Download PDF

1. Company Snapshot

1.a. Company Description

Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded (NYSE:HIW) real estate investment trust (“REIT”) and a member of the S&P MidCap 400 Index.Highwoods is a fully-integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa.

Show Full description

1.b. Last Insights on HIW

Highwoods Properties' recent performance was negatively driven by high competition in the office space market, weighing on its growth prospects. The company's Q4 2024 earnings release showed funds from operations (FFO) of $0.85 per share, in line with estimates, but down from $0.99 per share a year ago. Additionally, Highwoods Properties faces interest expense pressures, which could further impact its profitability. Despite efforts to rebalance its portfolio, the company's growth may be hindered by these challenges.

1.c. Company Highlights

2. Highwoods Properties Delivers Strong Q3 2025 Earnings

Highwoods Properties reported FFO of $0.86 per share, in line with estimates. The company's net income was $12.9 million or $0.12 per share. Revenue growth is expected to be around 4.5% next year, according to analyst estimates. The company's debt-to-EBITDAre was 6.4x at quarter end, and it is expected to improve meaningfully as customers who signed but not yet commenced leases move into occupancy.

Publication Date: Nov -03

📋 Highlights
  • Strong Leasing Momentum: Signed 1 million sq ft of second-gen leases (326K sq ft new leases) and 122K sq ft across development pipeline, achieving 72% lease percentage.
  • Balance Sheet Resilience: Debt-to-EBITDAre of 6.4x, $625M liquidity, and no consolidated debt maturities until 2027, supporting strategic flexibility.
  • NOI Growth Secured: Locked in 50% of $25M stabilized NOI upside in Core 4 properties, with 25% remaining potential and 70% of $30M future NOI growth from developments leased.
  • FFO & Occupancy Outlook: Raised FFO guidance to $3.41–$3.45/share (+$0.02 midpoint) and added 70 bps occupancy growth target for Q4 2025, ending at 85.3% occupied.

Financial Performance

The company's leasing metrics during the quarter were healthy, with net effective rents reaching new highs, an 18% increase compared to expiring rents at a record $40-plus per square foot, as mentioned by Brian Leary, "Net effective and GAAP rents reached new highs, with an 18% increase compared to expiring rents at a record $40-plus per square foot." The company ended the quarter 85.3% occupied and 88.7% leased, consistent with its long-term occupancy trough.

Valuation Metrics

With a P/E Ratio of 24.39 and an EV/EBITDA of 11.3, the company's valuation appears to be reasonable. The Dividend Yield is 6.99%, indicating a relatively attractive return for investors. The ROE is 5.34%, and the ROIC is 23.86%, suggesting that the company is generating strong returns on its investments.

Operational Highlights

The company signed 1 million square feet of second-gen leases, including 326,000 square feet of new leases. The development pipeline is also progressing well, with 122,000 square feet of leases signed, driving the lease percentage to 72%. The company's balance sheet is in great shape, with $625 million of available liquidity and no consolidated debt maturities until 2027.

Growth Prospects

The company is well-positioned for growth, with a limited near-term expiration outlook and a robust leasing pipeline. The company's diversified Sunbelt portfolio benefits from a broad tenant base, spanning industries, company sizes, and geographies. The company's development projects, including Ovation, are expected to drive future growth, with site work to begin in 2026 and a potential opening in fall 2028.

3. NewsRoom

Card image cap

B&I Capital AG Purchases 36,460 Shares of Highwoods Properties, Inc. $HIW

Nov -27

Source: defenseworld.net

Card image cap

Meet 33 Ideal "Safer" November Small/MidCap Value DiviBuys Of The S&P600

Nov -26

Source: seekingalpha.com

Card image cap

Highwoods Closes Acquisition of 6Hundred at Legacy Union in CBD Charlotte

Nov -19

Source: globenewswire.com

Card image cap

HIW's $223M Bet on 6Hundred at Legacy Union: Time to Buy the Stock?

Nov -18

Source: zacks.com

Card image cap

Key Reasons to Add Highwoods Stock to Your Portfolio Right Now

Nov -18

Source: zacks.com

Card image cap

Highwoods Agrees to Acquire 6Hundred at Legacy Union in CBD Charlotte

Nov -17

Source: globenewswire.com

Card image cap

Teacher Retirement System of Texas Has $1.21 Million Stock Holdings in Highwoods Properties, Inc. $HIW

Nov -06

Source: defenseworld.net

Card image cap

Highwoods Prices $350 Million of 5.350% Notes Due 2033

Nov -04

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.00%)

6. Segments

Office

Expected Growth: 2.0%

Highwoods Properties' 2.0% office segment growth is driven by increasing demand for Class A office spaces, particularly in urban areas, fueled by job growth and urbanization. Additionally, the company's strategic focus on high-growth markets, such as Raleigh-Durham and Tampa, and its value-add redevelopment pipeline contribute to the growth.

Other

Expected Growth: 2.0%

Highwoods Properties' 2.0% growth is driven by increasing demand for office spaces in the Southeast and Mid-Atlantic regions, fueled by job growth and urbanization. Additionally, the company's strategic acquisitions and development projects, as well as its focus on high-quality properties and strong tenant relationships, contribute to its growth momentum.

7. Detailed Products

Office Properties

Highwoods Properties, Inc. owns and operates a portfolio of office properties, offering Class A and Class B office spaces for lease to a diverse range of tenants.

Industrial Properties

Highwoods Properties, Inc. owns and operates a portfolio of industrial properties, offering warehouse, distribution, and manufacturing spaces for lease.

Retail Properties

Highwoods Properties, Inc. owns and operates a portfolio of retail properties, offering shopping centers, strip centers, and single-tenant retail spaces for lease.

Land Development

Highwoods Properties, Inc. develops and sells land parcels to third-party developers, builders, and investors.

Property Management Services

Highwoods Properties, Inc. offers property management services to third-party property owners, including leasing, marketing, and day-to-day property operations.

8. Highwoods Properties, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Highwoods Properties, Inc. operates in a niche market, providing office and industrial properties, which reduces the threat of substitutes. However, the increasing trend of remote work and virtual offices may pose a moderate threat to the company's business.

Bargaining Power Of Customers

Highwoods Properties, Inc. has a diversified customer base, which reduces the bargaining power of individual customers. Additionally, the company's properties are located in high-demand areas, giving it an upper hand in negotiations.

Bargaining Power Of Suppliers

Highwoods Properties, Inc. relies on a few large suppliers for construction materials and services, which gives them some bargaining power. However, the company's scale and reputation help to mitigate this risk.

Threat Of New Entrants

The commercial real estate industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to compete with established players like Highwoods Properties, Inc.

Intensity Of Rivalry

The commercial real estate industry is highly competitive, with many established players competing for a limited number of tenants. Highwoods Properties, Inc. must continually invest in its properties and services to remain competitive.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 56.96%
Debt Cost 10.02%
Equity Weight 43.04%
Equity Cost 10.02%
WACC 10.02%
Leverage 132.34%

11. Quality Control: Highwoods Properties, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
COPT Defense

A-Score: 6.1/10

Value: 4.2

Growth: 4.8

Quality: 5.7

Yield: 8.0

Momentum: 4.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Kilroy Realty

A-Score: 6.0/10

Value: 5.1

Growth: 3.9

Quality: 5.8

Yield: 8.0

Momentum: 6.0

Volatility: 7.0

1-Year Total Return ->

View Full Report
Stock-Card
Highwoods Properties

A-Score: 5.9/10

Value: 4.8

Growth: 3.1

Quality: 5.4

Yield: 10.0

Momentum: 4.0

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Douglas Emmett

A-Score: 4.9/10

Value: 4.3

Growth: 4.6

Quality: 3.7

Yield: 8.0

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

View Full Report
Stock-Card
Boston Properties

A-Score: 4.8/10

Value: 3.3

Growth: 3.1

Quality: 3.8

Yield: 8.0

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

View Full Report
Stock-Card
SL Green Realty

A-Score: 4.1/10

Value: 2.1

Growth: 0.9

Quality: 3.5

Yield: 9.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.03$

Current Price

26.03$

Potential

-0.00%

Expected Cash-Flows