Highwoods Properties, Inc. announced strong first-quarter 2025 financial results, with Funds From Operations (FFO) of $0.83 per share, exceeding Wall Street expectations. Net income for the quarter was $97.4 million, or $0.91 per share, which included a large property sale gain.
The company raised the midpoint of its 2025 FFO outlook by $0.04, to a new range of $3.31 to $3.47 per share. This increase is primarily attributed to the accretive impact of the Advance Auto Parts Tower acquisition ($0.03) and a modest improvement from operations ($0.01).
Investment activity included the recycling of $145 million from non-core dispositions into the $138 million acquisition of the Advance Auto Parts Tower. Additionally, the 2827 Peachtree development in Atlanta was placed in service, being 94% leased and 88% occupied.
Leasing momentum continued with 700,000 square feet of second-generation office space leased, including over 250,000 square feet of new leases. Net effective rents were more than 20% higher than the prior five-quarter average, with GAAP rent growth of 12.8% and average annual rent escalations of 2.7%.
The development pipeline, valued at $474 million, is now 63% leased, up 5% from the previous quarter. Projects like 23Springs in Dallas and Midtown East in Tampa were delivered, with 58% combined pre-leasing.
Highwoods secured a 145,000 square foot lease with a new customer at Symphony Place in Nashville, backfilling nearly two-thirds of a recent vacancy, scheduled to commence in Q2 2026. The company maintains a strong balance sheet with $710 million of available liquidity and no debt maturities until May 2026.
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