Highwoods Properties, Inc. Q1 FY2026 earnings call

Ted mentioned excellent quarter executing key initiatives with strong leasing volume. Leasing rates up on in - service and development properties. Invested $108M in best - in - class properties and sold $42M non - core. Recognized AI impact on workforce but customers still committed to in - office. Leasing pipeline robust, high - quality space scarce, demographic trends favorable. Solid financial performance, excellent leasing, delivered development properties, leasing progress on remaining developments, disposed non - core, evaluated acquisitions and stock repurchase. Brian discussed operating results reflecting advantage of commute - worthy assets, fundamentals improving, markets in Sunbelt metros, specific market highlights like Dallas, Charlotte, Raleigh, Nashville.

In the first quarter, Highwood Properties had FFO of $0.84 per share. Leasing rates on in - service portfolio increased by 50 basis points and on developments by 800 basis points. Invested $108 million in best - in - class properties in Dallas and Raleigh through joint ventures and sold $42 million of non - core properties in Richmond.

Maintained FFO outlook of $3.40 to $3.68 per share. Year - end occupancy outlook 86.5% - 88.5%. Expect to sell ~$200M of non - core assets by mid - year. Evaluating share repurchase. Capitalized interest expected to be lower. G&A expected to be lower in remaining quarters.

Risks include potential impact of AI on long - term office demand, development risks like high costs, difficult financing, high interest rates, market changes in disposition, operating expenses affected by weather.

Our first question comes from Seth Berge from Citi... Our last question comes from Nick Selman from Baird...