Highwoods Properties, Inc. (NYSE:HIW) Q3 2022 Earnings Conference Call October 26, 2022 11:00 AM ET

Company Participants

Hannah True – Investor Relations

Ted Klinck – Chief Executive Officer

Brian Leary – Chief Operating Officer

Brendan Maiorana – Chief Financial Officer

Conference Call Participants

Blaine Heck – Wells Fargo

Jeff Spector – Bank of America

Michael Griffin – Citi

Rob Stevenson – Janney Montgomery Scott

Ronald Kamdem – Morgan Stanley

Dave Rodgers – Baird

Tom Catherwood – BTIG

Operator

Greetings, and welcome to the Highwoods Properties Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference is being recorded, Wednesday, October 26, 2022.

I would now like to turn the conference over to Hannah True. Please go ahead.

Hannah True

Thank you, operator, and good morning, everyone. Joining me on the call this morning are Ted Klinck, our Chief Executive Officer; Brian Leary, our Chief Operating Officer; and Brendan Maiorana, our Chief Financial Officer. For your convenience, today's prepared remarks have been posted on the web. If you have not received yesterday's earnings release or supplemental, they're both available on the Investors section of our website at highwoods.com.

On today's call, our review will include non-GAAP measures, such as FFO, NOI and EBITDAre. The release and supplemental include a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. Forward-looking statements made during today's call are subject to risks and uncertainties. These risks and uncertainties are discussed at length in our press releases as well as our SEC filings. As you know, actual events and results can differ materially from these forward-looking statements and the company does not undertake a duty to update any forward-looking statements.

With that, I'll turn the call over to Ted.

Ted Klinck

Thanks, Hannah, and good morning, everyone. We had another excellent quarter with strong financial results, robust leasing activity and the third consecutive increase to our 2022 FFO outlook. Given continued investor uncertainty around the post-pandemic demand for office space, there are naturally questions about whether or not office landlords can sustain their operating performance. We have enjoyed consistent healthy demand for office space across our Sunbelt Portfolio for seven quarters in a row after only two quarters of below-average new leasing during the first pandemic year of 2020.

Customers and prospects have been making decisions on leasing space and we have been benefiting from the flight to quality to our high quality portfolio. In our portfolio since beginning of 2021, new customers, whether from organic growth, in migration or flight to quality, have generally offset those who downsize for work-from-home or hybrid work arrangements. Our portfolio occupancy has increased 40 basis points over those seven quarters.