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Here are 1-2 brief analogies for Highwoods Properties (HIW):

• It's like Simon Property Group (SPG), but for office buildings instead of shopping malls.
• It's similar to Prologis (PLD), but focused on owning and managing office properties rather than industrial warehouses.

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• Office Space Leasing: Providing businesses with rentable office and mixed-use properties.
• Property Management: Offering comprehensive management services, including maintenance, security, and tenant relations, for their owned properties.
• Real Estate Development: Developing new office and mixed-use properties for future leasing within their portfolio.

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Highwoods Properties (HIW) primarily leases office space to other companies.

The company maintains a diversified tenant base, with no single tenant accounting for 2% or more of its total revenue as of December 31, 2023. However, based on its Q4 2023 earnings presentation, the top ten tenants, representing approximately 11.2% of total revenue, are:

• State of Tennessee (Government)
• PNC Bank (Symbol: PNC)
• Wells Fargo (Symbol: WFC)
• Cigna (Symbol: CI)
• UBS (Symbol: UBS)
• Bank of America (Symbol: BAC)
• Duke Energy (Symbol: DUK)
• Truist Financial (Symbol: TFC)
• Fifth Third Bank (Symbol: FITB)
• IBM (Symbol: IBM)

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Theodore J. Klinck, President, Chief Executive Officer and Director

Ted Klinck joined Highwoods in March 2012 and became President and Chief Executive Officer in 2018. Prior to Highwoods, he served as principal and chief investment officer with Goddard Investment Group in Atlanta, a privately-owned real estate investment firm. He has 28 years of extensive real estate experience, having previously spent 16 years with Morgan Stanley Real Estate and its predecessor companies, Lend Lease and Equitable Real Estate. He focuses on sourcing core, value-add, and opportunistic real estate investments in high-growth markets.

Brendan C. Maiorana, Executive Vice President and Chief Financial Officer

Brendan Maiorana joined Highwoods in 2016. He was promoted to Executive Vice President of Finance and Investor Relations in July 2019 and assumed the role of Chief Financial Officer in January 2022. Previously, he spent 11 years in Equity Research at Wells Fargo Securities, starting as an Associate Equity Research Analyst. Before that, he worked for four years at Ernst & Young LLP as a senior auditor. He is a certified Chartered Financial Analyst.

Brian M. Leary, Executive Vice President and Chief Operating Officer

Brian Leary joined Highwoods in 2019. Prior to Highwoods, he served as president of Crescent Communities' commercial and mixed-use business unit from 2014, where he was responsible for the company's office, industrial, and retail developments and property management. His previous experience includes senior management and executive positions with Jacoby Development, Inc., Atlanta Beltline, Inc. (where he was President & CEO), AIG Global Real Estate, Atlantic Station, LLC, and Central Atlanta Progress.

Jeffrey D. Miller, Executive Vice President, General Counsel and Secretary

Jeffrey Miller joined Highwoods in 2007.

Carman J. Liuzzo, Senior Vice President of Investments

Carman Liuzzo leads Highwoods' Investment Group. He joined Highwoods in 1994 as Vice President, Chief Financial Officer, and Treasurer, a role he held until December 2003. Before joining Highwoods, he spent four years with KPMG Peat Marwick and then served as Chief Accounting Officer for Boddie-Noell Enterprises.

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The key risks to Highwoods Properties (HIW) primarily revolve around the evolving landscape of office space demand, interest rate sensitivity, and broader economic conditions.

1. Declining Occupancy Rates and Hybrid Work Trends: Highwoods Properties, an office REIT, faces a significant challenge from declining occupancy rates, which have been impacted by the persistent trend of remote and hybrid work. This trend is considered a long-term threat, directly affecting the company's rental revenue and net operating income (NOI). The company's reported occupancy decreased from 88.9% in 2023 to 87.1% in 2024, with expected average occupancy for 2025 projected to range from 85.0% to 86.5%.
2. Interest Rate Fluctuations: As a real estate investment trust (REIT), Highwoods Properties is sensitive to fluctuations in interest rates. Increases in interest rates can raise the company's cost of capital and debt servicing obligations, potentially putting pressure on its financials and increasing interest expenses. The company has some exposure to variable-rate debt, with $454 million not protected by hedge contracts.
3. Economic Downturns and Market Cycles: The commercial real estate market, in which Highwoods Properties operates, is inherently cyclical. Economic downturns or uncertainty can lead to reduced demand for office space, slower leasing activity, and potential downward pressure on rental rates, thereby adversely affecting the company's financial performance.

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The most significant clear emerging threat to Highwoods Properties (HIW) is the fundamental and sustained shift towards remote and hybrid work models. This trend is actively reshaping demand for traditional office space.

• Companies are increasingly adopting permanent hybrid or fully remote work policies, reducing the overall need for physical office space.
• This has led to rising office vacancy rates in many markets and an increase in available sublease space.
• Tenants are often seeking smaller footprints upon lease renewals or deferring long-term lease commitments.
• This shift directly impacts HIW's core business of owning and leasing office properties, potentially leading to lower occupancy rates, slower rental growth, increased competition, and downward pressure on property valuations.

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• Class A Office Space Leasing: This is their primary revenue stream, serving corporations, professional service firms, and government agencies with modern amenities and flexible floor plans in prime locations.
• Property Development: Highwoods engages in build-to-suit projects for clients and speculative development of new office properties, as well as redevelopment of existing ones, focusing on sustainable and energy-efficient buildings.
• Property and Asset Management, Leasing, and Construction Management: They provide comprehensive services to ensure the smooth operation of their portfolio and for third parties.

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Highwoods Properties (NYSE: HIW) is expected to drive future revenue growth over the next two to three years through a combination of increased occupancy and rental rates, the delivery and stabilization of its development pipeline, strategic asset recycling, and favorable market dynamics in its Sunbelt business districts.

Here are the key drivers:

1. Increased Occupancy and Rental Rates: Highwoods Properties has consistently reported strong leasing activity and anticipates a significant increase in occupancy. The company achieved "high watermarks across a variety of metrics, including meaningful net effective rent and dollar weighted average lease term" in Q3 2024, with cash rent spreads of 10.4% and GAAP rent spreads of 22.4%. Management expects robust leasing demand in its Sunbelt BBD portfolio to drive meaningful growth in occupancy and Net Operating Income (NOI) after an anticipated trough in early 2025. Leasing volumes have been strong for eight consecutive quarters, driving the leased rate 340 basis points higher than the occupancy rate, leading to confidence that occupancy will rise by the end of 2025 and throughout 2026. Furthermore, net effective rents are up 18% compared to 2019, and GAAP rents are also up 18% versus expiring rents.
2. Development Pipeline Deliveries and Stabilization: The company's active development pipeline is a crucial component of its future revenue growth. Highwoods has a $500 million development pipeline that is attracting healthy interest and is projected to significantly increase earnings and cash flow as projects are delivered and stabilized over the next few years. For example, in Q4 2024, two development projects in Dallas and Raleigh were delivered, expected to positively impact NOI by $10 million. Additionally, two more projects in Dallas and Tampa are slated for delivery in 2025, anticipated to generate an additional $20 million in NOI growth. As of Q3 2025, Highwoods had signed leases for 72% of its development pipeline, securing over 70% of the $30 million in future stabilized annual NOI growth from properties completed but not yet stabilized. These properties are expected to be a major driver of NOI growth in 2026 and 2027.
3. Strategic Asset Recycling: Highwoods actively engages in strategic acquisitions and dispositions to refine its portfolio and enhance long-term growth. The company has included up to an additional $150 million of non-core dispositions in its outlook, expected by early 2025. Proceeds from these sales are intended to be deployed to drive meaningful growth. Highwoods targets up to $500 million in acquisitions and dispositions, with recent acquisitions being funded in a leverage-neutral manner. This disciplined approach allows the company to continuously improve its portfolio quality and strengthen its cash flows by focusing on investments that enhance its overall portfolio quality and long-term growth rate.
4. Favorable Market Dynamics in Sunbelt Business Districts: Highwoods Properties strategically focuses on "Best Business Districts" (BBDs) within the high-growth Sunbelt region, which benefit from strong population and job growth and limited new supply. This positioning allows Highwoods to capitalize on secular migration trends, driving above-average demand and rental rate increases, thereby improving net operating income. Markets such as Dallas, Charlotte, Nashville, and Tampa are experiencing particularly strong demand, with Dallas leading in corporate in-migration. The company's strong presence in these dynamic markets, along with a diversified tenant base and solid leasing momentum, underpins its potential for future growth.

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Share Issuance

• In 2020, Highwoods Properties entered into equity distribution agreements allowing the company to offer and sell up to $300.0 million in aggregate gross sales price of common stock.
• During the first six months of 2021, the company issued 149,100 shares of common stock under these agreements, resulting in net proceeds of $6.8 million.

Outbound Investments

• In 2021, Highwoods Properties acquired real estate assets from PAC and obtained its joint venture partner's 75.0% interest in the Forum.
• In 2022, the company completed acquisitions of real estate assets from PAC and SIX50 at Legacy Union.
• For the nine months ended September 30, 2023, Highwoods reported $18.5 million in investments in acquired real estate and related intangible assets.

Capital Expenditures

• For the nine months ended September 30, 2024, capital expenditures included approximately $102.8 million for tenant improvements and deferred leasing costs, $27.8 million for building improvements, and $4.1 million for development in-process.
• For the nine months ended September 30, 2023, capital expenditures included approximately $68.6 million for tenant improvements and deferred leasing costs, $55.2 million for building improvements, and $26.2 million for development in-process.
• As of December 31, 2021, Highwoods Properties had approximately $176 million remaining to be funded for consolidated and unconsolidated development activities in 2022 and future years.