Highwoods Properties (HIW) Stock: Dividend vs FFO and Cash

The dividend as filed: $0.50 a quarter, $2.00 a year, four years running

The 2025 10-K says: “The Company declared and paid a cash dividend of $0.50 per share of Common Stock in each quarter of 2025.” The 2024 10-K says the same for 2024, and both give the annual total as $2.00 for 2022, 2023, 2024 and 2025. On July 22, 2026 the board declared another $0.50, payable September 9, 2026 to holders of record on August 17, 2026. We did not read earlier years, so we cannot say whether the dividend was ever cut before 2022.

Highwoods reports FFO (funds from operations as Nareit defines it, including operating partnership units), and the filings give FFO available for common stockholders and per share. The 10-Q and 10-K give no AFFO, so the useful yardstick is FFO, with the cash-flow check further down. Quarter by quarter:

The two fourth quarters are the full year less the nine months (our arithmetic); the 10-K does not print them. For the first half of 2026, FFO available for common stockholders was $194.7 million against $189.4 million (up 2.8%, our arithmetic) and per share $1.74 against $1.72. Net income available for common stockholders was $0.85 per diluted share in Q2 2026 against $0.17, but $79.0 million of that quarter's net income is gains on disposition of property, which FFO excludes.

FFO per share is 13.6% lower in 2025 than in 2022 (our arithmetic). Two items sit inside those years: impairments of $24.6 million in 2024 (including 625 Liberty, a non-core building in Pittsburgh) and $8.8 million in 2025 (two out-of-service assets at Century Center in Atlanta). Both are added back in FFO, so they do not explain the decline; lower occupancy, higher interest expense and more shares do.

What the dividend is made of for tax: more capital gains in 2025

The 10-K splits each year's $2.00 by federal tax treatment, with the warning that the company's tax returns have not been examined by the IRS.

In 2025, $0.85 of the $2.00 was taxable as capital gains, against $0.18 in 2024. The 10-K reports $100.6 million of gains on disposition of depreciable properties in 2025 against $46.5 million in 2024. This is analysis of public documents, not tax advice; how a dividend is taxed to you depends on your own account.

Cash after leasing costs: the dividend is covered by FFO but not by operating cash

FFO adds back depreciation. An office landlord then has to spend cash on tenant improvements, leasing commissions and building work to keep occupancy. The cash flow statement shows what was left. All three columns on the right are from the statements; the last one is our arithmetic and ignores preferred dividends ($2.4 million a year), distributions to operating partnership unit holders ($4.2 million in 2025) and working-capital swings.

Operating cash flow after capital spending covered 73% of the common dividend paid in 2025 and 70% in the first half of 2026 (our arithmetic). Over 2022 to 2025 the cumulative shortfall is $38.1 million (our arithmetic). Highwoods also sold properties (net proceeds of $195.2 million in 2025 and $297.5 million in the first half of 2026) and borrowed, and it spent $441.5 million on acquired real estate in 2025. The 10-Q says: “The amount of future distributions that will be made is at the discretion of the Company’s Board of Directors.” The point is not that the dividend is at risk, which the filings do not say; it is that the comfortable-looking 56% payout of FFO becomes close to 100% of cash once the cost of keeping buildings leased is taken out.

The price the filings print: $33.51, $21.41, then $30.16

Each 10-Q and 10-K prints the stock price at the end of the period in its capitalization table. These are not today's prices; they are the nine dates the company reported, and the yield on $2.00 is our arithmetic.

From $33.51 to $21.41 is a fall of 36.1%, and from $21.41 to $30.16 a rise of 40.9% (our arithmetic). The company's own leverage ratio, debt and preferred stock against the undepreciated book value of its assets, hardly moved (42.1% to 43.7%); the share of total capitalization moved because the market value of the equity did. The filings do not say why the price moved in the first half of 2026, and we do not guess. Mortgages and notes payable, net, rose from $3,295.5 million (September 2024) to $3,703.5 million (March 2026) and were $3,515.6 million at June 30, 2026.

What changed in the second quarter of 2026

• FFO per share $0.90 against $0.89. FFO available for common stockholders was $100.7 million against $97.7 million. Rental and other revenues were $216.4 million, up $15.8 million or 7.9%, mostly from acquisitions in Raleigh, Charlotte and Dallas ($15.6 million).
• Net operating income rose 6.8% to $146.2 million, and same-property NOI rose 1.4% ($1.8 million), the first rise in the quarters we read since Q3 2024 (+0.3%). Same-property cash NOI was $127.0 million against $126.6 million.
• Interest expense rose 10.7% to $41.7 million from $37.7 million, on higher average debt and lower capitalized interest. The company expects it to be higher for the rest of 2026.
• Net income was $96.8 million against $19.2 million, of which $79.0 million is gains on selling a Nashville building and Richmond land for $259.0 million in total.
• Two sales were pending. Highwoods expected to close $73.5 million of non-core sales (six buildings, 472,000 square feet, in the Innsbrook submarket of Richmond; and a 118,000 square foot building in Century Center, Atlanta) before August 15, 2026. We found no filing after July 28 reporting the closings.
• The bank term loan was pushed out. A $150.0 million unsecured term loan moved from May 2027 to June 2029 at SOFR plus 90 basis points (Form 8-K, June 4, 2026), and $11.0 million of the March 2027 notes were repurchased.
• A buyback exists, unused. An up-to-$250.0 million repurchase program was announced on April 22, 2026; the 10-Q says no shares were repurchased in the second quarter and that any repurchases would be funded from non-core asset sales, available cash and revolver borrowings.
• Looking ahead the company said it expects to sell $100 million to $250 million of additional non-core properties, to start up to $400 million of development (delivered 2028 or later) and to acquire up to $250 million of properties in the rest of 2026.

Occupancy and rents: 88.9% to 85.7%, with rents per square foot up

The 10-Q puts it this way: “Occupancy in our office portfolio increased from 85.3% as of December 31, 2025 to 85.7% as of June 30, 2026.” The portfolio is 26.83 million rentable square feet at December 31, 2025. Averages over the whole year and the rent per occupied square foot, from the 10-K:

GAAP rent per occupied square foot rose 13.2% from 2021 to 2025 and cash rent 13.8% (our arithmetic) while occupancy fell 4.5 points. Higher rent on less space is what the leasing table below shows.

The company's summary of the latest quarter: “Annual combined GAAP rents for new and renewal leases signed in the second quarter were $40.97 per rentable square foot, 20.9% higher compared to previous leases in the same office spaces.” In Q2 2026, 324,458 square feet were new leases (average term 8.5 years, tenant improvements $7.17 a square foot) and 701,804 were renewals (4.9 years, $3.16). Annualized improvements and commissions per square foot are the company's weighting over the lease term, so the cash outlay at signing is higher than the figure shown.

Where the rent comes from: three cities are 57%

The two columns on the right come from a different document and date than the first three, and the Dallas segment did not exist in Q2 2025 (the 10-Q shows no Dallas revenue then). In the first quarter of 2026 Highwoods bought Bloc83, a two-building, 492,000 square foot mixed-use asset in central Raleigh, through a joint venture with the North Carolina Investment Authority (planned investment $210.5 million, of which $21.0 million is Highwoods's), and The Terraces, a 173,000 square foot office building in Dallas's Preston Center, in a joint venture with Granite (planned investment $109.3 million, with $64.3 million of Highwoods preferred equity at 5.75% and $36.0 million of common). The company calls its eight cities “the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa”; the term Sun Belt is ours.

At June 30, 2026 “only Bank of America (4.2%) and Asurion (3.3%) accounted for more than 3% of our annualized GAAP revenues,” the company says; Bank of America was 3.7% at September 30, 2024 and 4.3% at December 31, 2025, so its share of the total has risen.

Lease expirations: 18.7% of rent in 2026 and 2027

This is the 10-K schedule; the 10-Q does not repeat it, so the 2026 line still includes months already past. 2026 to 2028 together are 28.8% of rent and 2030 plus 2031 are 22.7% (our arithmetic). The leases expiring in 2026 to 2031 carry average GAAP rents of $30.91 to $33.19 a square foot, against $40.97 on leases signed in Q2 2026, which is the arithmetic behind the 20.9% increase. The company says it concentrates on renewing before expiration, and that annualized revenues from second-generation leases expiring in any year are typically less than 15% of total.

Debt: $3.53 billion, mostly unsecured, nothing large due before March 2027

At June 30, 2026 mortgages and notes payable were $699.2 million secured (weighted average rate 4.44%) and $2,831.7 million unsecured (4.45%), $3,530.9 million together (our arithmetic) or $3,515.6 million net of debt issuance costs. Of that, $350.0 million bears floating interest. Cash was $145.4 million, and about $195 million at July 21, 2026, with the $750.0 million revolver (SOFR plus 85 basis points, maturing January 2028 with two six-month extensions) undrawn. The 10-Q says: “We have no debt scheduled to mature within one year from July 28, 2026 (the date of issuance of the quarterly financial statements), except for $289.1 million principal amount of unsecured notes that are scheduled to mature in March 2027.”

The year-by-year schedule is in the 10-K. Since December 31 the $150.0 million term loan has moved from 2027 to 2029 and $11.0 million of the 2027 notes were repurchased, so the 2027 bucket is smaller than shown.

The cheap part of the book is the 2.600% and 3.050% notes (due 2031 and 2030). New unsecured debt costs more: the November 2025 notes were priced to yield 5.431%, and interest expense is already up 10.7% year on year. The company states it is in compliance with its financial covenants.

Shares: the ATM has been used, the buyback has not

Highwoods issued 1.6 million shares in 2024 (average gross price $32.71, net proceeds $51.3 million) and 1.9 million in 2025 ($31.86, $60.7 million), including 0.3 million in the fourth quarter at $32.06. On February 11, 2026 it signed new equity distribution agreements for up to $300 million, including forward sales (Form 8-K); none were issued in the second quarter. Common stock outstanding was 105,710 thousand at December 31, 2023 and 110,306 thousand at June 30, 2026, up 4.3% (our arithmetic); the 3.5 million shares issued under the equity agreements in 2024 and 2025 account for most of that rise (our arithmetic). On April 22, 2026 the board authorized repurchases of up to $250.0 million; nothing had been bought by June 30, 2026.

How this compares with other office REITs and with non-traded vehicles

In our ten-company office REIT table, built from the June 30, 2026 10-Qs, Highwoods's 85.7% occupancy sat between BXP's 88.4% and Kilroy's 77.0% and Douglas Emmett's 75.6%, and it was one of four that held the dividend while SL Green ($0.773 to $0.618), BXP ($0.98 to $0.70) and Brandywine ($0.15 to $0.08) cut. Highwoods's payout of 56% of FFO was in the same 42% to 59% band as the other holders. The single-company pages show how different office is: BXP reset its dividend on taxable-income grounds, Vornado pays once a year, and Douglas Emmett has held $0.19 a quarter while occupancy fell to 75.6%. SL Green is the Manhattan version. Highwoods is a regional office landlord with a $2.00 dividend that has not moved, a spread of 8 cities and a book of leases that reprice upward at renewal; its weak point in the filings is the cash left after leasing costs, not the FFO payout. For a Sun Belt reader who prefers residential exposure, Camden Property Trust is our page on Sun Belt apartments.

Against a non-traded vehicle, the contrast is price visibility. A listed REIT's market value moved 36.1% down and 40.9% up across three quarter-ends while the dividend did not; a non-traded REIT or interval fund shows no such move day to day, but it gives you less of a way out. Our comparison of non-traded and publicly traded REITs and the listing discount page cover what that difference means when you want out.

What the next report will show, and when

Highwoods said in a September 15, 2026 press release (distributed by GlobeNewswire, not an SEC filing) that it will release third quarter 2026 results on Tuesday, October 27, 2026 after the market closes, with a call on Wednesday, October 28, 2026 at 11:00 a.m. Eastern. Highwoods does not file earnings releases as Forms 8-K: none of its 8-Ks since October 2024 carries an earnings item, so the Form 10-Q is the first SEC document with the numbers. Its last four 10-Qs were filed on Tuesdays (July 29, 2025; October 28, 2025; April 28, 2026; July 28, 2026), which points to the 10-Q arriving on or about October 27 to 28 (our arithmetic; the company does not announce it). As of October 19, 2026 it is not filed. The last periodic report is the 10-Q of July 28, 2026; apart from insider-transaction forms, the only filings after it in the EDGAR index are two Schedule 13G amendments.

What a holder or reader can do with this

This page is analysis of public documents, not investment, legal or tax advice. Things the filings let you check yourself:

• Say which yardstick. 56% of FFO and roughly 100% of operating cash after leasing costs describe the same $0.50. Highwoods's filings give FFO, not AFFO, so a site that shows an AFFO or cash-available figure is using the supplemental or its own method.
• Read the cash-flow statement, not just FFO. Tenant improvements and leasing costs were $155.0 million in 2025, about 40% of FFO in dollars (our arithmetic). If leasing costs keep rising with occupancy near 86%, the cash gap does not close by itself.
• Watch the repricing in both directions. Leases signed at 20.9% above the old GAAP rent help FFO; refinancing 3.875% notes at a 5% to 5.4% coupon works the other way.
• Treat yield as a price. $2.00 was 9.3% of the March 31, 2026 price and 6.6% of the June 30, 2026 price. The dividend did not change.
• Compare like with like. Use the office REIT table for the same dates and remember Highwoods's markets are mid-sized cities, not gateway Manhattan or Los Angeles.

FAQ

All figures are from Highwoods Properties, Inc. (SEC CIK 921082) filings read on EDGAR on October 19, 2026: Forms 10-Q for the quarters ended September 30, 2024 (accession 0000921082-24-000033), March 31, 2025 (0000921082-25-000021), June 30, 2025 (0000921082-25-000037), September 30, 2025 (0000921082-25-000044), March 31, 2026 (0000921082-26-000035) and June 30, 2026 (0000921082-26-000045); Forms 10-K for 2024 (0000921082-25-000004) and 2025 (0000921082-26-000005); and Forms 8-K of November 14, 2025 (0000921082-25-000048), February 11, 2026 (0000921082-26-000017) and June 4, 2026 (0000921082-26-000041). Highwoods Realty Limited Partnership (CIK 941713) files the same documents jointly. The October 27, 2026 results date comes from a September 15, 2026 press release distributed by GlobeNewswire, not an SEC filing. Peer figures for BXP, SL Green, Brandywine, Kilroy and Douglas Emmett are from our own office REIT page built from their June 30, 2026 10-Qs. Prices are the period-end prices printed in the company's capitalization tables, not current quotes. The two fourth-quarter FFO figures, payout and yield percentages, FFO per share changes, cash left after capital spending, shortfalls, shares of debt, rent and markets, NOI changes by market, GAAP and cash rent growth, the interest-cost illustration and the 10-Q timing are our arithmetic from those rows; FFO is the company's Nareit-defined measure. This is analysis of public documents, not investment, legal or tax advice.