One-glance verdict
Undervalued
$31.86 our estimate vs market $30.09
Wall Street consensus: $32.33 (1.5% higher than our fair-value estimate)
6% below our estimate, below the bear case
Fundamentals snapshot
Highwoods Properties, Inc.
HIW · NYQ · Real Estate · REIT - Office
Current price
$30.09
52-week range
$20.45 - $35.44
Market cap
$3.38B
Balance sheet
Stretched
1.37x Concerning
Net debt $3.37B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
3 Risks
3 rewards · 3 risks
- Reward Revenue grew 1.7% last year.
- Reward Returns 6.8% on equity, ahead of 66% of its peers.
- Risk Forward P/E (43.0x) is higher than trailing (19.9x) - earnings are expected to drop.
- Risk Net debt grew 11.1% over 3 years.
What this company does
Highwoods Properties, Inc.
Highwoods Properties is a real estate company that owns and manages high-end office buildings in the bustling downtown areas of several major U.S. cities like Atlanta and Charlotte. The company's main income comes from collecting rent from the businesses that lease its office spaces. This matters because the company's success depends on keeping these premium buildings filled with tenants, which is often tied to the economic health of these desirable city centers.
How the company got here
Highwoods Properties was founded in 1978 and became a publicly traded company in 1994. It is structured as a Real Estate Investment Trust, or REIT (a company that owns and often operates income-producing real estate). Over the years, it has transformed from a more broadly focused real estate operator into a company that concentrates specifically on high-quality office buildings. This change involved selling off properties that didn't fit its new focus and using that money to buy and develop buildings in a handful of fast-growing cities in the Southeastern U.S., often called the Sun Belt.
What it actually does
Highwoods is in the business of being a landlord for other businesses. It owns, develops, and manages office buildings in what it calls the Best Business Districts (BBDs) — desirable, amenity-rich areas within cities like Atlanta, Nashville, and Raleigh. Companies pay Highwoods rent to use these office spaces for their employees. Highwoods aims to create modern, attractive workplaces that help its corporate tenants recruit and keep their own employees.
Office Leasing and Management
This is the company's main business and where the vast majority of its money comes from. Highwoods owns a large portfolio of office buildings and leases space to a variety of corporate tenants under multi-year agreements. The company's revenue (the money it brings in) is primarily the recurring rent payments from these tenants. A key goal for this part of the business is to maintain high occupancy (the percentage of available space that is currently leased) and to attract reliable, financially sound tenants.
Property Development and Acquisition
This is a smaller but important part of the business that focuses on growth. Instead of just managing existing buildings, Highwoods also develops new office properties from the ground up and acquires existing high-quality buildings. Sometimes they build a custom office for a specific tenant, known as a build-to-suit project. This allows the company to add modern, desirable buildings to its portfolio in its target high-growth markets.
What management is betting on now
The company's main strategy is to focus its investments in high-growth Sun Belt cities like Charlotte, Dallas, and Tampa. Management believes these cities have strong job growth and are attracting more businesses, which will increase demand for high-quality office space. They are also focused on a strategy called capital recycling (selling older, less strategic properties and reinvesting the money into developing or buying better-located, more modern buildings). The goal is to own the best, most desirable office buildings in the very best locations, believing that even with changes in work habits, companies will pay for top-tier workplaces to attract talent.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$214.03M
Net income
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Diluted EPS
0.29
Operating cash flow
$62.85M
Free cash flow
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Sources
Revenue
$203.36M
Net income
—
Diluted EPS
0.25
Operating cash flow
$99.68M
Free cash flow
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Sources
Revenue
$201.77M
Net income
—
Diluted EPS
0.12
Operating cash flow
$96.67M
Free cash flow
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Sources
Revenue
$200.60M
Net income
—
Diluted EPS
0.17
Operating cash flow
$116.53M
Free cash flow
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Sources
Revenue
$200.38M
Net income
—
Diluted EPS
0.91
Operating cash flow
$46.32M
Free cash flow
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Sources
Revenue
$205.53M
Net income
—
Diluted EPS
-0.04
Operating cash flow
$103.73M
Free cash flow
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Sources
Revenue
$204.32M
Net income
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Diluted EPS
0.14
Operating cash flow
$97.49M
Free cash flow
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Sources
Revenue
$204.74M
Net income
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Diluted EPS
0.59
Operating cash flow
$129.96M
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $31.86 vs current price $30.09
Wall Street consensus is the average analyst price target: $32.33 (1.5% higher than our fair-value estimate).
Our most-likely fair value is $31.86 a share — about 5.9% above today's price of $30.09, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $3.4B. Interest coverage 1.4x.
Net debt
$3.37B
Interest coverage
1.37x
Highwoods Properties, Inc.'s profit covers its interest bill about 1.4 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
HIW
BASELINE
Highwoods Properties, Inc.
Total debt $3.52B Interest coverage 1.37x This is the baseline the peer rows are being compared against.
Total debt $3.78B Interest coverage 1.41x +3% vs HIW Has roughly the same debt cushion as HIW.
Total debt $2.25B Interest coverage 0.62x -55% vs HIW Carries about 2.2x less debt cushion than HIW.
Total debt $2.63B Interest coverage 0.58x -58% vs HIW Carries about 2.4x less debt cushion than HIW.
Total debt $4.66B Interest coverage 2.46x +79% vs HIW Carries about 1.8x more debt cushion than HIW.
Total debt $2.64B Interest coverage 2.70x +97% vs HIW Carries about 2.0x more debt cushion than HIW.
What you should know
The case for and against HIW
3 Rewards
3 Risks
Rewards
-
Revenue grew 1.7% last year.
-
Returns 6.8% on equity, ahead of 66% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Forward P/E (43.0x) is higher than trailing (19.9x) - earnings are expected to drop.
-
Net debt grew 11.1% over 3 years.
-
Operating margin compressed from 28.9% to 26.3% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
19.93x
Forward P/E
42.99x
P/B
1.40x
P/S
4.03x
EV/EBITDA
14.45x
PEG ratio
7.77x
Profitability
How much profit each dollar creates
Gross margin
67.3%
Operating margin
26.3%
Net margin
20.1%
ROE
6.8%
ROA
2.2%
Health
Liquidity and balance-sheet strength
Debt / equity
1.33x
Current ratio
1.05x
Quick ratio
0.82x
Total debt
$3.52B
Total cash
$145.38M
Growth
How the business has been compounding
Revenue TTM
$819.76M
Revenue 5Y CAGR
1.2%
EPS TTM
1.51
EPS 5Y CAGR
-0.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$375.73M
Free CF TTM
$359.21M
FCF margin
43.8%
Dividend
Shareholder payout
Yield
6.7%
Payout ratio
132.4%
Last ex-div date
2026-08-17