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Highwoods Properties, Inc. HIW announced that it has collected about 99% of its May contractual rents, maintaining the same level of collection with that of April.
The company has also approved the temporary rent deferrals to its tenants, representing 1.2% of Highwoods’ annualized rental revenues. This also includes the rent deferrals reported by the company in its first-quarter earnings released on Apr 28, 2020.
With the business environment mired in all kinds of macroeconomic uncertainties and spike in unemployment demand for space is likely to bear the brunt. Rent collection during these times has become particularly difficult and is likely to remain so in the near term. The pandemic’s adverse impact on the economy is expected to affect demand in the upcoming period.
Highwoods revised the current-year guidance during its first-quarter earnings conference call. The company lowered its funds from operations (FFO) per share guidance downwards to $3.55-$3.68 from $3.60-$3.72. It also expects its rental revenues to be affected to the tune of $2-$4 million and revenues from parking and other related activities to the extent of $3-$8 million. However, this will be offset by lower expenses with general and administrative expenses savings.
However, the company has adequate liquidity to meet its short-term liquidity needs. As of Mar 31, 2020, Highwoods had $12.7 million of cash and cash-equivalents, and full availability under its $600-million credit facility. Also, the company has no debt maturities to address until June 2021.
In addition, Highwoods’ focus on the BBD markets, and exit from Greensboro and Memphis as part of its market rotation bode well for long-term growth. The company has concluded the first phase of its market-rotation plan.
Shares of this Zacks Rank #3 (Hold) company have declined 8% over the past year compared with the industry's fall of 3.4%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Alexander & Baldwin, Inc.’s ALEX FFO per share estimate for 2020 moved up from 22 cents to 83 cents over the past two months. The stock currently sports a Zacks Rank of 1.
City Office REIT, Inc.’s CIO Zacks Consensus Estimate for the ongoing-year FFO per share moved 13.3% north to $1.11 over the past month. The stock currently flaunts a Zacks Rank of 1.
One Liberty Properties, Inc.’s OLP Zacks Consensus Estimate for the current year’s FFO per share moved 2.2% north to $1.89 over the past two months. The stock currently sports a Zacks Rank of 1.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Highwoods Properties, Inc. (HIW) : Free Stock Analysis Report
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