HIGHWOODS PROPERTIES INC
For the period ended Dec 31, 2024. Filed Feb 11, 2025.
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FY2024 · Filed Feb 11, 2025
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Item 2. PROPERTIES
Properties
The following table sets forth information about our portfolio by geographic location as of December 31, 2024:
| Market | Rentable Square Feet | Occupancy | Percentage of Annualized GAAP Rental Revenue (1) |
|---|---|---|---|
| Nashville | 5,098,000 | 89.0% | 20.3% |
| Raleigh | 5,592,000 | 88.6 | 20.2 |
| Atlanta | 4,935,000 | 83.7 | 16.5 |
| Tampa | 3,196,000 | 87.8 | 12.3 |
| Charlotte | 1,991,000 | 96.3 | 10.3 |
| Orlando | 1,789,000 | 88.3 | 6.5 |
| Richmond | 1,845,000 | 85.4 | 4.6 |
| Other | 2,754,000 | 79.5 | 9.3 |
| Total | 27,200,000 | 87.1% | 100.0% |
(1)Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) from our office properties for the month of December 2024 multiplied by 12.
The following table sets forth the net changes in rentable square footage of our portfolio:
| Year Ended December 31, | |||
|---|---|---|---|
| 2024 | 2023 | 2022 | |
| (in thousands) | |||
| Acquisitions | — | — | 367 |
| Developments Placed In-Service | 18 | — | 263 |
| Remeasurements/Other (1) | 575 | 5 | (11) |
| Dispositions | (605) | (383) | (437) |
| Net Change in Rentable Square Footage | (12) | (378) | 182 |
(1)Increase in square footage during 2024 is due to the inclusion of in-service properties owned by consolidated and unconsolidated joint ventures (at our share). See Explanatory Note.
The following table sets forth operating information about our portfolio:
| Average Occupancy · Annualized GAAP Rent Per Square Foot (1) · Annualized Cash Rent Per Square Foot (2) | |||
|---|---|---|---|
| 2020 | 90.7% | $29.23 | $28.21 |
| 2021 | 90.0% | $30.75 | $29.63 |
| 2022 | 90.8% | $31.89 | $30.51 |
| 2023 | 89.2% | $32.79 | $32.18 |
| 2024 | 88.0% | $33.73 | $33.18 |
(1)Annualized GAAP Rent Per Square Foot is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage.
(2)Annualized Cash Rent Per Square Foot is cash rental revenue (base rent plus cost recovery income, excluding straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage.
Customers
The following table sets forth information concerning the 20 largest customers in our portfolio as of December 31, 2024:
| Customer | Rentable Square Feet | Annualized GAAP Rental Revenue (1) | Percent of Total Annualized GAAP Rental Revenue (1) | Weighted Average Remaining Lease Term in Years |
|---|---|---|---|---|
| (in thousands) | ||||
| Bank of America | 648,440 | $30,168 | 3.78% | 9.2 |
| Asurion | 543,794 | 28,042 | 3.51 | 11.8 |
| Metropolitan Life Insurance | 667,228 | 21,228 | 2.66 | 6.2 |
| Federal Government | 736,663 | 21,120 | 2.64 | 4.0 |
| Bridgestone Americas | 506,128 | 19,684 | 2.46 | 12.7 |
| PPG Industries | 370,927 | 11,284 | 1.41 | 6.5 |
| Vanderbilt University | 294,389 | 9,672 | 1.21 | 4.9 |
| Mars Petcare | 223,700 | 9,194 | 1.15 | 6.4 |
| Albemarle Corporation | 162,368 | 7,154 | 0.90 | 9.1 |
| Bass, Berry & Sims | 213,951 | 6,987 | 0.87 | 0.1 |
| J.P. Morgan Chase & Co. | 183,864 | 6,508 | 0.81 | 3.4 |
| State of Georgia | 302,443 | 6,144 | 0.77 | 1.6 |
| Deloitte | 132,328 | 6,027 | 0.75 | 5.9 |
| Lifepoint Corporate Services | 202,991 | 5,814 | 0.73 | 4.2 |
| Delta Community Credit Union | 128,589 | 5,531 | 0.69 | 7.8 |
| CapFinancial Group | 120,847 | 5,495 | 0.69 | 8.6 |
| Regus | 169,833 | 5,368 | 0.67 | 5.6 |
| Fisher Asset Management | 179,184 | 5,255 | 0.66 | 5.3 |
| The Cigna Group | 180,728 | 5,187 | 0.65 | 3.0 |
| Global Payments | 168,051 | 5,055 | 0.63 | 8.2 |
| Total | 6,136,446 | $220,917 | 27.64% | 7.3 |
(1)Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2024 multiplied by 12.
Lease Expirations
The following table sets forth scheduled lease expirations for existing leases in our portfolio as of December 31, 2024:
| Lease Expiring (1) | Number of Leases Expiring | Rentable Square Feet Subject to Expiring Leases | Percentage of Leased Square Footage Represented by Expiring Leases | Annualized GAAP Rental Revenue Under Expiring Leases (2) | Average Annual GAAP Rental Rate Per Square Foot for Expirations | Percent of Annualized GAAP Rental Revenue Represented by Expiring Leases (2) |
|---|---|---|---|---|---|---|
| (in thousands) | ||||||
| 2025 (3) | 523 | 2,699,719 | 11.4% | $80,251 | $29.73 | 10.0% |
| 2026 | 348 | 2,218,130 | 9.4 | 72,868 | 32.85 | 9.1 |
| 2027 | 349 | 2,668,478 | 11.3 | 85,833 | 32.17 | 10.7 |
| 2028 | 258 | 2,411,216 | 10.2 | 80,393 | 33.34 | 10.1 |
| 2029 | 228 | 1,864,565 | 7.9 | 58,353 | 31.30 | 7.3 |
| 2030 | 217 | 2,951,965 | 12.4 | 90,918 | 30.80 | 11.4 |
| 2031 | 107 | 2,537,503 | 10.7 | 83,703 | 32.99 | 10.5 |
| 2032 | 74 | 1,089,158 | 4.6 | 44,056 | 40.45 | 5.5 |
| 2033 | 62 | 1,219,071 | 5.1 | 44,773 | 36.73 | 5.6 |
| 2034 | 49 | 1,502,307 | 6.3 | 61,645 | 41.03 | 7.7 |
| Thereafter | 106 | 2,531,399 | 10.7 | 96,339 | 38.06 | 12.1 |
| 2,321 | 23,693,511 | 100.0% | $799,132 | $33.73 | 100.0% | |
(1)Expirations that have been renewed are reflected above based on the renewal expiration date. Expirations include leases related to completed not stabilized development properties but exclude leases related to developments in-process.
(2)Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2024 multiplied by 12.
(3)Includes 47,000 rentable square feet of leases that are on a month-to-month basis, which represent 0.2% of total annualized GAAP rental revenue.
In-Process Development
The following table summarizes our in-process office development activity as of December 31, 2024:
| Property · Market · Own % · Consolidated (Y/N) · Rentable Square Feet · Anticipated Total Investment (1) · Investment as of December 31, 2024 · Pre Leased % · Estimated Completion · Estimated Stabilization | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| ($ in thousands) | |||||||||||
| 23Springs | Dallas | 50.0% | N | 642,000 | $460,000 | $299,422 | 61.6% | 1Q 25 | 1Q 28 | ||
| Midtown East | Tampa | 50.0% | N | 143,000 | 83,000 | 53,510 | 34.5 | 1Q 25 | 2Q 26 | ||
| GlenLake Two Retail (2) | Raleigh | 100.0% | Y | 8,600 | 8,100 | 1,241 | 100.0 | 1Q 26 | 1Q 26 | ||
| 793,600 | $551,100 | $354,173 | 57.1% | ||||||||
(1)Includes estimated lease up costs for tenant improvements and lease commissions until the property has reached stabilization.
(2)Will be recorded in development-in-process on our Consolidated Balance Sheets once we begin construction on the project.
Land Held for Development
As of December 31, 2024, we estimate that we can develop approximately 4.6 million rentable square feet of office space on the wholly-owned development land that we consider core assets for our future development needs. Our core office development land is zoned and available for development, and nearly all of the land has utility infrastructure in place. We believe that our commercially zoned and unencumbered land gives us a development advantage over other commercial office development companies in many of our markets. We also own additional development land on which we or third parties can develop approximately 2.8 million square feet of mixed-use real estate projects, including retail and multi-family.
Joint Venture Investments
The following table sets forth information about our in-service joint venture investments by geographic location as of December 31, 2024:
| Rentable Square Feet | Weighted Average Ownership Interest (1) | Occupancy | |
|---|---|---|---|
| Market | |||
| Dallas | 542,000 | 50.0% | 99.4% |
| Kansas City (2) | 292,000 | 50.0 | 89.4 |
| Richmond | 354,000 | 50.0 | 100.0 |
| Tampa (3) | 152,000 | 80.0 | 100.0 |
| Total | 1,340,000 | 53.4% | 97.5% |
(1)Weighted Average Ownership Interest is calculated using Rentable Square Feet.
(2)Excludes our 26.5% unconsolidated ownership interest in a real estate brokerage services company.
(3)The Midtown West joint venture in Tampa is consolidated.
In addition, we own 50.0% interests in 2827 Peachtree (Atlanta), Granite Park Six (Dallas), 23Springs (Dallas) and Midtown East (Tampa), four unconsolidated joint ventures that are currently developing projects that have not yet been placed in service.
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