RALEIGH, NC—Based on elevated office leasing activity and improving net operating income, RBC Capital Markets is upbeat on the locally-based Highwoods Properties, Inc. that is rated in the performing sector.
Highwoods Properties second quarter results exceeded RBC Capital's forecasts. The REIT's Funds from Operations (including land sale gains) in the second quarter totaled $0.80 per share. Excluding the land sales gains, Highwoods' second quarter FFO stood at $0.74 per share, which exceeded RBC's forecast at $0.72 per share and consensus, which was $0.73 per share.
The company revealed when it released its second quarter earnings on July 29 that it had sold the Research Commons Office Park in the Research Triangle Park for $58.7 million. The park includes five buildings totaling 422,000 square feet. The sale also includes an approximate 13-acre development site.
In its analysis, RBC Capital also praised Highwoods' elevated leasing activity during the second quarter, which totaled 1.5 million square feet, significantly higher than the company's prior five-quarter average of 1 million square feet.
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