Yahoo Finance Highwoods Properties Inc (HIW) Q1 2024 Earnings Call Transcript Highlights: Key Financial ...
FFO Per Share: $0.89
Same-Property Cash NOI Growth: +0.3%
Occupancy Rate: Dipped to 88.5%
2024 FFO Outlook: Adjusted to $3.46 - $3.61 per share, $0.015 lower at midpoint
Noncore Asset Sales: Nearly $80 million in Raleigh, additional $150 million expected
Development Pipeline: $506 million, 41% leased
Net Income: $26.1 million or $0.25 per share
Total Dispositions Outlook: Increased to $230 million
Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Great to see the pickup in leasing this quarter. Can you explain the drivers behind raising the low end of your same-store guide? And how confident are you in the bottom range here if there is a pullback in decision-making? A: Brendan C. Maiorana, Executive VP & CFO of Highwoods Properties, explained that the increase in the NOI outlook is roughly split between better revenue and some expense savings, driven by modestly higher average occupancy. He mentioned that the spec leasing included in the forecast could impact future years more significantly than 2024. Brendan expressed confidence in the company's leasing activity and its positive impact moving forward.
Q: Is the spec leasing the same as new leasing activity that you report? A: Brendan clarified that the spec outlook includes both new and renewal leasing activities.
Q: Can you walk us through any known move-outs and the occupancy trajectory in 2024? A: Theodore J. Klinck, President, CEO & Director, and Brendan discussed known move-outs, including spaces in Atlanta and Pittsburgh, and their strategies for these spaces. Brendan added that occupancy might dip in Q2 and Q3, stabilizing towards the end of the year, influenced by known expirations.
Q: We've noticed occupancy decline in Tampa and Orlando quarter-over-quarter, can you comment on what was the driver? A: Brian M. Leary, Executive VP & COO, addressed the occupancy dynamics in Orlando and Tampa, attributing fluctuations to normal market movements and maintaining a positive outlook on both markets.
Q: Recently, we've been hearing a lot about the flight to capital or tenants looking for landlords that are willing and able to fund TIs on new leases. Can you give more color on that trend? A: Theodore J. Klinck discussed the increasing market bifurcation, where tenants prefer financially stable landlords who can invest in tenant improvements. He provided examples of Highwoods winning leases due to their ability to fund these improvements, emphasizing the competitive advantage this provides.
Q: How are you thinking about the Pittsburgh portfolio in the near and midterm? Do you think dispositions are still likely off the table in the near term? A: Theodore J. Klinck indicated that selling assets in Pittsburgh might be challenging under current market conditions. He suggested a focus on leasing and operational improvements until the capital markets recover, aligning with their strategic patience in asset disposition.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
