Highwoods Properties boosted its guidance for the full year above Wall Street’s expectations as it reported a 7.7 percent increase in third-quarter funds from operations, a key measure of profitability for real estate investment trusts.
The Raleigh-based company reported after the markets closed Tuesday that it expects funds from operations for the full year to range from $3.26 to $3.28 per share. That boosted the lower end of its guidance to a penny per share more than the $3.25 per share that analysts polled by Bloomberg News were anticipating.
Highwoods reported that funds from operations totaled $84.1 million, or 82 cents per share, in the third quarter, up from $74.8 million a year ago. Net income totaled $32 million, or 32 cents per share, up 2.8 percent.
During the quarter, Highwoods, which is the Triangle’s largest landlord, announced several new investments – including two locally plus a $29.1 million fully pre-leased built-to-suit office building in Richmond. It expanded its downtown Raleigh portfolio by acquiring the 11-story Charter Square building on Fayetteville Street for $78.4 million and reported that its paid $5.8 million for a six-tenths of an acre site where a local developer’s plans for a high-rise office project at the southeast corner of Wilmington and Martin streets had stalled.
The latter purchase price wasn’t revealed when Highwoods said in August that it had signed a contract to acquire the site, which the company says can support a 300,000-square-foot building, from an affiliate of developer Gregg Sandreuter’s Beacon Partners.
But CEO Ed Fritsch had told analysts during the second-quarter conference call that the company expected to pay $7.7 million for a downtown Raleigh site that could be developed into 292,000 square feet of office space. He did not name the site at that time.
Highwoods has scheduled a conference call for Wednesday morning to discuss its quarterly results with analysts.
Earlier Tuesday, Highwoods shares closed at $49.69, down 60 cents. Its shares have risen 14 percent this year.