Highwoods Properties Reports Q3 Revenue Decline, Strategic Acquisitions, and Increased Nine-Month Net Income

Highwoods Properties, Inc. reported its financial results for the third quarter and nine months ended September 30, 2025, revealing a decline in rental and other revenues. For the third quarter, revenues totaled $201.8 million, a decrease of 1.2% from $204.3 million in the same period last year. The nine-month revenue figures also reflected a decline, totaling $602.8 million compared to $620.3 million in 2024. The company attributed these decreases primarily to lost revenue from property dispositions and lower consolidated same property revenues, which were impacted by a decrease in average occupancy.

In terms of profitability, Highwoods recorded a net income of $13.7 million for the third quarter, down from $15.5 million in the prior year, while net income for the nine months increased to $132.9 million from $107.5 million. The diluted earnings per share for the third quarter were $0.12, compared to $0.14 in the same quarter of 2024. The company noted that the increase in net income for the nine-month period was driven by gains on property dispositions, which totaled $87.9 million, significantly higher than the $42.6 million recorded in the previous year.

Strategically, Highwoods made significant acquisitions during the reporting period, including the purchase of the Legacy Union parking garage in Charlotte for $110.2 million and the Advance Auto Parts Tower in Raleigh for $137.9 million. The company also sold a building in Richmond for $16 million, realizing a gain of $5.7 million. Additionally, an impairment charge of $8.8 million was recorded for two non-core assets at Century Center in Atlanta, reflecting a strategic focus on optimizing its portfolio.

Operationally, Highwoods reported a decrease in average occupancy from 87.1% at the end of 2024 to 85.3% as of September 30, 2025. The company anticipates average occupancy to range between 85.0% and 86.0% for the remainder of the year. The total number of common shares outstanding increased to 109.9 million as of October 21, 2025, reflecting the issuance of new shares under its equity distribution agreements, which raised approximately $50 million in net proceeds.

Looking ahead, Highwoods Properties expressed a cautious but optimistic outlook, planning to sell between $50 million and $500 million in assets over the next six months to fund further acquisitions of high-quality office buildings in its core markets. The company emphasized its commitment to maintaining a strong balance sheet and leveraging its operational capabilities to navigate market conditions effectively.