At-A-Glance NYSE: HIW 4Q SunTrust Financial Centre, Tampa DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT

Transcription

1 At-A-Glance NYSE: HIW 4Q 2015 SunTrust Financial Centre, Tampa DEVELOPMENT ACQUISITION LEASING ASSET MANAGEMENT

2 HIGHLIGHTS 4Q 2015 Operations Earned FFO of $0.82 per share, $3.08 per share for full year Grew same property cash NOI by 4.4% year-over-year, 6.7% for full year Increased occupancy to 93.1% at year-end, a 120 basis point increase from year-end 2014 Leasing Activity Leased 1.0 million square feet of second generation office at an average term of 6.9 years, 19% longer than the prior five-quarter average Grew average in-place office cash rents per square foot by 5.5% year-over-year Achieved GAAP rent growth of +10.6% on second generation office leases signed Diversification (% of Annualized Revenue) By Customer Federal Government 5.5 MetLife 2.3 PPG Industries 1.4 HCA Corporation 1.2 EQT Corporation 1.2 International Paper 1.1 Healthways 1.0 Bass, Berry & Sims 1.0 State of Georgia 0.9 Lockton Companies 0.9 Top % Investment Activity Agreed to sell substantially all of its wholly-owned Country Club Plaza (the Plaza ) assets for $660 million Financing Activity Paid off $112 million of secured debt (6.9% weighted average interest rate) scheduled to mature in 2016, growing unencumbered NOI to over 91% Issued 744,000 shares of common stock through its ATM program at an average gross sales price of $43.54 per share, raising net proceeds of $32 million Ended the year with leverage of 44.9%, projected to go to ~38-39% when Plaza sale closes on March, By Market Average Office Cash Rental Rates for All In-Place Leases as of: $ Greensboro Richmond 5% 6% Orlando 7% 18% Memphis 7% Kansas City 7% Pittsburgh 9% Tampa 12% 13% 16% 20 12/31/11 12/31/12 12/31/13 12/31/14 12/31/15 2

3 DEVELOPMENT 2016 DEVELOPMENT GUIDANCE $100 $200M Pipeline $546M 70% Pre-leased 1.8M SF 5 Markets 8 Buildings $200M Bridgestone Americas HQ $41M 5000 CentreGreen 514K SF 167K SF 99% pre-leased Completion 3Q17 0% pre-leased Completion 3Q17 $107M Riverwood K SF 66% pre-leased Completion 2Q17 $7.6M Enterprise V (Industrial) Greensboro 131K SF 0% pre-leased Completion 2Q16 $59M Seven Springs West $37M GlenLake Five 203K SF 166K SF 86% pre-leased Completion 3Q16 88% leased Delivered 1Q15 Stabilizes 2Q17 $56M Laser Spine Institute HQ Tampa 176K SF 100% pre-leased Completion 1Q16 $110M MetLife I & II 427K SF 100% leased Delivered & Stabilized 2Q15 $38M Seven Springs II $15M Biologics HQ 131K SF 43% pre-leased Completion 2Q17 75K SF 100% leased Delivered & Stabilized 2Q15 Cash Rent Commencement Investment($M) SF Pre-Leased % 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 MetLife I , Biologics HQ 15 75, MetLife II , GlenLake Five , Enterprise V (Industrial) ,000 0 Laser Spine Institute HQ , Seven Springs West , Bridgestone Americas HQ , CentreGreen ,000 0 Riverwood , Seven Springs II , Totals $670 2,289,000 77% 3

4 VALUE-ADD ACQUISITIONS 2016 ACQUISITION GUIDANCE $220 - $320M Highwoodtizing 2014 $68M Lincoln Plaza Orlando $92M 421 Fayetteville Shock n Awe BI CapEx Brand Trigger Highwoods Standard 2013 $153M Pinnacle at Symphony Place $46M Glenlake N & S (2 bldgs) $118M CBD Orlando (5 bldgs) Orlando $143M One Alliance Center $56M Meridian I & II (2 bldgs) Tampa Before After 2012 $147M Two Alliance Center $99M EQT Plaza Pittsburgh 2011 $86M Riverwood 100 $214M PPG Place (6 bldgs) Pittsburgh We have captured 8.9% of occupancy in value add lease-up Before After 9.2M SF of acquisitions since 2011 There is another 3.2% of occupancy yet to be captured! 421 Fayetteville 4

5 RE-INVESTMENT SPREAD Source Sell Country Club Plaza $660M Kansas City 804,000 SF Retail 468,000 SF Office Under contract to Taubman/Macerich JV $50M Hard Money Scheduled to Close 3/1/16 4.7% YR 1 Cap Rate Highwoods retained: 149,000 SF of wholy owned Office Ownership in 2 JVs (12.5%/50%) that own 554,000 SF of Office Uses Bought Monarch Centre (2 Buildings) $303M Buckhead 896,000 SF 80% occupancy (with known near-term moveouts) 20% below replacement cost Acquired 9/30/15 Project 7+% Stabilized Return Bought SunTrust Financial Centre $124M CBD Tampa 528,000 SF 77% occupancy (with known near-term moveouts) 40% below replacement cost Acquired 9/30/15 Project 7+% Stabilized Return Buy??? $220M $124 M $220 M $303 M 5

6 FINANCIALS FFO Growth: 5.2% YOY Increase at Midpoint 2016 Outlook* (Assumptions as of February 10, 2016) Effect Assumed in FFO Outlook Low High FFO per Share $3.18 $3.30 Growth in Same Property Cash NOI from Continuing Operations 4.0% 5.0% Straight-Line Rental Income $22M $24M G&A Expenses $36M $38M Year-End Occupancy 92.5% 93.5% Weighted Average Fully Diluted Shares Outstanding 99M 100M Disposition of Plaza Assets $660M $660M Acquisitions Using Escrowed Funds from Disposition of Plaza Assets $0M $220M Effect Not Assumed in FFO Outlook Other Potential Dispositions $100M $200M Other Potential Acquisitions $ $0M $100M Potential Development Announcements $100M $200M * Factors that could cause actual 2016 FFO results to differ materially from Highwoods current expectations are detailed in the Company s 2015 Annual Report on Form 10-K and subsequent SEC filings. Strong Balance Sheet (12/31/15) War on Complexity 44.9% Debt + Preferreds as % of Gross Assets 6.1x Debt to Annualized EBITDA 91.0% Unencumbered NOI 3.1% Secured Debt as % of Gross Assets Investment Grade Ratings Baa2 BBB Joint Ventures * Reduction Buildings % SF 7.3M 1.8M -75% % of Annualized Revenue 10.2% 2.0% -80% Streamlines leasing process Enhances unencumbered pool Removes JV partner credit risk Reduces G&A expense *Pro Forma: Assumes sale of Concourse (Greensboro) Sound Maturity Ladder (12/31/15) $ Millions % 1.45% Average Interest Rate % $350 Bank Loan Floating Yr '16 $380 Bonds Yr ' % Yr '18 $299 LOC $200 Bank $298 $200 Loan Bonds $248 $132 Bonds Floating $0 Bonds Secured $44 Secured Yr ' % $350 Bank Loan Fixed / Floating Yr ' % Yr '21 Yr ' % Yr '23 6

7 FISHIN Independence Park Tampa Ovation Ovation Capital Plaza III Orlando Innsbrook Richmond SouthSide Works Pittsburgh North Shore Commons Richmond 7

8 YOU VE COME TO THE RIGHT PLACE.