HIGHWOODS PROPERTIES, INC.
For the period ended Jun 30, 2026. Filed Jul 28, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 28, 2026
HIW$31.47-0.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-28.
0000921082-26-000035
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSDisclosure Regarding Forward-Looking StatementsExecutive SummaryCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-28.
0000921082-26-000045
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSDisclosure Regarding Forward-Looking StatementsExecutive SummaryThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 55 previous paragraphs and 58 current paragraphs.
45 unchanged; 10 reworded; 3 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 1 previous and 1 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
•closing of the planned disposition of $73.5 million of non-core buildings prior to August 15, 2026 may not occur on the terms described in this Quarterly Report under “Executive Summary – Investment Activity” or at all.
Current report
We expect to close two non-core sales transactions aggregating $73.5 million prior to August 15, 2026. First, we have agreed to sell six non-core office buildings encompassing 472,000 square feet in the Innsbrook submarket of Richmond. Second, we have agreed to sell a 118,000 square foot non-core office building in Century Center in Atlanta. The sales are subject to customary closing conditions. In each transaction, the buyer’s contractual due diligence period has ended and the buyer has posted earnest money deposits that are nonrefundable except in limited circumstances. During the remainder of 2026, we expect to sell between $100 million to $250 million of additional properties no longer considered to be core assets due to location, age, quality and/or overall strategic fit. We can make no assurance, however, that we will sell any additional non-core assets or, if we do, what the timing or terms of any such sale will be.
Current report
In addition, we anticipate commencing up to $400 million of new development during the remainder of 2026. Any such development projects would not be delivered until 2028 or beyond. We also anticipate acquiring up to $250 million of properties during the remainder of 2026. We generally seek to acquire and develop assets that are consistent with our strategic plan, improve the average quality of our overall portfolio and deliver consistent and sustainable value for our stockholders over the long-term. We also generally intend to grow on a leverage-neutral basis. We can make no assurance, however, that we will develop or acquire any opportunities we may be reviewing, bidding on or negotiating or that we may have under contract or that any opportunities will be consummated or perform as expected.
Reworded paragraphs (10)
Previous wording
•we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or repay or refinance outstanding debt upon maturity; and
Current wording
•we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or repay or refinance outstanding debt upon maturity;
Previous wording
•the Company could lose key executive officers.
Current wording
•the Company could lose key executive officers; and
Previous wording
The key components affecting our rental and other revenues are average occupancy, rental rates, cost recovery income, new developments placed in service, acquisitions and dispositions. Average occupancy generally increases during times of improving economic growth, as our ability to lease space outpaces vacancies that occur upon the expirations of existing leases. Average occupancy generally declines during times of slower or negative economic growth, when new vacancies tend to outpace our ability to lease space. Asset acquisitions, dispositions and new developments placed in service directly impact our rental revenues and could impact our average occupancy, depending upon the occupancy rate of the properties that are acquired, sold or placed in service. Another indicator of the predictability of future revenues is the expected lease expirations of our portfolio. As a result, in addition to seeking to increase our average occupancy by leasing current vacant space, we also concentrate our leasing efforts on renewing existing leases prior to expiration. For more information regarding our lease expirations, see “Item 2. Properties – Lease Expirations” and “Item 1A. Risk Factors – Risks Related to our Operations. The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term” in our 2025 Annual Report on Form 10-K. Occupancy in our office portfolio decreased from 85.3% as of December 31, 2025 to 85.0% as of March 31, 2026. We expect average occupancy in our office portfolio to range from 85.5% to 86.5% for the remainder of 2026.
Current wording
The key components affecting our rental and other revenues are average occupancy, rental rates, cost recovery income, new developments placed in service, acquisitions and dispositions. Average occupancy generally increases during times of improving economic growth, as our ability to lease space outpaces vacancies that occur upon the expirations of existing leases. Average occupancy generally declines during times of slower or negative economic growth, when new vacancies tend to outpace our ability to lease space. Asset acquisitions, dispositions and new developments placed in service directly impact our rental revenues and could impact our average occupancy, depending upon the occupancy rate of the properties that are acquired, sold or placed in service. Another indicator of the predictability of future revenues is the expected lease expirations of our portfolio. As a result, in addition to seeking to increase our average occupancy by leasing current vacant space, we also concentrate our leasing efforts on renewing existing leases prior to expiration. For more information regarding our lease expirations, see “Item 2. Properties – Lease Expirations” and “Item 1A. Risk Factors – Risks Related to our Operations. The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term” in our 2025 Annual Report on Form 10-K. Occupancy in our office portfolio increased from 85.3% as of December 31, 2025 to 85.7% as of June 30, 2026. We expect average occupancy in our office portfolio to range from 86.0% to 87.0% for the remainder of 2026.
Previous wording
Whether or not our rental revenue tracks average occupancy proportionally depends upon whether GAAP rents under signed new and renewal leases are higher or lower than the GAAP rents under expiring leases. Annualized rental revenues from second generation leases expiring during any particular year are typically less than 15% of our total annual rental revenues. The following table sets forth information regarding second generation office leases signed during the first quarter of 2026 (we define second generation office leases as leases with new customers and renewals of existing customers in both consolidated and unconsolidated office space that has been previously occupied and leases with respect to vacant space in acquired buildings):
Current wording
Whether or not our rental revenue tracks average occupancy proportionally depends upon whether GAAP rents under signed new and renewal leases are higher or lower than the GAAP rents under expiring leases. Annualized rental revenues from second generation leases expiring during any particular year are typically less than 15% of our total annual rental revenues. The following table sets forth information regarding second generation office leases signed during the second quarter of 2026 (we define second generation office leases as leases with new customers and renewals of existing customers in both consolidated and unconsolidated office space that has been previously occupied and leases with respect to vacant space in acquired buildings):
Previous wording
Annual combined GAAP rents for new and renewal leases signed in the first quarter were $39.45 per rentable square foot, 19.4% higher compared to previous leases in the same office spaces.
Current wording
Annual combined GAAP rents for new and renewal leases signed in the second quarter were $40.97 per rentable square foot, 20.9% higher compared to previous leases in the same office spaces.
Previous wording
We strive to maintain a diverse, stable and creditworthy customer base. We have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with the Company’s Board of Directors. As of March 31, 2026, only Bank of America (4.2%) and Asurion (3.4%) accounted for more than 3% of our annualized GAAP revenues.
Current wording
We strive to maintain a diverse, stable and creditworthy customer base. We have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with the Company’s Board of Directors. As of June 30, 2026, only Bank of America (4.2%) and Asurion (3.3%) accounted for more than 3% of our annualized GAAP revenues.
Previous wording
Whether or not we record increasing net operating income (“NOI”) in our same property portfolio typically depends upon our ability to garner higher rental revenues, whether from higher average occupancy, higher GAAP rents per rentable square foot or higher cost recovery income, that exceed any corresponding growth in operating expenses. Consolidated same property NOI was $1.8 million, or 1.3%, lower in the first quarter of 2026 as compared to 2025 due to an increase of $3.4 million in same property expenses, partially offset by an increase of $1.7 million in same property revenues.
Current wording
Whether or not we record increasing net operating income (“NOI”) in our same property portfolio typically depends upon our ability to garner higher rental revenues, whether from higher average occupancy, higher GAAP rents per rentable square foot or higher cost recovery income, that exceed any corresponding growth in operating expenses. Consolidated same property NOI was $1.8 million, or 1.4%, higher in the second quarter of 2026 as compared to 2025 due to an increase of $5.4 million in same property revenues, partially offset by an increase of $3.7 million in same property expenses.
Previous wording
In addition to the effect of consolidated same property NOI, whether or not NOI increases typically depends upon whether the NOI from our acquired properties and recently completed development projects exceeds the lost NOI from property dispositions. NOI was $7.6 million, or 5.6%, higher in the first quarter of 2026 as compared to 2025 primarily due to property acquisitions in Raleigh, Charlotte and Dallas, partially offset by lost NOI from property dispositions and lower consolidated same property NOI. We expect NOI to be higher for the remainder of 2026 as compared to 2025 due to NOI from the recent property acquisitions in Raleigh, Charlotte and Dallas, recently completed development projects in Raleigh and an anticipated increase in consolidated same property NOI, partially offset by lost NOI from property dispositions.
Current wording
In addition to the effect of consolidated same property NOI, whether or not NOI increases typically depends upon whether the NOI from our acquired properties and recently completed development projects exceeds the lost NOI from property dispositions. NOI was $9.3 million, or 6.8%, higher in the second quarter of 2026 as compared to 2025 primarily due to 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. We expect NOI to be higher for the remainder of 2026 as compared to 2025 for similar reasons.
Previous wording
We continue to maintain a conservative and flexible balance sheet and believe we have ample liquidity to fund our operations and growth prospects. As of April 21, 2026, we had approximately $32 million of existing cash and $175.0 million drawn on our $750.0 million revolving credit facility, which is scheduled to mature in January 2028 (but which can be extended for two additional six-month periods at our option). As of March 31, 2026, our leverage ratio, as measured by the ratio of our mortgages and notes payable and outstanding preferred stock to the undepreciated book value of our assets, was 43.6%, and there were 112.3 million diluted shares of Common Stock outstanding.
Current wording
We continue to maintain a conservative and flexible balance sheet and believe we have ample liquidity to fund our operations and growth prospects. As of July 21, 2026, we had approximately $195 million of existing cash and no amounts drawn on our $750.0 million revolving credit facility, which is scheduled to mature in January 2028 (but which can be extended for two additional six-month periods at our option). As of June 30, 2026, our leverage ratio, as measured by the ratio of our mortgages and notes payable and outstanding preferred stock to the undepreciated book value of our assets, was 42.1%, and there were 112.3 million diluted shares of Common Stock outstanding.
Previous wording
We have no debt scheduled to mature within one year from April 28, 2026 (the date of issuance of the quarterly financial statements), except for $300.0 million principal amount of unsecured notes that are scheduled to mature in March 2027. We generally believe we will be able to satisfy future obligations with existing cash, borrowings under our revolving credit facility, new bank term loans, issuance of other unsecured debt, mortgage debt and/or proceeds from the sale of additional non-core assets.
Current wording
We have no debt scheduled to mature within one year from July 28, 2026 (the date of issuance of the quarterly financial statements), except for $289.1 million principal amount of unsecured notes that are scheduled to mature in March 2027. We generally believe we will be able to satisfy future obligations with existing cash, borrowings under our revolving credit facility, new bank term loans, issuance of other unsecured debt, mortgage debt and/or proceeds from the sale of additional non-core assets.