Highwoods Properties Reports Decline in Net Income and Revenues for Q3 and Nine Months Ended September 30, 2024

Highwoods Properties, Inc. reported its financial results for the third quarter and the nine months ended September 30, 2024, revealing a decline in net income and revenues compared to the same periods in 2023. For the three months ended September 30, 2024, the company recorded net income of $15.5 million, down from $23.2 million in 2023. Similarly, net income for the nine months decreased to $107.5 million from $112.0 million in the prior year. Earnings per common share for the third quarter fell to $0.14 from $0.21, while for the nine months, it decreased to $0.98 from $1.03.

Total rental and other revenues for the third quarter were $204.3 million, a decrease from $207.1 million in 2023. For the nine months, revenues also declined to $620.3 million from $627.1 million. The decrease in revenues was attributed to lost income from property dispositions and lower occupancy rates, which fell from 88.9% at the end of 2023 to 88.0% by September 30, 2024.

Operating expenses increased, with total operating expenses for the third quarter rising to $154.7 million from $150.8 million in 2023. For the nine months, expenses increased to $459.0 million from $450.3 million. Notably, interest expenses rose by 9.4% due to higher average interest rates and increased debt balances.

Highwoods Properties continued its strategic focus on enhancing its portfolio, owning or having interests in 28.0 million rentable square feet of in-service properties as of September 30, 2024. The company is also developing 1.6 million rentable square feet of office properties. During the nine months, the company redeemed 5,385 Common Units for shares of Common Stock and entered into equity distribution agreements for potential future stock sales.

The company’s total assets increased slightly to $6.03 billion from $6.00 billion at the end of 2023, while total liabilities rose to $3.59 billion from $3.52 billion. The leverage ratio stood at 42.3%, with mortgages and notes payable representing 47.8% of total capitalization.

Cash and cash equivalents at the end of the period were $23.7 million, with total cash and restricted cash amounting to $33.9 million. The company declared a cash dividend of $0.50 per share, payable in December 2024.

Overall, Highwoods Properties is navigating a challenging market environment while continuing to focus on its long-term strategic goals of developing and acquiring high-quality office properties.