Highwoods Properties, Inc. (HIW): Business Model Canvas [Dec-2025 Updated]

You're looking to cut through the noise on Highwoods Properties, Inc. (HIW) to see exactly how this major office REIT makes its money, especially now with the market shifting. Honestly, their model isn't just about collecting rent; it's a sharp strategy focused on premium, commute-worthy Class A space in the booming Sunbelt Best Business Districts (BBDs), backed by a solid balance sheet with no big debt payments until 2027. With a trailing twelve-month revenue hitting $808 million, their blueprint for growth-balancing asset sales with a development pipeline promising $30 million in stabilized annual future NOI-is laid out right here. Dive into the full Business Model Canvas below to see the key partnerships and costs driving this operation.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Highwoods Properties, Inc. relies on to execute its strategy of owning, developing, and managing office properties in Best Business Districts (BBDs). These partnerships are where capital meets execution.

Joint ventures for development, like with Granite Properties in Dallas

Highwoods Properties, Inc. entered the Dallas market via 50/50 joint ventures with Granite Properties for two major developments.

• 23Springs: A development encompassing 626,000 square feet of office space and 16,000 square feet of retail in Uptown Dallas.
• Granite Park Six: A multi-customer office development of 422,000 square feet in the Frisco/Plano BBD.

The combined total anticipated investment for both projects was approximately $660 million at 100%. As of December 31, 2024, Highwoods Properties, Inc.'s 50% share of the equity funded was $76.2 million for Granite Park Six and $94.0 million for 23Springs.

Co-development partners such as Bromley Companies for Midtown East, Tampa

The partnership with The Bromley Companies is central to the $1 billion Midtown Tampa mixed-use development. Their joint venture is developing Midtown East, an 18-story tower slated for completion in 2025.

The total size of Midtown East is 430,000 square feet of Class A office space. The Highwoods and Bromley joint venture will jointly own 134,000 square feet, which includes five office floors (floors 10 through 15) and ground-level retail. The total anticipated investment for the joint venture's share of this project was $83 million. This builds on their prior partnership on Midtown West, a $71 million, 150,000-square-foot office building completed in the second quarter of 2021.

National and local commercial real estate brokerage firms

While specific firm names aren't always listed as ongoing partners, the volume of executed leasing activity shows the reliance on the brokerage community to drive occupancy in Highwoods Properties, Inc.'s portfolio.

The leasing pipeline is actively being worked to drive future NOI growth.

Financial institutions for debt financing and credit facilities

Access to capital markets and banking relationships is key for funding acquisitions and development. As of the third quarter of 2025, Highwoods Properties, Inc.'s balance sheet strength is supported by these facilities.

• Available Liquidity (Q3 2025): $625 million.
• Credit Facility Availability (9/30/2025): $644,900 (in thousands, or $644.9 million).
• Debt-to-EBITDAre (Q3 2025): 6.4x.
• Maturity De-risking: Extended a $200 million variable rate term loan maturity from 2026 to 2031.
• No consolidated debt maturities until 2027 (post-term loan extension).

The unsecured revolving credit facility, recast in January 2024, has a maturity date extending to 2029 with extension options, and the initial amount was $750M.

General contractors and architectural firms for development projects

These partners are essential for the physical execution of the development pipeline, ensuring projects meet quality and certification standards.

• Midtown East, Tampa: Designed by Rule Joy Trammell + Rubio.
• Dallas JVs (23Springs and Granite Park Six): Designed with commitments to achieve LEED and Fitwel certifications.

The development pipeline completion requires only $96 million left to complete as of Q3 2025.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Key Activities

You're looking at the core engine of Highwoods Properties, Inc. (HIW) right now, focusing on what they actually do every day to generate revenue and grow the portfolio as of late 2025. It's all about executing on high-quality office space in the Best Business Districts (BBDs).

Leasing and re-leasing office space, signing over 1 million SF in Q3 2025

Leasing activity was robust through the third quarter of 2025, marking the eighth consecutive quarter of strong leasing volume. This activity is key to securing future net operating income (NOI).

• Signed 1,049,000 SF of second generation leases in Q3 2025.
• This volume included 326,000 SF of new leases.
• First generation leases signed totaled 138,000 SF.
• Leases signed in the development pipeline accounted for 122,000 SF of that first-gen volume.

The economics on these deals show you the pricing power Highwoods Properties is achieving. GAAP Rent Growth delivered was 18.3%, while Cash Rent Growth was 0.3%. More importantly, the Net Effective Rents achieved were 21.8% higher than the prior five-quarter average, which is the highest in Highwoods Properties' history. At the end of Q3 2025, the portfolio was 85.3% occupied and 88.7% leased.

Strategic asset recycling: selling non-core assets and acquiring BBD properties

This activity is about constantly upgrading the quality of the assets under management. Highwoods Properties is actively selling properties where they feel value has been maximized and reinvesting in premium locations.

The acquisition of the Legacy Union Parking Garage in Charlotte's Uptown BBD was executed on a leverage-neutral basis. This recycling strategy is designed to accelerate the long-term growth rate and strengthen cash flows.

Property management and tenant service delivery

While specific tenant satisfaction scores aren't public, the success in leasing economics speaks to the quality of the environments Highwoods Properties creates. The company is in the work-placemaking business, aiming to inspire customers to achieve more. The fact that expansions outpaced contractions by a 4:1 ratio in Q3 2025 is a strong indicator of tenant satisfaction and growth within existing leases.

Development and stabilization of new Class A office towers

The development pipeline remains a key focus for future NOI growth, with a strategic emphasis on leasing these new assets before they are fully stabilized. As of the Q3 2025 report, the current development pipeline stood at $474 million (at Highwoods Properties' share).

• The pipeline was 72% pre-leased.
• 122,000 SF of first-generation leases were signed in Q3 2025 alone.
• The remaining funding requirement to complete the pipeline was $96 million.

These projects are expected to be a large driver of NOI growth in 2026 and 2027, with signed leases locking in over 50% of the previously identified $25 million stabilized NOI upside from the Core 4 elevated vacancy buildings.

Capital allocation and balance sheet management

Managing the balance sheet involves funding development, executing acquisitions, and maintaining liquidity. Highwoods Properties updated its full-year 2025 FFO outlook to a range of $3.41 to $3.45 per share in Q3 2025, raising the midpoint for the third consecutive quarter. For the nine months ended September 30, 2025, Net Income was $128.6 million, and FFO was $284.2 million.

On the liquidity front, Highwoods Properties had total available liquidity of over $700 million at the end of Q2 2025, with $625 million available as of the Q3 report, and only $96 million left to fund the development pipeline. Furthermore, the company extended the maturity on its $200 million variable rate term loan from 2026 to 2031, meaning there are no consolidated debt maturities until 2027. They also raised $59 million of equity since July 1, 2025, to support their leverage-neutral investment strategy. Finance: draft 13-week cash view by Friday.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Key Resources

You're looking at the core assets that make Highwoods Properties, Inc. run, the stuff they own and the structural advantages they have as of late 2025. Honestly, for a REIT focused on office space, these are the things that keep the lights on and the growth engine turning.

Portfolio of Class A office properties in Sunbelt BBDs (Best Business Districts)

Highwoods Properties, Inc. focuses on owning and managing properties in the Best Business Districts (BBDs) across dynamic markets. As of early 2025, the portfolio spanned 26.7 million square feet, with over 95% of its net operating income (NOI) coming from Sunbelt markets. You'll want to track the occupancy rate, which was reported at 88.1% leased as of March 31, 2025. By the third quarter of 2025, the leased rate had ticked up to 88.9%.

Here's a snapshot of where the portfolio is concentrated:

• Owns properties in BBDs across Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa.
• The portfolio has an average construction year of 2004.
• Reported a trailing 12-month revenue of $808M as of September 30, 2025.

The company actively recycles capital, for example, acquiring the Advance Auto Parts Tower in Raleigh, a 350,000 square-foot Class AA building, in Q1 2025.

Development pipeline with $30 million in stabilized annual future NOI potential

This pipeline represents near-term growth that's already being locked in. Management noted that the development pipeline is expected to contribute $30 million in NOI above the 2025 outlook. By the third quarter of 2025, Highwoods Properties, Inc. had signed leases for over 70% of this $30 million stabilized annual future NOI growth potential from the four completed, but not yet stabilized, development properties.

The current development activity looks like this:

The two developments delivered earlier in 2025, 23Springs and Midtown East, alone have over $20,000,000 of annual NOI growth potential upon stabilization, with $14,000,000 of that upside already secured via signed leases.

Strong, flexible balance sheet with no major debt maturities until 2027

Maintaining financial flexibility is key, especially when capital markets shift. Highwoods Properties, Inc. has made moves to ensure this stability. As of the third quarter of 2025 filings, the company stated, 'We have no debt scheduled to mature prior to 2027'. This was achieved partly by extending a key obligation; specifically, they modified a $200,000,000 unsecured bank term loan maturity from May 2026 to January 2029.

Key balance sheet metrics as of late 2025:

The company also raised $59 million of equity since July 1, 2025, while selling a non-core property for $16 million in Q3 2025.

Experienced, fully-integrated in-house leasing and management teams

Highwoods Properties, Inc. operates as a fully integrated REIT, meaning they handle the acquisition, ownership, development, leasing, and management functions internally. This structure is a resource in itself, allowing for direct control over the customer experience. The company has 435 total employees. The leasing momentum is a direct result of these teams, with second-generation net effective rents hitting a highwater mark in Q3 2025.

• Fully integrated approach to property management and investment.
• Leasing volumes strong for 8 consecutive quarters through Q3 2025.
• Signed over 1 million square feet of second-gen leases in Q3 2025.

Land bank for future development in high-growth markets

Beyond the current in-process pipeline, the company holds undeveloped land to fuel long-term growth. This land bank has an estimated build-out potential valued at $3.6 billion across its key markets. This resource gives Highwoods Properties, Inc. the optionality to deploy capital opportunistically in its core Sunbelt BBDs when conditions are right.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Value Propositions

You're looking at the core reasons why Highwoods Properties, Inc. (HIW) commands a premium in the office sector, especially now in late 2025. It's about quality, location, and landlord reliability. Here's the quick math on what they offer their tenants.

Premium, 'commute-worthy' Class A office space in top Sunbelt locations

Highwoods Properties, Inc. focuses its entire strategy on the Best Business Districts (BBDs) in the fastest-growing Sunbelt cities. This isn't accidental; it's where the best talent is moving and working. You see this commitment in the numbers:

• 95% of Highwoods Properties, Inc.'s net operating income (NOI) comes from Sunbelt markets.
• The portfolio size as of March 31, 2025, was 26.7 million square feet.
• The average age of the portfolio is relatively modern, with an average construction year of 2004.
• The premium segment of the office market, where Highwoods Properties, Inc. plays, has a vacancy rate of about 13%, which is significantly lower than the roughly 19% for the rest of the market.

The demographic tailwinds in these markets are strong; between 2010 and 2024, Highwoods Properties, Inc.'s markets saw population growth of 1.7% annually, more than double the U.S. average of 0.8%.

Creating inspiring work environments and experiences (work-placemaking)

Highwoods Properties, Inc. explicitly states its mission is 'creating environments and experiences that inspire our teammates and our customers to achieve more together'. This isn't just talk; it's reflected in the performance of their signature assets. They are in the work-placemaking business.

• McKinney & Olive in Uptown remains 99% occupied.
• The new 23Springs Tower, which opened in Q3 2025, reached 67% leased in that same quarter.

The company is actively securing future revenue from new developments, with its current development pipeline of $474 million (at HIW share) being 72% pre-leased as of Q3 2025.

Financial stability and reliability of a well-capitalized REIT landlord

You want a landlord that won't face liquidity issues, and Highwoods Properties, Inc. has been raising its outlook, signaling confidence. They've also structured their debt smartly.

Here's a look at the financial footing as of late 2025:

Plus, Highwoods Properties, Inc. has maintained its dividend payments for 32 consecutive years. That's defintely a track record of reliability.

High-quality, modern amenities and sustainable building features

While specific sustainability metrics aren't detailed in the latest summaries, the focus on 'Class A' space and BBD locations implies modern standards. The company is actively recycling capital by selling non-core, older assets, such as a 35-year-old building sold in Q3 2025 for $16 million. Conversely, they invested $111.5 million in the Legacy Union Parking Garage in Charlotte to support their office space.

Long-term partnership focus with high tenant retention rates

The leasing activity shows tenants are committing for the long haul, which speaks directly to partnership value. They aren't just signing short-term deals; they're locking in good economics.

• The dollar-weighted average term for second-generation leasing in Q3 2025 was 6.7 years.
• Net effective rents from Q3 2025 leasing were 21.8% higher than the previous five-quarter average.
• Net effective rents over the trailing 4 quarters were 18% higher compared to the 2019 average.

In Q3 2025, they signed 200,000 square feet in Charlotte alone, with GAAP rents approaching $50 a square foot. Finance: draft 13-week cash view by Friday.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Customer Relationships

You're looking at how Highwoods Properties, Inc. keeps its tenants happy and locked in, which is the engine for their recurring revenue. Honestly, for an office REIT focused on Best Business Districts (BBDs), the relationship part is everything; it's not just about the square footage, it's about the long-term commitment.

Dedicated in-house property management is a core part of the Highwoods Properties, Inc. service offering. They are a fully-integrated REIT, meaning they handle the whole lifecycle-owning, developing, acquiring, leasing, and managing properties. This direct control helps them maintain the high-quality environments their tenants expect in places like Charlotte, Dallas, and Nashville.

The commitment to long-term relationships shows up clearly in the lease durations they secure. While you mentioned an average of 5.3 years for Q1 2025, the latest reported figures show even stronger long-term agreements being executed. For instance, the dollar-weighted average term on second-generation leases signed in the third quarter of 2025 was 6.7 years. This focus on duration helps stabilize cash flows, which is key when managing debt, such as their debt-to-Adjusted EBITDAre ratio of 6.3x at the end of Q2 2025.

Proactive tenant retention programs are definitely working, as evidenced by the financial results from securing existing customers. In the third quarter of 2025, Highwoods Properties, Inc. reported a 23.6% increase in recurring revenue from lease renewals. This success, combined with new leasing, pushed their overall occupancy rate to 94.2% across 16.3 million sq. ft. of commercial real estate by the end of Q3 2025.

The service model is tailored, especially for larger, credit-worthy tenants who value the prime locations. Highwoods Properties, Inc. emphasizes operating in the strongest BBDs in the Sunbelt, which continually attract talent and companies. This strategy supports a high-touch approach, as they are seeing strong demand from both new users and existing customers valuing their commute-worthy portfolio.

For public shareholders and analysts, Highwoods Properties, Inc. maintains regular communication, often raising guidance based on operational success. Following strong Q3 2025 results, the company raised its full-year 2025 Funds From Operations (FFO) outlook midpoint to $3.43 per share (midpoint of $3.41-$3.45). They keep over $700 million in total available liquidity as of Q2 2025, which provides a flexible balance sheet for ongoing relationship management and investment.

Here's a quick look at some key relationship and operational metrics as of late 2025:

The focus on quality locations and service drives tangible results in leasing activity:

• Leased 1.0 million square feet of second-generation space in Q3 2025.
• Achieved GAAP rent growth of 18.3% on Q3 2025 leases.
• Net effective rents were 21.8% higher than the previous five-quarter average.
• The development pipeline is 72% pre-leased as of Q3 2025.
• The company expects occupancy growth of 100-200 basis points through 2026.

The relationship with the capital markets is also managed closely, as seen by the recent debt issuance of $350 million of 5.350% Notes Due 2033 in November 2025.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Channels

You're looking at how Highwoods Properties, Inc. (HIW) gets its product-prime office space in top U.S. Business Districts (BBDs)-to its customers. This involves a mix of direct engagement and external partnerships, all aimed at maintaining high occupancy and driving rent growth across its portfolio, which stood at 26.7 million square feet as of March 31, 2025.

Direct in-house leasing and sales teams

The internal team is responsible for executing the leasing strategy, evidenced by the significant volume of deals closed directly. This team manages renewals and new lease signings, which are critical given the current in-service portfolio occupancy of 85.3% at the end of the third quarter of 2025. The success of these direct efforts is reflected in the leasing economics achieved.

• Second-generation net effective rents in Q3 2025 were 21.8% higher than the previous five-quarter average.
• GAAP rent growth for second-generation leases in Q3 2025 was 18.3%.
• Average in-place cash rent was up 1.6% per square foot year-over-year in Q3 2025.

Third-party commercial real estate brokers (e.g., CBRE, Cushman & Wakefield)

While Highwoods Properties, Inc. (HIW) utilizes an in-house team, third-party brokers are a recognized part of the distribution network, especially in driving activity in key markets. The overall leasing volume demonstrates the effectiveness of the combined direct and broker channels.

Company website and digital marketing for property listings

The company website, www.highwoods.com, serves as a primary hub for property information and investor relations materials, which indirectly supports leasing by establishing corporate credibility and providing access to required documents. Specific metrics on digital lead generation from the website for leasing are not publicly detailed in the latest reports, but the overall leasing pipeline remains robust.

Investor presentations and SEC filings for capital markets

This channel is crucial for securing the capital required for development and acquisitions, which supports the physical assets being leased. The market's perception of the company's financial health, communicated through these filings, directly impacts the cost and availability of capital.

• Full Year 2025 FFO Outlook Midpoint Raised to $3.43 per share as of Q3 2025.
• Full Year 2025 FFO Guidance Range is $3.41 to $3.45 per share.
• Debt Priced: $350 Million of 5.350% Notes Due 2033 on November 4, 2025.
• Equity Raised since July 1, 2025: $59 million.
• Market Capitalization as of October 28, 2025: $3.04B.

The development pipeline, aggregating $474 million (at HIW share), is 72% pre-leased as of Q3 2025, indicating strong pre-commitment success channeled through these overall business efforts.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Customer Segments

You're looking at the core groups Highwoods Properties, Inc. (HIW) serves, which are essentially the companies and capital providers that rely on their office space in prime locations. Honestly, for a fully-integrated office REIT like Highwoods, the customer segments are tightly linked to the quality and location of their assets-the Best Business Districts (BBDs) in high-growth Sunbelt cities.

The primary customers are the tenants who occupy the 26.7 million square feet of office space as of March 31, 2025. These tenants are concentrated in the BBDs of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond, and Tampa, with over 95% of net operating income coming from the Sunbelt region.

Here is how we can break down those customer segments based on the available data:

• Large corporate users requiring Class A office space in BBDs: These are the anchor tenants driving the leasing activity in their core markets.
• Companies in high-growth sectors like FIRE and TAMI: While specific sector revenue breakdowns aren't public, the focus on Sunbelt BBDs targets corporate headquarters and major regional offices in growth industries.
• Credit-worthy tenants seeking long-term, stable office solutions: This is evidenced by the lease duration metrics. For instance, the weighted average contractual term for roughly 70% of projected revenue is about 9 years.
• Institutional and individual investors (shareholders): These are the capital providers who own a stake in Highwoods Properties, Inc.
• Government and regional headquarters tenants: These tenants seek the stability and prime location Highwoods offers in its key markets.

The leasing statistics from the third quarter of 2025 give you a real sense of the demand from these corporate users. They signed over 1 million square feet of second-generation leases in Q3 2025 alone. The quality of the deals is strong, with GAAP rent growth on those second-gen leases hitting 18.3% compared to expiring rents.

For the investor segment, you look at the ownership structure and the company's commitment to returning capital. Highwoods Properties, Inc. has maintained dividend payments for 32 consecutive years, which speaks directly to the stability sought by long-term shareholders. As of late October 2025, the market capitalization stood at $2.98 billion.

Here's a quick look at the metrics that define the tenant base and the capital structure supporting these customer segments:

The focus on BBDs means Highwoods Properties, Inc. is targeting tenants who value accessibility and prestige for their employees and clients. The leasing economics, with net effective rents 21.8% higher than the previous five-quarter average, confirm that these corporate customers are willing to pay a premium for that quality and location. Finance: draft 13-week cash view by Friday.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Highwoods Properties, Inc.'s operations as of late 2025, based on their nine-month performance ending September 30, 2025. For a Real Estate Investment Trust (REIT) like Highwoods Properties, Inc., the cost structure is heavily weighted toward debt service and property upkeep.

The most significant fixed cost, outside of property-level expenses, is the cost of capital. Highwoods Properties, Inc. reported significant interest expense on debt, totaling $112.782 million YTD Q3 2025. This reflects the leverage required to finance their portfolio of office properties in prime business districts.

General and administrative (G&A) expenses, which cover corporate overhead, are relatively controlled for a company of this scale, coming in at $31.771 million YTD Q3 2025. This is a key area where you want to see efficiency, as it directly impacts the distributable income.

Here's a breakdown of the key cost components for the nine months ended September 30, 2025, with figures in thousands, as reported:

Property operating expenses are the day-to-day costs of keeping the buildings running. These include utilities, maintenance, and property taxes. For the nine months ended September 30, 2025, Highwoods Properties, Inc. recorded $200.700 million in rental property and other expenses.

Capital outlays for leasing are substantial, as Highwoods Properties, Inc. is actively signing new and renewal leases. The dollars committed for tenant improvements under signed leases year-to-date Q3 2025 were approximately $34.094 million (specifically, $34,093,698). This is a direct investment to secure the revenue stream.

Development and redevelopment costs represent future growth investment, but they are a current cash outflow. While a total YTD development spend isn't explicitly listed as a single line item, we see the commitment level:

• Total investment for the recent Legacy Union Parking Garage acquisition, including near-term planned building improvements, was $111.5 million.
• The current development pipeline aggregates $474 million (at HIW share).
• Only $96 million was left to complete the existing development pipeline as of Q3 2025.

These figures show where capital is being deployed for portfolio enhancement and expansion, which is a necessary cost to maintain the quality of their Best Business District (BBD) focused portfolio.

Highwoods Properties, Inc. (HIW) - Canvas Business Model: Revenue Streams

You're looking at the core ways Highwoods Properties, Inc. brings in cash, which is almost entirely tied to its portfolio of office properties in the Best Business Districts (BBDs) across the Sunbelt.

Rental income from office properties is the primary source, representing the bulk of the top line. As of late 2025, the Trailing Twelve Month (TTM) revenue for Highwoods Properties, Inc. stands at $808 million.

To give you a clearer picture of the components that make up the revenue flow, especially around the third quarter of 2025, here is a breakdown of some key items:

Lease termination fees and other non-cash adjustments flow through the income statement, impacting reported earnings but not necessarily immediate cash flow. For the third quarter of 2025, Lease Termination Income, Net, was reported at $585 thousand, or $0.005 per share. Also impacting non-cash results was Straight-Line Rental Income, which totaled $3,927 thousand for the quarter, translating to $0.036 per share.

Gains from strategic disposition of non-core assets are a key part of the asset recycling strategy. Highwoods Properties, Inc. has targeted $161 million in completed dispositions for its 2025 outlook, continuing to shed less-core assets to fund higher-quality investments.

Parking and other ancillary property income contribute to the overall revenue stream. In the third quarter of 2025, Highwoods Properties, Inc. acquired the Legacy Union Parking Garage for $111.5 million, a 3,057-space facility, which is expected to bolster this ancillary income category moving forward.

Funds From Operations (FFO) is the key metric for a REIT like Highwoods Properties, Inc. The company updated its full-year 2025 FFO guidance to a range of $3.41 to $3.45 per share. This represents the third consecutive quarter raising the midpoint of the outlook for the year.

• FFO midpoint for full-year 2025 is $3.43 per share.
• This updated midpoint is $0.02 higher than the previous outlook provided in July 2025.
• The current FFO outlook midpoint is $0.08 above the initial outlook provided in February 2025.

Finance: review the impact of the Q3 2025 $16 million non-core sale on the remaining disposition target by end of year.