EarningsQ2 2026 Earnings Report
MX:HIW Q2 2026 EPS Results
Actual EPS$15.52
Consensus EPS$7.81
Beat/MissBeat by +$7.70
One Year Ago EPS$3.10
MX:HIW Q2 2026 Revenue Results
Actual Revenue$3.97B
Expected Revenue$3.87B
Beat/MissBeat by +$92.79M
YoY Revenue Growth+7.93%
Earnings Announcement Details
QuarterQ2 2026
Date07/28/2026
TimeAfter Close
Conference CallTuesday, July 28, 2026
MX:HIW Upcoming Earnings
Highwoods Properties's next earnings date is estimated for October 27, 2026, based on past reporting schedules.
Q2 2026 Earnings Call Audio
MX:HIW Q2 2026 Earnings Call
0:00 / 0:00
Q2 2026 Earnings Slide Deck
No slide deck is available for this earnings event.
Q2 2026 Earnings Call Summary
Earnings Call Sentiment|Positive
The call was strongly optimistic. Highlights included healthy leasing, rising rents, improving occupancy, accelerated 23Springs stabilization, substantial disposition proceeds, stronger liquidity, reduced leverage, and higher 2026 FFO guidance. Management also described favorable Sun Belt supply-demand conditions and growing build-to-suit opportunities. The main challenges were low current dividend coverage, elevated leasing capital expenditures, pre-development write-offs, disposition-related FFO dilution, remaining 2027 debt maturity, and some soft submarkets, but these were presented alongside specific funding resources and expected improvements.Company Guidance
Healthy Leasing Volume
The company signed over 1 million square feet of second-generation leases, including 326,000 square feet of new leases, plus 63,000 square feet of first-generation leases in the development pipeline. Brian Leary also cited over 120 leases, including 41 new deals totaling 326,000 square feet.
Strong Rent Growth and Leasing Economics
Cash rent spreads were 3.2% and GAAP rent growth was 20.9%. Net effective rents were 8% higher than the prior five-quarter average and the second highest in company history.
Occupancy Improvement
Occupancy increased 70 basis points sequentially, or 110 basis points when adjusted for properties owned and in service for the entirety of the second quarter. The company expects occupancy to continue improving in the second half of 2026 and projects year-end occupancy of 86.5%-88.5%.
23Springs Leasing and Stabilization Progress
23Springs in Uptown Dallas reached a 93% lease rate, up 10 percentage points during the quarter. Only $28 million of projected spend remains to bring the property to stabilization, and the projected stabilization date was accelerated by nine months from the first quarter of 2028 to the second quarter of 2027. Rents are meaningfully higher than the original underwriting.
Portfolio Pruning and Capital Recycling
Highwoods sold nearly $260 million of properties in the second quarter and expects to close on an additional $74 million of non-core dispositions in the next few weeks, bringing 2026 year-to-date dispositions to $375 million. The company expects at least an additional $100 million and potentially as much as $300 million of dispositions by year-end.
Strategic Asset Swap Improved Portfolio Profile
The company effectively swapped 100%-occupied Bridgestone Tower in Nashville for 6Hundred South Tryon in Charlotte, which was acquired for $30 million less, has $1 million more of NOI upside upon stabilization, higher annual rent bumps, a longer weighted average lease term, and a more diversified rent roll.
Development Pipeline Replenishment
Highwoods has advanced discussions on build-to-suit and substantially pre-leased development projects in its core markets. The company expects to announce at least $100 million and potentially as much as $400 million of new development during the remainder of the year.
Sun Belt Supply and Demand Advantage
The company said its Sun Belt Best Business District portfolio is benefiting from limited new supply and dwindling blocks of high-quality commute-worthy space. High-quality building vacancy rates in core BBDs were estimated to be at least 5% lower than stated overall submarket vacancy rates. CBRE reported that prime office vacancy was 640 basis points lower than non-prime office vacancy, the widest spread since it began tracking the metric.
Charlotte Market Strength
Charlotte's Uptown market saw approximately 200,000-square-foot commitments from Capital Group and Sumitomo Mitsui. The broader market recorded over 550,000 square feet of positive net absorption, overall vacancy fell to a three-year low of 23%, and prime trophy availability tightened below 4%. Direct asking rents for trophy space exceeded $59 per square foot, a 60% premium to the market average. Highwoods' Charlotte portfolio generated 10% cash rent roll-ups, 29% GAAP rent roll-ups, and net effective rents averaging over $31 per square foot.
Nashville Leasing Momentum
Nashville was the company's leasing volume leader, with approximately 241,000 square feet of leasing, roughly half of which was new business. This followed over 130,000 square feet of new leasing in the first quarter. The broader market recorded 1.3 million square feet of leasing activity and 400,000 square feet of positive net absorption, while active construction was limited to 450,000 square feet, 77% of which was already pre-leased.
Dallas Fundamentals and Rent Growth
Dallas recorded nearly 940,000 square feet of positive net absorption in the second quarter. Vacancy declined 70 basis points sequentially to 25%, and Class A asking rents rose above $39 per square foot. Vacancy in Highwoods' Uptown and Preston Center footprint was below 5%, with double-digit cash and GAAP rent spreads and net effective rents above $50 per square foot.
Improved Earnings Outlook
Second-quarter FFO was $0.90 per share, including $0.04 per share of land gains. Based on year-to-date results and confidence in the remaining two quarters, Highwoods increased its 2026 FFO outlook to $3.46-$3.70 per share, or $3.58 at the midpoint, an increase of $0.04 per share. Excluding land sale gains, the range increased by $0.01 per share.
Strong Balance Sheet and Liquidity
Net income was $93.5 million, or $0.85 per share, and FFO was $100.7 million, or $0.90 per share. Debt to EBITDA improved from 6.7x to 6.2x. Highwoods ended the quarter with $145 million of cash, no borrowings on its $750 million revolving line, and no near-term debt maturities.
Debt Management Progress
The company extended the maturity of its $150 million term loan from 2027 to 2031 and reduced the borrowing rate by 15 basis points. It also closed a $56 million secured mortgage at the 50/50 Midtown East joint venture, repatriating over $44 million to Highwoods, and repurchased $11 million of its 2027 notes.
Additional Liquidity Expected
After the expected asset sales of more than $70 million, Highwoods expects a pro forma cash balance of more than $250 million with no revolver borrowings. The company also expects one or more additional joint venture financings during the remainder of the year to repatriate more capital and further strengthen liquidity and its unencumbered debt-to-EBITDA ratio.
Future FFO and Cash Flow Drivers
Management expects second-half 2026 FFO to accelerate, excluding land sale gains, due to an occupancy ramp weighted more heavily toward the fourth quarter and steady NOI gains at 23Springs. The company also expects additional 23Springs gains as leases commence over the next four quarters and believes debt to EBITDA will be modestly lower at year-end and continue to decline throughout 2027, assuming otherwise leverage-neutral investment activities.
Dividend Coverage Outlook
Management said the dividend is a very important part of total return and that it feels comfortable with the dividend. The company expects to get back to covering $2 per share next year, hopefully, supported by occupancy gains, development deliveries, normalized occupancy, and lower leasing capital expenditures over time.
Ovation Development Potential
Highwoods fully owns nearly 150 acres at Ovation in Franklin, Tennessee, which is fully re-entitled for 1.4 million square feet of office, 1,600 residential units, 430,000 square feet of retail, and 350 hotel rooms. The company has identified build-to-core partners with aligned capital interests.
Build-to-Suit Demand Conditions
Management said companies are looking out two to three years and finding few large blocks of high-quality space, with some tenants willing to pay higher rents to occupy their own buildings. Construction costs have moderated, while rents are outpacing construction costs in BBDs with limited availability, making some projects underwritable.
Active Leasing and Pricing Power Across the Portfolio
Management said tour activity remained active across all markets without a typical summer slowdown. Dallas, Charlotte, and Nashville were identified as the top markets for landlord pricing power, while Buckhead was improving and Westshore in Tampa was seeing good economics. Management estimated that it may be able to push rents across approximately 60%-65% of the overall portfolio. Charlotte asking rents were described as approximately 20% higher year-to-date, and Buckhead asking rents were approximately 5% higher year-over-year.
MX:HIW Earnings History
The table shows recent earnings report dates and whether the forecast was beat or missed. See the change in forecast and EPS from the previous year.
Beat
Missed