Highwoods Properties (HIW) 7 Feb 242023 Q4 Earnings call transcript

Hello, everyone, and welcome to the Highwoods Properties Fourth Quarter 2023 Earnings Call. My name is Bruno, and I'll be operating your call today. [Operator Instructions]. I will now hand over to your host, Hannah True. Please go ahead.

Thank you, operator, and good morning, everyone.

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

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

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

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

results to update forward-looking know, materially the events differ and statements, you from any duty does forward-looking actual not a company and can statements. undertake these As

to that, call I'll Ted. over the turn With

good and Hannah, morning, Thanks, everyone.

for solid next Before me several I the our first about years. for start talk operating financial XXXX, our priorities by let outlining strategic results and

continue First, portfolio. of our the quality will to improve we

on employees, focused laser return positioned customers' is and portfolio resource, attract, a business workplaces. cycles, are We well resilient throughout to valuable most our to retain that their their all owning

that acquiring longer by this well-located buildings developing exists meet assets do repositioning We risk-adjusted our best-in-class high-quality no redeveloping upside attractive selling and and properties criteria. returns, with properties substantial where

driving role the early we within backfilling occupancy. Second, of and and solidifying possible, in means future as pockets proactively portfolio. on rent our customers prudently are This renewing as focused vacancy

markets long-term for we Simply demographics long-term districts our shareholders. of to are create on Sunbelt. value continue We bullish business to in best the best be put, and the the

shareholder this the of by investment Third, markets. value high-growth BBDs opportunities groundwork cycle acquiring create to for believe future we present assets high-quality the us are in with will We opportunities. laying

and patient be ready. we be will We will

And best-in-class a balance sheet. fourth, we will continue to maintain

progress multiple to XXXX. and us. cycle in of throughout days, priorities sources the differentiator all the having past meaningful access demonstrated ample is XX over strategic an made of these As for liquidity important capital We during

over Park $XXX progress made sold Glenlake Granite pipeline on of Peachtree, Six properties, land and We including with and of the our XXXX Three. solid million completion development noncore

developments already growth in in future rates significant generating We highwoodtizing rental provide Further, leasing they on and buildings will we these higher stabilize. expect Raleigh, activity. as meaningful projects we're where years and existing Nashville increased completed

rent the and on Nashville We also will expirations, and traction made with detail our larger more focused had we're our future pleased in we've shortly, roll. progress near-term remain solidifying Tampa. Atlanta, Brian We provide and

the known late move-outs has the activity and dip significant already XXXX. since into is Given in of some we've to the XXXX for that portfolio, discussed But we're encouraged likely XXXX. signings translated the occupancy throughout lease early start which by time, seen we've

playbook we a It's early, in of transaction setting of we through the the exploratory the investments deployed with lenders and while we is in our the don't similar attractive to stage This activity lot future term, expect the and markets. properties following discussions for owners are GFC. years in near

$XXX million spread. debt sheet balance until the consolidated term our to over size capital We by change a with ago, May we now weeks just no strengthened nearly the and $XXX further liquidity of no have our million XXXX. extended during We million Plus XXXX. of current of debt few $XXX or maturities XXXX facility borrowing raising the into credit

product By this is half current a developments expected and our for the to BBDs outlook confident next of minimal the markets new in supply projected few our new these ago, expected deliver markets under in X the of next based long-term it supply since limited over next on over few the The be to be years what are to We most construction. quarters. added just years. year, pipeline was with time

picture supply tightening available further are as focus our buildings. in confidence that our to will This up we or adds become high-quality on blocks leasing

reputation continue a Our and sponsorship financial portfolio, and best-in-class market operator high-quality gain us positions to strong as well-located share. to

Turning to share full unusual quarter delivered $X.XX share. We our quarter, of FFO. fourth to FFO in items per higher results with $X.XX per Both out XXXX to the included net of full year that results. and the $X.XX year

the $X.XX per Excluding of these our core outlook. XXXX items, above initial our midpoint share, was FFO $X.XX

We outlook. factored given and were year, asset sales the interest neither our unanticipated during are pleased of results financial initial with into rates which these the rise in

the We net properties to Similar play million year. with be of and depend of the will close the first to XXXX, $XXX out. investment conditions dispositions market to in to of volume have million of under $XX a the how dispositions. half XXXX, expect seller sales million timing sales in do on those and in about again expect $XX We noncore contract

building don't for actively investment opportunities, have the we're any foundation XXXX we our in included While acquisitions future outlook.

share Our midpoint. NOI $X.XX $X.XX at and is per initial growth FFO positive is the cash XXXX X% projected same-property to outlook to be

on won't have XXXX NOI and amount they will NOI some the addition, meaningfully the impacted in We're contribute also we a that backfilled move-outs of larger years. significant larger activity XXXX and good of occupancy. In later while backfilling these drive known to seeing early XXXX. And move-outs known future backfills XXXX, in

be optimistic to continues about office future. the the in obviously sector, headwinds we're there While

growth prospects. current with potential First, interest we high-quality portfolio organic significant pockets operating we're where within of vacancy from have solid our seeing

will pipeline the years. few in as Second, next our $XXX stabilizes upside development it and provide meaningful delivers million

raise shape, and the ample Third, capital for of balance couple with years. liquidity excellent next no in is need sheet our to

like also interest but because our portfolio, cash I come. our engaged, of many we're to for commitment in of because headwinds their is returns wrap success and finally, positioned portfolio. has absorb And To the It we as their drive for tireless remain hard-working to to strong, up, Brian? not dedication. team generate our entire flows only highwoodtizing years markets Highwoods teammates investing talented higher our capital and to us on after success even that existing from and rates, our optimistic for thank day our effort would higher day.

feet we our term Thanks, fourth good average we're Ted, a are XXXX to XXXX, towards hit macro and vacancies. our on quarter and and performance, of off an XXX,XXX where briefly I'd start then upcoming to lease X.X for with In like of years. markets where making team trends backfilling our progress leasing square everyone. signed morning, drill down our strong QX

of Raleigh and occupancies Charlotte Atlanta, respectively. and Nashville with the at Orlando the and highest XX.X% had volume. led the quarter's X/X way XX.X%,

we lease XXX,XXX Dallas. our JV at addition, development square a In signed Uptown foot in first-generation XXSprings,

the basis of the downward portfolio's by we're over points. While occupancy many leasing of reflect by our current outperformance in comparison encouraged BBDs our XXX pressure market, to metrics our

quarter's commute start and environment. And rent January XXX,XXX sponsorship XXXX, us since believe experience a already expansions We're portfolio, quarter's bumps clear X.X%, at edge lifestyle square worthy of XXX,XXX quality we have today's with we of embedded average fourth provide XX,XXX leases, having growth and feet our over in new feet signed including the off to leases in to the X. a of we feet rent second-generation our gives our square square office leasing of strong the meaningful results. The customers

can work physical tide thrive. their goes to with lease via and one-on-one We where where that and us as can company's where lightest telling and see a the the onboarded collaborate workplace, the occupancy mentored, they programs be talent that the physical the activity be and Fridays are to brightest return mandates, customers on best can pandemic. the culture days office, fact our continue were and with before also raise they in problems, the value recognition just will This solve that and their

not quality. activity quality This with artificial flight most market today easily of had to flight with the is to leasing Atlanta, exported tomorrow. companies in feet or in the fourth intelligence a square Quality couch signed. the perspective, jobs, where XXX,XXX we let's to a start From quarter quality

negative Cushman of Wakefield overall feet While another trend absorption. square noted & XXX,XXX the Buckhead absorption, of of positive from broke saw market this quarter

underway the Music own of City, quarter. Georgia our of relocating Department Nashville's the of remainder Novelis' XX,XXX being feet there. and Atlanta, than buildings backfilled no of successfully square in BBDs, XXX,XXX our X-million-square-foot we within expiration. Staying square the Revenue, feet X-building, X.X office feet collection square beneficiaries has lifestyle development XXX,XXX square as upcoming beginning In at QX square in team more The has project of in for expected, will With we into signed are and highwoodtizing downsize, the and our prospects new feet team XXXX XXX,XXX the XXXX. Buckhead where portfolio X active the million feet of them

positive the X Over feet nation that quarter. for feet Nashville in markets of period, square absorption, the XXX,XXX of XXX,XXX Cushman same square post one to posted the absorption noted greater than of

Last than and quarter roughly we Brentwood supports our where commute more million year, workplaces BBDs, the all that building half that the things our attracting the experience more equal, exceptional in we where these square an and is thesis for office lifestyle [indiscernible] and signed hybridized Franklin Nashville's are customers. worthy This feet of about lifestyle a deals X being building. than tower,

space. formerly Tivity shared Springs may an substantial and the by quarter that X-story of on that square the Cool update foot we backfill You last recall building, XXX,XXX V occupied

fourth the XX,XXX quarter modified XXXX XXXX Highwoods and feet. been We the and the rental have in commitment will third Free of feet in the fourth been Under rent lease of tenant signed to has improvement square the XX,XXX per XXXX. reduced from terms square have been feet XXX,XXX has square rate foot increased. the quarter modified XXX,XXX quarter in commence the square of the remaining of square feet periods lease, eliminated.

aforementioned Springs other we our in and highwoodtizing adjacent assets, significant of With Cool the the have interest property these assets.

of the XXXX. this is square is Pinnacle Hotel and have the In hybridizing a year River, We bridge of enclosed this directly connected billion new starting Residences construction move-out later the of Bass Cumberland year. well-located anticipation multi-floor the in heart year asset prospects Bass, Nashville, pedestrian advance opened $X already to the & this expiration. next Berry several tower of & will begin NFL Downtown later Nashville, January of newly Four in in spanning Berry's our known the joining only In XXX,XXX to foot Sims door we Seasons stadium

square in A have Tampa for to a ended prospects Sunshine customer where XXXX the to backfilled percentage leasing finish floor a in in for We downsize Plaza state, the #X additional on assets at Pittsburgh the of I'd XXXX. quarter and as fourth nation we quick like Cushman our inventory. space. noted, the where foot update expect EQT noncore XXX,XXX full of

Our team Tampa been Bay busy at Tampa has Park.

collection of across our square of us throughout years, addressing record are prior In by over foot square feet markets while resilient several we we our the backfill with square are believe BBDs. Competitive million park encouraged XXX,XXX arise. assets and ongoing the and land in as opportunities in seeing of same X bring strong development aggregate enable expect on to activity we is sheet our pipelines commence. Brendan? of we balance portfolio, will highwoodtizing Westshore leasing approximately that to Our the are past capitalize level in faced we lows, many sizable they XXXX efforts, by bank at to move-outs, XX,XXX conclusion, challenges yet the feet

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

Ted were in items our netted items were As None per included the FFO in these share. updated mentioned, of $X.XX provided in that October. to outlook quarter there unusual

year, XXXX in initial items, the above $X.XX Excluding was last these fourth for share FFO our the $X.XX February. and per quarter outlook FFO provided $X.XX

upside, sales higher asset with interest of We lost from these and earlier-than-expected investment higher are the $X.XX the of results pleased combination mostly $X.XX repayment the as NOI, overcame our full preferred of year we from M&O. in rates,

of basis remaining attributable a of predevelopment reflected unusual up was accounting, million reduced the few expect Just income items; shows in sale million land statement. are the rents income straight-line items. on from while quarter JV. the were in would of as extinguishment unconsolidated it to $X.X The unusual and on cash a the shows moving you due affiliates debt G&A, million. up costs written to as a off fourth The costs details form to write-off $X gains, this $X.X in the customer

maturity our for During sheet excellent XXXX, us balance ladder, several strengthened the out further years. we puts in next pushing our by which shape

During the support raised group fourth million with bonds XX-year investors. income a we quarter, $XXX of fixed of strong broad from

in property secured X-year loan $XX consolidated where XX% Tampa, interest. a million West, a at obtained also Midtown we We JV an own

accessed In million credit months, obtained facility to We After also we capacity XX loan of debt year. consolidated our past no In total and our a $X.X secured we million almost $XXX spread. year-end, during the capital March. left $XXX liquidity, mortgage our capital. the $XXX debt borrowing raised maturities the with change market million the until bank available bond million capital of billion recast credit to having of now and over market, May $XXX XXXX we've for total, have of no than in complete market the million $XXX less We development pipeline. or over

flows, just markets affirmed sheet last balance our with strong our In XXXX, Digging a once high-growth even the with ample clearer the reason of resiliency an credit with emerges. of combined little picture again week. I'd a cash why our high-quality deeper, like BaaX rating Our time portfolio trajectory. healthy in outlook BBDs highlighting we to a spend Moody's Sunbelt had and liquidity, portfolio stable flow cash platform. demonstrating our is some large

balance First, have in were NOI Springs you XXXX space, XXXX interest These re-leased negative substantially V additional Center. been from that we in the now year, they had properties XXXX. the sizable nearly entire with and prior vacant the but Cool as during solid X know generated Century calls, of

FFO long operating not empty take or negatively flow. of available occupancy, X our been for of these cash portfolio our regardless practice lease buildings has in-service same-store Because properties to out and impacted

committed during capital Second, XXXX. the high above funded XXXX we spend TI had signed of average in volume on as leases new we

our provided capital Third, we shareholders repositioning with and dividend coverage. We Even existing flows that invested in outlook. our positive we the year. X factors, the heavily highwoodtize properties generated still in to renovation cash should of give during believe our these confidence healthy resiliency cash long-term flows

to outlook $X.XX our mentioned, share. XXXX Ted per FFO $X.XX for As is

year-end are note overall have growth is should and up years. as rather at occupancy vacancies full flat Center than also a now done NOI year the known in average projected we the Center You'll do vacancies Tampa headwinds of date that year. Cool average cash and includes our insight as our into customers take Pittsburgh occupancy prior X%. detailed second the the full better in Same-property to half to year in later year. this single for think providing we outlook for begin or This Atlanta as projection Park Bay provide be the not We Plaza early until Springs backfill the Century to in XXXX well as Alliance of we've pending EQT the occupancy Two outlook

share in results quarter Nashville. the While related Springs is XXXX primarily capital in financing backfill of treatment costs at accounting decline fourth XXXX, down is the raising customer to the modification activities projected FFO to to and higher V core with the associated to be in Cool of the and our per XXXX lease compared our attributable

of impact dilutive $X.XX between roughly combined evenly a approximately split the X. have items These per share

in negative Springs expect will NOI generate We XXXX. Cool V

modified discussed interest in be seeing and V of solid we've years. we're and based the in the commenced case This signed, growth will leases. we lease Springs prospects, not the also from believe on is based future Cool Tampa significant a the Atlanta However, yet on but driver

interest combined Peachtree, our X capitalizing to Glenlake have delivered as year. these projected potential to addition, we Granite basis, On roughly properties in FFO stop this from late Three. XXXX are XXXX future meaningful we In development later and Six XXXX; be pipeline. will We growth properties Park neutral a

in growth activity cash we FFO provide for NOI, flow properties, to which years. future However, and prospect these healthy have should

in future cycle-tested is be, team wants portfolio creation. Operator, questions. our balance sheet ready our for to now are the shape, our about In and excellent optimistic located in is is talent and BBDs where high-quality summary, Sunbelt we value

question first Heck [Operator Instructions] We from Wells from do Fargo. our Blaine comes have registered

Okay. Great.

like up be So some great. picked context has it sounds leasing but would

between and are pipeline what what size activity you How whether perspective? levels working compares that you So year? that or I size overall from has leasing the and talk mix all industry pipeline a changed tenant renewal guess, at Maybe can guys the right is now? last saw new on about composition the of leases you with or the

those I'll just start, leases. are obviously, pleased fourth of with XX we add XXX,XXX feet. Ted. our the it. and Brian it's Look, deals, of shy were leasing in Sure, our par maybe can XXX did sort to quarter was We average. of right on which historical new with

companies primarily up opened new-to-market had that X,XXX X,XXX X also small were feet. or regional square We customers, offices,

no So inbound relocations. big

same seeing. we've smaller we're is and trends it's of been couple widening the that's for trend and evenly we're markets. the of It's our been companies, last But a the pretty years gap look, but a in few But there's seen activity office among really the divided the haves small. between seeing And is couple trends have-nots owners.

have companies for I've brokers some the a from calls, I think even think doing hearing job of qualifier brokers, that capital really some binary And talked good buildings this We're as tour debt for prior buildings. certainly near-term sort won't of a office stack maturities, cycle on and that buildings. they're the understanding about I

don't coming and highly talking of just we're the We've think to plays got of that brokers. debt single asset our strength, really loans. out I So maturities have are up, amount secured to a unencumbered this portfolio. given lot We a

prepared a situation. remarks, we're last able And I quarter. -- you the start And than as in we're taking this that, think our to know, our as capturing advantage stated been share in last we've So we're more certainly, think great quarters. fair trying always, capture we're but -- the we of I of couple to off do to

it's last -- are year seeing XXs lot smaller deals, been while So the to the another XXns, or to a deals of starting larger we come we're seeing so, are back, more those. trend, look,

another is and companies larger trend that smaller the -- growing probably the are ones ones the A trend are are are shrinking. the companies that

starting more They pocket Companies of we're earlier. are We do to to see mentioned to out longer also terms. TIs. expansions, think, had, don't I XX So that. for come of as I willing want

So quality we the final to I about additional flight always certainly and real. term the talk TI. that's get amenities trend, It's ownership. they'll to quality. guess buildings, quality quality Certainly, the give

question. I So your answered hope that

appreciate that. there, Yes. I That's Ted. very helpful color

second at Are So some my pursuing would say activity operating of guys opportunities point? side? for question. on your focused this you portfolio, sure Or lease-up gets investment making the you you actively talk done? gears any appetite development for about just in switching just the backfill the more and leasing Can the you're on currently acquisition

Yes. know, when the out we get certainly answer I at as We inbound -- we Look, we from -- look well. always we're mean there. you phone as everything that's calls folks

We stay lenders. also to close

the watching So our trying lot we we data -- second. we're that for there's on actively wish just nothing have But one list as our market, so and talk on -- I'll see we're -- not trades, we're to the said, a radar, points about where right a now. are in monitoring

say on our discussions, at doubt. same the but laser nothing filling focused there's backfills. I'd we're look, imminent But without a early time,

this leaking starting we've over in up got into As several all year. we late quarter know, next year, fourth the first the coming quarter

on early. we're we on leasing like So seeing activity Again, the highly these inbound focused teams are backfills that. our

both. not we're of sort of sort laser-focused on we're just doing So one,

trade others but XXXX. seller it's a it adjust closed, higher did just, know, but asset. was it X in here a traded talk couple for about better-than-market there's high-quality happened look Raleigh, of than coming, better-than-market cap seller building don't in a financing. It there will that the actually is have comps, a I high-quality It X.X% at and a some think for that's are basically one we if -- financing, did the rate or as I we And month ago, a what seller price you sold

shy is understanding from up just our bids. ticked a XXX that. like of to signed, CAs X%, it Maybe double-digit there's something But

And we're And that for few type good again, so asset. watching we're a others. a of pretty market

per cap on about your foot opportunity. up pricing are that. guess, you I environment other threshold rate Great. I given are And excited words, metrics just to fundamentals where guys in and an In square targeted is threshold? where IRR interest office guess, threshold rate or going what in would this even or today, follow -- price

a is us of in Yes. bar Look, leased I discount partially we Again, lot used bought this out -- with one assets of mentioned it's replacement of coming obviously, lot upside. cost the environment. a for playbook GFC, we

So ourselves. the and would risk leasing We love cap we rates and cap stabilized up right then we irrelevant look us. at to the a if it at for pretty can price lease take get rate, asset some

some are. are years. to at next And be we couple to I But so acquisitions obviously, of we'll those we're and pencil attractive what think the pretty we're looking to to going think at have guess -- yields see. I development, acquisitions for I a going able than think, get better

So to again, risk-adjusted we'll what just have return the see is.

Citi. comes question from Michael Griffin from next Our

sticking just Any are they that would about Are on Maybe make Are making elongated tenants, front. Great. to decisions leasing the quicker you in be decisions. still time noticing space? around helpful? color the leasing back

might pushed it's I a close quarter, Yes, on still sometimes slow it's one thought It's mean elongated. quarters. deals the getting we unfortunately, Michael, decision-making. quarter, been -- X

I still the to policies They're time. some companies. the So They return work are now users understand larger the been taking decisions. think can. starting seeing we what do the decision-making of are that have of kicking is that make to

delaying So -- longer while to of take for those they whatever. instead year, going years, X.X are a make to going done, them the decisions are get be decisions to

time. to So it's taking deals more time, going over done still but more are get

is This add. might Brian. I Michael,

Ted past. have farther footnote gotten have in maybe guilty from they and exploration the of of little lot customers might or that, engaged, is market this. to we're tenants one A than in said Just what out the

longer. So to they actually have board little a take free bit of

that submarkets, due, in that's portfolio decisions. there's role or and look kind time, the same when portfolio national of forces our a and you coming the the at the While natural at

so see that. starting we're And to

of that start during now lines are decisions. the But kind think some there some we're and roll, maturities cross happened were I -- you that to pandemic. to starting can X make and year, see X competing assets get folks debt definitely the to kick make year, of have as against you

here Michael. This helpful. with Joseph Nick is That's

potential on for the you Can capital asset where later update into just around kind this sales. the that the expirations of timing then Pittsburgh stand, provide an the Just how on given XXXX and plan some lease those of plays it, year?

and on Yes, It we it. to Michael We (sic) of [ markets. that our out a Nick ] put as that back And line third us 'XX just those as years was about we're know, exit XXXX it's out a Ted. you Memphis we Look, quarter intention announced on X took all to going the get of didn't to in Pittsburgh, announced Pittsburgh. ultimately reminder, in Greensboro. get time

just then So a layer exit not environment office it's our big a office an transactions. intention time. very is given Pittsburgh, difficult still -- and market on for big It's capital to very -- just but office opportune

the focused like normally So the running leasing are we assets just vacancies, we up vacancies and upcoming would. the on

Brendan. is this Nick, And

years. anything if think uses didn't and got during pipeline. some But for Just need spend any in we sell that $XXX over I existing the sources from of for there have ample we development the a isn't I liquidity. those we money We'll proceeds. several terms mean standpoint, liquidity the of the year, million even of on year, don't capital plan we've anything really

from comes Rob Stevenson next from Our Janney. question

competitive. touring turning brokers about zombie comments there? buildings with issues, your else into there given that's longer fund just assets not are on can't Is going no that debt and TIs Ted, these something

got pay loan, are got down, think exactly those their with yes, who a they're right -- up I not a you secured wants -- So coming a -- also it's a has anybody And willing having lender who's right. the anybody borrower the of it's got pay down. discussions loan some lender be to Look, to may right? -- with now, a do

room, between lenders tension I the think, borrowers. just -- the a So got of those lot you've in and

if to yes, now, right lender the with going do out So who's fund they the worked going TIs? it extension borrower. to an haven't the Is

of conversations I are going that they lot are maturities. difficult think a with loans So that have on near-term are

markets? guys the back assets? taking the and road they're quality have we're And assets it on seeing your the that down you just in lenders Or sort the the core better just as kicking lower-tier is good quality assets can seen of headlines

Yes.

typically cycles, I generally lower it. prior that's back Lower the is what think quality goes -- quality first.

starting there see been assets lenders say, to months. we're fact, -- gone So have, to I'd to past XX have the a but handful over that XX it, high-quality of back a in maybe

there's more. going I think to some be

'XX So it's But did just started 'XX. we 'XX, to not GFC, and out or -- assets you XXXX just the coming of GFC got be high-quality patient. buy-in until

years it the takes So we want. a few just to through cycle quality of assets the

But patient. -- on we to just call what radar to we'll again, our be it's our on list. going our wish several got we've -- So have

out there at this remaining leasing just market are and reasonable there -- overpaying in the then cost given ask seeing up? rational today? a of And Okay. conditions et are your different landlords question fairly markets to way. are Are Or lease, occupancy How people driving length and point you cetera? for

it's to what market. I similar tenant's Look, market any It economic this during think the Yes. downturn, office experience environment, becomes is right? a

there's you what the what So knowing building landlord, landlords is very -- is situation increasing. getting with intention are Vacancy each is each not aggressive. got and

are You got sublease increased Capital space. increasing. costs

years. environment going compete for it's -- we're So XX competitive leases, as -- look, I saw irrational the we market just We're but an to we some or highly that see all well. it's there's but would and XX on, argue -- it's going deals a every there's a tenant's

on XX%, change. mentioned $XX in then, And million your Okay. million Brendan, improvements like tenant to just $XX like you up year-over-year, up that, that comments, follow almost and

you Given What year are get are these you 'XX. remain the up? levels you until or there? it in Is to X the budgeting guys amount slated guys the and 'XX in occupancy that next at to of over leasing, rollover do likely elevated

to likely kind outlook. good Yes, question. the probably migrate baked That's kind XXXX Rob, least. what that's of at We have of into during down a it's more we think

a of lot of dollars in of a 'XX leasing was lot the So an those new volume amount. the I expect leasing above-average got was 'XX, that all 'XX was particularly it and in done volume, spent

like to is XX% likely think more normalized I a year. look

prior are come So down probably of that those and spend. that like before in see will years prior XXXX you our we'll terms look numbers expectations more saw to

in of -- reduction be expectation. plan. to million current that our might business million the it's $XX be kind would So again, the $XX that on But kind based of range is

nice of leasing be think spend the would volume think remains that we'd case, I the capital. with here, result. I If if year the for it way high, the we of result happy lot has and that it be month first a that's very a

But we'll and look more plan our -- much that expectation like it's to kind did now is XXXX, in much going see think to the look it business what's more spend I how but going to prior is goes. of

from next Nick Our comes question Baird. from Thillman

earlier. dynamics some the lease or on Maybe guys term of comments are -- starting you kind you on Ted from with Brian commented

that? increased the tenants the driving in Is to X of or last like really on based what's I like guess kind Some West duration quarter-over-quarter your mentioned shorter-term had peers the size just of Coast of doesn't your of the your lease markets markets that for quarters. that that X deals, be to are case your seem tenants? for type seeking but tenants guys'

Brian. it's Nick,

the probably opting a it's who conviction the are the just workplace priority. think of make to folks I

in the the and return markets. work has the kicked folks team of here shorter-term and previously. is And the to done office think can return have deals I our So got

anything larger it's that. where we're that's that's conviction know it's I other a out, little that than I seeing. popped some we're but stat weird what don't getting if don't So think and size.

up following maybe And Brian. on that,

Orlando on Just and specific.

call commentary, rate in didn't it change You over out your but there was XX%.

anything the out whether in you're doing to that? tenant So specific like be market. type seeing, it call type What deals that of you're or

heading so Orlando right, and macro trends Well, what's I to glacial in interesting Florida. many think are Orlando, about there's Florida Central that

zero as development so that's there's development is new There underway. And been zero competitive. new added

this through in been invest able so have them well-positioned period. of And We've we to kind assets.

kind difficult the Zombie talk we funding commissions, we or some TI where and upgrade questions of to earlier only call about the that kind highwoodtizing fund So is what also repositionings buildings, not experience. did about that of of to

that think [ ]. has beneficiary we've workplace spec of Orlando terms the And that. of the We've the in of our pandemic I our portfolio right So done been mix suites. into kind through leaned

So such Orlando partners her across up of the there. we're has of and kind great the caught that's markets, why results seeing rest to

me. And last for maybe helpful. then That's one

kind $XX deal out difference On to like and the between $XX dispositions, just of more And property Nashville transaction? similar million regulated are in in can sales? we land one to to million maybe these of then -- we break the you going XQ, bite-sized assume sales the did

Sure.

between multi-customer sort just $XXX separate that closed what So and million buildings XXXX. in let of totaling $XX We included roughly million me single million land. summarize as buildings land mix dispositions There did of X $XX then a for parcels, land then X and buildings. dispos and we customer in the and both was of buildings,

We've single long-term low sold rates lease low throughout of customer The sort the the Xs a really cap Xs high range for for a multi-customer to them year. WALT. with

So X.X-year lease was It building, Ramparts XX% rate. of was quarter. was X it the sort most WALT, cap low in fourth that and recently,

So going I of is have what multi-tenant I well. a to think this to of any need as not mix think probably be mix about It's land This may see that. that you'll buildings. and single sort tenant. year

and due assets. Smaller contract are million the and to to done. half saw is of the that But get that we Those side. multi-tenant multi-tenant are easier and under on in year, ones will that's we sort similar think and do easier the Smaller first last year is what the have somewhere about we of close larger $XX harder. diligence,

so year. And very mix, a this probably it's what you'll similar see

comes question Bank from next Bonnel Our America. of from Camille

your Good progress backfilling on the to see expiries. of larger some

renewing given strategic tracking in are tenants early discussions possible, priorities as Just your pipeline? how early your renewal of as leasing the

to well. one the earlier seeing portfolio. too, also on And tracking term in They're of questions, the TI. We're Camille, more lean maybe we're is Brian here. able in why our

mentioned property in trade TI would cases. ability Ted most As unencumbered term, that customers and level being by have we earlier, that debt for

of think helped. that's So kind I

audience. that of thing, have The is you other kind captured too,

have our buildings. our we relationships So have own our -- We We lease customers. so buildings. we those relationships. own We with -- and own that operate our that manage and buildings,

to competitive a natural thinking So office? to about of return as make to it's how it a space little conversation their retain and to more their start upgrade to recruit, the talent back

that to been can down it's to seeing year a we've just the pick -- to Because hearing continuing you down of kind like up kick the road? are So compared activity ago? starts

and me let try. in jump yes, So

feet square just So We've in it I'm XX,XXX about XXX,XXX remarks on, already upcoming Buckhead, of backfilled in Brian I in square talked about our the thinking mean, of that. prepared his maturities. some feet September.

-- over and interest assets. XXX,XXX feet a activity of square have lot interest tour the in some We of

we that specific space. So about good backfilling feel

Brian And interest. have and we've you go there, mentioned, up floor EQT to backfilled Plaza, one already we

We have several out floors. on proposals other

has really last I up, Plaza. mid year think from activity the again, So at picked EQT

ready year Bass to there. to We're getting out Berry. they're XXXX, several that got got Berry still and in we've start Bass multi-floor highwoodtizing we've but go February touring from a on. You our We're to proposals users, of leaving plan implement

is just from pick activity, up the our but by activity seeing any pretty encouraging etched tour standpoint. stretch, is Nothing the

and emphasis raising additional placed you've a securing been And very past it. at liquidity in successful year Got big capital. the have on

are capital raise? So covered given needs, to much you've pretty much seeking more you your how liquidity

feel go need that we of improvement. like you at we sales I beginning get say I that we done. that the the to feel just at think, we do that portfolio about year if are the comments Ted's there think Camille, But capital it's not back Brendan. -- there's raise. would to do I asset the talking just likely of beginning script, continual will

I So disposition think to capital is will I we'll debt to year, capital in raising going envision proceeds. this get do think -- get be it's asset year likely we during as this opposed to done whether markets, I out the debt sales capital think but via don't raising the -- it's that through done the door

capital Finally, with of Board then yield? paying it view whether high the to covered? be there cash -- next is this source long this Or at continue year, flows the as just dividend it's the your as has discussions on the given looking could a could for been

Sure.

want Let we supplement to me talk start Board. every But answer. it's with off and the about Brendan the something look, virtually quarter may maybe

we As flow. we dividend look by at our part important dividend, And covered cash it think total an return is the for us. of is our

CapEx been So our and the flows with pretty years few to we've been spend have cash our proactive improving. respect and last --

the on we we see based at business, for dividend with outlook this comfortable So the that feel very the time.

Our from Stanley. Ronald next Morgan Kamdem comes question from

dispositions. a with Just couple Staying of quick ones. the

thinking in to XX market, You those are guys rates how sense on of come. those? sort color about you more assets, more financing? the seller those on quality of the talked maybe on cap And Any be the Just would helpful? about any

what respect haven't we With market, closed. again, Sure. in to the they have

did there we one. -- I'm So think a Ron. cap of maybe earlier one next I financing to to guess financing, building that is a something have I Seller we're short-term have we'll out X-month about providing rates. financing, there it's on XX-month what hesitant talk similar a year, about Hopefully, last to short-term, talk call, very we

financing other purchase. But one that we'll asset than have X seller that, a now equity $XX year. million, So of small all for it's

of say I'll terms rates. Ron, in just cap

if average for blended it's XXXX. of the of you kind looked cap think I fair sort at the rates and

think would of the to of trying XXXX, model that. of the to that think that reasonable gauge in kind kind a say, as course thought you year. something first over use not XX you half the kind to that in But just comparable about I if the we strokes, of If of XXXX, of that's with broad expect I you're

on to situation the cash forth. Helpful. the of And then my second one flow so is sort and questions just going back

you expirations half 'XX, you Have forth. those sales. could scenarios about back as starting you under year leverage of about looked go how scenarios the cash analysis lease think Pittsburgh potentially and at this at those of guys preserving an sort into flows think the so and where So potential of in

question the sheet the the really trend onto with sort Pittsburgh leverage just lease does balance expirations, is how sale, potential those? So of

Yes, a Ron, it's question. good

are we of comfortable So kind with I pretty think where are now. we

be Of and XXXX course, on going in pipeline NOI. even development on to EBITDAre a we into spending really increase, certainly we're migrate corresponding throughout dollars without 'XX the XXXX as

development kind stabilize deliver that down NOI. properties So going as significant you'll of a and will the to upward go movement the you is I But bit of in of throughout see debt-to-EBITDAre and those be think amounts ratio little year. then come generate as

we'll get I of of think with that, be. we where peak of levels even we when very comfortable So all forecast kind when we're debt-to-EBITDA, to

With that, number them, the will that embedded growth come down.

with we're flows And to also where are with comfortable think the all while, cash I the very respect dividend. our

a you good feel we've drivers, So lot I about lot think got XXXX think we position if and coming a of we're in like of strength a of going coverage forward. at from growth this dividend

position of we drivers So of from strength lot flow with I at also a not do cash respect a forward, levels. going from it kind from of only growth XXXX about to coming have we're it think thinking

from Mizuho. comes from Vikram question next Malhotra Our

through you just can the move-outs color over Georgi you occupancy walk And Can X on years? the is XXXX? next Vikram. more This provide trajectory us for in on known

or I'll large then Ted start, over maybe Georgi, on for Brian up. expirations it's I'll hand Brendan. the to coming color some and it

So in typical is of have quarter. this the we kind as for past, years us, we've dip usually a seasonally in and of talked kind about seasonal first

the large single handful there's no that January single that a expirations So users, users. at but beginning happened are of floor of

into a and bit as of So a we hold expect dip then bit third in the sort of quarters. steady, up migrate maybe kind occupancy little kind little of second migrate and you to quarter first

Novelis late the we've fourth the beginning then then quarter third the with in And the quarter in and of with got expiration EQT.

range year of of that XX% average of So we you'll at I the discussed. as think with XX% end this to occupancy low the see of in kind kind

But I'll this. that mention doesn't -- -- just I

move not into Park. of we that call, Brian expect feet that, I 'XX. the and got kind XXX about only leases yet Center -- of square Springs think of about There's XXX,XXX on and have this We V, by but about commenced talked occupancy to XXXX Cool signed, just Century between Tampa year-end we've Bay

kind you come when of done into a we've amount fair occupancy 'XX, will into in there's leasing 'XX. even go of So that that still

vacancy then forward in -- to we expect occupancy think space be as years. lease we and on but continue to go which kind or in contribute we to throughout -- I will of 'XX, existing we'll to future So future expect 'XX, don't

Why And one quickly don't I time. known the XX,XXX is of of sort go more few through Ted. went Novelis, a then feet. we this I'll backfilled in. jump move-outs. through I

We backfilled feet. So XXX,XXX September XX,XXX feet, 'XX. Novelis is

so, We prospects good have with feet. the of XXX,XXX XXX,XXX or remaining feet feet XXX,XXX

really we So good activity. the there, feel

We XX,XXX I said of EQT is October with subtenant Basically, square feet. 'XX, backfill. a EQT. We've direct went backfilled feet. XXX,XXX

some do that. space. we're to additional good on activity We've happy pretty got So

some we'll Revenue, Department So expire see of I They're there. early. Then end XXXX. of at have feet very not It's the still the year one. like we -- about XXX,XXX that think, that talked

but they're -- retained So we're vacating, we've them.

building. feet that remarks, different As park them. in XXX,XXX we our same to mentioned, are we the within downsizing. moving in square prepared moving We're They're a about

them is perspective. to We layout would building from have just a They loved in in. the keep just -- difficult very they're

various for residential building what at the strategy is is a conversion. vacating, including then on we're the that. And actually that scenarios, potential we've building, DOR So the got looking

on more we'll probably in next to XX the respect So XXX to more know that, days, DOR. with the

XX,XXX the headquarter our that vacate Fargo Fayetteville, we're have end And this XXXX. of known feet Wells was in And We XXX it bought building that. square October point. building back that We vacating we sitting a do year. of knew in, is here this Raleigh at a in at

XX,XXX which floor first building, state-of-the-art square turn location excited XXXX. we're plan since square feet amenities to for the has building actually get -- a the we're going into that about the our branch on that's that of includes to So feet been of XX,XXX

really So plans lot, neat we're about a to that. get re-lease and It's some there, for XX,XXX we've to excited feet back. got that square

I care the good feel activity, taken Again, in year just but then several a we're a that tour still get we got given And floors question we've away. we'll prospects on of. interest one Berry, that's Bass So which early prior mentioned multi-tenant those.

the just And tech that news to about for all layoffs, your me. With very think last you translates That's helpful. a markets? do one how

Yes. We're not tech big a market.

pretty Raleigh, lot more anybody. exposure base. in diversified. know, -- than probably general, to Our tech. I as of a have But don't we've customer you

the was up to have space. a I years lot did maybe we tech. tech we ago, don't we But several markets in gobbling think exposure of when our wish

comes from question Green Burzinski next from Our Dylan Street.

just And one for me.

than us lost occupancy to and that moving forward seems into less dipping Is So lot percentage, throughout as a be the about you is what we recover I should the sort to lease some that quickly. therefore, we the if XXXX good near-term I relatively into guess, early I drop-off occupancy just in comments the of the think as pair And say? activity in move-outs. think about XXXX, guess drop-off lease around fair Brendan, with up and of made, you occupancy. percentage 'XX just it sort that on beyond, comments of should

good would Dylan, leases that outlook hopeful seeing we're activity as translates if that I prospect that correct. it question. activity it's that your a terms we're into prove in the certainly will, of think Yes,

execution there's needs Now get to that done.

conclusion. to foregone not is this that's it's say So a that --

hold able outlook -- good that, your we're activity correct. the I what translate levels up would prove activity if think are to think I we do that that think But then is and prospect leases, into

Our next question Jefferies. comes from from Peter Abramowitz

the XX any in for change market demand the the Have backdrop here. Have XX, any buildings one and have macro in you sort days my call sort of and in last, in of just environment backdrop questions Most but your general? office rate been change has answered, the you as of shifted it, noticed here? noticed

from general then for office and assets been the you're to in perspective in the just has guess, market there also change that guess it out I appetite I any a as with. relates transactions?

so. think don't I No,

in been we're assets of the the sort think I already have tied up. with market

little of turned, There's coming a down, from see of lot real-time from powder to going I after stuff that. lot market the brokers. I are came respect do think brokers we're points the a to the year the rates sidelines. you're So with dry sitting do whole bit confident. on we to think more what more don't is have hearing data some a

fully of would what clear still of today. capital on is their a of to get the it's cost office I and expect to So be have once tough understanding going buyers alone availability capital,

sources, the difficult. the it I up capital I think in loosen it's But months. do X may virtually next think very all X to

activity of likely I the year, that. it's of back going lot money is the a invest. that to think to half But to So pick in think before up, I still we of going be a whole lot see transaction wants there's but

Our Omotayo Deutsche next from from comes Bank. question Okusanya

cash have you Tivity again, is of renegotiated regards that again, was move same with that, back down cash since I'm line, kind in to in lease comfortable Curious of XX the accounting, the tenant do tenant assuming the to months which you again, to the the Just space. moved get you're not accounting. How same the to them taking kind situation?

terms the Yes, is -- GAAP Tayo. that you to mean, accounting so probable rent It's the all, overall. a I good kind question duration the have think of term. of that first Yes, -- on throughout collecting than put standard in of I you're of somebody more

uncertain. a that little So cycle long-term bit very a the we have is is business lease and this

to of I think will we expect space the to amount the rent we're incrementally this account is them that we basis. put that with because was lot term. and conservative comfortable due we in cash to prudent, talked of the not a we think and over I there for to I of capital this, our life meaningful think just where how about But a auditors would being we And invest felt it kind are terms we of there's a like of into on

to or So of abundance a accounting. we of rent, that's think suggest likely move cash that a it's collection collect think basis amount not them significant out just we but of I don't an there on that is caution,

industries we core a that's I maybe other dissimilar that, bit say And with that volatile not our will do view from to we as more that things than customer base. tend little

move them That's basis. on portfolio, retailers just within the have of most we example, standard cash just our for an practice a as we us. that So

lease feel about I there. the we very So that's good modified think

didn't lease. the very to nature feel caution, given GAAP we particular, we long-term that revenue outlook to 'XX, for that about of of abundance think long-term I optimistic building the start record just of but an in in want out

no have further currently We questions.

to remarks. So to I'd like for the hand Over to management back closing team you.

thanks, great quarter, talking great your for call you for interest everybody, to questions, thank you look forward the And for to in and joining today. your Have next before. day. Well, Highwoods. if Thanks we not a

Ladies and gentlemen, for concludes this Thank today's call. you joining.

now disconnect you. lines. You your may Thank