Earnings

Highwoods Occupancy Rebounds and Same-Property NOI Turns

The Tip Desk · November 8, 2026 · 4 min read

Office occupancy reached 87.0% at Sept. 30, 2026, and consolidated same-property NOI rose $6.0 million, or 4.9%, from a year earlier.

Highwoods Properties (HIW), a fully integrated office REIT in Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa, reported that office occupancy rose to 87.0% as of September 30, 2026, from 85.7% at June 30, after a 0.3-point dip to 85.0% at March 31.

The company raised its remaining-2026 occupancy outlook to 87.0% to 88.0% from 86.0% to 87.0%.

Consolidated same-property net operating income was $6.0 million, or 4.9%, higher in the third quarter of 2026 than in 2025, after a $1.8 million, or 1.4%, increase in the second quarter and a $1.8 million, or 1.3%, decline in the first. The company attributed the third-quarter same-property NOI gain to a $10.6 million rise in same-property revenues, partially offset by a $4.6 million increase in same-property expenses.

Total NOI was $10.7 million, or 7.9%, higher in the third quarter of 2026 than in 2025, up from a $9.3 million, or 6.8%, increase in the second quarter. The company said the third-quarter NOI increase came primarily from property acquisitions in Raleigh, Charlotte and Dallas, higher consolidated same-property NOI and recently completed development projects in Raleigh, partially offset by lost NOI from property dispositions.

Rental and other revenues were $16.4 million, or 8.1%, higher in the third quarter of 2026 than in 2025, after a $15.8 million, or 7.9%, increase in the second quarter. Acquisitions in Raleigh, Charlotte and Dallas added $15.3 million to third-quarter revenues, higher consolidated same-property revenues added $10.6 million, and recently completed Raleigh developments added $1.0 million. Property dispositions reduced revenues by $10.3 million. Consolidated same-property rental and other revenues were higher primarily due to higher average GAAP rents per rentable square foot, higher average occupancy and higher cost recoveries, the company said.

Second-generation leasing volume increased to 1,211,851 rentable square feet in the third quarter from 1,026,262 in the second quarter. Combined GAAP rents on those leases were $40.08 per rentable square foot, 28.8% higher than previous leases in the same office spaces, versus $40.97 per square foot and a 20.9% premium in the second quarter. New leases covered 289,131 square feet and renewals 922,720 square feet, with a combined average term of 7.2 years.

Rental property and other expenses were $5.7 million, or 8.6%, higher in the third quarter of 2026 than in 2025. The company said the increase reflected higher consolidated same-property operating expenses and acquisitions in Raleigh, Charlotte and Dallas, which added $4.6 million and $3.9 million, respectively, partially offset by a $2.5 million decrease from property dispositions. Interest expense was $2.1 million, or 5.5%, higher, which the company attributed to higher average debt balances and lower capitalized interest.

Gains on disposition of property were $7.9 million higher in the third quarter of 2026 than in 2025, after a $79.0 million increase in the second quarter. Third-quarter 2026 gains related primarily to building dispositions in Richmond and Raleigh. Diluted earnings per common share was $0.17 higher in the third quarter of 2026 than in 2025.

Cash was approximately $276 million as of October 20, 2026, with no amounts drawn on the $750.0 million revolving credit facility, versus approximately $195 million as of July 21. Leverage, measured as mortgages and notes payable plus outstanding preferred stock to undepreciated book value of assets, was 42.2% at September 30, 2026. There were 112.3 million diluted shares of Common Stock outstanding.

The company said it anticipates commencing up to $400 million of new office building development during the remainder of 2026, with deliveries in 2028 or beyond, and acquiring up to $85 million of properties in that period. That acquisition outlook is down from up to $250 million as of July 28. It generally intends to grow on a leverage-neutral basis.