RALEIGH, N.C. – Highwoods Properties , Inc. (NYSE:HIW), a real estate investment trust specializing in office properties, has reported strong leasing activity for the third quarter of 2024. The company announced that it has signed leases totaling 738,000 square feet since July 1, with over 400,000 square feet representing new leases.
Among the significant transactions is a long-term lease for 104,000 square feet at Two Alliance Center in Atlanta's Buckhead Business District. This lease, set to commence in 2026, is with a new customer and will backfill a large portion of space vacated earlier in the third quarter of 2024.
Ted Klinck, President and CEO of Highwoods, commented on the leasing momentum, stating, "Leasing activity continues to be robust across our portfolio as office users are gravitating towards the highest quality buildings with the best capitalized landlords." He highlighted the company's performance, noting that new deals signed thus far in 2024 have surpassed the total number from the previous year by 37%.
Highwoods Properties is headquartered in Raleigh and operates primarily in the most desirable business districts of several major cities, including Atlanta, Charlotte, Dallas, Nashville, Orlando, Richmond, and Tampa. The company's strategy revolves around owning, developing, leasing, and managing high-quality office spaces.
This leasing update is based on a press release statement from Highwoods Properties, Inc. The company's forward-looking statements indicate a positive outlook on its financial and operational plans, although they also acknowledge the potential risks that could impact future results, such as economic downturns, natural disasters, and changes in market demand.
Investors and market watchers may see the leasing activity as a sign of Highwoods' strong position in the office property market, especially given the challenges faced by the commercial real estate sector in recent times. The company's ability to sign new leases and manage second-generation space effectively appears to be a key factor in its operational strategy.
In other recent news, Highwoods Properties Inc. witnessed a significant upliftment from Truist Securities, raising its price target to $33.00 from $29.00, while maintaining a Buy rating on the stock. This adjustment comes after a reassessment of Highwoods Properties' financial forecast, with expectations of a decrease in funds from operations (FFO) for the second half of 2024 and the full year of 2025. Despite this, Truist Securities anticipates a positive turn for Highwoods Properties, citing an expected occupancy and earnings inflection point early next year.
On the earnings front, Highwoods Properties reported a 4% year-over-year growth in FFO per share in Q2 2024, reaching $0.98. In response to this, the company raised its full-year FFO outlook. Additionally, robust leasing activity was noted, with 909,000 square feet of second-gen leases and seven first-gen leases signed.
BofA Securities also adjusted its price target on the company's shares from $23.00 to $25.00, maintaining a neutral rating. This follows Highwoods Properties' recent quarterly results, which met expectations with a 32% rise in leasing activity above the average for the past four quarters. Despite these developments, Highwoods Properties is preparing for potential obstacles, including significant tenant move-outs over the year and projected occupancy rates to hit their lowest in early 2025. These are the recent developments for Highwoods Properties.
InvestingPro Insights
Highwoods Properties, Inc. (NYSE:HIW) continues to demonstrate its resilience and strategic prowess in the office property market, as evidenced by its recent leasing achievements and steady financial performance. The company's commitment to maintaining a robust portfolio is reflected in its long-standing history of dividend reliability, with Highwoods having maintained dividend payments for an impressive 31 consecutive years. This track record of consistent dividends is a testament to the company's financial stability and its prioritization of shareholder returns.
Investors monitoring the company's stock will find encouragement in the positive trends captured by InvestingPro Data. Over the last three months, Highwoods Properties has experienced a strong return, with a 27.15% increase in price total return, signaling investor confidence and market momentum. This is coupled with a significant price uptick over the last six months, as the company's stock has seen a 31.71% price total return during this period. The company's ability to navigate the market is further underscored by its current trading position, which is near its 52-week high, with the price percentage of its 52-week high at 97.89%.
From a financial standpoint, Highwoods' market capitalization stands at $3.43 billion, reflecting its substantial presence in the real estate investment trust sector. The company's P/E ratio is currently at 22.51, which offers investors a measure of the company's earnings relative to its share price. Additionally, Highwoods' liquid assets surpass its short-term obligations, which is a strong indicator of the company's liquidity and its ability to meet immediate financial liabilities.
For those seeking deeper insights and additional metrics on Highwoods Properties, InvestingPro offers a range of valuable tips and data points. As of now, there are six additional InvestingPro Tips available for Highwoods Properties, which can be accessed at InvestingPro. These tips offer a more comprehensive view of the company's financial health and market performance, providing investors with the information necessary to make informed decisions.
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