basis points during the quarter for in-service properties owned as of both Dec. 31, 2025 and March 31, 2026, supporting its view that occupancy should trend higher.
Same-property cash NOI declined 0.6% year over year, with cash NOI of $128.5 million versus $129.2 million in the prior-year period. Same-property performance remained pressured by operating expense growth.
Highwoods Builds Pipeline While Recycling Assets
Development remained a key focus. The company placed $202.7 million of development (at HIW share) into service, including GlenLake Two Retail and GlenLake Three in Raleigh and Granite Park Six in Dallas. Those placed-in-service projects were 87.4% leased and 55.8% occupied at quarter-end.
The current development pipeline (at HIW share) stood at $271.5 million and was 85% leased, with only $40.0 million remaining to fund. Highwoods also signed 107,000 square feet of first-generation leases, reinforcing the pre-leasing cadence across its active projects.
On the capital recycling front, Highwoods acquired The Terraces in Dallas and Bloc83 in Raleigh through joint ventures and sold a 357,000-square-foot non-core Richmond portfolio for $42.3 million. These actions, alongside management’s commentary about improving portfolio quality, were positioned to strengthen long-term cash flow growth.
HIW's Leverage Stays Elevated
Balance sheet leverage remained notable, with net debt-to-Adjusted EBITDAre of 6.72X at quarter-end. The company reported total available liquidity of more than $650 million, and subsequent to quarter-end, its board authorized up to $250 million of common stock repurchases on a leverage-neutral basis using proceeds from non-core asset sales.
Highwoods also disclosed a secured loan for up to $100 million at its Granite Park Six joint venture, with $85.3 million drawn, adding another funding source as it advances leasing and development plans.
Highwoods Maintains 2026 Outlook
Highwoods maintained its 2026 FFO outlook of $3.40 to $3.68 per share. The Zacks Consensus Estimate is currently pegged at $3.55 and lies within this range.
The outlook assumes same-property cash NOI growth between -1% and +1% and year-end occupancy of 86.5% to 88.5%, along with $40 million to $42 million of G&A expense and $40 million to $50 million of non-cash revenue.
BXP, Inc. (BXP - Free Report) reported first-quarter 2026 FFO of $1.59 per share, edging past the Zacks Consensus Estimate of $1.58. Still, FFO per share slipped 3.1% from $1.64 a year ago. BXP’s quarterly results reflected healthy leasing activity and higher occupancy. Operating execution stood out as the office REIT completed more than 1.1 million square feet of leasing during the quarter. BXP also raised its guidance for 2026 FFO per share.
BXP’s lease revenues were $818.16 million, up marginally year over year and ahead of the consensus mark by 2.1%. Total revenues increased marginally from the prior-year quarter to $872.1 million.
SL Green Realty Corp. (SLG - Free Report) delivered first-quarter 2026 FFO per share of 84 cents, down 40% from $1.40 in the year-ago quarter. The figure missed the Zacks Consensus Estimate of $1.06, translating into a negative surprise of 20.8%. Net rental revenues came in at $166 million, up 14.9% year over year and ahead of the Zacks Consensus Estimate of $163 million. The revenue beat, a 1.8% surprise, arrived alongside record first-quarter leasing volume across SLG’s Manhattan office portfolio.
While leasing activity strengthened, SL Green’s first-quarter 2026 FFO per share performance was weighed down by items embedded in FFO and a tougher year-ago comparison. The latest reported quarter included 6 cents per share of unamortized deferred financing costs and 3 cents per share of positive non-cash fair value adjustments on mark-to-market derivatives. The year-ago quarter included 33 cents per share of income tied to the resolution of a commercial mortgage investment. Nevertheless, SL Green reaffirmed its 2026 guidance.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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HIW Q1 FFO Meets Estimates, Revenues Top on Rent Growth
Key Takeaways
Highwoods Properties, Inc. (HIW - Free Report) reported first-quarter 2026 FFO of 84 cents per share, in line with the Zacks Consensus Estimate, and up 1.2% from 83 cents a year ago. Rental and other revenues rose 6.8% year over year to $214.0 million and beat the consensus mark of $208.0 million by 2.9%.
Results reflected solid leasing execution, with 958,000 square feet of second-generation leases signed in the quarter and GAAP rent growth of 19.4% on those deals.
Highwoods Shows Strong Leasing Economics
Highwoods ended the quarter with average in-place cash rents 2.2% higher per square foot year over year, underscoring continued pricing power in its BBDs. The company also achieved net effective rents that were 8.8% higher than its prior five-quarter average, pointing to improved deal economics.
Second-generation leasing of 958,000 square feet included 307,000 square feet of new leases, and the dollar-weighted average lease term was 7.5 years. Cash rent growth on second-generation deals was 4.8%, providing a tangible lift to future cash flows as leases roll.
HIW's Occupancy Holds, Same-Property Cash NOI Slips
At quarter-end, HIW’s in-service occupancy stood at 85%, while the in-service leased rate was 89.7%. Management noted the leased rate improved by 60 basis points during the quarter for in-service properties owned as of both Dec. 31, 2025 and March 31, 2026, supporting its view that occupancy should trend higher.
Same-property cash NOI declined 0.6% year over year, with cash NOI of $128.5 million versus $129.2 million in the prior-year period. Same-property performance remained pressured by operating expense growth.
Highwoods Builds Pipeline While Recycling Assets
Development remained a key focus. The company placed $202.7 million of development (at HIW share) into service, including GlenLake Two Retail and GlenLake Three in Raleigh and Granite Park Six in Dallas. Those placed-in-service projects were 87.4% leased and 55.8% occupied at quarter-end.
The current development pipeline (at HIW share) stood at $271.5 million and was 85% leased, with only $40.0 million remaining to fund. Highwoods also signed 107,000 square feet of first-generation leases, reinforcing the pre-leasing cadence across its active projects.
On the capital recycling front, Highwoods acquired The Terraces in Dallas and Bloc83 in Raleigh through joint ventures and sold a 357,000-square-foot non-core Richmond portfolio for $42.3 million. These actions, alongside management’s commentary about improving portfolio quality, were positioned to strengthen long-term cash flow growth.
HIW's Leverage Stays Elevated
Balance sheet leverage remained notable, with net debt-to-Adjusted EBITDAre of 6.72X at quarter-end. The company reported total available liquidity of more than $650 million, and subsequent to quarter-end, its board authorized up to $250 million of common stock repurchases on a leverage-neutral basis using proceeds from non-core asset sales.
Highwoods also disclosed a secured loan for up to $100 million at its Granite Park Six joint venture, with $85.3 million drawn, adding another funding source as it advances leasing and development plans.
Highwoods Maintains 2026 Outlook
Highwoods maintained its 2026 FFO outlook of $3.40 to $3.68 per share. The Zacks Consensus Estimate is currently pegged at $3.55 and lies within this range.
The outlook assumes same-property cash NOI growth between -1% and +1% and year-end occupancy of 86.5% to 88.5%, along with $40 million to $42 million of G&A expense and $40 million to $50 million of non-cash revenue.
HIW's Zacks Rank
Highwoods currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Highwoods Properties, Inc. Price, Consensus and EPS Surprise
Highwoods Properties, Inc. price-consensus-eps-surprise-chart | Highwoods Properties, Inc. Quote
Performance of Other Office REITs
BXP, Inc. (BXP - Free Report) reported first-quarter 2026 FFO of $1.59 per share, edging past the Zacks Consensus Estimate of $1.58. Still, FFO per share slipped 3.1% from $1.64 a year ago. BXP’s quarterly results reflected healthy leasing activity and higher occupancy. Operating execution stood out as the office REIT completed more than 1.1 million square feet of leasing during the quarter. BXP also raised its guidance for 2026 FFO per share.
BXP’s lease revenues were $818.16 million, up marginally year over year and ahead of the consensus mark by 2.1%. Total revenues increased marginally from the prior-year quarter to $872.1 million.
SL Green Realty Corp. (SLG - Free Report) delivered first-quarter 2026 FFO per share of 84 cents, down 40% from $1.40 in the year-ago quarter. The figure missed the Zacks Consensus Estimate of $1.06, translating into a negative surprise of 20.8%. Net rental revenues came in at $166 million, up 14.9% year over year and ahead of the Zacks Consensus Estimate of $163 million. The revenue beat, a 1.8% surprise, arrived alongside record first-quarter leasing volume across SLG’s Manhattan office portfolio.
While leasing activity strengthened, SL Green’s first-quarter 2026 FFO per share performance was weighed down by items embedded in FFO and a tougher year-ago comparison. The latest reported quarter included 6 cents per share of unamortized deferred financing costs and 3 cents per share of positive non-cash fair value adjustments on mark-to-market derivatives. The year-ago quarter included 33 cents per share of income tied to the resolution of a commercial mortgage investment. Nevertheless, SL Green reaffirmed its 2026 guidance.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.