The Raleigh, NC-based REIT's executive team also reported strongFFO as well as net income for the quarter ending June 30. In thesecond-quarter earnings call, the performance was labeled as"stronger-than-expected operating results" by analysts atMilwaukee-based Robert W. Baird & Co. Highwoods, which wasspotlighted in a in aGlobeSt.com feature with senior vice president MichaelBeale recently, is primarily an office REIT that generates 83.2% ofits revenue from its office properties. It also owns some retailand industrial properties that account for 9.2% and 7.6% of itsrevenue, respectively.

As Highwoods COO Mike Harris pointed out during the conferencecall, "leasing activity has slowed slightly, but deals are beingsigned." Harris cited the 1.5 million sf of second-quarter leasesversus 1.6 million sf in last year's second quarter, adding "thecurrent leasing theme points towards shorter-term renewals withmany customers choosing to stay put until economic uncertaintypasses."

Although the REIT would prefer to sign longer-term leases--asall building owners generally would--Harris said Highwoods isdirecting its leasing agents to get deals done. "Customers arewilling to pay more and accept lower TI allowances for theflexibility of shorter term," he said.