HIW - Earnings call transcript Q3 2018 | Highwoods Properties, Inc.

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Operator

Good morning, and welcome to the Highwoods Properties conference call. [Operator Instructions].

As a reminder, this conference is being recorded, October 24, 2018. I would now like to turn the conference over to Mr. Brendan Maiorana. Mr. ahead, go Please Maiorana.

Brendan Maiorana

and operator, good you, morning. Thank

Officer. on President and me and Officer; Chief the Klinck, call Fritsch, Ed Investment Financial Mulhern, Mark are morning and Chief Operating this Chief Joining Executive Ted Officer;

on As is our or received If website today's section prepared supplemental, not they're of and have earnings EBITDAre. on at On the non-GAAP the call, NOI such of review as been you Investors include remarks any include yesterday's web. have supplemental custom, posted will release measures most directly both available these measures the today's comparable measures. non-GAAP Also, a GAAP highwoods.com. our the of and release financial FFO, reconciliation to our

length call subject as uncertainties, during releases risks filings. made well as today's statements our Forward-looking are our in SEC press discussed to at and which are

As any and you materially duty forward-looking statements. can undertake statements. company call from Ed. forward-looking to the I'll these differ a know, does turn to not events The update results actual now

Edward Fritsch

Thank morning, you, everyone. Brendan, and good

While remain interest sound, our new existing stock and in prices and rents fundamentals have indicators business REIT contracted, customers economic have with steady demand remain rising prospects. and from increased healthy rates and

prerequisite worked impacting And our know, have balance sheet modestly meaningfully hard issue built you or balance our shares. have to quiver a sheet. additional in arrows we As near-term earnings fortress-like development our while without pipeline a has leverage we lowering to reduced growth, to triggering fund metrics

relets. square of square of including of space, per Turning second-gen XXX,XXX third to share and delivered the feet leased XXX,XXX we $X.XX quarter, FFO feet office

rent of by rent quarter in effective quarter, rents leasing the roughly leasing five posted increased plus than we line lease five rents XX.X% solid assigned XX%. with Furthermore, net in plus years' also our effective garnered Net spreads we've more recent quarter average. to X.X%. time, in on were of strong addition cash metrics. In In we and the third spreads GAAP volume,

in-place cash X.X% compared metrics, a leasing strong year rents up to our Given ago. are

XXXXX to move-out anticipated, division, XX.X%. in with known points As Weston our Fidelity's our the in Raleigh XX of square - occupancy basis declined feet Weston building from XXX,XXX our

Excluding XX increased have occupancy this basis move-out, would points.

our reflected occupancy to by we improve year-end. in As expect outlook,

development whole pro or strongest quarter. XX% X generate representing quarter now Raleigh scotched of X quarter at to earnings of original forma, we're service of Similarly, our in stabilization by the investment Center fully given spec from quarters space Corporate first XXX,XXX The pipeline. Virginia Also, our of anticipate XXX Since I first-gen up square ahead total with program. and remaining a leasing pro XXX% of we million we move development Springs accelerating which third the the development the our XXX,XXX our than the continue last our X square call, forma. date We This in placed last the from half development over encompassing in two feet. growth leasing, represents $XX quarter more we've original XXXX. stabilization of in of in demand, Nashville, to projects XXXX project's ahead strong quarters preleased, projected accelerated of this strong was has where feet

over square square Virginia million, $XX Nashville, our foot, it pipeline X years. leased headquarters million foot service a Springs And for that XX,XXX in second, After cash will our pipeline projects ambulatory and $XX now II in project the XXX% development This First, in build-to-suit is as center XX% and delivers leased. provide XX% Seven flow few next Urology these placing XXX,XXX service, is Richmond. meaningful $XXX million, preleased.

deliver in to quarter be placed be we in preleased service to center we've on which of in which XXXX. XXXX; the delivered quarter X first in in XXXX. mentioned, track Springs development to in of X/X% the ZIP in continue million per the I Nashville, Raleigh, have we These projects reminder, at and Mars over the of third now regard our of Technology Pet them to a service is is headquarters With in experiencing Global Care's third which years. Virginia with MetLife's building deliver $XXX and at few XXX% approximately quarter second rise are in construction the been U.S. will Nashville, in costs, delivering line see and month, scheduled code XXXX; As placed past

we contracts and insulated build-to-suit book, projects cost from place in our have development given our know, development largely projects. you are for As GMP in we pipeline open are increases our multi-customer current

During several higher for demand new years, the has despite space rents. strong past remained

have with continue across sustained remain conversations to preleased construction attractive number This development potential interest addition, we rise. leads depth several of a prospects rents continue us the level sizable of to and to as In of should believe demand costs projects.

$XXX announcement our With Asurion announcement, was million. to surpassed million $XX development original outlook by reminder, $XXX a initial we As $XXX XXXX million midpoint our build-to-suit our million.

$XXX Turning million million outlook is million, to to our XXXX closed $XX thus building current far. with $XX dispositions,

We sales occur million. continue outlook to kept to acquisition million to unchanged at expect year-end. a We've our $XXX number of before $X noncore asset

cap for BBD-located, with For low-Xs. to highly office A in remains in few that mid-Xs market, assets have Class the the been rates the properties competitive pricing

several pipeline, balance sheet a and for off-market We development activity in years. NAV table a continue leasing operating In commitment on- and on opportunities and combined a preleased with with expenses, managed carefully focus our Ted? the very strong flow recycling, cash to highly growth continued sets the strong capital over investing. next prudent disciplined summary, operating to and our in evaluate portfolio

Theodore Klinck

good Ed, Thanks, morning. and

square strong than FAA T-Mobile. its well-located given FAA expirations. their very the location confident renewals taken the renewals our made From XXXX the and the INC in for at progress see user. and list selling AT&T our of expirations foot We've through We good already through BBD building. the on attractive care XXX,XXX in XXXX X demand XXX,XXX sole Two lease and by continue we've We're and Highwoods products. feet, probability to of a This its square renew occupancy Tower to the leaves UMA three, terms greater will

not prepared to and end across attention the square they're November levels footprint. until their lease We're XXX,XXX to yet, of expire supply doesn't T-Mobile, our paying make decision XXXX. a Regarding foot

While overviews. and has I been remain has I'll a on activity, equilibrium. increase markets there prior absorption been below to peak modest enabled has in more where been net development which notable and the more turn the market development at levels, touch Nashville Raleigh, to supply healthy, when remains has broadly

demographics to our strong appeal Solid market businesses relocate to that fundamentals continue to underscore seeking footprint. to

leased can five leasing including at XXX,XXX of our second-gen feet way portfolio were XX.X%, stats. rent new spreads were were deal at our space, average, feet GAAP working cash rent leases. higher of approximately our new office ago. into to higher year observed quarterly was XXX,XXX and than turning robust We than while prior cash which average spreads quarter the volume square a our XX% strong square Now X.X% performance Evidence quarter-end, rents in-place X.X%. its by healthy of be positive at The

contribution last higher occupancy X.X% was was cash occupancy more offset from escalators third with by despite annual to cash commencing compared Our average same-property leases The in rent and year. rents. lower positive decline NOI than quarter

ability XX.XX%, outlook driven user our the our midpoint fourth we decline the midpoint a improving original attributable midpoint signed backfill XX foot down to quarter, leases At quarter, updated unforeseen year-end the was to We feel the XX,XXX points so before block. by bankruptcy good XX.X% XX%. largely of about This in the occupied, that is anticipate occupancy in the end scheduled of commence Greensboro. occupancy Our of solely are portfolio basis our to industrial range The outlook. XX.X% is this year-end. from in implies to of square almost a industrial

markets. into XXX,XXX by in is third our to square Atlanta's strong Buckhead. in our Now competitive the CBRE. million This Midtown they and believe XXX,XXX market's Buckhead vacated move-outs. particularly campus, feet foot square - is reported net considering X to not Atlanta any StateFarm square vacated do Perimeter nearly X result of their profile AT&T Central their as was feet, The consolidation feet quarter space this portfolio. high in owned and We the XXX,XXX absorption square continued as

spreads XXX,XXX the there of for in X.X X.X% total office XXX,XXX We're nothing executing leases those additional to as third average year-over-year. Raleigh new X term the square square quarter than a than during and X% Class XXX,XXX Buckhead, or positive progress of signed Young. in of our terms X.X% foot second-gen was rent is at Class underway The term accounted of portfolio. A solid before We for feet end are million less X% Half and feet for of of competitive Raleigh rent the square second-gen GAAP to quarter A a healthy was feet XXX,XXX of and Buckhead. stock. construction were strong supply renewal We development, under the We Raleigh. with feet, square year-end. of of preleased. the approximately GAAP feet see This stock. perspective XX,XXX more of construction with under X.X square percentage is feet the years. across quarter, earlier. narrowing a leases spreads mentioned quarter the feet. strong pleased takes space the of office positive to during Buckhead Atlanta have Midtown includes year-to-date there During stock in in to quarter, continued I relets that square of signed XX.X% an Avison were weighted-average half the rates to XXX,XXX demand absorption while quarter, square meaningful figure of reported second-gen forward approximately signed We XXX,XXX AT&T in our and XX% increased or look net square while feet included agreed during of first- XX.X%. When by million X.X saw we've deals years. the of asking set, This the estimate square

absorption Nashville posted construction square until submarkets, operating of by spread Brentwood but X the have under total is we as little vacancy Lastly, essentially the under where and portfolio, this from reported XX% square roughly is expirations to The Approximately construction, XX% preleased. out have and meaningful during remaining feet lease our X.X XXX,XXX in square which Cool We're positive quarter no million development any XXX,XXX square or in amount tracking Springs. feet year-to-date. a urban we feet of net XXXX. over million CBRE, feet is

feel portfolio. that foot of ended We second-gen ability quarter indicate demand strong GAAP leasing rent rents. healthy. signed to markets absorption improving XX.X% our our the results the at good broader of our current We during delivers. with occupancy capture X.X Consistent of continue million as spreads square Nashville with occupancy net feet leases We remains strong the kept operating XX.X% square across and portfolio supply about our has conclusion, to of levels XX,XXX and activity across steady In occupancy maintain new levels quarter.

Continued our vacancy. of future Mark? us BBD demand for keeps leasing while be upbeat that able pockets we'll well-located expiration risk continue reducing out to product

Mark Mulhern

the supplemental fee which October third third $XX.X of partially and aforementioned basis Raleigh other by share repair million, than XXX $X.XX million seasonal final the normal press Thanks, a accelerated and from was from Ted. division, the accelerated share, recognition quarter. the net on per year. Included forward months per release our extra restoration Page $X.X $X.X points and In the payment million quarter compared in expense. costs the of plus or in Rolling their is occupancy of as the the quarter million in FFO average X.X%, their was quarter $XX.X second in $X.XX reported quarter, with rent change We table delivered in quarter, NOI offset million growth utility their rent. last cash offset We and FFO partially two termination in Fidelity same or lower Fidelity increase Weston rent our This rent rent the this quarterly for the X clean of in the was lower of share. major at per $X.X XXXXX The to of from fee normal the package. third million classified growth of property we same-property by recorded maintenance $X.XX but payment income second is in in was Fidelity. $X.X saw from November

of it termination to we same-property payment Because include As you know, full exclude satisfy calculation to original typically their our the their NOI. growth. from was under payment obligation same-property appropriate fees accelerated the NOI in was lease,

our the not down NOI extra the on their adjusting restoration for does fee. of XXXX occupancy, from in same-property of months growth Eliminating quarter in on received increased leases X partially impact include Fidelity XXX NOI their same-property Our would reported rent. recognition average third and rent occupancy NOI by points. growth Higher line driven X.X%, same-property with was nearly second-gen bumps healthy leasing, have all higher solid straight basis on annual offset by cash and

Turning with and to quarter the leverage our balance of sheet, of we X.XXx. net ended debt-to-EBITDAre XX.X%

We the quarter shares second have last the haven't any ATM issued since on year.

are operating range have without issuing selling assets. target We our development and $XXX fund the or of on debt-to-EBITDAre to within to current flexibility shares million grow remaining committed to of pipeline our X.X the the prerequisite X.Xx

term any we of million that maturities treasury underlying obtained lock a matures the swaps we X.XXX%, XXXX. June don't XXXX. our financing forward July have As until starting quarter, $XXX potential before loan $XXX mentioned of last of advance in in million debt XX-year at We

reminder, XXXX. Other maturity until in XXXX, that this loan, well schedule X.XX% debt the is have on LIBOR loan January term no a As and hedge laddered. than we expires term maturities our

mentioned, outlook Ed we $X.XXX original As $X.XX above per $X.XXX outlook to the updated midpoint, share. is previous our this our our and to above $X.XX At outlook. FFO

is to rent renewals towards NOI updated original several Last not to plus in reduction due X.X%. plus trend of and we to earlier outlook also have outlook. X.X% The the hoped a signed original primarily X% were same-property I that even we X%. plus included expected than component free our sizable quarter, our our We of mentioned outlook low cash end to to

in our reported our our per straight we've to that seen Taking rent our outlook is outlook, to the our $X.XX a the line imputed for the share same-property outlook, $X at mostly revised midpoint original million increased you've $X.XX compared to relating year-to-date, of fourth $X.XX share. forecast FFO As quarter pool.

the will there provide quarter some know, guidance are Finally, interim, I to as our we in would during like call. items fourth you XXXX But highlight.

scheduled XXX% of over estimate capitalized burn-off we $X.XX as building, third We are the to and deliver to of of $X.XX be the First, $XXX inclusive accretion, million takedown MetLife's XXXX. per FFO the XXXX mentioned, Ed course will preleased interest staged development the share. approximately of reflective of of

earlier to mentioned potential Second, fixed-rate the prior a I XXXX. for financing July debt

Given million use reduce maturity X.XX% our credit the bank term the likely in loan and proceeds hedge January XXXX, line we refinance our of $XXX the LIBOR balance. of would to

XX-year low-Xs, a on mid-Xs. the rate. a in quarter hovering the to rate per the full financing year lock compared debt all-in place would treasury $X.XX the With likely such interest of XXXX and the in fourth would new U.S. be somewhere in be our refinancing around scenario, the Under run impact share this

floating have we over debt. a rate $XXX Third, million of currently little

under in other expense overall this in-house required any drive base, While is be the approximately like estimate G&A. LIBOR expense and teams, GAAP to year $X.XXX relative leasing-related or asset increase modest change we interest our will our in would higher. Last, XXXX REITs actuals, this be in to with FFO certain employees. $X.X projections we starting will leasing Based share per noncommissioned million XXXX in on costs annual will from appear prior accounting and for dilution XXXX,

signaled we've highly free the as pipeline. delivery to million we this forward, past to preleased flow years, continue and cash few Looking continues development our expect with strengthen, of the $XXX our

the about for now given very are our impact your will timing the for flow any Operator, good we long-term we feel quarter, company. the trajectory flow questions. cash in While cash ready

Operator

And with first line of Jamie Merrill Bank question Instructions]. is the [Operator our of America from Lynch. Feldman

James Feldman

missing. largest specific details can SCI might guys hoping FBI, on Atlanta, you lease that you're Buckhead, any Fidelity, I was to the blocks in be others vacant give and trying just I more

Edward Fritsch

you don't I any. missed Jamie. think Sure,

take gave just that the in them. order you them So

that's were So X/X will last end of that in the - inked Buckhead, our the on we now call, relet quarter. of on third we X/X and how of year. be relet. It's end be at sit by the that We'll

call. XX%, good FBI, at we're At XX% We've that very on on additional we've It our XX% relet XX% very now progress since so and made was we're leased last on report, relet. So that. progress good we've last SCI. made also an

We Highwoodtizing now have that since that is at we there, building been had space a Highwoodtizing FBI And is another that undertook prospect, X% is know, put the XX-plus-percent XXXX, strong in in would so XX%. heavy and as you a that us multicustomer and complete. some

that Fidelity for So cleaned we'll early now the where building showings. XXXXX is Weston, know, $X next well It's building Met just pretty in punching out up. right received be shape paid Technology fees. good as them Campus. it then commissioned there you We're so The a from are we through rent and of in Global but, where be vacated month, XXXX, we And beside restoration November shy Highwoodtizing also million of well-positioned building

and month. we've And XXX% month, so will roof, to prospects all end this we're be XX% for And anywhere of from showings that the mechanical, for commissioned have done et cetera, of the parking lot, building. repositioning next building from that that early we

James Feldman

guess, A were I from movers when Okay. perspective, on 'XX think this But quarter, the same-store external year developed the think we thoughts were - were a for you your internal pretty us And of talked lot just again, was growth? same-store of a in guess, things Mark, in then confusing big can same-store help more the next investment. I more through drivers you helpful. about growth or

Mark Mulhern

because to together. how I'm explanation going do numbers, he's Brendan in that steeped good he's so all a Yes, for hangs it at let Jamie, got

Brendan Maiorana

Jamie. Yes, hey,

in for a third confusing quarter. You're right, quarter is kind it numbers of the the from same-store

also couple encountering occupancy we'd extra we're of just that year-to-date, the the we then out look would for the and year-to-date months revenue overall for straight at them and XXXX, we about about of adjust cash of X.X%. up headwinds adjust our numbers of the months of the nine in and line I through we if got in that, terms kind let's year-to-date think growth occupancy with Fidelity the out be find is adjust impact, and down X.X%, what NOI that

the that We'll in that's with think that of we've what I rents, NOI I cash in headwinds, long we then up, in 'XX, if about guide think respect bumps to to just term think position of annual see And of line have terms I about rent occupancy mid-Xs. we do good think in a are have. where didn't terms we're I with line. relationship in sense or leases probably - might don't tailwind, I I OpEx straight would all occupancy talk happening So it, portfolio. or any give across But February. then good where that how a should and in you in could to the adjustments longer-term top And to with do been occupancy think cash or the think impact on signing think headwind 'XX be no our with that that call you specifics I respect think trends

James Feldman

question helpful. That's And me. for then last Okay.

conversations more just - more color around give you build-to-suit. potential Just mentioned you those? Can had from

Edward Fritsch

Sure.

to almost said, those these where traditionally in reductions prospects, routinely we from and conversation on of a early So in are with conversations test-fits. calls, handful varies that about we in are

over as well the we've overall now, that volume able continue of these pipeline, development are be demand, of today well and to And about the given million pricing our so worth square regard is past. preleased. we of with we'll development witnessed stout It's very But that we to replenish we in right ongoing conversations to which on a feet feel, all pretty process roughly. protracted XXX,XXX basically $XXX have

Operator

Blaine question with Fargo. of next Heck line Our Wells from comes the

Blaine Heck

I office properties bit about solid on in the touched reading prepared wave your developers clip speculative leased continuing development to with little projects. Raleigh, you remarks, being just but construction under at Ted, of up new and in start this was continued a a

with play where I at two, Number Ed, for it of up? newer directly And this you've the the maybe you starting your than devil's cycle. you Is just you any and expirations could markets downtown be think of growth little point? some does great one, pipeline leaving a lower in to money you development of have done given more table, you any question. supply But coming on kind are in have that advocate, preleasing So more not you have maybe this typically your guys strength two the then seen being projects aggressive any number part competitive have? space might with demand, with concern there

Theodore Klinck

first part. the I'll So take

terms preleased. preleased. In different spread million it's the mentioned, is so, and approximately more about next, XX and to feet it, six our call really square And we that million, as XX over down, little Drooling submarkets - or set to will is that's out $X.X competitive probably. also months delivered bit XX a and closer of get than months, that's XX% across X Raleigh, XX%

you right of new the So feel we the I historical at absorption look well. think construction it's matching is up meeting now, like really, pretty if so Raleigh, demand sort in

small In under the both is buildings. preleased XX% is so, or terms in reasonably of one the XX%. construction, about there's other buildings downtown And competitive two space, CBD

So the have nor the lot do lot a - near spec space not downtown expirations of term. a of in in next we

demand. keeping really, seems be concerned now. So overly It right pace not to with

Edward Fritsch

about development and you take thank of comment second that, have. Blaine, the the program for the So part I'll we that

back when spec V, think components look and largest. CentreGreen, we et of heavy Riverwood about where on cetera, we've buildings the XXX similar started X, GlenLake XXX, being that think there Riverwood were at we pre-leasing was XXXX with I those things Springs Virginia

less were pro we building. first or stabilization that forma that. We're to on we So meet from going preleased beat than announced X/X

build-to-suit, so missed of these a I to So opportunity. I of of we've cadenced done component we've basis. stapled that heavy have the on balanced we've speculative know we that more build-to-suit that buildings think buildings ballast well we've been don't the versus spec dollars how have on

how that think that can methodology the where deliberate the in our put risk wouldn't the meaningful of that how board pro maintain on very spec to successful been scale space been component well managing we've we've together us with on aspect be there's average, we able being that build-to-suit balanced development how this, in believe given particularly we've a continue have that that the and had forma we across and a no we're stabilization past, to think we've to, smaller had I to that, about has spec gone some I reason those about beat dates.

Blaine Heck

Great. any per helpful. TIs CapEx in guys little quarter. Then were trends Can about higher guys respect prerent? just are That's with very square lastly, you talk to concessions foot you a this seeing in markets your and

Theodore Klinck

respect us, new with we higher had to XX% quarter leases renewals the done, new this of significant versus a Sure, for amount about leasing quarter.

that to our year. slight I CapEx tick-up in So largely this think would attribute

quarter payback TIs look, - I think there within historical our markets. think this through having of most payer I range. that, some our do is said our still But ratio on now pressure was our

to of in think bit I we're going to back an we've attention job we're net give And managing it done rents. good if to extra effective We TI, rents. pay a get pretty that. going

while is I - there to it been it, able well. it's So pretty think manage we've some pressure on

Operator

Korchman next from Our the line of Manny Citibank. comes question with

Jill Sawyer

with of asset? market market noncore. This to the are these of end assets I sell the of you Which just know the of by is type curious, Jill here some for it's you're said the year? you And see the how looking characteristics selling what today? assets I'm Manny.

Theodore Klinck

it's Jill, Ted. So

define where all, in like not if dispositions of of close, we of that on. expect noncore, They're on the sweet to have spot working have several what spread as and are we the and them BBD what much over very guidance. we top out last interest the end in the in which the very Orlando. to Tampa active means that Atlanta, been with them, buildings all We our we're We But so, that year-end, across before be. do have where market they're have years. they're hence four most not all we keeping our They're

Jill Sawyer

environment. cap in cautious you remain investing rate on lower Okay. And how noted just, you always this

So be right? from midpoint, plans what million About I proceeds? would in the $XX think,

Theodore Klinck

Correct. our We down would just line. pay

Operator

[Operator Instructions].

of comes Rodgers Dave Baird. question Our next from line the from

David Rodgers

you wanted tie a your of thoughts. in it just back couple prepared up kind and to think, I to development I get spend comments made, follow different and of on development and comments your

I'll And question ask you so maybe, directly. the Ed,

comments, Mark's exponentially you you you the that in selling in or right. think change I sell I said said you balance assets, equity more sheet. wouldn't wouldn't Ed, your be guys if got really comments,

You left and then earlier, made got arrows-in-the-quiver in development, $XXX spend in tie million to I'll you Ed. the comment

properties way best made pipeline the the So current as with to you're million backfill mature? love versus going me million give you kind guys more in - talking way? development, $XXX a it to if market fund consider sense these you your if Has funding? Would especially joint noncore? maybe of $XXX this another I'd some or venture So been really are maybe just that of thoughts. sales sense, What's your

Edward Fritsch

that, take of Yes, so first the David. part I'll

in stay was I now any and what we stock fund what saying right of within order stated the think that were more we we remainder that not could to our issue have on our would how our we do funded we for current that that. be pipeline much committed debt much we've how far, range have thus to comfort And development able metrics. given

about $XXX million we another take stay zone. addition, comfort In and could still within on our

plus that So commitments, it not comes for remainder just range be and million. we limits $XXX our were what our basically, down another current-day long-stated the how of comfort is we our the of do funding of really metrics. debt out testing of could to And much that, still

David Rodgers

out kind your up see you staying where maybe lower, there? that in guess, opportunities with versus doing working that what's or how given the of level I'll Then environment at is, I Okay. is follow leverage comfort just your and current

Mark Mulhern

Dave, it's Mark.

is - really as So listen, shape. you good I think in know, sheet balance we've our

level favorably respect really on kind sheet. balance the metrics We're Our leverage right peers. of compare good with in to spot a to very of the

been a got of with a we've level, flexibility. the in kind expect lot we've out, a I I kind maybe We've would dispositions. never. put done of like still feel And of to we just on what a So year point previously. finer a XXX-ish mean, disposition didn't consistent XXX-ish, say we

I that's ladder we got we cards think the to forward. going lot get opportunities probably think a where the And getting relative up ability we So still real to in just if need on an and flex maturity a we've flexibility value. of to

pipeline gives flow. development preleased highly delivering cash us improved Our

we're a we feel good like spot. in pretty So

Operator

Our line the John from Stifel. of next Guinee with question comes

John Guinee

Great.

Okay.

not hit $X.XX maybe debt, refinance question. on correct? a were you Just to But when through Mark, your a going very FFO, the FFO, - very smart the that's

Mark Mulhern

to were do we If Correct. that's that, correct.

John Guinee

So you've got...

Mark Mulhern

kind that. the you the And It's rate to when it. quarter still I'm sorry, think want fourth run of clarify just about

how that's So year, on would it a basis. compare for full year full I

John Guinee

if I development, to negative to increase, of get to debt have underwater a another the $X.XX the What's same-store on positive? same-store $X.XXX XQ on way on sort shifting leasing of another on we're natural negative dispos, $X.XX $X.XX expensing $X.XX guides, So NOI. before to NOI the positive capitalization $X.XX G&A on we

Mark Mulhern

I'm little on trying I you to reluctant again, a to specifics So give give was you some... a XXXX.

John Guinee

Whisper, whisper.

Mark Mulhern

the our about some But we the growth we'll have got - - leases, so our usual John, from think , just to naturally things bumps we've to from all portfolio. Some that. in have relative still

about I think development. some you made commentary

contributor. a that expect be We to

year. company. picture as element the again, got But it how trying people they're of Although, just with large, the to thinking calibrated sure go-forward well to for terms it are in the it's about and during comes to when in some respect make by timing we're

Brendan Maiorana

just to I to add wanted John, And that.

additional leases to the and are have to We development, would for NOI that are the deliveries spoke we take development - Mark get had XXXX. will some expect deliveries XXXX project not in we place those some in we and additional that about. to where that development XXXX leasing which commence on fully where that stabilized addition In

look of So estimates of think or respect 'XX. with fulsome or it I likely the that model a the out think for as just to 'XX, was quarter highlight are certainly things are wasn't about drivers some known into your few from suggest fourth you there may rolling kind to your but moves all a it what

John Guinee

what 'XX, the Is would on took $X.XX and I $X.XX? would into account, or is that timing on FFO? how So essentially worth lease-up - a Brendan, on that if which that, the 'XX that the a timing improve

Brendan Maiorana

kind it within bit think that but range. of little depends there's I things like it's that, and - leasing a on

call Let's that. it

John Guinee

back on on numbers $X.XX. and of sub-XX that parity. that getting number there? And looks envelope, pretty way look at doing it? your bad the if FAD Okay. us it just right dividend's am I And to to then is to the average being your FAD Is as to Or dividend close you're

Mark Mulhern

but it's I you're to bad numbers timing I think is the of flowed. relative think CapEx doing do necessarily, way the some don't So

higher little guess quarter. a some done. of the the see to in you'll leasing referred I CapEx Ted So we've

to consistent to continue expect relative few available coverage - kind the We to fund of after amount of CAD with of dividend. CapEx maybe to the fund last years the

we the even of made maintain So to face the in of range that last expect - in the we we've dividends increases years. couple

Operator

Instructions]. [Operator

the next State comes line Advisors. with Street of from Scott Powers question Our Global

Scott Powers

I want supply. to the potential go again over

debt. of You it before talked about refinancing

term the about clear, you maturing loan had talked in XXXX. be to Just

in until place You LIBOR lock year. January next have of a

what potential the So lock in note correct? senior and talked treasury you've got right, from financing. of advance and a - that that's I've about those unsecured apart facts separate

Mark Mulhern

do. You

Scott Powers

Okay.

balances, - ahead next as after Is saying? revolver disclosed at to are we're LIBOR there is looking like about be would the well looking for of couple what away right at potentially before million not up deals early your you point all. term - last the in which timing So year has been lock it what sometime quarter-end. and goes locking February, is as you refi sometime supply maturity its potentially you're of the that looks your at the you I mean, loan at is But clean down that $XXX

Mark Mulhern

we So kind of to try facts. is out the lay what do listen,

think I flexibility we As a you know, what on got we do here. lot of and timing

that So And also around well. we facts out of we've lay got hedge as pipeline you lock got that's just some timing spending this We've that in really have. expires. treasury LIBOR The kind dollars place, to got properly wanted as we the development we're loan on a the term note, hot that.

think general how in just that's it So uses. I sources kind of about and terms would in of

Scott Powers

them your current assume it Is the Okay. what you've - in they like managed you be talked are. going had in fair that about context terms metrics, helps. where leverage what you That they're to And of to of reported?

Mark Mulhern

the to of lower we flexibility. there balance again, some as on at dispositions end little bit from And that target. think quarter. we metric sheet, in we're of I We're those we've at Again, have X.XX quarter-to-quarter. We're have, put a bounce comfortable out X.X the the metrics. given side X.X from got obviously timing-wise, the the those debt end debt-to-EBITDA the a Yes, may flexibility But around the we've that of at comfortable there.

Operator

And there questions I'll back further appears the for on no the time. this to comments. at any lines phone final turn presentation be

Edward Fritsch

thank everyone additional and you dialing any please a if us questions, have Thank call. as you. in. you, Thank operator, And give for always, you,

Operator

gentlemen, lines. today. you that and and conclude disconnect the that participation does We your call conference for you Ladies for please your thank ask

Highwoods Properties (HIW) 24 Oct 182018 Q3 Earnings call transcript