Highwoods (HIW) Q3 FFO & Revenues Top Estimates, NOI Rises
Highwoods' (HIW) better-than-expected Q3 results reflect healthy rental revenues and solid same-property cash net operating income.
Highwoods Properties, Inc.’s HIW third-quarter 2021 funds from operations (FFO) per share of 96 cents surpassed the Zacks Consensus Estimate of 93 cents. Rental and other revenues of $195.5 million outpaced the Zacks Consensus Estimate of $192.2 million.
Decent leasing activity as well as rent and same-property cash net operating income (NOI) growth aided the company.
As the FFO per share increased 11.6% to 96 cents, year over year, the rental and other revenues climbed 8% in the third quarter.
Quarter in Detail
Highwoods leased 672,000 square feet of second-generation office space in the third quarter, including 245,000 square feet of new leases. The in-place cash rent was up 2% per square foot on a year-over-year basis. At the end of the reported quarter, occupancy was 90.4%.
Excluding the net impact of temporary rent deferral repayments, the same-property cash NOI increased 5.2% year over year.
As of Sep 30, 2021, Highwoods had $27.9 million of cash and cash equivalents compared with the $109.3 million reported as of Dec 31, 2020.
The company closed the acquisition of office assets from Preferred Apartment Communities, Inc for $683 million.
Guidance
Highwoods predicts 2021 FFO per share of $3.73-$3.76 compared with the $3.62-$3.73 estimated earlier. The Zacks Consensus Estimate for the same is pegged at $3.71.
The same-property cash NOI for the current year is projected at 6-7%, while the year-end occupancy is estimated to be 90-91%. Dispositions are expected to be $87-$137 million.
Highwoods currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Highwoods Properties, Inc. Price, Consensus and EPS Surprise
Highwoods Properties, Inc. price-consensus-eps-surprise-chart | Highwoods Properties, Inc. Quote
We now look forward to the earnings releases of other REITs like CyrusOne Inc. CONE scheduled for Oct 28, Apple Hospitality REIT APLE and CubeSmart CUBE slated for Nov 4.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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