If you notice today Highwoods was quick to disclose its exposure to US Airways. We had to wait for the quarterly earnings report for Worldcom situation to be disclosed. I wonder if this is tied into share repurchase program. Would they need to disclose a material fact before they could repurchase shares in the open market?
unless they lied in the article I posted in msg. 1073, it said:
"Highwoods officials said its vacancy would have to reach 18 percent for more than four quarters before dropping revenue would force the company to consider cutting its dividend to shareholders."
This agrees with ML. Current is 14%; U & WCOM are 5+%. That space and all other vacancies would have to sit completely unleased for a year by those standards (unlikely IMHO).
Agreed, 1) the negatives don't like the idea of you making 10% and 2) they always have a secret "better place" - usually after the fact when hindsight is 20/10, and when no one can call them on it :-)
<<All they need is for WCOM and USAir to reject their leases.>>
Since U is planning on staying in business I believe it unlikely that they will reject all of their leases. WCOM less certain but it's already factored in with the straight line rents writeoff and the space is releasable.
<<the dividend here is at risk>>
You may be a crackerjack analyst but the pro at ML says occupancy would have to be below 82% for several quarters before the dividend must be cut. At 86+% I'm not worried.
<<potential for capital gains is remote. Better places in reitville to invest $$$.>>
Ditto for the whole market but I'm getting 10% while I wait.
BTW, you negative types always seem to end with "better places exist etc..." Pls tell us yours.
HIW doesn't need to have someone build next door to be in trouble. All they need is for WCOM and USAir to reject their leases.IMHO, the dividend here is at risk and the potential for capital gains is remote. Better places in reitville to invest $$$.
"when next door someone is putting up a building that's going to steal all your tenants or force you to lower rents by 15 %"
Who is building next door?
What idiot is loaning the money?
How can you build at today's costs and rent 15% cheaper?
Sounds like you haven't really thought this through. Specifics please before more alarmism.
they still have to endure some additional negative publicity - they have little demand in their markets, and when the next real estate survey is released, you'll see the southeast as one of the softest sectors - after San Francisco. The difference is that eveyrone loves SF, it's where the knowledge workers want to congregate, and "I left my heart in San Francisco". As opposed to HIW's home turf which still relies on Dixie rising again.
Buy it for the yield if you wish; just remember that yield alone is illusory when next door someone is putting up a building that's going to steal all your tenants or force you to lower rents by 15 %
HIW is faced with a
In the meanwhile, management will be reluctant to use cash for buybacks when it may need all the cash it can get for TI work or for opportunistic buybacks of debt.
So, unless it is taken over, HIW will be around for a while; however, there'll be a time before year-end (say between Thanksgiving and Christmas when tax-selling is at its strongest) when you can buy it a lot cheaper.
Despite the increased discount to nav, HIW may be in NO position to repurchase shares as they have to be "liquid" should WCOM and/or U.S.Air reject their leases. These 2 companies account for over 5% of HIW's revenues.
it's not a pleasant task - waiting around to see which of your leases will be rejected, assigned or kept
it's even tougher in this
it's even worse when there's a pipeline in construction that's not leasing up as fast as these things used to
and, it's even worse when
see you guys at $21 share