Highwoods Properties, Inc. (NYSE:HIW) reported first‑quarter 2026 financial results, posting revenue of $214.03 million and funds from operations of $94 million, or $0.84 per share. The company’s earnings per share of $0.29 significantly beat analyst consensus estimates of $0.13, a beat of $0.16 or roughly 123 %. Revenue also topped consensus estimates, with $214.03 million versus the highest analyst estimate of $209.73 million, a beat of $4.3 million or about 2 %.
The strong earnings beat was driven by disciplined cost management and robust leasing activity in the company’s Sun‑belt best‑business‑district portfolio. Management highlighted that “customers and prospects recognize that blocks of high‑quality, BBD‑located office space with well‑capitalized owners are diminishing across our footprint, which gives us strong pricing power in the best submarkets.” The company signed 958,000 sq ft of second‑generation leases, including over 300,000 sq ft of new leases, and 107,000 sq ft of first‑generation leases, supporting continued occupancy and rent growth.
Revenue growth was supported by a 19.4 % GAAP rent increase on second‑generation leases and a 4.8 % cash rent increase, with net effective rents ranking second highest in company history and 9 % above the prior five‑quarter average. The company’s portfolio quality improved as it invested $108 million in new properties in Dallas and Raleigh and sold $42 million of non‑core assets in Richmond, a strategy that maintains a leverage‑neutral balance sheet while recycling capital into higher‑quality assets.
Highwoods reaffirmed its full‑year funds‑from‑operations guidance at $3.40 to $3.68 per share, unchanged from the earlier guidance issued earlier in the year. The guidance reflects management’s confidence that the company can sustain its leasing momentum and pricing power in Sun‑belt markets, even as it navigates broader headwinds such as the potential impact of AI on the workforce.
Market reaction to the results was modest, with the stock trading within a narrow range after the announcement. Investors noted the significant EPS beat and the solid revenue performance, while the in‑line FFO and reaffirmed guidance tempered enthusiasm. The company’s focus on capital recycling and disciplined cost control positions it to continue generating cash flow while expanding its portfolio in high‑growth markets.
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