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Highwoods Properties' (HIW) Q2 FFO Beats, Revenues Up Y/Y


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Highwoods Properties Inc. HIW reported second-quarter 2018 funds from operations (FFO) of 87 cents per share, marginally beating the Zacks Consensus Estimate. However, the figure compares unfavorably with the year-ago tally of 90 cents.

Results indicate growth in average in-place office cash rent per square foot and GAAP rent for second-generation office space. Nevertheless, the company witnessed decline in same-property cash net operating income (NOI).

Total revenues for the quarter inched up 0.9% year over year to $178.8 million. The revenue figure came in almost in line with the Zacks Consensus Estimate of $179 million.

Quarter in Detail

Highwoods leased 1.1 million square feet of second-generation office space during the second quarter. However, same-property cash NOI edged down 1.1% year over year.

During the reported quarter, the company increased its total development pipeline to $725 million by signing an additional 642,000 square feet of space.

Further, Highwood sold two of its assets for $34 million, which included $31 million for Tower Two in Raleigh and $3 million for non-core industrial land.

The company paid off unsecured notes worth $200 million having an interest rate of 7.50 %. Notably, it did not issue any shares under the ATM program.

As of Jun 30, 2018, Highwoods had $4.2 million of cash and cash-equivalents compared with $31 million reported as of Mar 31, 2018.

2018 Outlook

Highwoods expects 2018 FFO per share of $3.39-$3.45, down from the previous range of $3.37-$3.47. The Zacks Consensus Estimate for the same is currently pegged at $3.44.

Our Viewpoint

Highwoods' operating performance looks encouraging. Also, the company has a diversified and comprehensive real estate portfolio which can stoke growth in net effective rent.

Furthermore, focus on high-quality office assets in best business districts (BBDs) enabled the company to achieve high rent growth and active pre-leasing of pipeline.

Nonetheless, escalating operating and interest expenses remained headwinds.

Highwoods Properties, Inc. Price, Consensus and EPS Surprise

Highwoods Properties, Inc. Price, Consensus and EPS Surprise | Highwoods Properties, Inc. Quote

Highwoods currently carries a Zacks Rank #3 (Hold). You can the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities, Inc. ARE , Regency Centers Corporation REG and Welltower Inc. WELL . Alexandria and Regency Centers are scheduled to release their quarterly figures on Jul 30 and Aug 2, respectively, while Welltower is slated to report its numbers on Aug 3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Business , Stocks
Referenced Symbols: REG , HIW , ARE , WELL



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