Highwoods Properties (HIW) 27 Apr 222022 Q1 Earnings call transcript

Good morning. And welcome to the Highwoods Properties Earnings Call.

During the presentation, all participants will be in a listen-only mode. Afterwards we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, April 27, 2022. to Finance conference and like True, to now of Manager Corporate would turn over the Hannah I Strategy. Please go ahead, Ms. True.

And Thank operator. good everyone. you, morning,

Klinck, Brian Joining Chief our Officer; Chief on the this Maiorana, are me Officer. call and Brendan Executive our Leary, Ted Officer; Financial Chief Operating morning our

have today's the posted web. your convenience, been For prepared remarks on

will our supplemental you most measures. include financial The call, on the available have they're supplemental, both today's as such not If measures reconciliation to GAAP release On section non-GAAP received these website of FFO, or our EBITDAre. the highwoods.com. yesterday's measures comparable non-GAAP review include earnings release and of at Investors directly NOI a and

and uncertainties discussed in during as as press length made well are releases call our statements SEC to today's risks filings. risks our subject at Forward-looking These are and uncertainties.

With can As materially any does undertake you a differ duty the the Ted. from these statements. I'll and actual update company events statements. And call over not that, know, to to now turn results forward-looking forward-looking

Same was good everyone. our record the in our cash consecutive We results financial gains. operational consistent and quarter, FFO is first core growth had share, quarter the since Hannah, morning, activity robust. Leasing land per the NOI sale start performance Thanks, pandemic. solid. had of excludes We excellent and of property third with which

strengthen to strong continue our sheet excellent continuing balance to our flows and start is of strategy. to performance our Our the largely We execution cash believe is in year shape. attributable

portfolio markets workplaces said returns and of acquiring by over in differentiated generate stated is and commute our and of sustainable that or to our office quality, developing, simple worthy. BBDs we've buildings strategy long-term way, investment high the before, another are As owning a straightforward the attractive

building growth further the portfolio. operational resiliency and performance, for to the are prospects and blocks together long-term strengthen financial putting our actively We

starts. Our potential development team is exploring numerous

make high-quality continuing progress of plan acquire assets. and cycling about with We non-core assets, out to to long-proven are the potential of we're additional optimistic our

in Turning to quarter. our results. We delivered share FFO $X.XX the first per of

land more than $X.XX first our gains, was FFO higher year. quarter X% per last share, Excluding the of sale $X.XX than

to our occupancy higher on compared to to start leases as year-end the at portfolios robust around with X.X% confidence feet spreads the held were at maintained operations Occupancy Same-property relatively were percentage plans from new customers. up was quarter portfolio were XX%, to And Average to square positive XX.X%, year gen our on XXX,XXX a last XX addition second us leases. outlook also its during we XXX,XXX to with pick months. our cash cash NOI cash X.X%. across increase consistent upbeat year our given flat and return of the past based later ago. roughly square a steady in foot growth has many Utilization will rates with term increased signed In FFO, are the years. we XX.X space, feet of year. commence points square of couple momentum to on to average work foot new including leasing basis Rent basis million square the in-service GAAP expect one a per a on to XX.X% X.X our continue increasing of and up hearing The basis, rental in about healthy.

strong the are is seen last start office and are are As which pre-pandemic out below of across though our leasing of since customers schedules, by figuring workspace consistently levels hybrid, encouraged utilization markets we've activity even we've the stated before, we their year. many

investments. to Turning

to value which Westshore a BBD sale parcel pad included from will of developer maximize community base our existing building. who the adjacent office good strategy to a We sold land foot XXX,XXX $X.X million for construct a sold assets, center our $X.X whether buildings is our we example gain. square luxury or to quarter, the a multifamily Tampa's million, During a in land. This

parcels desirable our of Our never be more for in the office the us ownership case office support of this billion choose properties optionality can adjacent development bring sell hotels. as development. million and It has Bay land outright another mixed-use create almost and more been may to a we land sites of $X.X via apartments, billion Either value shops, and attractive. adjacent build-out amenities as approximately bank participate to mixed-use the $XXX $X way, These new restaurants of and the mixed-use future will will has at excellent Center. or even

XXX,XXX million another our development February is since call. XX,XXX square square preleased, $XXX now leased feet pipeline XX% foot Our having

We projects and remain and that II have our both of across Virginia healthy the confident will stabilize West the Midtown by interest Springs end year.

spec may fully XXXX. projects you As we both remember, in started

While spec developments we on our year. with additional be this We're dispositions. later didn't announce any build-to-suit busy potential and new could that the non-core developments team working in announced quarter, progressing is

have We we marketing contract, others of various stages process. under the have properties multiple and in

plan, acquisition middle to year. the of has by sheet return metrics we are balance on the been pace our our As to prepack

acquisition the front, be to our On markets strong. for has competition BBDs in properties high-quality continued

assets further to seeing will of investors but our rest capital We're continue with excellent performance, allocation and disciplined assets acquire we institutional our long-term arise be As in strengthen recognize prospects. BBDs, would across our opportunities growth long-term that as seek resiliency office the located footprint. submarkets in to we assured, value best

we outlook since property basis XX of X%, to cash occupancy project at now also XXXX the up our of expect our up projected year year to the basis up with share, outlook. initial to to X.X% share at the Now end is to FFO % XX.X%, at Same NOI full per points February. per midpoint, midpoint. points to $X.XX FFO the grow We XX at in $X.XX and midpoint $X.XX XX

outlook. and acquisitions, activities, unchanged dispositions our are investment from Our development announcements prior

and Brian, to over performance the turn like outlook. our recap I'd call to briefly I Before

this new by feet. evidenced pre-pandemic Our square leasing levels, quarter's as leasing rebounded XXX,XXX especially activity has to

XXXX are respective and share forecasted. higher full operational primary same-property three than outlook the originally all Our year of per occupancy, cash and FFO at year-end financial for our indicators, NOI midpoints

Our $XXX to XX% And to the meaningful debt-to-EBITDA of development will balance is of a the delivers. building times. over Brian? our with We're in have flow generate XX% million sheet and X.X growth and is that leverage continue ratio long-term. preleased it as place strong pipeline we confident sustainable blocks drive cash

you, Thank morning, all. good Ted, and

is for results Our albeit quarter to capturing high-quality solid resilient located, and on and with different continued back its portfolio latent team deliver invest occupants, growth lines. well a welcoming time customer inbound that's the

worthy trends in both business best our of in maintaining Highwoods workplaces the and a nature, suburban nexus formula strategy a positioned markets, are districts the proven which capable number simple commute at and rents accelerating term. for Our occupancy, owning growing and of of urban of increasing has

square as collective quarterly The approach XX a can deals our creativity. square for our deals XXX,XXX These results bear compelling advantage team which, culture, this and quarter is and highest of first feet, returning work recruiting representing making a evidence on new achieve represent QX collaboration where they 'XX. providing competitive important, can together office, place were XXX,XXX new. our talent feet and our for count since of XXX us signed the of retaining, the told what they part, to customers As they've

increase To comes As we of at XX.X% expect rates and year. half markets, levels residents latter the in of and with to below. occupancy currently our returned to the jobs where the online, pre-pandemic this continues unemployment leasing in-migration have or

X% year-over-year, up almost Tampa, is X%. Office below in and last where unemployment have is rents employment start Let's from increased X% year. market

XX% the XXX,XXX year. signing We square this quarter. has to of leased the vacancy Our Avion, at feet occupancy busy will leasing bring XXXX for portfolio's team end largest our been the which asset's by

tech we X One largest company. long-term foot no both expirations, leased our square downtime backfilled to addition, via company's In XXXX XXX,XXX remaining with a Independence at a

marker Our and place plan. One our work a uses the XX-acre the through retail to success Parkside Independent at add a clear to rezoning having taken residential is single-use strategy, mixed-use independence master making for

are and markets to at main of new markets leases net Richmond feet collective and market Nashville five positioning XXX,XXX GAAP leases with of term operating square worthy the to of the in users. innovation occupy of BBDs. below years. For posted rents and strongest folds in leases corporate research diverse to XX.X and our rising markets our for square team be the X% was where desirability X% last square to X% Not rents XX,XXX a grow, was over the demonstrate up tower. main year-over-year up announcement Richmond outdone, will the year-over-year over average year new $XXX their positive strategy properties X,XXX These unemployment feet compared the they seven has commitment maintaining signing market in by XX-story markets of increases campus, signed and employees the each JLL Raleigh's most quarter. of Their to rates where notes, expansion of million commute absorption over and our feet their emphasize a Raleigh a owning, and buildings as The Tampa and rent CoStar's X% million in quarter, averaged strong quarter, in of where reinforce BBDs posted the continue years. for last XX.X% the the our were or these rents these technology

occupied. In by of feet signed XX% in to Nashville, leases and and of Cool ended Nashville's XX% the and schedule there on XX.X% BBD. ended balance occupied, the acquired XXX the leased team we II year. the of Our end Virginia acres burgeoning the at Springs Franklin square Having Ovation's our quarter XX,XXX development is Springs quarter stabilize

to be and As plan over third-party are more the the with several quarters. mixed-use residential will best-in-class and integrated mixed-use the reenvisioning next a master working we city developer, center developers retail and town advance

earlier, across time, The footprint our or build-to-suit at potential up ever and or construction new development the RFPs hand. design the either in as ahead success pandemic us as in looking on underway on anchor Ted budget delivering confidence As throughout us. before development with with team's mentioned solid is leasing pipeline gives and opportunities our

changing to dynamic become ever and continue clear. things While we a few operate have a industry, in

for problems products. us It rising your couldn't are our you without day. that the Highwoods giving first This to new provide for onboard same throughout we and results collaborate work provides that office, being a effort. for said, total very specifically mentor customers. led new every better customers culture and the be and a our these fact spaces teams talent, currently is team the flexibility, in places are that of their The can thank develop of opportunity these our teammates, a to hires, cultivate we solve is or To our realizing best where have they many most is believe matter to together customers week hybrid work model

to care unwavering customer the from foundation portfolio has will which to continue from Your providing best resilient been commitment the we possible proven grow. the and has which

Now let me hand to it off Brendan.

good and or quarter, or the of share million Brian, income morning, $XXX.X net share. per $XX.X first delivered we of and Thanks, everyone. million $X.XX FFO In per $X.XX

by incentive of the mostly due average average the expense quarter termination each land Rolling a from fee; to our core mentioned, primarily to $X.XX FFO balances, higher quarter lower of term $X.XX last items the our contributed and primarily occupancy and while the our net the sale including customarily Ted the NOI which increase fourth of factored both land of fourth driven higher fee quarter in following: quarter lower long-term lower fourth $X.XX to the impact first the $X.XX combination quarter, first annual FFO As fee sale and the grants, $X.XX in made quarter of of XXXX not. to increase quarter from $X.XX attributable and was was $X.XX, $X.XX the and in into debt year. accounting The $X.XX, the gain were February, OpEx; to original was outlook higher forward attributable compared are included from first increase which G&A, a per termination offset quarter's by these increased quarter share. was FFO land XXXX. provided excluding aforementioned of FFO the The remaining gain contributed first sales the in $X.XX, to

and Even return net-debt-to-EBITDA Turning balance at dispositions metrics in balance don't down to sell we still raise ratio as can opportunities times. on this pace sheet, of our X.X billion to invest X.X from planned. of still equity, assets development We up plenty we to estimate times which of selling in raising excellent complete X XXXX. acquisition be with sheet the future or to times, We're net last dry our maintain the complete a pre-pack any we remains assets noncore balance opportunistic equity existing has to and powder the additional end pipeline few quarter additional we of the our our investments. of any sheet we've non-core or under shape. end, with ended without prerequisite To $X.X if debt-to-EBITDAre

In optionality debt creates maturities, our plans. with addition, which limited we have financing

prior this million to the that ATM Our in million efficient $X an proceeds, $XXX XXXX year incremental amount we non-core maturities pipeline only price loan we to penalty with debt an issued without of investments retained repay October. our on disposition leverage-neutral measured of that modest $XXX and to can a January basis. a XXXX bond We average flow two remain to matures we tools quarter unsecured for that the maturities one matures ATM other fourth proceeds a cash million. share of term particularly of in and on plan way or Similar quarters, satisfy a these and recent are shares per program financings. of development $XX.XX issuances at believe our in net fund

and we balance sheet exploring Ted planning. team prudent potential some projects, and of future powder As financial our is mentioned, Brian additional believe ahead our dry announcements and on creating development busy is conservative

anticipated are from share As upside, and $X.XX to dispositions the quarter; increase share rates XXXX from $X.XX expense. following. the -- gains $X.XX at expense from up from parking The in range increase $X.XX lesser $X.XX in from partially our and attributable related leasing, prior timing. we've $X.XX changes our to to better midpoint. in add of revenues increase share, offset $X.XX of anticipated first which Ted higher lower by interest outlook items midpoint A to planned the NOI from major equate of projected and updated per to pickup midpoint up per OpEx original recorded $X.XX projected anticipated a higher the introduced These at interest due dilution the to are items per higher we $X.XX net the G&A a range These rising February. mentioned, outlook stronger to sale at land of $X.XX the primarily FFO

during the our flows Finally, as strengthen. mentioned times past to years, several many continue cash

This markets. the cash of XXXX and It primary with office a the continue the capital more and $XX acquisition quarter is in executed or to can from early Memphis growth flow of assets PAC of of to market year-to-year, recent of be sale excellent of the of million, markets plan our after slower our improvement our the distribution a lumpy was Greensboro redeploy additional the late-XXXX this into behind and cycle is in that that non-core Charlotte. again, the driver while higher high-quality CAD existing growth as of funding and strengthen. quarter-to-quarter the was, trend portfolio out of assets drivers an clear example cash plan flows improvement Cash flow behind available long from we one cash the over run was primary

As we further are continue we our and to to now going our portfolio resiliency while long-term capital expect for growth quality, flows. cash recycle questions. improve also strengthening we Operator, rate ready forward,

you. go Instructions] ahead. Our [Operator from with question Thank Malhotra first Please Mizuho. Vikram is

have just on you this it's point? the covered Maybe just on us ones question. half much do latest morning. update maybe us Good walk just into where any first, any the taking just and XX I process? maybe months expirations Brendan, of views in can kind next you through back the Thanks at your guess, still move-outs, known how of for in And 'XX. actually

Vikram. Good morning. Hey, Sure.

talk to seeing activity and to we Brian probably expirations the specific we're the But target. did you outlook, about that occupancy year-end and start, updated that pass think off as there. I the I'll overall, our saw I'll So in increase

moved So XX ended to quarter midpoint, the and up basis at that midpoint at XX.XX we XX.X. the points

XXXX, think to So occupancy we back-end migrating I about as for we loaded. expectations, throughout expect the our do be think ramp

the I'll markets. expect our of we throughout about seeing we as occupancy we to off back specific have talk Brian overall then into activity to the And we're activity some the do would to good So and year. half maybe move it accelerate there. hand But expirations of

Thanks, will, the tech were earlier have have I may Vikram, ones you that ahead Brendan. we've in that specifically, question. of company regard, since to 'XX in into Tampa heard building take been XX in Thanks, one entire to those we no in company. with the for if backfilled remarks the a in largest care getting and downtime expirations the

One. Independent that's So

we as really expirations feeling work up, get about we're So these the them. team's ahead But there. come of good

we as Tivity We're the good have [ph] good really expiration even so as that full 'XX, for building activity relet well. And and we where feeling prospects into on look too. about

we Brendan's . to front staying point, these we're able to early, feel foot. being So address optimistic do about and on the

tech And clarify sorry, just was that? what if mark-to-market the you on could company, the

was Vikram, a about a that we and Brian largest the flat. long-term no cash on backfill GAAP two remaining, to basis, was had XXXX that positive was it a with that that That recall, was in you And mentioned, backfilled that basis. expirations if on downtime. one we was

good that felt -- in and So transaction Tampa. we about

then coming given that? should given and this some what's past, side, us where is embedded back. in in just the And update variable the the just year any -- OpEx utilization Okay. income OpEx Can of expect -- in on on you variability the

Yeah.

$X.XX So chatted XXXX about think this of that, lessened share and tune thought We That the and OpEx number, $X.XX has -- you headwind for net be beginning bit. little that to we 'XX. a would probably the others a disclosed compared to on of of we lot so I to we the I many phone. recovery per said with in the say we a year, would what know

So to of levels it's improvement terms in of is the headwind in terms of probably occupancy $X.XX other than more that offsetting more our range NOI. updated in and within $X.XX are growth kind overall But outlook. revenue, of parking kind

up NOI, in would of the in part as think beginning I year. we mentioned -- our share to our we're about I be compared prepared the So thought we remarks, a the where $X.XX

than the financial seen that headwinds offset we've in So we've plan. more the some elsewhere of

it. Got

so Thanks Okay. much.

next Please Our Wells Fargo. is ahead. Blaine Heck with question from go

to related and Thanks. Brendan, on color the thanks Good morning. the for outs guidance. ins

Can on that to that Just one driven loading little were term might expecting by that. on the Or more question facility? interest your this contemplated year of other bit this now increased rate is you're more talk costly solely $X.XX there increased expense whether moves $X.XX you were that a credit balance environment? sheet about be in loan the and expense

going thanks expense the it's just little overall. solely rates on for speculate And forward are look No, do. give perspective, to don't a curve layer and bit We into what Yeah. Blaine, assumption. of mean, rate to question. attributable we that the at just I you Yes, our

So months, But half $X.XX of really total driving assets. curve our fairly about past the our and to less $X.XX the a increase. has that over reminder, it's just and debt, as our is XX% debt forward X% than two of moved substantially variable total up and that's rate overall

in that's terms $X.XX months, overall base past over So significant and we're talking about $X.XX increase impacting of a by FFO. of on about the an share several us it's a rates

might from seen for own view, bit as lot And the term? opportunity of you while, Nashville in did a page some then something for largest quite The the projects guys jumps of a but maybe where Brian. more you in helpful. well. comment a makes That's is under quarter and the Can in guys has on little maybe the starting development the you bank And supply off that largest the you of you that whether leasing company's a history. comfortable on it's kind development during be, point near that land on land the of it. Ted been market as Got

on you if prospects there that comment So specifically, Nashville on could helpful? be then and the would generally

yeah, But higher is end can million had on probably Sure, in close Nashville right. start the land specifically. bank maybe I'll Look, Blaine. to of you're historically. and $XXX Brian jump our we've

a having us. for think growth helpful bank, land development. I material it's for our well-located extremely and It’s raw

they've -- prospects in would a whether they're in a our us tell most as kick probably you of in of us long gets And either or building. front at a in can of our it gets active been seat would a be on table. team, got We've front markets busy gets going what the a development discussions I be So time. numerous us build-to-suite that really off as and prelease

is on are own existing development working hard. we've So most our own it's the of our bank. And land -- land team that these had

for added last alluded we another. hopeful are we've starts. I've quarter just for time are guys can They're the the we're longer. all all the of quarters of have ongoing, two, Things taking last in the or working few. -- So about in reason them still some discussions couple our to one talked a we've are long of and a or taking hard

predict to Nashville? developments. But we the hard it's more And touch want excited when So can about bank. we're Brian, land again, to on you do if get -- and when

to Yeah. markets advantage things competing development against a and is now, -- more Sure. get the design the having might we better little an I'm us bank of XX,XXX-foot will can in with of disruptions one is on merchant into of that design. time supply there be and land level these land that as typical the And us escalations it on out give Right clip just that advance costing. visibility sure bank gives kind I chain

to of an we're it what to going us gives start. advantage them build, terms In

So Nashville. Blaine, on you with hit it

But jurisdictions to where -- can in and through the and of the Gulch the the assembly there Central of three, blocks that the for already most couple of our square of is we in that include city three development, quickly. density, those which Church. we out of nuances and of some surrounding BBDs envision the We starting are Gulf, positions Nashville in in approvals inside be three land We around local maximum so are three we way has of working approval, house a move of really very very working fortunate in significant million really Broadway kind basically having with significant all our site a bank on two feet that X received upwards mixed-use as the an Asurion, office. would one it's city cleared plan

are retail which kind other residential as probably vetting so uses. be and that, and And of the hotel uses of high-end part would

you be not lands XXX% And so inventory, for So we hopefully, got we only stable are have the raw but towards by on that We've is up to advancing. So point of then building. the look pipeline. activity That down materials to our leasing II, balance Brentwood, year, for that will Springs the the we of have end building where right? Ted's moving committed. Virginia mentioned

XXX outlining $X.X and And so full ownership Franklin which for it, see and entitlements million Brentwood full residential working units, a we opportunity. of control stars a Nashville the that tremendous now County. office, the of and we're XXX have it's previously, obviously, are currently at The We of there, Williamson hotels. Bayer for and mentioned as with that that for city is Ovation multi-building. acres Then I multiple

out third-party of forward part So we are and year process opportunities. this other of gate to end coming at to the the developers for vetting the reimagination of we look of that, those of be

guys. helpful. Very Thanks,

Scott. Montgomery Janney with go Stevenson ahead. Rob from is Please question next Our

mean Ted in the later bank. year-over-year back you been you costs, that Brian, land the been? year, material of costs? labor? developments? know But rental basis talk guys. about if construction to a is labor can expected in on or of the doing have of need construction the I half and that morning, new starting how you And just substantial I the something year in and or you that materials start and has Will this if something you're the Good that yield what that on have terms rate terms

bit last Hey, of there answer. threw little a I Rob. that Great sort probably that out in question.

couple I development off, not think compromising holding are yet. don't on having based that of First we're to we yields steady a do things. They're

X% tell supply see that's We're between about demand of kind that me continuing seeing throughout And what the really Let and kind we're for is escalation delta primarily we of of you X.X% This next seeing. and year. a the to markets. month-over-month.

forward. a more secure couple we're who things of That just on getting I out the to construction go work, with so and in ahead typically then ability project's have build. competing have the developers that we XX% their and cost. site asphalt, ahead month-to-month that of can the merchant will price by others glass, within in mitigate XXX% hit some we since to may Typically, escalation way then X.X% live ground cases, get and balance X% get want buying And on not early. developing folks a are sheet on the without with some contractor construction the general to major that to about represents go lending, of GC to GMP to steel, this Again, Now trades subs on. financing merchant the the to

that months a it's to having to year us helping others, lock So control six and cases, in of we kind can maybe some of that that early, if erosion many accept that because not in yield growing, rates the are in and that are growing. that particularly quality. ones buildings we're seeing developing, market. the seeing in the are Rental the we're rates And for to we're flight

it. so addressing basically how daily. real monitor we we're deal, And But it's that's and a

summer there's apartments availability hearing markets employers your cost of and that And a of demand that big lack your terms and the in this of graduating how is number in issue not and in office the that is are XXXX utilization of Are tenants office We've issue of Okay. general an guys in in been incremental then housing. classes your markets? Or seeing markets? find yet that issues having getting issue? that you their experiencing college for they because an can't your you

I Yeah. been on fair don't markets. an our going multifamily a issue think of that's amount with construction Certainly, us. in there's

are Rents heard know the of I So increased. strong product. extremely is multifamily definitely that's I've demand first it. for

Rents the XX% I be of think and XX%, of last our risen in half. the here. affordability versus more markets, some issue year, might year in availability have

So markets. availability our I don't issue think it's an in

Rob, on to to clip Ted's answer.

housing something that trying seeing years -- country, short pandemic say, the been typical to couple the over shortage. delivery wasn't XX about X get we've I as mean, we're to on we're and seeing the our coming trying the hit from or last last, housing of a You've million of actual it ahead for units years.

recently in base have office have that, and we that building story. housing you so tower. as we the construction that residential of some Tampa sold as part multifamily mentioned, center residential Ted so to available noticed doing office of pad We're high-rise can for our nearby of next mitigation may And the a site

you lived there. here of work So and kind can

And of at We've is the in book through so major an gone we're portfolio. to Obviously, entire assemblage in that major rezoning land office around buildings collection multifamily. a Nashville, we're that. of across looking enrichment have our doing

office's the pretty stay if step full. that that bullish we're so And to play we all can on within ability one of live, work, create office,

part using to it Brendan. And then term XX Is XXX-XXX disposition are loan? proceeds? to next Is get something your when How -- for going of be Okay. line me, anticipating the How expected what's the days proceeds that down or the last and pay maybe you one use else? so? that you in the that of

Yeah.

there's a going are little a basics bit timing and -- to mismatch. be of the So

coming bond with about respect two related. due FFO mismatch have overall perspective, think term you October. matures what or earnings, kind off to of have our $XXX we but we of from an January million have the quarter loan, in timing a pay impact may and if we that But and the million it I solely in So can 'XX we debt mentioned that $XXX then

debt million $XXX that we million be is XXXX. that of that's it, take, do What million then $XXX classify expect and call of maybe that proceeds really the refinance by would debt proceeds million, loan maturities and and of and capital. disposition So let's of upsized term we $XXX to $XXX as the probably use

January used XXXX the those bond that we pay take to pay in upsized we'll take from the October. and off term those So proceeds remainder off don't the loan

not? all Okay. that is And guidance of point in at this included or the

It is, yes.

perfect. guys. time. the Thanks, Okay, Appreciate

go Dave from Baird. is ahead. question next with Rogers Our Please

Hey, economics and/or function of rent for economics. the in of It new that that an economics? indictment of quarter. Or I geographical the guys. Nick wanted first It's on is mix? more as though more seemed Dave. more touch leasing slipped on a to current Was

Well, leasing, That it's was sure. XX leases. really new. think know, did of highest Yeah, percent That's as new you our XXX,XXX XX% leasing feet over was square total and new of of years. the I we

us Our finance team told this morning.

just given mix, relative total strictly welcome -- it's able portfolio thrilled leasing new it's quarter to be the I mean, this to to So new volume alone. we're leasing. to our a customers XX

and So we're in portfolio. new just function leasing activity the the it's bringing of a the

Great. a bit. little And utilization then touching on

any changes you utilization. that there has prior XX% a larger more you're bit mentioned mentioned were some case? calls, the more seeing Or In smaller maybe suburban activity. You that been there? little assets tenants still tenants and of active than Is the

bigger small public as remained of their only are again, -- time. that's been is companies bringing that come but many But the that's shifts back, companies to to are than utilization. big change back companies a I that what over No, is. announced think exactly you've again, the that come urban, The now it's the office. The helping more it workers back the have papers, they're large seen to the suburban, starting them guys in

calls, of of I One double there America really back has to to but I Bank some during people to future, Nick, we've part Tower. monthly major coffee that best-in-class on people may pandemic, were cafe hard for got we trends of these officially. I'd put anecdotes. the worked sure when in out and to it's the amenity, built some their basically as project And we seen bank add The know last make operator Charlotte, months. the our everyone like to and in brought large that. on kind the back, in Brian. all One thing an is in and And sales there general, add wants Charlotte in three of came caffeinated, they properly want and together

time, seeing back. utility real come that we're in So

is us company seeing the highest. Now it's kind through flexibility going Mondays granting our be We're to utilization to if Thursday, Tuesday and the you Fridays for still teammates. board across of ask more their

on seeing lastly, vacancies particular? Buckhead your maybe and/or That's activity additional in commentary some then you're the there great. And maybe in

again. Brian, Nick. Sure,

good We're it's busy. Buckhead. seeing So We're Buckhead kind was seeing pipeline, well. as folks And renewals. The very grow. are added which the for or seeing we some in thing has is inbounds little inventory a been of

now right development a XXXX Peachtree. doing are are they We

quality that the ground very seeing you're leasing flight that's out in it's even well, barely the coming forget win, ground. up and So to of

sizes. a out to prospects firm our Buckhead. assets, of there's to land We all Buckhead, able we of came downtown of one in and were So law coming

life, The and we're bullish. of so unmatched. well blend shops of Maybe would pretty the be quality closest. Midtown is access restaurants regional And

So Ted, we're pretty any there. still busy thoughts?

No, I right. think that's

we're signed another largely Peachtree and firms from project mean, see to off to demand demand during again, the I quality. continue firms that services I professional think are demand as, We But law square signed XXXX well. just seeing services good we and XX,XXX to financial Brian's we as kicked flight the on companies feet, quarter. and point, the

we're Buckhead of fan that's big and a well. So doing still

Thanks, guys.

is question America. Jamie of next with from Feldman Bank Our

in filling in Could This guys. environment? would have rising appetite Hey, the markets? the buyer investor about for [indiscernible] with Jamie. how rate talk it assets demand changed characterize interest your you or for rates And and you cap is

Sure.

up. rates the few has But been a high-quality generally picking couple have held average seeing, assets for months. in core that couple of months. you're market last we've weighted started obviously, what We've think lease up with credit, pricing great seen last in I the of the term long just

given see be to tenant single-tenant gotten me single the of surprise wouldn't low for market held it the rates have how up. generally, affected could So have assets some cap just deals. core But

hearing interest up. rate interest some early exact that on leverage we're deals rising environment. attract said some buyers still in have value-add for the reason pressure rates going We But the with of you are

how see we'll are deals, unlevered to buyers So investor our it in the is trying our also plays that to be the pool in get out. wants core The markets deep levered the is but nice are markets. that both incredibly chasing thing

of fundamentals good. are is the chasing abundance and an capital So

more do vacancy the some ago. think a I buyers the of So able easily than underwrite are aspects year value-add they to were or

see lot we'll balances. investor how of So But that net-net, a appetite tenor for assets still.

those out rising Okay. that recession front? slow Or stand general, then have any tenant kind do Great. And rates along markets lines, in on concerns leasing or decision-making? of

mean, robust. No, is activity the I not at all.

We XX%. this from on saw from on some got to as leases, XXXX, signed XX% I of the I X XX%, Midtown but II to think fill in those XX% the quarter. gen. projects both progress to our think really good went mentioned made buildings Virginia you second numbers We Tampa prospects well. development up. our XX%, we went We've Springs

we're markets. our across seeing demand robust really So

their better. decisions they've and for I the from might on rates activity. us can it's sideline be from argue we're now are sensing that where on has and part been and talent of realize together. retaining competitive very two hands office, that But their number making or they've that specific workplace that think -- question the told sitting they're independent They're the we kicking better returning on of I decision-making for the their years to or recruiting, advantage your to a customers

seeing so going going they're escalations And that to end, fit-ups up. They're on up. rates also seeing potential

want we up and space urgency it rates for make up. costs now do decisions who believe be I are some to to they in going going so because office seeing And see some

That’s great. for me. guys. Thank you, Okay, all

Our next ahead. from Korchman Please with is Manny question Citi. go

follow actually just up wanted last topic. I to on Hey. the

come the -- that built because of and how takes timeline quickly? the looking these Highwoods Or to are look hasn't how going into can about ground space that they to getting still yet, so and that at even the about how decision-making process, of a thinking we'll thinking thinking you to Are they terms sort a it's move tomorrow about we're out spaces? today In some Or are they of they they it the of it get versus of years couple are tenant into building space? just wait long existing of now get we in? want at to

Sure.

know Friday work to look do up our I think that the show yes. also for spec program. one want up yes we've talked play. just and week and suite ramped wait really want -- We've plug We've later. answer about and willing thing is who got on willing They to some got we've it aren't to we've a customers some wait. and is to that I done are and at

well. demand space good as there's So that for

depends making examples seeing line. we're time on each process decision of So it of company's I think it sort just individual But again, both. own their and

Ted, utilization seeing And then, you and differences between new leases. are in any releases alter

XX% and a for space somebody's Or conclusion? deals only new time, of XX%? kind So the had do up a they number, wrong also showing longer a have a of is are that spaces

Yeah.

are early think -- couple is the last the of what the in out months bigger just coming figure to companies I company conclusion back. that too it's

So I figure pre-pandemic, they they've and But maybe the wait calls, pretty companies been to we're close back don't think work generally other larger to smaller were again, a they're we've got on enough companies, data on mentioned and less. what what to what back going like. we've as look return see they still to and little the bit out it's just as points trying

much. so Thanks Great.

you. Thank

Kamdem Our Stanley. next Ronald go Morgan is question Please from with ahead.

Hey.

Just couple ones. of a quick

back, raised the so see sort lot towards and the with power to where of a pricing shift of think a -- landlord to started take starting the get you balance what occupancy the forth? historically the here. Just start have do in just of occupancy, you you guidance level the you Can step just portfolio,

Sure.

good question. I think a it's

I down I vacancy XX% about market the bit think would historically, the gets you, a when leverage tell to to landlords. little

elevated we're that today. above we're So

'XX in back it and 'XX. below are We

most market in a is But there's without markets submarket of market typically today. still, about I it's then we tenant also standpoint. think thought well. and and tipping historically, our a as doubt, XX% leverage it's a building the I've point from Certainly, So by do nuances

too. many it's just quality Maybe silly, as rate-driven in kind of a clip It ways, doesn't opposed -- driven sound on. this to to and might less little

think that seeing also I we're that. So

some dig expirations, lease the And obviously, 'XX. in ones specific of in Great. large just to no on

the maybe for tenants just still that Just space? of there? be think are was And space, some I tenants I subletting, there past user, a some to tenant to on in activity have it those think or opportunities said will there the new still space you take is

Sure. into Good specific good asset. question that visibility and

activity. them do we could So is obviously. But in have directly and some good tenancy we in with have the other and with deal there we've users, stayed to there option sub touch,

the a performing process the central process sense, have in Pickleball. buildings And We for have venue bring a even a park. started collection of we've that started music bring in to to retail of real is, it's kind and three reimagination around of what

And really we're so we started that to there. that in with kind come of getting traction wants repositioning, and the good food

that, with with that so and activity user. to relet entire good we And a some have interest single

So hopefully about talk in but the more that feeling to good. future, we're pretty

of you versus Joe, on bumps? last I was a obviously. And more any think Got on newer maybe my X.X% rent there change lease historically? talked lease sort structure it the vintages you. great is the Is Anything, still you then question structure. about Thank leasing term, on it. quarter of sort But just got

Ron. the average. Brendan. I our mean, say, were think It's higher I would quarter in I a little bumps bit Hey, than

But annual an range. some if we be as over forward to expectation those we I that get where going will probably several we about next better this they quarters. continue I upward the be. think we to there's And our in escalators. that's suppose move around will X.X% pressure we is probably X.X% But forward, average were say, did than I continue X.X% that on So a quarter. I remain environment, above think probably elevated bit little would it is think inflationary

you. questions. Thank Great. my That’s all

Truist next go Our Michael Instructions] with Securities. from question Please [Operator is Lewis ahead.

Great. Thank you.

any seems Is of I'll wanted I've those what like one there than more will had I'm recent they investing So be to going potentially and past, malls to but the you just the you and investors ask long then is try A- sense assets. And think one, just okay. thought question, then office pretty succinct. faced a B+ trophy like to be And current to in to that? to soon going if ones on malls then investor to I X some to urgency sell your the situation where better Or a pivot office be there and or lower do in and know own be quality office, Because it's into feel that I'm there's best that think a that needs assets opportunities don't and do maybe your assets? here capital focus you overstating think in I development some situation? made to like overstating a it it. the the you balance if said, does, and you're that think it your like development the flexibility capability, necessary if but guys thing I you with does, that's or positioned and Brendan what could about sheet said do maybe I'm that maybe,

measure thing. this of to we be think and want to customers office. is talking what want lot They together. to a back And I cultural It's we're our But to talking CEOs. unpack team us. we're our a tag come the to Mike, three look, to may CEOs customers, there Yeah, between

term. the not think just ability buildings It's newest, is in over landlords it's the there's to we a shiniest to willingness and to And that locations office the invest brightest, assets so the the flight thrive. do the We quality have quality quality quality, the got long their but going think with buildings. in

in this quarter back XXX you the leases XXX or new older the or we well new leases transportation decision high signed when incredibly down buildings makers leases XX those signed just XXXX and submarkets. corridors specifically our break we and roughly go you home the are located leases. near markets the even in XXX to near demographics the lot are that best If if we are done of signed and A that

in is locations well best to about our So in we're of think development buildings then submarkets. big as going believers portfolio. in having develop to you drive And same -- We're -- the the high-quality from going those obviously, assets.

last to at sold, $X three the in over it's We've I think billion selling. so. believers we time, years We think, are recycles. big the office. in or the And we're same So continue. We going been active

center result worthy. last trends whatever of historically, are going the that lot be assets as be Michael. in them can we that if out COVID customers suburban be result the center of couple we But less Tampa good to you as there. less a A that of can assets office technology a We're home. to that of are be home, they've done been some So can type shifted think or side. COVID, for efficiently back to that more us, in this resilient couple going center actually work largely saw we disposition a is call commute year examples call recognizing move of done of call those A to performers

to going going resilient were So less we be thought forward. they

called we portfolio. those our from So

So of we've If things. going types move we been to going don't location stand We're is withstand up doing think time. the those of those the test to assets out.

everything. that's I I So -- if don't know on hit

here kind malls with Hi, I question. in Michael, I on. the and Brian retail the general. clip love analog to love of potential

gotten And stronger, even that strip of of gotten retail retail. but from the and this, and your if kind experience, point, malls, in I through quotes fortress so to level a slice also -- you And have busier right? malls that's stronger standpoint all kind of dice across and that's -- potentially as the experience even even is the what's put of experience gotten

term the So about war the together, do talent for talent compelling and return workplace commute which to assets building, something isn't competitive customers that win and we to and use, going the that a to that worthy advantage back to Ted I'm we to if our the what to providing that. got come call is

it's hard first word think worthy, some the commute. commute is just And of you that first so when about place

something those the assets of easier close a photo so just located to it easier and where the asked general be suburban in the previous the shops. of is some commute to that's as particular, worthy, And commute about lives statement footprint. America about And most right? make entire So that our is happen to

number making It’s at commute And so as a uses. worthy. look of we these

of the them, already one Brentwood, collection gaining there we're a lift we large reimagined called off and Maryland of and we're office repositioning a have now. rent and the renderings. right Nashville where Farms We've in a that be like place of going at buildings are just look you interesting, and number to BBDs it's we them, buildings repositioning So

to touches what Taj our we're everyone But in out we've and build the winning. the assets words our these People Well, focusing work need worthy Now people, we've even convenient feel the our doesn't because going that's And super be the surpass occupants underwriting. places commute shown that experience we're trophy throw are like original around trophy. that are we got to around just are like Mahal. in a to building. finding going all

just I was the we we feel value like because we answer three out as over might Michael, outsized that question, about selling as level level So we What some assets it talk create excellent some of from would say, or regularly perspective financial think -- long-term, something It used team. I the to question. have playbook in is past be of point whether that NOI your all an or a just a deterioration the of deterioration risk. risk, well

the during Ted as X the that past we've And most COVID. since $X sold of billion so over done years, of mentioned, onset COVID

that place I have the grow and strengthen our overtime. think redeploy capital still and we be and playbook assets so our cash company flows to to And monetize in able

feel And I maybe the well, Day a Nashville -- throughout pandemic. place, up signed think Brian very will going Investor we know as and I blocks confident show we're think of mention for, just assets our performed in building that. that I a as those So still for in have I that about have as mentioned, to quick these some plug you're

where we we will So I outsized term-versus ones the have about of see increase long feel the how we risks segregated and we think the have think be those to that the push assets. good monetization assets winners those and

to the question. thoughtful think an for easy Thanks not what I Thanks. answers, Great.

this And no questions we have at time. further

remarks. closing or presentation your with continue may You

to interest for And has call the thanks, Thank Highwoods. questions, follow-up any If out. in for on today. thank anybody free Well, you you. everybody, feel your being reach

today. day, that disconnect you the all does for lines. everyone. great kindly and please your call your conference Have thank for ask a We And that conclude you participation