Key Highlights

  • Highwoods Properties reported third quarter rental and other revenues of USD 218.2 million, up 8.1% year over year.
  • Net income available for common stockholders was USD 31.8 million, or USD 0.29 per diluted share.
  • Consolidated same-property net operating income increased 4.9%, while total net operating income rose 7.9%.
  • The company leased 1,211,851 square feet of office space during the quarter across new and renewal transactions.

Revenue Growth Driven by Recent Acquisitions

Highwoods Properties (NYSE:HIW) reported third quarter rental and other revenues of USD 218.2 million, up 8.1% from USD 201.8 million a year earlier. Net income available for common stockholders was USD 31.8 million, or USD 0.29 per diluted share. The revenue increase was driven primarily by recent property acquisitions in Raleigh, Charlotte and Dallas, which added USD 15.3 million, alongside USD 10.6 million from higher consolidated same-property revenues and USD 1.0 million from recently completed development projects in Raleigh.

These gains were partially offset by a USD 10.3 million reduction tied to property dispositions completed earlier in the portfolio's turnover cycle.

Same-Property NOI and Leasing Activity

Consolidated same-property net operating income was USD 6.0 million, or 4.9%, higher in the third quarter compared with the same period of 2025, driven by higher average GAAP rents per rentable square foot, higher average occupancy, and increased cost recoveries. Total net operating income, which also reflects the contribution from acquired and newly developed properties, rose USD 10.7 million, or 7.9%.

The company leased 1,211,851 square feet of office space during the quarter, split between 289,131 square feet of new leases and 922,720 square feet of renewals. Operating expenses rose 8.6% during the quarter, driven by higher repairs and maintenance, utilities, contract services and property taxes tied to the same-property portfolio, alongside incremental costs from recent acquisitions.

Development Pipeline and Capital Plans

The company said it anticipates commencing up to USD 400 million of new office building development during the remainder of 2026, with any such projects not delivered until 2028 or beyond. It also anticipates acquiring up to USD 85 million of additional properties during the remainder of the year, consistent with its strategy of expanding its Sunbelt office portfolio.

The company recorded no impairment charges this quarter, compared with an USD 8.8 million impairment recorded in the third quarter of 2025 related to two non-core assets in Atlanta, a year over year comparison that favorably affected this quarter's depreciation and amortization trends.

Portfolio Metrics to Track

Same-property NOI growth relative to the 4.9% reported this quarter, progress on the planned USD 400 million development pipeline and USD 85 million of additional acquisitions for the remainder of 2026, and leasing volume relative to the 1.2 million square feet signed this quarter are among the items that may shape how the fourth quarter compares with this result.