Highwoods Properties Inc (HIW) reported FFO (fund from operations) of $53.2 million or 70 cents per share in the fourth quarter of 2011 compared with $46.8 million or 62 cents per share in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
Excluding one-time charges, FFO in the quarter stood at 70 cents per share as opposed to 63 cents per share in the year-earlier quarter. Recurring FFO also surpassed the Zacks Consensus Estimate by a penny.
The company reported FFO (fund from operations) of $190.2 million or $2.50 per share in fiscal year 2011 compared with $184.7 million or $2.44 per share in fiscal 2010.
Excluding one-time charges, FFO in fiscal 2011 stood at $2.58 per share compared with $2.46 per share in the prior year.
Total revenue during the quarter was $128.7 million compared with $117.3 million in the prior-year quarter.
Total revenue during fiscal 2011 was $482.8 million compared with $461.1 million in 2010.
Average in-place cash rental rates during the quarter expanded 2.5% year over year across the entire portfolio. Within the office portfolio, rent crept up 2.8% (GAAP) but decreased 8.1% (cash) on a yearly basis, while for the industrial and retail portfolio rent decreased 1.4% (GAAP) and 4.9% (cash), but increased 32.3% (GAAP) and 18.1% (cash), respectively.
Overall occupancy was 90% at the end of fiscal 2011and same property occupancy stood at 90.8%.
The company leased 4.3 million square feet of space,of first and second generation office space, up 19% from a year ago and achieved aweighted average lease term of 5.6 years on second generation office leasing,.
Highwoods deployed $308.9 million in acquisitions and announced $48.4 million development project. The company also closed $24.7 million of dispositions in fiscal year 2011.
Cash NOI (net operating income) decreased 0.9% and 0.8%, respectively, for the quarter and fiscal year 2011.
At quarter end, Highwoods had $11.2 million in cash and cash equivalents. The company executed a $475 million credit facility with a four-year term and one year extension option.
For full-year 2012, Highwoods expects FFO in the range of $2.56 to $2.76 per share. The company expects occupancy in the range of 89.5% – 91.5% and same property cash NOI growth in the range of 1.0%- for full year 2012.
Highwoods currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Cousins Properties Inc. (CUZ) holds a Zacks #2 Rank, which translates into a short-term Buy rating.
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