Highwoods raises outlook after strong leasing quarter

07/29/2014 4:29 PM

07/29/2014 4:30 PM

Highwoods Properties reported late Tuesday that it leased 1.5 million square feet of office space in the second quarter as the Raleigh real estate investment trust raised its full-year guidance.

Highwoods reported funds from operations, a profitability measure for REITs, of 80 cents per share for the quarter. That included 6 cents per share earned from land sale gains in the quarter. Excluding the land sale gains, Highwoods equaled the 74 cents that was the consensus of Wall Street analysts who cover the company, according to Bloomberg.

Highwoods also raised its year-end occupancy forecast as well as its fund from operations outlook.

The company now expects its year-end occupancy to be between 91.8 percent and 92.5 percent, up from 91.3 percent to 92.5 percent. Funds from operations is expected to be between $2.88 and $2.94 per share. That's up from $2.86 to $2.94 per share.

In a statement, CEO Ed Fritsch said Highwoods leasing in the quarter was 50 percent more than the average over the company’s five previous quarters. The average term of the new leases was 7.7 years.

Highwoods also announced Tuesday that it sold in July the Research Commons Office Park in Research Triangle Park for $58.7 million. The park includes 5 buildings containing 422,000 square feet as well as a 13-acre development site that represented $3.1 million of the purchase price.

The park is 82.7 percent occupied. Highwoods will record a $11.7 million gain from the sale in the third quarter.

Earlier Tuesday, Highwoods shares closed at $42.09, down 12 cents. The stock is up 6 percent this year.

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