Highwoods Properties, Inc. reported Funds From Operations (FFO) of $0.90 per share for the third quarter of 2024, surpassing analyst expectations of $0.88 per share. Net income for the quarter was $14.6 million, or $0.14 per share. Rental and other revenues for the quarter totaled $204.323 million.
The company's full-year 2024 FFO outlook was raised to a range of $3.59 to $3.63 per share, up from the previous guidance of $3.54 to $3.62 per share. This increase reflects stronger-than-anticipated financial performance through the first three quarters of the year.
Leasing activity was robust, with 906,000 square feet of second-generation leases signed during the quarter, marking the highest quarterly performance in over a decade. New second-generation leasing accounted for 530,000 square feet, with net effective rents reaching a company-record high and 25% higher than the prior five-quarter average.
The weighted average lease term for new and renewal leases in Q3 2024 was 10.4 years, also a historical high for the company. This strong leasing volume has resulted in a leased rate over 300 basis points higher than the in-service occupied rate of 88.0%, indicating a substantial pipeline of signed but not yet commenced leases.
Highwoods' development pipeline, totaling 1.6 million square feet and valued at $514 million, was 49% leased as of quarter-end. The company also completed $84 million in non-core asset sales year-to-date, with plans for up to an additional $150 million in dispositions by early 2025.
The company maintained a strong balance sheet with nearly $800 million of total available liquidity at September 30, 2024. This financial strength supports ongoing operations and future investment opportunities, reinforcing the company's strategy of improving portfolio quality and long-term growth.
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