Q4 2025 Highwoods Properties Inc Earnings Call

February 11, 2026

Speaker #1: Good morning, everyone. And thank you for joining today's HIGHWOODS PROPERTIES Q4 2025 earnings call. My name is Reagan, and I'll be your moderator for today's call.

Operator: Good morning, everyone, and thank you for joining today's Highwoods Properties Q4 2025 earnings call. My name is Regan, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you'd like to ask a question, you may do so by pressing star 1 on your telephone keypad. I will now like to pass the conference over to Brendan Maiorana, Executive Vice President and Chief Financial Officer. Please proceed.

Speaker #1: I'll last will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. And if you'd like to ask a question, you may do so by pressing star 1 on your telephone keypad.

Speaker #1: I'll now like to pass the conference over to Brendan Maiorana, Executive Vice President and Chief Financial Officer. Please proceed.

Speaker #2: Thank you, operator. And good morning, everyone. Joining me on the call this morning are Ted Klinck, our Chief Executive Officer, and Brian Leary, our Chief Operating Officer.

Brendan Maiorana: Thank you, operator, and good morning, everyone. Joining me on the call this morning are Ted Klinck, our Chief Executive Officer, and Brian Leary, our Chief Operating Officer. For your convenience, today's prepared remarks have been posted on the web. If you have not received yesterday's earnings release or supplemental, they're both available on the investors section of our website at HIGHWOODS.com. On today's call, our review will include non-GAAP measures such as FFO, NOI, and EBITDA. The release and supplemental include a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures. Forward-looking statements made during today's call are subject to risks and uncertainties. These risks and uncertainties are discussed at length in our press releases as well as our SEC filings.

Speaker #2: For your convenience, today's prepared remarks have been posted on the web. If you have not received yesterday's earnings release or supplemental, they're both available on the Investors section of our website at highwoods.com.

Speaker #2: On today's call, our review will include non-GAAP measures, such as FFO, NOI, and EBITDA. The release and supplemental include a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measures.

Speaker #2: Forward-looking statements made during today's call are subject to risks and uncertainties. These risks and uncertainties are discussed at length in our press releases as well as our SEC filings.

Speaker #2: As you know, actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update any forward-looking statements.

Brendan Maiorana: As you know, actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update any forward-looking statements. With that, I'll turn the call over to Ted.

Speaker #2: With that, I'll turn the

Speaker #2: call over to Ted. Thanks,

Brian Leary: Thanks, Brendan, and good morning, everyone. Before I talk about our fourth quarter and outlook for 2026, I'd like to begin by highlighting some of the reasons why we're upbeat about the next few years for Highwoods. First, the fundamental backdrop across our core Sunbelt BBDs is as strong as it's been in many years. There's limited to no new supply across our markets and dwindling blocks of available high-quality space. New users continue to migrate to the Sunbelt, and even with mixed signals about the health of the overall economy, many existing companies in our footprint continue to grow their businesses. This dynamic has created rental rate growth, not just in face rates, but growth in net effective rents, including rent spikes in our best BBDs.

Ted Klinck: Thanks, Brendan, and good morning, everyone. Before I talk about our fourth quarter and outlook for 2026, I'd like to begin by highlighting some of the reasons why we're upbeat about the next few years for Highwoods. First, the fundamental backdrop across our core Sunbelt BBDs is as strong as it's been in many years. There's limited to no new supply across our markets and dwindling blocks of available high-quality space. New users continue to migrate to the Sunbelt, and even with mixed signals about the health of the overall economy, many existing companies in our footprint continue to grow their businesses. This dynamic has created rental rate growth, not just in face rates, but growth in net effective rents, including rent spikes in our best BBDs.

Speaker #3: Brendan: And good morning, everyone. Before I talk about our fourth quarter and outlook for 2026, I'd like to begin by highlighting some of the reasons why we're upbeat about the next few years for Highwoods.

Speaker #3: First, the fundamental backdrop across our core Sunbelt BBDs is a strong as it's been in many years. There's limited to no new supply across our markets, and dwindling blocks of available high-quality space.

Speaker #3: New users continue to migrate to the Sunbelt. And even with mixed signals about the health of the overall economy, many existing companies in our footprint continue to grow their businesses.

Speaker #3: This dynamic has created rental rate growth, not just in face rates, but growth in net effective rents, including rent spikes in our best BBDs.

Speaker #3: Given limited development starts forecasted for the foreseeable future, well-capitalized landlords with high-quality office and BBD locations in the Sunbelt are positioned to drive meaningful growth in rents.

Brian Leary: Given limited development starts forecasted for the foreseeable future, well-capitalized landlords with high-quality offices and BBD locations in the Sunbelt are positioned to drive meaningful growth in rents. Second, the convergence of occupancy gains, rental rate growth, and stabilization of our development pipeline should enable Highwoods to deliver outsized NOI and earnings growth the next few years. We expect to drive occupancy higher by roughly 200 basis points from the end of 2025 to the end of 2026. Plus, our development properties are projected to deliver year-over-year growth in each of the next three years. For the last few quarters, we've been emphasizing approximately $50 to 60 million of NOI growth potential across eight buildings, four existing operating properties, and four developments. We will realize some of this growth in 2026, but most will benefit our NOI trajectory in 2027 and beyond.

Ted Klinck: Given limited development starts forecasted for the foreseeable future, well-capitalized landlords with high-quality offices and BBD locations in the Sunbelt are positioned to drive meaningful growth in rents. Second, the convergence of occupancy gains, rental rate growth, and stabilization of our development pipeline should enable Highwoods to deliver outsized NOI and earnings growth the next few years. We expect to drive occupancy higher by roughly 200 basis points from the end of 2025 to the end of 2026. Plus, our development properties are projected to deliver year-over-year growth in each of the next three years. For the last few quarters, we've been emphasizing approximately $50 to 60 million of NOI growth potential across eight buildings, four existing operating properties, and four developments. We will realize some of this growth in 2026, but most will benefit our NOI trajectory in 2027 and beyond.

Speaker #3: Second, the convergence of occupancy gains and rental rate growth, and stabilization of our development pipeline, should enable Highwoods to deliver outsized NOI and earnings growth the next few years.

Speaker #3: We expect to drive occupancy higher by roughly 200 basis points, from the end of 2025 to the end of 2026. Plus, our development properties are projected to deliver year-over-year growth in each of the next three years.

Speaker #3: For the last few quarters, we've been emphasizing approximately 50 to 60 million of NOI growth potential across eight buildings. Four existing operating properties and four developments.

Speaker #3: We have realized some of this growth in 2026, but most will benefit our NOI trajectory in 2027 and beyond. Third, and finally, we are positioned to invest at attractive risk-adjusted returns.

Brian Leary: Third and finally, we are positioned to invest at attractive risk-adjusted returns. Future investments are also likely to drive additional growth. We've invested approximately $800 million or nearly $600 million at our share over the last 12 months. These acquisitions, which were in the strongest BBDs of Charlotte, Raleigh, and Dallas, have a weighted average vintage of 4 years, an initial lease rate of 93.5%, WALTs of 9 years, rents approximately 15% below market, and projected stabilized cash yields of roughly 8%. The combination of strong fundamentals for high-quality BBD offices and limited buyer pools creates an excellent opportunity for us to deploy capital at attractive risk-adjusted returns. These items, combined with our proven track record and strong balance sheet, give us confidence that we're well-positioned to grow for the foreseeable future. Our initial 2026 FFO outlook is 5.7% higher at the midpoint than our initial 2025 outlook.

Ted Klinck: Third and finally, we are positioned to invest at attractive risk-adjusted returns. Future investments are also likely to drive additional growth. We've invested approximately $800 million or nearly $600 million at our share over the last 12 months. These acquisitions, which were in the strongest BBDs of Charlotte, Raleigh, and Dallas, have a weighted average vintage of 4 years, an initial lease rate of 93.5%, WALTs of 9 years, rents approximately 15% below market, and projected stabilized cash yields of roughly 8%. The combination of strong fundamentals for high-quality BBD offices and limited buyer pools creates an excellent opportunity for us to deploy capital at attractive risk-adjusted returns. These items, combined with our proven track record and strong balance sheet, give us confidence that we're well-positioned to grow for the foreseeable future. Our initial 2026 FFO outlook is 5.7% higher at the midpoint than our initial 2025 outlook.

Speaker #3: Future investments are also likely to drive additional growth. We've invested approximately $800 million or nearly $600 million at our share over the past 12 months, which were in the strongest BBDs of Charlotte, Raleigh, and Dallas, have a weighted average vintage of four years, an initial lease rate of 93.5%, WALT of nine years, rents approximately 15% below market, and projected stabilized cash yields of roughly 8%.

Speaker #3: The combination of strong fundamentals for high-quality BBD office and limited buyer pools creates an excellent opportunity for us to deploy capital at attractive risk-adjusted returns.

Speaker #3: These items, combined with our proven track record and strong balance sheet, give us confidence that we're well positioned to grow for the foreseeable future.

Speaker #3: Our initial 2026 FFO outlook is 5.7% higher at the midpoint than our initial 2025 outlook. Now turning to our fourth quarter. We had solid financial performance with FFO of 90 cents per share, including 6 cents of land sale gains.

Brian Leary: Now, turning to our fourth quarter, we had solid financial performance with FFO of $0.90 per share, including $0.06 of land sale gains, resulting in full-year 2025 FFO of $3.48 per share. Excluding land sale gains, full-year FFO was $3.41 per share, which was 2% higher than the midpoint of our original outlook provided at the beginning of 2025. We leased 526,000 sq ft of second-gen space during the fourth quarter, including 221,000 sq ft of new leases. In addition, we signed 95,000 sq ft of first-gen leases on our development pipeline. Signings on second-gen space were a bit lower in the fourth quarter compared to earlier in the year. We believe that was largely just timing, as already in 2026, signings have accelerated, and the long-term trend continues to be positive. Leasing economics continued to be healthy in the fourth quarter.

Ted Klinck: Now, turning to our fourth quarter, we had solid financial performance with FFO of $0.90 per share, including $0.06 of land sale gains, resulting in full-year 2025 FFO of $3.48 per share. Excluding land sale gains, full-year FFO was $3.41 per share, which was 2% higher than the midpoint of our original outlook provided at the beginning of 2025. We leased 526,000 sq ft of second-gen space during the fourth quarter, including 221,000 sq ft of new leases. In addition, we signed 95,000 sq ft of first-gen leases on our development pipeline. Signings on second-gen space were a bit lower in the fourth quarter compared to earlier in the year. We believe that was largely just timing, as already in 2026, signings have accelerated, and the long-term trend continues to be positive. Leasing economics continued to be healthy in the fourth quarter.

Speaker #3: Resulting in full-year 2025 FFO of $3.48 per share. Excluding land sale gains, full-year FFO was $0.07 per share, or 2% higher than the midpoint of our original outlook provided at the beginning of 2025.

Speaker #3: We leased 526,000 square feet of second-gen space during the fourth quarter, including 221,000 square feet of new leases. In addition, we signed 95,000 square feet of first-gen leases on our development pipeline.

Speaker #3: Signings on second-gen space were a bit lower in the fourth quarter compared to earlier in the year. We believe that was largely just timing, as already in 2026, signings have accelerated and the long-term trend continues to be positive.

Speaker #3: Leasing economics continue to be healthy in the fourth quarter. Cash rent spreads were positive, with GAAP rent spreads in the mid-teens. As we've long stated, we're most focused on net effective rents, which are strong again in the fourth quarter, and help make full-year 2025 our high-water mark.

Brian Leary: Cash rent spreads were positive, with GAAP rent spreads in the mid-teens. As we've long stated, we're most focused on net effective rents, which are strong again in the fourth quarter, and help make full-year 2025 our high-water mark. For the year, net effective rents were 20% higher than in 2024 and 19% higher than 2022, our prior peak year. This performance underscores the improving fundamentals we're seeing across our markets and BBDs. Our $474 million development pipeline is now 78% pre-leased, up from 72% last quarter and 56% one year ago. Glenlake 3, our 218,000sq ft office and amenity retail development in Raleigh, is 84% leased, with strong prospects to bring the property to the mid-90s. At Granite Park 6, our 422,000sq ft building in the Legacy BBD of Dallas, we signed 44,000sq ft since our last earnings call and are now nearly 80% leased.

Ted Klinck: Cash rent spreads were positive, with GAAP rent spreads in the mid-teens. As we've long stated, we're most focused on net effective rents, which are strong again in the fourth quarter, and help make full-year 2025 our high-water mark. For the year, net effective rents were 20% higher than in 2024 and 19% higher than 2022, our prior peak year. This performance underscores the improving fundamentals we're seeing across our markets and BBDs. Our $474 million development pipeline is now 78% pre-leased, up from 72% last quarter and 56% one year ago. Glenlake 3, our 218,000sq ft office and amenity retail development in Raleigh, is 84% leased, with strong prospects to bring the property to the mid-90s. At Granite Park 6, our 422,000sq ft building in the Legacy BBD of Dallas, we signed 44,000sq ft since our last earnings call and are now nearly 80% leased.

Speaker #3: For the year, net effective rents were 20% higher than in 2024 and 19% higher than 2022, our prior peak year. This performance underscores the improving fundamentals we're seeing across our markets and BBDs.

Speaker #3: Our 474 million development pipeline is now 78% pre-leased. Up from 72% last quarter and 56% one year ago. Glen Lake 3, our 218,000 square foot office and amenity retail development in Raleigh, is 84% leased, with strong prospects to bring the property to the mid-90s.

Speaker #3: At Granite Park 6, our 422,000 square foot building in the legacy BBD of Dallas, we signed 44,000 square feet since our last earnings call and are now nearly 80% leased.

Speaker #3: We signed 51,000 square feet at 23 Springs, our 642,000-square-foot mixed-use development in Uptown Dallas, bringing the property to nearly 75% leased, up from 67% last quarter.

Brian Leary: We signed 51,000 sq ft at 23Springs, our 642,000 sq ft mixed-use development in Uptown Dallas, bringing the property to nearly 75% leased, up from 67% last quarter. At 23Springs, current rents are 40% above our pro forma underwriting. Lastly, Midtown East in Tampa, our 143,000 sq ft development, is 76% leased, and we have strong prospects for the remaining office space. Given the strong demand we've experienced with our current developments and demand from sizable users across many of our markets, we're starting to have conversations with prospective build-to-suit and anchor customers for new projects. We've included the potential for up to $200 million of development announcements in our 2026 outlook. We've been active on the investment front, especially late in 2025 and early in 2026. We acquired $472 million in 2025, including our $223 million acquisition of 600 at Legacy Union in Q4.

Ted Klinck: We signed 51,000 sq ft at 23Springs, our 642,000 sq ft mixed-use development in Uptown Dallas, bringing the property to nearly 75% leased, up from 67% last quarter. At 23Springs, current rents are 40% above our pro forma underwriting. Lastly, Midtown East in Tampa, our 143,000 sq ft development, is 76% leased, and we have strong prospects for the remaining office space. Given the strong demand we've experienced with our current developments and demand from sizable users across many of our markets, we're starting to have conversations with prospective build-to-suit and anchor customers for new projects. We've included the potential for up to $200 million of development announcements in our 2026 outlook. We've been active on the investment front, especially late in 2025 and early in 2026. We acquired $472 million in 2025, including our $223 million acquisition of 600 at Legacy Union in Q4.

Speaker #3: At 23 Springs, current rents are 40% above our pro forma underwriting. Lastly, Midtown East in Tampa, our 143,000-square-foot development, is 76% leased, and we have strong prospects for the remaining office space.

Speaker #3: Given the strong demand we've experienced with our current developments and demand from sizable users across many of our markets, we're starting to have conversations with prospective build-to-suit and anchor customers for new projects.

Speaker #3: We've included the potential for up to 200 million of development announcements in our 2026 outlook. We've been active on the investment front, especially late in 2025 and early in 2026.

Speaker #3: We acquired 472 million in 2025, including our 223 million acquisition of 600 at Legacy Union in the fourth quarter. 600 is a $411,000 square foot class AA office tower in Uptown Charlotte.

Brian Leary: 600 is a 411,000 square foot Class AA office tower in Uptown Charlotte. This property was completed in 2025 and is currently 89% leased, up from 84% when we acquired the building in November. We have strong prospects to bring the building into the mid-90s. Because the property is just delivered and is currently only mid-40% occupied, NOI will be temporarily lower in 2026. We expect to reach stabilized yields of around 8% on both a cash and GAAP basis, with projected stabilization occurring on a GAAP basis in 2027 and cash in 2028. In January, we acquired two buildings in the BBDs of Raleigh and Dallas for a total expected investment of $318 million, of which our share was $108 million, plus $13 million of preferred equity.

Ted Klinck: 600 is a 411,000 square foot Class AA office tower in Uptown Charlotte. This property was completed in 2025 and is currently 89% leased, up from 84% when we acquired the building in November. We have strong prospects to bring the building into the mid-90s. Because the property is just delivered and is currently only mid-40% occupied, NOI will be temporarily lower in 2026. We expect to reach stabilized yields of around 8% on both a cash and GAAP basis, with projected stabilization occurring on a GAAP basis in 2027 and cash in 2028. In January, we acquired two buildings in the BBDs of Raleigh and Dallas for a total expected investment of $318 million, of which our share was $108 million, plus $13 million of preferred equity.

Speaker #3: This property was completed in 2025 and is currently 89% leased. Up from 84% when we acquired the building in November. We have strong prospects to bring the building into the mid-90s.

Speaker #3: Because the property is just delivered and is currently only mid-40s percent occupied, NOI will be temporarily lower in 2026. We expect to reach stabilized yields of around 8% on both a cash and GAAP basis, with projected stabilization occurring on a GAAP basis in 2027 and cash in 2028.

Speaker #3: In January, we acquired two buildings in the BBDs of Raleigh and Dallas, for a total expected investment of $318 million, of which our share was $108 million, plus $13 million of preferred equity.

Speaker #3: First, we acquired The Terraces in Dallas for $109 million, and a JV with our longtime local partner, Granite Properties, in which we have an 80% interest.

Brian Leary: First, we acquired The Terraces in Dallas for $109 million in a JV with our longtime local partner, Granite Properties, in which we have an 80% interest. The Terraces is a 173,000-square-foot best-in-class property that was built in 2017 and is located in Preston Center, a new BBD for Highwoods. We believe Preston Center is the most supply-constrained BBD in Dallas, where rents have grown substantially over the past few years, giving us more than 30% mark-to-market upside on in-place leases. After signing a lease following our acquisition, we are now 100% leased at The Terraces. Second, we acquired Block 83 in Raleigh, a 492,000-square-foot mixed-use asset that includes two 10-story best-in-class office buildings with 27,000 square feet of ground-floor amenity retail located in CBD Raleigh. We initially owned a 10% interest in the joint venture that was formed to acquire Block 83.

Ted Klinck: First, we acquired The Terraces in Dallas for $109 million in a JV with our longtime local partner, Granite Properties, in which we have an 80% interest. The Terraces is a 173,000-square-foot best-in-class property that was built in 2017 and is located in Preston Center, a new BBD for Highwoods. We believe Preston Center is the most supply-constrained BBD in Dallas, where rents have grown substantially over the past few years, giving us more than 30% mark-to-market upside on in-place leases. After signing a lease following our acquisition, we are now 100% leased at The Terraces. Second, we acquired Block 83 in Raleigh, a 492,000-square-foot mixed-use asset that includes two 10-story best-in-class office buildings with 27,000 square feet of ground-floor amenity retail located in CBD Raleigh. We initially owned a 10% interest in the joint venture that was formed to acquire Block 83.

Speaker #3: The terraces is a 173,000 square foot best-in-class property that was built in 2017 and is located in Preston Center, a new BBD for Highwoods.

Speaker #3: We believe Preston Center is the most supply-constrained BBD in Dallas, where rents have grown substantially over the past few years, giving us more than 30% mark-to-market upside on in-place leases.

Speaker #3: After signing a lease following our acquisition, we are now 100% leased at The Terraces. Second, we acquired Block 83 in Raleigh, a 492,000-square-foot mixed-use asset that includes two 10-story, best-in-class office buildings, with 27,000 square feet of ground-floor amenity retail located in CBD Raleigh.

Speaker #3: We initially owned a 10% interest in the joint venture that was formed to acquire Block 83. The North Carolina Investment Authority, a new strategic investment partner for Highwoods, owns the remaining 90%.

Brian Leary: The North Carolina Investment Authority, a new strategic investment partner for Highwoods, owns the remaining 90%. We have the option to increase our ownership in Block 83 to 50%. On a combined basis, we expect the initial GAAP yield on Block 83 and Terraces to be in the low to mid-8% range during 2026, while our initial cash yield will be around 7%, which is temporarily low due to free rent at the Terraces that will burn off during 2026 and result in stabilized cash yields in the mid to upper 7s on a combined basis prior to achieving rent roll-ups at the Terraces. We expect to fund our recent acquisition activity on a leverage-neutral basis, primarily through the sale of non-core assets where properties value has been maximized.

Ted Klinck: The North Carolina Investment Authority, a new strategic investment partner for Highwoods, owns the remaining 90%. We have the option to increase our ownership in Block 83 to 50%. On a combined basis, we expect the initial GAAP yield on Block 83 and Terraces to be in the low to mid-8% range during 2026, while our initial cash yield will be around 7%, which is temporarily low due to free rent at the Terraces that will burn off during 2026 and result in stabilized cash yields in the mid to upper 7s on a combined basis prior to achieving rent roll-ups at the Terraces. We expect to fund our recent acquisition activity on a leverage-neutral basis, primarily through the sale of non-core assets where properties value has been maximized.

Speaker #3: We have the option to increase our ownership in Block 83 to 50%. On a combined basis, we expect the initial GAAP yield on Block 83 and terraces to be in the low to mid-8% range.

Speaker #3: During 2026, while our initial cash yield will be around 7%, which is temporarily low due to free rent at the Terraces that will burn off during 2026 and result in stabilized cash yields in the mid to upper 7s on a combined basis, prior to achieving rent roll-ups at the Terraces.

Speaker #3: We expect to fund our recent acquisition activity on a leverage-neutral basis, primarily through the sale of non-core assets, where properties' value has been maximized.

Speaker #3: We sold $66 million of non-core buildings and land across various markets in the fourth quarter, and an additional $42 million of non-core properties in Richmond, subsequent to year-end.

Brian Leary: We sold $66 million of non-core buildings and land across various markets in Q4 and an additional $42 million of non-core properties in Richmond subsequent to year-end. Our 2026 FFO outlook assumes we close $190 to 210 million of additional dispositions by mid-year. Upon stabilization of 600, we expect this leverage-neutral rotation of capital to be modestly accretive to our unaffected FFO run rate, while improving our long-term growth rate, strengthening our cash flows, and increasing our portfolio quality. To wrap up, we're excited about the outlook for Highwoods. First, given strong fundamentals across our markets, pricing power is shifting towards well-capitalized landlords who own high-quality buildings. Second, organic growth potential embedded in the Highwoods portfolio will be realized primarily through occupancy gains in our operating portfolio and stabilization of our development pipeline.

Ted Klinck: We sold $66 million of non-core buildings and land across various markets in Q4 and an additional $42 million of non-core properties in Richmond subsequent to year-end. Our 2026 FFO outlook assumes we close $190 to 210 million of additional dispositions by mid-year. Upon stabilization of 600, we expect this leverage-neutral rotation of capital to be modestly accretive to our unaffected FFO run rate, while improving our long-term growth rate, strengthening our cash flows, and increasing our portfolio quality. To wrap up, we're excited about the outlook for Highwoods. First, given strong fundamentals across our markets, pricing power is shifting towards well-capitalized landlords who own high-quality buildings. Second, organic growth potential embedded in the Highwoods portfolio will be realized primarily through occupancy gains in our operating portfolio and stabilization of our development pipeline.

Speaker #3: Our 2026 FFO outlook assumes we close $190 to $210 million of additional dispositions by mid-year. Upon stabilization of 600, we expect this leverage-neutral rotation of capital to be modestly accretive to our unaffected FFO run rate.

Speaker #3: While improving our long-term growth rate, strengthening our cash flows, and increasing our portfolio quality. To wrap up, we're excited about the outlook for Highwoods.

Speaker #3: First, given strong fundamentals across our markets, pricing power is shifting towards well-capitalized landlords who own high-quality buildings. Second, organic growth potential embedded in the Highwoods portfolio will be realized primarily through occupancy gains in our operating portfolio and stabilization of our development pipeline.

Speaker #3: Third, given our proven track record, we expect to continue to deploy capital and attracted risk-adjusted returns, that enhance our long-term growth outlook, increase our portfolio quality, and strengthen our cash flows.

Brian Leary: Third, given our proven track record, we expect to continue to deploy capital at attractive risk-adjusted returns that enhance our long-term growth outlook, increase our portfolio quality, and strengthen our cash flows. These factors, combined with our strong balance sheet and strong platform, provide the foundation for sizable momentum over the next few years. I'm also confident in our outlook because of our engaged, hardworking, and talented teammates who have long driven our consistent success. I thank the entire Highwoods team for their commitment and tireless dedication. Brian? Thank you, Ted. Our Sunbelt markets delivered a strong finish to 2025, validating our BBD strategy and setting us up for another year of occupancy and rent growth in 2026. These cities are net winners with regard to inbound talent, corporate relocations, and job growth.

Ted Klinck: Third, given our proven track record, we expect to continue to deploy capital at attractive risk-adjusted returns that enhance our long-term growth outlook, increase our portfolio quality, and strengthen our cash flows. These factors, combined with our strong balance sheet and strong platform, provide the foundation for sizable momentum over the next few years. I'm also confident in our outlook because of our engaged, hardworking, and talented teammates who have long driven our consistent success. I thank the entire Highwoods team for their commitment and tireless dedication. Brian?

Speaker #3: These factors, combined with our strong balance sheet and strong platform, provide the foundation for sizable momentum over the next few years. I'm also confident in our outlook because of our engaged, hardworking, and talented teammates, who have long driven our consistent success.

Speaker #3: I thank the entire Highwoods team for their commitment and tireless dedication.

Brian Leary: Thank you, Ted. Our Sunbelt markets delivered a strong finish to 2025, validating our BBD strategy and setting us up for another year of occupancy and rent growth in 2026. These cities are net winners with regard to inbound talent, corporate relocations, and job growth.

Speaker #2: Thank you, Ted. Our Sunbelt markets delivered a strong finish to 2025. Validating our BBD strategy and setting us up for another year of occupancy and rent growth in 2026.

Speaker #2: These cities are net winners with regard to inbound talent, corporate relocations, and job growth. All are in the top 15 of the Urban Land Institute and PwC's top markets to watch, and widely finished the year posting positive net absorption.

Brian Leary: All are in the top 15 of the Urban Land Institute and PwC's top markets to watch and widely finished the year posting positive net absorption. With office development pipelines at record lows, a best-in-class commute-worthy portfolio, and a strong balance sheet, we're the beneficiaries of a market in full Flight-to-Quality mode, which is driving healthy leased economics across our BBD portfolio. The year's body of work included 3.2 million sq ft signed with strong GAAP rent spreads of 16.4%, all-time high net effective rents, significant leasing across the development pipeline, and the meaningful backfill of long-communicated vacancies. In the fourth quarter, we signed 88 deals with cash rent spreads of a positive 1.2% and weighted average lease terms of almost six years. Expansions outpaced contractions 2.5 to 1 for the quarter, over 3 to 1 for the year, and we ended 2025 over 89% leased.

Speaker #2: With office development pipelines at record lows, a best-in-class commute-worthy portfolio, and a strong balance sheet, we're the beneficiaries of a market in full flight-to-quality mode.

Speaker #2: Which is driving healthy lease economics across our BBD portfolio. The year's body of work included 3.2 million square feet signed with strong GAAP rent spreads of 16.4%, all-time high net effective rents, significant leasing across the development pipeline, and the meaningful backfill of long-communicated vacancies.

Speaker #2: 88 deals with cash rent spreads of a In the fourth quarter, we signed positive 1.2% and weighted average lease terms of almost six years.

Speaker #2: Expansions outpace contractions two and a half to one for the quarter, over three to one for the year, and we ended 2025 over 89% leased.

Speaker #2: With competitive supply decreasing, construction pipelines at record lows, and with our customers' conviction on having their best and brightest in the office resolute, 2025's positive leasing environment is continuing into the new year.

Brian Leary: With competitive supply decreasing, construction pipelines at record lows, and with our customers' conviction on having their best and brightest in the office resolute, 2025's positive leasing environment is continuing into the new year. Across our Sunbelt BBDs, market fundamentals continue to outperform the nation. New supply is almost nonexistent, and inbound corporate relocations and growth marches on. Starting in Charlotte, the Queen City has not only kept its post-pandemic momentum. It found another gear, according to the Bureau of Labor Statistics, finishing 2025 having generated more nominal jobs than any other metro area except New York City, which is seven times the size of Charlotte. The city's Economic Development Office reinforced this highlight, naming 2025 the best year for business recruitment in a decade, with 15 announcements totaling 4,000 jobs and with no sign of a slowdown in 2026.

Speaker #2: Across our Sunbelt BBDs, market fundamentals continue to outperform the nation. New supply is almost nonexistent, and inbound corporate relocations and growth marches on. Starting in Charlotte, the Queen City has not only kept its post-pandemic momentum, it found another gear according to the Bureau of Labor Statistics.

Speaker #2: Finishing 2025, having generated more nominal jobs than any other metro area except New York City. Which is seven times the size of Charlotte. The city's economic development office reinforced this highlight, naming 2025 the best year for business recruitment in a decade, with 15 announcements totaling $4,000 jobs and with no sign of a slowdown in 2026.

Speaker #2: This included major corporate relocations or new regional hubs, for the likes of global logistics giants Maersk, Domler Truck, Pack Life, SoFi, American Express, our new customer joining the recently acquired 600 at Legacy Union, and Scout Motors' 1,200 job global headquarters in the uptown-adjacent neighborhood of Plaza Midwood.

Brian Leary: This included major corporate relocations or new regional hubs for the likes of global logistics giants Maersk, Domowicz Truck, PacLife, SoFi, American Express, our new customer joining the recently acquired 600 at Legacy Union, and Scout Motors' 1,200-job global headquarters in the Uptown-adjacent neighborhood of Plaza Midwood. CBRE noted leasing activity in 2025 echoed the region's job productivity, reaching its highest level in more than six years. Roughly 5.2 million sq ft of deals were signed, with 75% of the volume related to leases that were either new or expansions. Trophy and top-tier Class A space in Uptown, South Park, and South End are effectively full. Development under construction is largely pre-leased, and there is virtually no new speculative product in the pipeline. Against this backdrop, our 2.4 million sq ft Charlotte portfolio, already in the mid-90s leased, is positioned to capture further rate growth as leases roll.

Speaker #2: CBRE noted leasing activity in 2025 echoed the region's job productivity, reaching its highest level in more than six years. Roughly 5.2 million square feet of deals were signed, with 75% of the volume related to leases that were either new or expansions.

Speaker #2: Trophy and Top Tier Class A space in uptown, South Park, and South End are effectively full. Development under construction is largely pre-leased, and there is virtually no new speculative product in the pipeline.

Speaker #2: Against this backdrop, our $2.4 million square foot Charlotte portfolio, already in the mid-90s leased, is positioned to capture further rate growth as leases roll.

Speaker #2: This is evident in our portfolio by the pace and healthy economics of any reletting as well as the activity Ted mentioned at 600 since our acquisition.

Brian Leary: This is evident in our portfolio by the pace and healthy economics of any reletting, as well as the activity Ted mentioned at 600 since our acquisition. Heading west to Y'all Street, Dallas is the number one market to watch, according to ULI and PwC, for the second straight year. In Big D, CBRE noted 2025 net absorption near its post-pandemic high. Class A office posted its fifth consecutive quarter of positive absorption. With the recent acquisition of The Terraces in Preston Center, we now own 1.8 million sq ft with our partners at Granite across Uptown, Legacy, and Preston Center, the three BBDs we initially targeted for investment when we entered Dallas four years ago and where the market strength is largely concentrated.

Speaker #2: Heading west to Yall Street, Dallas is the number one market to watch according to ULI and PWC for the second straight year. In Big D, CBRE noted 2025 net absorption near its post-pandemic high.

Speaker #2: Class A office posted its fifth consecutive quarter of positive absorption, and with the recent acquisition of the Terraces and Preston Center, we now own $1.8 million square feet with our partners at Granite, across uptown, Legacy, and Preston Center, the three BBDs we initially targeted for investment when we entered Dallas four years ago.

Speaker #2: And where the market's strength is largely concentrated. To the volunteer state, where Cushman highlighted that Nashville's 2025 net absorption was 12th nationally overall with 900,000 square feet for the year, and asking rents reaching all-time highs.

Brian Leary: To the Volunteer State, where Cushman & Wakefield highlighted that Nashville's 2025 net absorption was 12th nationally overall with 900,000 sq ft for the year and asking rents reaching all-time highs. Avison Young noted that after absorbing a wave of new construction, the pipeline has dropped to historical lows. Trophy office availability declined at a nationally leading rate, and up to 2,000,000 sq ft, or 13%, of downtown office stock is being converted to announced hotel and residential uses. Our portfolio, concentrated in downtown Franklin and Brentwood, is benefiting from this environment, with steady leasing velocity and prospects that should allow us to both fill remaining vacancy and mark rents to market. To that end, Symphony Place in downtown, Park Place West, and Franklin in our Westwood South building in Brentwood all have strong pipeline of prospects to bring these buildings to stabilized levels.

Speaker #2: Avis and Young noted that after absorbing a wave of new construction, the pipeline has dropped to historical lows. Trophy office availability declined at a nationally leading rate, and up to 2 million square feet or 13% of downtown office stock is being converted to announced hotel and residential uses.

Speaker #2: Our portfolio, concentrated in downtown, Franklin, and Brentwood, is benefiting from this environment, with steady leasing velocity and prospects that should allow us to both fill remaining vacancy and mark rents to market.

Speaker #2: To that end, Symphony Place in downtown, Park Place West in Franklin, and our Westwood South building in Brentwood all have strong pipeline of prospects, to bring these buildings to stabilized levels.

Speaker #2: Stepping back, 2025 confirmed that our Sunbelt BBD-focused portfolio is aligned with where tenants want to be. We are overweighted in the submarkets with the greatest absorption.

Brian Leary: Stepping back, 2025 confirmed that our Sunbelt BBD-focused portfolio is aligned with where tenants want to be. We are overweighted in the submarkets with the greatest absorption, tightest supply, and rising Class A rents. This combination gives us line of sight to further occupancy gains and mark-to-market economics in 2026. This underscores our confidence in our ability to unlock the durable growth that is embedded within the Highwoods platform. Brendan? Thanks, Brian. In the fourth quarter, we reported net income of $28.7 million, or $0.26 per share. Our FFO was at $100.8 million, or $0.90 per share, which includes $0.06 per share of land sale gains. During the quarter, we issued $350 million of unsecured bonds and acquired 600 at Legacy Union, which, as Ted described, is a just-completed Trophy office building with low initial NOI as several signed leases have not yet commenced.

Speaker #2: Tightest supply, and rising Class A rents. This combination gives us line of sight to further occupancy gains and mark-to-market economics in 2026. This underscores our confidence in our ability to unlock the durable growth that is embedded within the Highwoods platform.

Speaker #2: Brendan?

Brendan Maiorana: Thanks, Brian. In the fourth quarter, we reported net income of $28.7 million, or $0.26 per share. Our FFO was at $100.8 million, or $0.90 per share, which includes $0.06 per share of land sale gains. During the quarter, we issued $350 million of unsecured bonds and acquired 600 at Legacy Union, which, as Ted described, is a just-completed Trophy office building with low initial NOI as several signed leases have not yet commenced.

Speaker #1: Thanks, Brian. In the fourth quarter, we reported net income of $28.7 million, or $26 per share. Our FFO was at $100.8 million, or $0.90 per share, which includes $0.06 per share of land sale gains.

Speaker #1: During the quarter, we issued $350 million of unsecured bonds and acquired Legacy Union for $600 million, which, as Ted described, is a just-completed trophy office building with low initial NOI as several signed leases have not yet commenced.

Speaker #1: The impact of the bond issuance and the acquisition of 600 reduced FFO by $0.01 per share. Excluding these two items, and the land sale gains, our fourth-quarter results were in line with the midpoint of our upwardly revised 2025 outlook provided in October.

Brian Leary: The impact of the bond issuance and the acquisition of 600 reduced FFO by $0.01 per share. Excluding these two items and the land sale gains, our Q4 results were in line with the midpoint of our upwardly revised 2025 outlook provided in October. Since our last earnings call, we've invested over $330 million to acquire best-in-class office and amenity retail properties across the strongest BBDs in Charlotte, Dallas, and Raleigh. We plan to fund these acquisitions on a leverage-neutral basis, primarily through the sale of non-core assets or other properties where value has been maximized. We closed $66 million of dispositions in the Q4 and another $42 million so far this year. Our early Q4 2025 ATM issuances provided about $20 million of leverage-neutral purchasing capacity, leaving us roughly $200 million of additional dispositions required to complete our asset rotation on a leverage-neutral basis.

Brendan Maiorana: The impact of the bond issuance and the acquisition of 600 reduced FFO by $0.01 per share. Excluding these two items and the land sale gains, our Q4 results were in line with the midpoint of our upwardly revised 2025 outlook provided in October. Since our last earnings call, we've invested over $330 million to acquire best-in-class office and amenity retail properties across the strongest BBDs in Charlotte, Dallas, and Raleigh. We plan to fund these acquisitions on a leverage-neutral basis, primarily through the sale of non-core assets or other properties where value has been maximized. We closed $66 million of dispositions in the Q4 and another $42 million so far this year. Our early Q4 2025 ATM issuances provided about $20 million of leverage-neutral purchasing capacity, leaving us roughly $200 million of additional dispositions required to complete our asset rotation on a leverage-neutral basis.

Speaker #1: Since our last earnings call, we've invested over $330 million to acquire best-in-class office and amenity retail properties across the strongest BBDs in Charlotte, Dallas, and Raleigh.

Speaker #1: We plan to fund these acquisitions on a leverage-neutral basis, primarily through the sale of non-core assets or other properties where value has been maximized.

Speaker #1: We closed 66 million of dispositions in the fourth quarter, and another $42 million so far this year. Our early fourth-quarter 2025 ATM issuances, provided about $20 million of leverage-neutral purchasing capacity, leaving us roughly $200 million of additional dispositions required to complete our asset rotation on a leverage-neutral basis.

Speaker #1: We plan to complete these additional dispositions by mid-year. Before I review the impact of the recent investment activities on our 2026 outlook, I want to first highlight our asset recycling over the past 12 months.

Brian Leary: We plan to complete these additional dispositions by mid-year. Before I review the impact of the recent investment activities on our 2026 outlook, I want to first highlight our asset recycling over the past 12 months. We've invested $580 million to acquire high-quality office buildings in the strongest BBD locations in the Sunbelt and sold $270 million of non-core properties. Upon stabilization of 600 and after we sell another $200 million of assets, this leverage-neutral rotation will be modestly accretive to our near-term FFO, strengthen our cash flow, increase our long-term growth rate, and improve our market mix and portfolio quality. This rotation has resulted in a reduction to our portfolio age by over two years to a weighted average vintage of 2007. That's not easy on a roughly 27 million square feet portfolio. Now to our 2026 outlook.

Brendan Maiorana: We plan to complete these additional dispositions by mid-year. Before I review the impact of the recent investment activities on our 2026 outlook, I want to first highlight our asset recycling over the past 12 months. We've invested $580 million to acquire high-quality office buildings in the strongest BBD locations in the Sunbelt and sold $270 million of non-core properties. Upon stabilization of 600 and after we sell another $200 million of assets, this leverage-neutral rotation will be modestly accretive to our near-term FFO, strengthen our cash flow, increase our long-term growth rate, and improve our market mix and portfolio quality. This rotation has resulted in a reduction to our portfolio age by over two years to a weighted average vintage of 2007. That's not easy on a roughly 27 million square feet portfolio. Now to our 2026 outlook.

Speaker #1: We've invested $580 million to acquire high-quality office buildings in the strongest BBD locations in the Sunbelt, and sold 270 million of non-core properties. Upon stabilization of 600, and after we sell another 200 million of assets, this leverage-neutral rotation will be modestly accretive to our near-term FFO, strengthen our cash flow, increase our long-term growth rate, and improve our market mix and portfolio quality.

Speaker #1: This rotation has resulted in a reduction to our portfolio age by over two years, to a weighted average vintage of 2,007. That's not easy on a roughly 27 million square foot portfolio.

Speaker #1: Now, to our 2026 outlook. We're introducing an initial FFO range of $3.40 to $3.68 per share, which equates to $3.54 at the midpoint. Since our last call in late October, we've completed a number of investment and financing transactions that will temporarily impact 2026, but not impact 2027 and thereafter.

Brian Leary: We're introducing an initial FFO range of $3.40 to $3.68 per share, which equates to 3.54% at the midpoint. Since our last call in late October, we've completed a number of investment and financing transactions that will temporarily impact 2026 but not impact 2027 and thereafter. First, the acquisition of 600 at Legacy Union will have a dilutive impact on 2026 by approximately $0.07 per share, given the building is 89% leased but currently only 44% occupied as several large leases won't commence until late in the year. GAAP NOI at 600 is projected to be approximately $10 million in 2026 and more than $18 million in 2027 upon stabilization. Second, we opportunistically accelerated a bond issuance into late 2025 that we had originally planned for late 2026 or early 2027.

Brendan Maiorana: We're introducing an initial FFO range of $3.40 to $3.68 per share, which equates to 3.54% at the midpoint. Since our last call in late October, we've completed a number of investment and financing transactions that will temporarily impact 2026 but not impact 2027 and thereafter. First, the acquisition of 600 at Legacy Union will have a dilutive impact on 2026 by approximately $0.07 per share, given the building is 89% leased but currently only 44% occupied as several large leases won't commence until late in the year. GAAP NOI at 600 is projected to be approximately $10 million in 2026 and more than $18 million in 2027 upon stabilization. Second, we opportunistically accelerated a bond issuance into late 2025 that we had originally planned for late 2026 or early 2027.

Speaker #1: First, the acquisition of 600 at Legacy Union will have a dilutive impact on 2026 by approximately $0.07 per share, given the building is 89% leased, but currently only 44% occupied as several large leases won't commence until late in the year.

Speaker #1: Gap NOI at 600 is projected to be approximately $10 million in 2026, and more than $18 million in 2027 upon stabilization. Second, we opportunistically accelerated a bond issuance into late 2025 that we had originally planned for late 2026 or early 2027.

Speaker #1: We made this decision given the strong backdrop in the bond market, and to provide us temporary liquidity to fund the acquisitions of 600, the terraces, and Block 83 prior to completing the leverage-neutral rotation of capital I described earlier.

Brian Leary: We made this decision given the strong backdrop in the bond market and to provide us temporary liquidity to fund the acquisitions of 600, The Terraces, and Block 83 prior to completing the leverage-neutral rotation of capital I described earlier. This will leave us with excess cash on the balance sheet and no borrowings on our credit facility for much of 2026, but eliminates the need for a bond issuance later this year and will enable us to repay our $300 million March 2027 bond maturity with cash on hand and borrowings on the credit facility. This short-term excess liquidity is expected to reduce 2026 FFO by $0.03 per share but should not have any impact on our previously unaffected run rate for FFO for 2027 and beyond.

Brendan Maiorana: We made this decision given the strong backdrop in the bond market and to provide us temporary liquidity to fund the acquisitions of 600, The Terraces, and Block 83 prior to completing the leverage-neutral rotation of capital I described earlier. This will leave us with excess cash on the balance sheet and no borrowings on our credit facility for much of 2026, but eliminates the need for a bond issuance later this year and will enable us to repay our $300 million March 2027 bond maturity with cash on hand and borrowings on the credit facility. This short-term excess liquidity is expected to reduce 2026 FFO by $0.03 per share but should not have any impact on our previously unaffected run rate for FFO for 2027 and beyond.

Speaker #1: This will leave us with excess cash on the balance sheet and no borrowings on our credit facility for much of 2026, but eliminates the need for a bond issuance later this year and will enable us to repay our $300 million March 2027 bond maturity with cash on hand and borrowings on the credit facility.

Speaker #1: This short-term excess liquidity is expected to reduce 2026 FFO by $0.03 per share, but should not have any impact on our previously unaffected run rate for FFO for 2027 and beyond.

Speaker #1: Third, because we have another 200 million of dispositions to go to complete our leverage-neutral rotation of capital, our leverage is temporarily elevated, which increases our projected 2026 FFO by $0.01 per share.

Brian Leary: Third, because we have another $200 million of dispositions to go to complete our leverage-neutral rotation of capital, our leverage is temporarily elevated, which increases our projected 2026 FFO by 1 cent per share. Said differently, if we had completed the planned additional $200 million of dispositions in January instead of the first half of the year, our FFO outlook would be 1 cent lower. Adding all these items together results in 9 cents per share of temporarily lower FFO in 2026 at the midpoint of our outlook but doesn't have any impact on our 2027 FFO or subsequent years. Finally, we've included up to 16 cents per share of land sale gains, or 8 cents at the midpoint of the range. The potential land sale gains all relate to parcels that are under contract and scheduled to close later in 2026.

Brendan Maiorana: Third, because we have another $200 million of dispositions to go to complete our leverage-neutral rotation of capital, our leverage is temporarily elevated, which increases our projected 2026 FFO by 1 cent per share. Said differently, if we had completed the planned additional $200 million of dispositions in January instead of the first half of the year, our FFO outlook would be 1 cent lower. Adding all these items together results in 9 cents per share of temporarily lower FFO in 2026 at the midpoint of our outlook but doesn't have any impact on our 2027 FFO or subsequent years. Finally, we've included up to 16 cents per share of land sale gains, or 8 cents at the midpoint of the range. The potential land sale gains all relate to parcels that are under contract and scheduled to close later in 2026.

Speaker #1: Said differently, if we had completed the planned additional 200 million of dispositions in January instead of the first half of the year, our FFO outlook would be $0.01 lower.

Speaker #1: Adding all these items together results in $0.09 per share of temporarily lower FFO in 2026 at the midpoint of our outlook, but doesn't have any impact on our 2027 FFO or subsequent years.

Speaker #1: Finally, we've included up to $0.16 per share of land sale gains, or $0.08 at the midpoint of the range. The potential land sale gains all relate to parcels that are under contract and scheduled to close later in 2026.

Speaker #1: Taken together, these items—none of which were known when we reported third-quarter 2025 results in October—have reduced the midpoint of our otherwise unaffected 2026 FFO outlook by $0.01 per share.

Brian Leary: Taken together, these items, none of which were known when we reported Q3 2025 results in October, have reduced the midpoint of our otherwise unaffected 2026 FFO outlook by 1 cent per share. Just a couple of other items to note. First, we provided our projected year-end occupancy outlook rather than average occupancy primarily due to the outsized impact of 600 at Legacy Union. At the midpoint, our year-end occupancy projection of 87.5% appears consistent with what we discussed on our last call but is actually a little stronger as our planned asset recycling activities are projected to reduce our year-end 2026 occupancy by 25 basis points compared to our portfolio at the end of the Q3 2025. Second, Same-Property Cash NOI is expected to be roughly flat in 2026, but GAAP NOI is estimated to be 150 basis points higher than cash NOI.

Brendan Maiorana: Taken together, these items, none of which were known when we reported Q3 2025 results in October, have reduced the midpoint of our otherwise unaffected 2026 FFO outlook by 1 cent per share. Just a couple of other items to note. First, we provided our projected year-end occupancy outlook rather than average occupancy primarily due to the outsized impact of 600 at Legacy Union. At the midpoint, our year-end occupancy projection of 87.5% appears consistent with what we discussed on our last call but is actually a little stronger as our planned asset recycling activities are projected to reduce our year-end 2026 occupancy by 25 basis points compared to our portfolio at the end of the Q3 2025. Second, Same-Property Cash NOI is expected to be roughly flat in 2026, but GAAP NOI is estimated to be 150 basis points higher than cash NOI.

Speaker #1: Just a couple of other items to note. First, we provided our projected year-end occupancy outlook rather than average occupancy, primarily due to the outsized impact of 600 at Legacy Union.

Speaker #1: At the midpoint, our year-end occupancy projection of 87.5% appears consistent with what we discussed on our last call, but is actually a little stronger, as our planned asset recycling activities are projected to reduce our year-end 2026 occupancy by 25 basis points compared to our portfolio at the end of the third quarter 2025.

Speaker #1: Second, same-property cash NOI is expected to be roughly flat in 2026, but GAAP NOI is estimated to be 150 basis points higher than cash NOI.

Speaker #1: As you know, when gap same property NOI is higher than the corresponding cash metric, it's typically a strong indicator for future same property cash NOI year elevated, but steadily declines after Q1 as planned disposition proceeds are used to reduce debt and EBITDA steadily grows as we migrate throughout the year.

Brian Leary: As you know, when GAAP same property NOI is higher than the corresponding cash metric, it's typically a strong indicator for future same property cash NOI growth. Finally, we expect our debt-to-EBITDA ratio to start the year elevated but steadily decline after Q1 as planned disposition proceeds are used to reduce debt, and EBITDA steadily grows as we migrate throughout the year. Lastly, as you may have noticed, we made some routine SEC filings yesterday and this morning. Under SEC rules, S-3 shelf registration statements sunset every three years. It has been three years since our last shelf filing. As a result, last evening, we filed a new S-3 with the SEC. This was a joint shelf filing by the REIT and the operating partnership that registers an indeterminate number of debt securities, preferred stock, and common stock for future capital markets transactions.

Brendan Maiorana: As you know, when GAAP same property NOI is higher than the corresponding cash metric, it's typically a strong indicator for future same property cash NOI growth. Finally, we expect our debt-to-EBITDA ratio to start the year elevated but steadily decline after Q1 as planned disposition proceeds are used to reduce debt, and EBITDA steadily grows as we migrate throughout the year. Lastly, as you may have noticed, we made some routine SEC filings yesterday and this morning. Under SEC rules, S-3 shelf registration statements sunset every three years. It has been three years since our last shelf filing. As a result, last evening, we filed a new S-3 with the SEC. This was a joint shelf filing by the REIT and the operating partnership that registers an indeterminate number of debt securities, preferred stock, and common stock for future capital markets transactions.

Speaker #1: Lastly, as you may have noticed, we made some routine SEC filings yesterday and this morning. Under SEC rules, S3 shelf registration statements sunset every three years.

Speaker #1: It has been three years since our last shelf filing. As a result, last evening we filed a new S-3 with the SEC. This was a joint shelf filing by the REIT and the operating partnership that registers an indeterminate number of debt securities, preferred stock, and common stock for future capital markets transactions.

Speaker #1: With this new shelf in place, we also needed to refresh our long-standing ATM program, which we filed via Form 424B this morning. As you know, keeping an ATM program in place is one of the many arrows we like to keep in our capital raising quiver.

Brian Leary: With this new shelf in place, we also needed to refresh our longstanding ATM program, which we filed via Form 424B this morning. As you know, keeping an ATM program in place is one of the many arrows we like to keep in our capital-raising quiver. To be clear, the FFO per share outlook that we provided in last night's release assumes no ATM issuances during 2026. Operator, we are now ready for questions.

Brendan Maiorana: With this new shelf in place, we also needed to refresh our longstanding ATM program, which we filed via Form 424B this morning. As you know, keeping an ATM program in place is one of the many arrows we like to keep in our capital-raising quiver. To be clear, the FFO per share outlook that we provided in last night's release assumes no ATM issuances during 2026. Operator, we are now ready for questions.

Speaker #1: To be clear, the FFO per share outlook that we provided in last night's release assumes no ATM issuances during 2026. Operator, we are now ready for questions.

Speaker #2: Thank you. We'll now begin our Q&A session. So if you'd like to ask a question, you may do so by pressing star one on your telephone keypad, or if you'd like to remove your question for any reason, please press star two.

Operator: Thank you. We will now begin our Q&A session. So if you would like to ask a question, you may do so by pressing star one on your telephone keypad. Or if you would like to remove your question for any reason, please press star two. Once again, to ask a question, please press star one. As a reminder, if you are using a speakerphone, please remember to pick up your handset before asking your question. We'll briefly pause here as questions are registered. Our first question comes from Seth Bergey of Citi. Your line is open.

Speaker #2: Once again, to ask a question, please press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question.

Speaker #2: We'll briefly pause here as questions are registered. Our first question comes from a line of Seth Bergie of City. Your line is

Speaker #2: open. Hey, thanks for taking my question.

Brian Leary: Hey, thanks for taking my question. I guess just to start off with, kind of on the capital recycling, you talked a little bit in the opening comments around kind of enhancing your long-term growth rate. Just kind of in the context of kind of the 2026 guidance, when do you kind of expect to realize that elevated growth rate? Is that kind of like a 2027 story or something further beyond that?

Seth Bergey: Hey, thanks for taking my question. I guess just to start off with, kind of on the capital recycling, you talked a little bit in the opening comments around kind of enhancing your long-term growth rate. Just kind of in the context of kind of the 2026 guidance, when do you kind of expect to realize that elevated growth rate? Is that kind of like a 2027 story or something further beyond that?

Speaker #3: I guess just to start off with, kind of on the capital recycling, you talked a little bit in the opening comments around kind of enhancing your long-term growth rate.

Speaker #3: Just kind of in the context of kind of the 2026 guidance, when do you kind of expect to realize that elevated growth rate? Is that kind of like a 2027 story, or something further beyond

Speaker #3: that? Hey, Seth.

Brendan Maiorana: Hey, Seth. It's Brendan. Maybe I'll try to answer that. So I think there's a couple of different things going on with the recycling activity. Obviously, the impact on 2026 numbers is one-time in nature that we tried to lay out. So that's that kind of $0.09 one-time impact that's there. That goes away in 2027. So I think if you thought about stabilized growth and you reverted back to what your estimates were in October for 2027, nothing that we've done since October should have any impact on your 2027 outlook. The asset recycling is neutral to modestly accretive to FFO in 2027. And the outlook on occupancy for year-end 2026 is right in line with what we mentioned in October. If anything, it's probably up 25 basis points kind of on a same-store basis. So that feels a little bit better.

Speaker #4: It's Brendan. Maybe I'll try to answer that. So I think there's a couple of different things going on with the recycling activity. Obviously, the impact on 2026 numbers is one time in nature that we tried to lay out.

Speaker #4: So that's that kind of one $0.09 one-time impact that's there. That goes away in 2027. So I think if you thought about stabilized growth and you reverted back to what your estimates were in October for 2027, nothing that we've done since October should have any impact on your 2027 outlook.

Speaker #4: The asset recycling is neutral to modestly accretive to FFO in 2027. And the outlook on occupancy for year-end '26 is right in line with what we've mentioned in October.

Speaker #4: If anything, it's probably up 25 basis points, kind of on the same-store basis. So that feels a little bit better. So I guess if you looked at the '26 numbers and backed out the land sale gains, you'd get a lower growth in '26, but then a very significant amount of growth in 2027.

Brendan Maiorana: So, I guess if you looked at the 2026 numbers and backed out the land sale gains, you'd get a lower growth in 2026 but then a very significant amount of growth in 2027. But I think the way that we think about it from a long-term perspective is if the internal growth of the portfolio is just, say, 3% NOI over time, we continue to kind of grind that number higher by recycling into higher-growth assets and recycling out of lower-growth assets.

Speaker #4: But I think the way that we think about it from a long-term perspective is if the internal growth of the portfolio is just, say, 3% NOI over time, we continue to kind of grind to that number higher.

Speaker #4: By recycling into higher-growth growth.

Speaker #4: assets. Thanks.

Brian Leary: Thanks. That's helpful. And then just going back to kind of the development pipeline and hitting kind of that 78% pre-lease number, how is kind of demand for kind of the balance of that leasing on the development pipeline?

Seth Bergey: Thanks. That's helpful. And then just going back to kind of the development pipeline and hitting kind of that 78% pre-lease number, how is kind of demand for kind of the balance of that leasing on the development pipeline?

Speaker #3: That's helpful. And then just going back to kind of the development pipeline, and hitting kind of that 70% pre-release number, how is kind of demand for kind of the balance of that leasing that on the development

Speaker #3: pipeline? Hi, Seth.

Ted Klinck: Hey, Seth. It's Ted. Look, I think we're still seeing really good demand. I think if you think about the progress we made throughout 2025, a year ago, we were 56% leased, and then last quarter, 72%. So we've just continued to grind higher throughout 2025. And the demand remains good. As I mentioned, I think, on our prepared remarks, two of our developments, Glenlake 3 here in Raleigh, and Midtown East in Tampa, we have what we classify as strong prospects for the remaining space, effectively. For Midtown East, it's all the remaining office space. And for Glenlake 3, it gets us to mid-90s%, I think. And then you go over to Dallas, the 23Springs, we're currently around 70, almost 75%. We've got prospects to move higher there as well. And then on Granite Park 6, it's a little quieter.

Speaker #5: It's Ted. Look, I think demand we're still seeing really good demand. I think if you think about the progress we made throughout '25, a year ago, we were 56% leased.

Speaker #5: And then last quarter, 72%. So we've just continued to grind to higher throughout 2025. And the demand remains good. As I mentioned, I think on our prepared remarks, two of our developments, Glenlake 3 here in Raleigh and Midtown East in Tampa, we have what we classify as strong prospects for the remaining space effectively for Midtown East.

Speaker #5: It's all the remaining office space. And for Glenlake 3, it gets us to mid-90s, I think, percent. And then you go over to Dallas, the 23 Springs, we're currently 75%.

Speaker #5: We've got prospects to move higher there as well. And then on Granite Park 6, it's a little quieter. We've got a couple of smaller prospects.

Ted Klinck: We've got a couple of smaller prospects. I think it's just going to be a long slog. And there aren't any big users out there to get us from, I think, we're just shy of 80 today. So I think we're just going to hit some singles, and we'll continue to march that higher as well over time. But we feel overall really, really good about our prospects.

Speaker #5: I think it's just going to be a long slog. And there aren't any big users out there to get us from, I think we're just shy of 80 today.

Speaker #5: So I think we're just going to hit some singles, and we'll continue to march that higher as well over time. But overall, really, really good about our prospects.

Speaker #3: Thanks.

Brian Leary: Thanks.

Seth Bergey: Thanks.

Speaker #2: Thank

Speaker #2: You. Our next question comes from the line of Blaine Heck of Wells Fargo. Your line is open.

Operator: Thank you. Our next question comes from Blaine Heck of Wells Fargo. Your line is open.

Speaker #3: Great, thanks. I guess just digging in a little bit more to your tenant conversations, there's a narrative out there that the Sunbelt is more prone to AI displacement.

Brendan Maiorana: Great. Thanks. I guess just digging in a little bit more to your tenant conversations, there's a narrative out there that the Sun Belt is more prone to AI displacement. So I was hoping you could comment on whether you've seen any impact to your investor or tenant base, I should say, from AI-related layoffs. And do you see any of your markets as having elevated exposure to potential displacement of jobs driven by AI kind of efficiency?

Operator: Great. Thanks. I guess just digging in a little bit more to your tenant conversations, there's a narrative out there that the Sun Belt is more prone to AI displacement. So I was hoping you could comment on whether you've seen any impact to your investor or tenant base, I should say, from AI-related layoffs. And do you see any of your markets as having elevated exposure to potential displacement of jobs driven by AI kind of efficiency?

Speaker #3: So I was hoping you could comment on whether you've seen any impact to your investor or tenant base, I should say, from AI-related layoffs and do you see any of your markets of having elevated exposure to potential displacement of jobs driven by AI kind of

Speaker #3: efficiency? Hey, Blaine.

Ted Klinck: Hey, Blaine. It's Ted. I'll start, and if Brendan or Brian want to jump in. Look, we really haven't. I mean, obviously, what we try and tell you on the calls is what we're seeing with boots on the ground. And we all see the narrative on AI, whether it be software companies a week or so ago, financials the other day. It's just not what we're seeing from our customers and the demand. I mean, we continue to see in migration coming to our markets, companies are taking more space, not less space. In our own operating portfolio, expansions continue to outpace contractions. So look, who knows what the ultimate outcome is going to be? I do think back-office jobs are probably more susceptible to AI versus client-facing jobs. And that's most of our portfolio is client-facing jobs. So it's yet to be seen.

Speaker #5: It's Ted. I'll start, and if Brendan or Brian want to jump in, look, we really haven't—I mean, obviously, what we try and tell you on the calls is what we're seeing with boots on the ground.

Speaker #5: And we all see the narrative on AI, whether it be software companies a week or so ago, financials the other day—it's just not what we're seeing from our customers.

Speaker #5: And then the demand. I mean, we continue to see in-migration coming to our markets. Companies are taking more space, not less space. In our own operating portfolio, expansions continue to outpace contractions.

Speaker #5: So look, who knows what the ultimate outcome is going to be? I do think back-office jobs are probably more susceptible to AI versus client-facing jobs.

Speaker #5: And that's most of our portfolio is client-facing jobs. So it's yet to be seen, but look, we're not hearing any of that out of our client base

Ted Klinck: But look, we're not hearing any of that out of our client base yet.

Speaker #5: yet. Hey, Blaine.

Brian Leary: Hey, Blaine. Brian here, just to chime in. Ted's mentioned this in the past. Our bread and butter are smaller customers in general. That has a sort of insulator effect on the AI, at least right now. I think folks are seeing it as a productivity tool as opposed to a job elimination tool at the moment. We know we're not ignorant to the impacts we'll have on the overall job market.

Speaker #3: Brian here. Just a clip on. And Ted's mentioned this in the past. Our bread and butter are smaller customers in general. So that has a sort of insulator effect on the AI, at least right now.

Speaker #3: I think folks are seeing it as a productivity tool as opposed to a job elimination tool at the moment. But we know we're not ignorant to the impacts it will have on the overall job market.

Speaker #4: Okay. That's great to hear. Brendan, sorry for the broken record question, but we're getting a lot of questions on cash flow. We've touched on the elevated capex before with all the leasing you're doing, but it does look like straight-line will also be much higher this year.

Brendan Maiorana: Okay. That's great to hear. Brendan, sorry for the broken record question, but we're getting a lot of questions on cash flow. We've touched on the elevated CapEx before with all the leasing you're doing, but it does look like straight line will also be much higher this year. So I guess, again, can you give us an update on how long you see these elevated expenditures impacting cash flow? And related to that, just touch on the payout ratio and your comfort of riding through some period of depressed cash flow as it pertains to the dividend.

Brian Leary: Okay. That's great to hear. Brendan, sorry for the broken record question, but we're getting a lot of questions on cash flow. We've touched on the elevated CapEx before with all the leasing you're doing, but it does look like straight line will also be much higher this year. So I guess, again, can you give us an update on how long you see these elevated expenditures impacting cash flow? And related to that, just touch on the payout ratio and your comfort of riding through some period of depressed cash flow as it pertains to the dividend.

Speaker #4: So I guess again, can you give us an update on how long you see these elevated expenditures impacting cash flow and related to that, just touch on the payout ratio and your comfort of riding through some period of depressed cash flow as it pertains to the dividend?

Speaker #3: Yeah, Blaine. Thanks. So what I would say, I guess, if we look at 2025 levels, and I think we were call it on overall cash flow, we might have been 13 or 14 million kind of shy of coverage on the dividend.

Brendan Maiorana: Yeah, Blaine. Thanks. So what I would say, I guess, if we look at 2025 levels and I think we were, call it, on overall cash flow, we might have been $13 or 14 million kind of shy of coverage on the dividend. But that included $145 million of spend on leasing capital in 2025. And a normal year for us is about $100 million. And we committed $115 million during 2025. So anytime there's more spend than what is committed, that's typically a pretty good indicator that your spend on future periods is going to go down. So I think it's likely that 2026 spend is probably going to be a little bit lower than '25. I don't know if we'll be $30 million lower, but we think it's going to be lower.

Speaker #3: But that included 145 million of spend on leasing capital in 2025. And a normal year for us is about 100 million. And we committed 115 million during 2025.

Speaker #3: So anytime there's more spend than what is committed, that's typically a pretty good indicator that your spend on future periods is going to go down.

Speaker #3: So I think it's likely that 2026 spend is probably going to be a little bit lower than '25. I don't know if we'll be 30 million lower, but we think it's going to be lower.

Speaker #3: And then when you think about the amount of straight-line rent that's kind of in those numbers, that is future cash flow that's going to come online.

Brendan Maiorana: And then when you think about the amount of straight-line rent that's kind of in those numbers, that is future cash flow that's going to come online. And so we feel very good about kind of the long-term outlook of cash flow going forward from a combination of increased cash NOI that will come online over the next several quarters and a return to normalized leasing CapEx over time. So that's going to create a significant amount of increased cash flow. And we're comparing that to last year's numbers where we were a little bit shy. But I think if you kind of normalize for all of those things, that gets you back into that context of where we were a few years ago. Which keep in mind, from 2021 through 2024, I think we retained a cumulative $150 million of cash flow above the dividend.

Speaker #3: And so we feel very good about kind of the long-term outlook of cash flow going forward from a combination of increased cash NOI that will come online over the next several quarters, and a return to normalized leasing capex over time.

Speaker #3: So that's going to create a significant amount of increased cash flow. And we're comparing that to last year's numbers where we were a little bit shy, but I think if you kind of normalize for all of those things, that gets you back into that context of where we were a few years ago, which keep in mind from 2021 through 2024, I think we retained a cumulative 150 million of cash flow above the dividend.

Speaker #3: So I think we feel very good about our ability to kind of get back

Brendan Maiorana: So I think we feel very good about our ability to kind of get back there.

Speaker #3: there. Very helpful.

Brendan Maiorana: Very helpful. Thank you.

Speaker #4: Thank

Speaker #4: you.

Speaker #2: you. Our next question is from a line of Nick Fillman of Baird. Your line is open.

Operator: Thank you. Our next question is from Nick Thillman of Baird. Your line is open.

Speaker #5: Hey, good morning, everyone. Maybe touching on the $200 million of non-core sales, and the $0 to $17 million of land sale gains embedded in the guidance here.

Dave Rodgers: Hey, good morning, everyone. Maybe touching on the $200 million of non-core sales and the $0 to 17 million of land sale gains embedded in the guidance here. I guess overall, as we're reviewing that non-core sales, what percentage of that, or if you could put a number around of that, is related to land sales versus core asset sales? And the type of maybe touching on the type of buildings you're also looking to dispose of within that pool.

Nick Thillman: Hey, good morning, everyone. Maybe touching on the $200 million of non-core sales and the $0 to 17 million of land sale gains embedded in the guidance here. I guess overall, as we're reviewing that non-core sales, what percentage of that, or if you could put a number around of that, is related to land sales versus core asset sales? And the type of maybe touching on the type of buildings you're also looking to dispose of within that pool.

Speaker #5: I guess overall, as we're reviewing that non-core sales, what percentage of that or if you could put a number around of that is related to land sales versus core asset sales?

Speaker #5: And the type of maybe touching on the type of buildings you're also looking to dispose of within that pool. Hey, Nick. It's Ted. Yeah.

Ted Klinck: Hey, Nick. It's Ted. Yeah, of that 200 or so, none of that land is not any part of that. The land sales we have will probably be later in the year, we would anticipate. So look, as you know, we're regular sellers of non-core assets every year. And I think this year is going to be really no different. It's either non-core assets or assets where we've maximized we think we've maximized the value. So it's going to be a variety of markets as well. I think last year, we sold assets in Richmond, Atlanta, Raleigh, Tampa, Orlando. We sold land in Orlando. So it's just going to be a mix of older assets or assets where we've maximized the value as well. So it's going to look a lot like prior years, probably.

Speaker #5: Of that 200 or so none of that land is not any part of that. The land sales we have will probably be later in the year.

Speaker #5: We were anticipating. So look, as you know, we're regular sellers of non-core assets every year. And I think this year is going to be really no different.

Speaker #5: It's either non-core assets or assets where we've maximized we think we've maximized the value. So it's going to be a variety of markets as well.

Speaker #5: I think last year, we sold assets in Richmond, Atlanta, Raleigh, Tampa, Orlando. We sold land in Orlando. So it's just going to be a mix of older assets, or assets where we've maximized the value, as well.

Speaker #5: So it's going to look a lot like prior years, probably.

Speaker #4: That's helpful. And then Brendan, maybe just a little bit on the occupancy bridge throughout the year. I know you removed the average occupancy within the press release, but in the UK, you did mention it's going to be average occupancy of 85 to 87 percent throughout the year.

Brendan Maiorana: That's helpful. And then Brendan, maybe just a little bit on the occupancy bridge throughout the year. I know you removed the average occupancy within the press release, but in the UK, you did mention it's going to be average occupancy of 85% to 87% throughout the year. I know there's a little bit of a drag related to some developments coming online. But maybe just touch on how you expect that occupancy to progress throughout the year.

Nick Thillman: That's helpful. And then Brendan, maybe just a little bit on the occupancy bridge throughout the year. I know you removed the average occupancy within the press release, but in the UK, you did mention it's going to be average occupancy of 85% to 87% throughout the year. I know there's a little bit of a drag related to some developments coming online. But maybe just touch on how you expect that occupancy to progress throughout the year.

Speaker #4: I know there's a little bit of a drag related to some developments coming online but maybe just touch on how you expect that occupancy to progress throughout the

Speaker #4: year. Yeah, Nick.

Brendan Maiorana: Yeah, Nick. Good question. Yeah. So we ended the year at 85.3. That obviously included kind of a 70 basis point drag associated with the acquisition of 600. And then as you correctly point out, we've got developments, Glenlake 3 and Granite Park 6, that'll move into the operating pool in Q1. Those are low in terms of occupancy. Will not be low in occupancy by end of year because the lease rate on those is relatively high. But that's going to depress kind of Q1 numbers a little bit. And also keep in mind, we just sold roughly a little over 500,000 sq ft of very highly occupied assets that are going to come out of that number. And then what we're planning on selling for the remaining roughly $200 million also is fairly occupied.

Speaker #3: Good question. Yeah. It is so we ended the year at 85.3. That obviously included kind of a 70 basis point drag associated with the acquisition of 600.

Speaker #3: And then as you correctly point out, we've got developments Glenlake 3 and Granite Park 6 that'll move into the operating pool in the first quarter.

Speaker #3: Those are low in terms of occupancy, will not be low in occupancy by end of year because the lease rate on those is relatively high.

Speaker #3: But that's going to depress kind of first quarter numbers a little bit. And also keep in mind, we just sold roughly a little over 500,000 square feet of very highly occupied assets that are going to come out of that number.

Speaker #3: And then what we're planning on selling for the remaining roughly 200 million also is fairly occupied. So that's going to kind of bring the number down a little bit early in the year, and then steadily improve kind of as we migrate second quarter, third quarter, fourth

Brendan Maiorana: So that's going to kind of bring the number down a little bit early in the year, and then steadily improve kind of as we migrate Q2, Q3, Q4.

Speaker #3: quarter. Helpful.

Brendan Maiorana: Helpful. Thank you.

Nick Thillman: Helpful. Thank you.

Speaker #4: Thank you.

Speaker #2: Thank you. Our next question is from the line of Dylan Brzezinski of Green Street. Your line is

Operator: Thank you. Our next question is from the line of Dylan Burzinski of Green Street. Your line is open.

Speaker #2: open. Hi,

Speaker #4: guys. Thanks for taking the question. You guys talked a lot about sort of how you're expecting to sort of complete the current capital recycling program within the first half of this year.

Brendan Maiorana: Hi, guys. Thanks for taking the question. You guys talked a lot about sort of how you're expecting to sort of complete the current capital recycling program within the first half of this year. I think in your guys' press release, you guys mentioned also potentially up to another $250 million of dispositions. Just sort of curious, as you guys look at the portfolio today, I mean, do you guys get the sense that you're sort of nearing the final innings of paring down some of the what you guys might call "non-core assets"? And then as you sort of think about uses of that capital, you also mentioned $250 million of potential acquisitions. Just sort of curious how you guys are looking at things now that the stock has sold off quite a bit now, are share repurchases a potential use of that capital. Thanks.

Dylan Burzinski: Hi, guys. Thanks for taking the question. You guys talked a lot about sort of how you're expecting to sort of complete the current capital recycling program within the first half of this year. I think in your guys' press release, you guys mentioned also potentially up to another $250 million of dispositions. Just sort of curious, as you guys look at the portfolio today, I mean, do you guys get the sense that you're sort of nearing the final innings of paring down some of the what you guys might call "non-core assets"? And then as you sort of think about uses of that capital, you also mentioned $250 million of potential acquisitions. Just sort of curious how you guys are looking at things now that the stock has sold off quite a bit now, are share repurchases a potential use of that capital. Thanks.

Speaker #4: I think in your guys' press release, you guys mentioned also potentially up to another 250 million of dispositions just sort of curious. As you guys look at the portfolio today, I mean, do you guys get the sense that you're sort of nearing the final innings of paring down some of the what you guys might call "non-core assets"?

Speaker #4: And then, as you sort of think about uses of that capital, you also mentioned $250 million of potential acquisitions. Just sort of curious how you guys are looking at things now that the stock has sold off quite a bit now.

Speaker #4: Are share repurchases a potential use of that capital?

Speaker #4: Thanks. Hey, Dylan.

Ted Klinck: Hey, Dylan. It's Ted. I'll start. Look, I think as you know us pretty well, I think if you've looked at our strategy throughout the years, we've been consistent capital recyclers, always selling the bottom assets and recycling into newer, higher growth assets. So I think that's something we're going to continue. And obviously, we still have Pittsburgh that we do want to get out of and some other older assets on top of that. So there's still some work to do. But again, as we said, we've been incredibly successful to do this capital rotation time and time again on a leverage neutral, an FFO neutral to slightly accretive basis. And we feel comfortable with our ability to do that as well as that dilutions. So anyway, we feel comfortable about our long-term capital rotation plan.

Speaker #5: It's Ted. I'll start. Look, I think as you know, you know us pretty well. I think if you've looked at our strategy throughout the years, we've been consistent capital recyclers.

Speaker #5: Always sell on the bottom assets and recycling into newer higher growth assets. So I think that's something we're going to continue. And there's still obviously, we still have Pittsburgh that we do want to get out of.

Speaker #5: And some other older assets on top of that. So there's still some work to do. But we've been, again, as we said, we've been incredibly successful to do this capital rotation time and time again on a leverage-neutral and FFO-neutral to slightly accretive basis.

Speaker #5: And we feel comfortable with our ability to do that as well. That dilutions. So anyway, we feel comfortable about our long-term capital rotation plan.

Speaker #5: In terms of the buybacks, look, I think we talk about it with our board. Quarterly, it's obviously a capital allocation decisions you alluded to.

Ted Klinck: In terms of the buybacks, look, I think we talk about it with our board quarterly. It's obviously a capital allocation decision as you alluded to. We're always looking to what's the best use of our capital. We look at all of our alternatives, whether it's buybacks, acquisitions, development, which I think is becoming more interesting these days, highwodizing, which we constantly get very attractive yields on our highwodizing projects I think you're familiar with. Again, we look at what we're going to do over the long term. I'd never say never, but right now, I wouldn't say we're going to deviate from our standard operating procedure.

Speaker #5: We're always looking to what's the best use of our capital. And we look at all of our alternatives, whether it's buybacks, acquisitions, development, which I think is becoming more interesting these days, high-witizing, which we get constantly get very attractive yields on our high-witizing projects.

Speaker #5: I think you're familiar with it. So again, we look at what we're going to do over the long term. I'd never say never, but right now, I wouldn't say we're going to deviate from our standard operating procedure.

Speaker #4: That's helpful. And then maybe just one last one. You mentioned potential development opportunities. I guess, what sort of yield requirement would you guys need in today's investment environment to start any sort of either build-to-suit or spec development project?

Brendan Maiorana: That's helpful. And then maybe just one last one. You mentioned potential development opportunities. I guess what sort of yield requirement would you guys need in today's investment environment to start any sort of either build to suit or spec development project?

Dylan Burzinski: That's helpful. And then maybe just one last one. You mentioned potential development opportunities. I guess what sort of yield requirement would you guys need in today's investment environment to start any sort of either build to suit or spec development project?

Speaker #5: Yeah. Look, I think you've seen what we're buying, and one of the nice things about Highwoods is we're both a developer and an acquirer.

Ted Klinck: Yeah, look, I think you've seen what we're buying. One of the nice things about Highwoods is we're both a developer and an acquirer. So we can sort of toggle back and forth throughout the cycle. And just given the dearth of new development, we're starting to feel more incoming calls on both developments and whether it be a build to suit or a substantially pre-leased development start. So there's got to be a premium, right, on acquisitions to new developments. So look, we don't really discuss our development yields primarily from a competitive standpoint. I mean, there's a lot of things that go into a development yield, whether it be it's the market, the submarket, what we think the exit cap rate is, the term, the credit of the lease, what annual bumps are. So just a lot of factors that come into it.

Speaker #5: So we can sort of toggle back and forth throughout the cycle. And just given the dearth of new development, we're starting to feel more incoming calls on both developments, and whether it be a build-to-suit or a substantially pre-leased development start.

Speaker #5: So there's got to be a premium, right, on acquisitions to new development. So look, we don't really discuss our development yields primarily from a competitive standpoint.

Speaker #5: I mean, there's a lot of things that go into a development yield, whether it be the market, the submarket, what we think the exit cap rate is, the term, the credit of the lease, what annual bumps are.

Speaker #5: So, just a lot of factors that come into it. So, we really don't get into those yields. But, suffice it to say, it'd be a premium over sort of what acquisition cap rates are today.

Ted Klinck: So we really don't get into those yields. But suffice it to say it'd be a premium over sort of what acquisition Cap Rates are today.

Speaker #4: Great, Ted. Appreciate the dominance.

Brendan Maiorana: Great, Ted. Appreciate the development. Thanks.

Dylan Burzinski: Great, Ted. Appreciate the development. Thanks.

Speaker #2: Thank you. Our next question comes to the line of Ronald Candon of Morgan Stanley. Your line is open.

Operator: Thank you. Our next question comes from the line of Ronald Kamdem of Morgan Stanley. Your line is open.

Speaker #3: Yeah. Oh, great. Just two quick ones. Just going back to sort of the guidance, if you sort of back out the land sale gain and so forth, just trying to think, is the when you think about 25 versus 26, was there anything else sort of going into the number other than the dilution from the sales and the financing?

Brendan Maiorana: Yeah. Oh, great. Just two quick ones. Just going back to sort of the guidance, if you sort of back out the land sale gain and so forth, just trying to think as the when you think about 2025 versus 2026, was there anything else sort of going into the number other than the dilution from the sales and the financing? Just wondering if there was anything else sort of fundamental driving that number. Thanks.

Ronald Kamdem: Yeah. Oh, great. Just two quick ones. Just going back to sort of the guidance, if you sort of back out the land sale gain and so forth, just trying to think as the when you think about 2025 versus 2026, was there anything else sort of going into the number other than the dilution from the sales and the financing? Just wondering if there was anything else sort of fundamental driving that number. Thanks.

Speaker #3: Just wondering if there was anything else sort of fundamental driving that number. Thanks. Yeah, Ron, it's Brendan. The only other thing that we've talked about is there's probably, on a year-over-year basis, kind of call it $0.05 of headwind on that other income line item that's there, which I think we talked about maybe on one of the last calls that '25 was sort of elevated.

Brian Leary: Yeah, Ron. It's Brendan. The only other thing that we've talked about is there's probably on a year-over-year basis, kind of call it, $0.05 of headwind on that other income line item that's there, which I think we talked about maybe on one of the last calls, that 2025 was sort of elevated. 2026 is not; it's not a zero, but it's probably more in line with a normalized year compared to kind of an elevated outlook. So I think if you adjust for the one-time items associated with the acquisition and the financing in 2026 and you normalize kind of that other income line item, you get to a pretty healthy kind of growth rate at the core, which I think gives us confidence as we think about kind of the company going forward where we've got good growth levers that are in there.

Brendan Maiorana: Yeah, Ron. It's Brendan. The only other thing that we've talked about is there's probably on a year-over-year basis, kind of call it, $0.05 of headwind on that other income line item that's there, which I think we talked about maybe on one of the last calls, that 2025 was sort of elevated. 2026 is not; it's not a zero, but it's probably more in line with a normalized year compared to kind of an elevated outlook. So I think if you adjust for the one-time items associated with the acquisition and the financing in 2026 and you normalize kind of that other income line item, you get to a pretty healthy kind of growth rate at the core, which I think gives us confidence as we think about kind of the company going forward where we've got good growth levers that are in there.

Speaker #3: 2026 is not. It's not a zero, but it's probably more in line with a normalized year compared to kind of an elevated outlook. So I think if you adjust for the one-time items associated with the acquisition and the financing, in 2026, and you normalize kind of that other income line item, you get to a pretty healthy kind of growth rate at the core, which I think gives us confidence as we think about the company going forward, where we've got good growth levers that are in there.

Speaker #3: So I think that's probably a fair way to think about kind of at the core how much we're growing. And how we think about that over an extended period of

Brian Leary: So I think that's probably a fair way to think about kind of at the core how much we're growing and how we think about that over an extended period of time.

Brendan Maiorana: So I think that's probably a fair way to think about kind of at the core how much we're growing and how we think about that over an extended period of time.

Speaker #3: time. Great.

Brendan Maiorana: Great. And then my second question was just on the leasing. Can you just remind us what sort of the new leasing bogey we should be thinking about to grow occupancy? It looked like maybe it was a little bit lighter during the quarter, then picked up post-quarter. Is that right? Just any color there would be helpful.

Ronald Kamdem: Great. And then my second question was just on the leasing. Can you just remind us what sort of the new leasing bogey we should be thinking about to grow occupancy? It looked like maybe it was a little bit lighter during the quarter, then picked up post-quarter. Is that right? Just any color there would be helpful.

Speaker #4: And then my second question was just on the leasing. Can you just remind us what sort of the new leasing bogey we should be thinking about to grow occupancy?

Speaker #4: It looked like maybe it was a little bit lighter during the quarter. Then picked up post-quarter. Is that right? Just any color there would be helpful.

Brian Leary: quarter is long. As you mentioned, it certainly picked up here in the early part of the year. So just to kind of lay out context in terms of where we need to get to to be at that 87.5 number by end of year, we've got about 2.1 million sq ft of remaining expirations in 2026. We expect about 1.3 of that is likely to kind of move out. We currently have 1.2 million sq ft of leases that are signed that are not yet in occupancy that will be in occupancy during 2026. So that leaves kind of compared to where we are at the end of 2025, we're down about 100,000 sq ft, maybe a little bit less than that.

Brendan Maiorana: quarter is long. As you mentioned, it certainly picked up here in the early part of the year. So just to kind of lay out context in terms of where we need to get to to be at that 87.5 number by end of year, we've got about 2.1 million sq ft of remaining expirations in 2026. We expect about 1.3 of that is likely to kind of move out. We currently have 1.2 million sq ft of leases that are signed that are not yet in occupancy that will be in occupancy during 2026. So that leaves kind of compared to where we are at the end of 2025, we're down about 100,000 sq ft, maybe a little bit less than that.

Speaker #3: As you mentioned, it certainly picked up here in the early part of the year. So, just to kind of lay out context in terms of where we need to get to in order to be at that 87.5 number by end of year.

Speaker #3: We've got about 2.1 million square feet of remaining expirations in 2026. There's probably we expect about 1.3 of that is likely to kind of move out.

Speaker #3: We currently have 1.2 million square feet of leases that are signed that are not yet in occupancy that will be in occupancy during 2026.

Speaker #3: So that leaves kind of compared to where we are at the end of 2025, we're down about 100,000 square feet, maybe a little bit less than that.

Speaker #3: So what we need to do from a new leasing standpoint is do about 750,000 square feet of new, 7 to 750,000 square feet of new, and generally, we probably need to get those signed to have them in occupancy by kind of middle of the third quarter.

Brian Leary: So what we need to do from a new leasing standpoint is do about 750,000sq ft of new, 7 to 750,000sq ft of new. And generally, we probably need to get those signed to have them in occupancy by kind of middle of Q3. So that's about 300,000sq ft of new per quarter. And that creates about 250 basis points of net absorption. Our occupancy guide is 220. So we're going to lose about 25 basis points or so from the asset recycling that we talked about, just selling some of the things that we did early in this year and then what we expect to do. So hopefully, that all makes sense. But we feel like all of that is very attainable relative to kind of what the business plan is.

Brendan Maiorana: So what we need to do from a new leasing standpoint is do about 750,000sq ft of new, 7 to 750,000sq ft of new. And generally, we probably need to get those signed to have them in occupancy by kind of middle of Q3. So that's about 300,000sq ft of new per quarter. And that creates about 250 basis points of net absorption. Our occupancy guide is 220. So we're going to lose about 25 basis points or so from the asset recycling that we talked about, just selling some of the things that we did early in this year and then what we expect to do. So hopefully, that all makes sense. But we feel like all of that is very attainable relative to kind of what the business plan is.

Speaker #3: So that's about 300,000 square feet of new per quarter. And that creates about 250 basis points of net absorption. Our occupancy guide is 220.

Speaker #3: So we're going to lose about 25 basis points or so from the asset recycling that we talked about just selling some of the things that we did early in this year and then what we expect to do.

Speaker #3: So hopefully, that all makes sense. But we feel like all of that is very attainable relative to kind of what the business plan

Speaker #3: is. Thank

Speaker #2: Our next question comes from the line of Vikram Mahotra of Ms. Zuhal. Your line is open.

Operator: Thank you. Our next question comes from the line of Vikram Malhotra of Mizuho. Your line is open.

Speaker #4: Good morning. Thanks for doing the question. I guess, Brendan, I just wanted to go back to be clear on your comments around the unaffected rate—I mean, the FFO run rate not being affected as we go into '27.

Dave Rodgers: Good morning. Thanks for the question. I guess, Brendan, I just wanted to go back to be clear on your comments around sort of the unaffected rate, I mean, the FFO run rate not being affected as we go into 2027, just thinking about the positive benefits from the land sales that's one-time versus the dilution or the run rate occupancy from the acquisition trending up. Do you mind just sort of going over that math again just so we understand as we go from Q4 2026 into Q1 2027, kind of that step up that you're alluding to versus maybe what we have modeled for 2027 FFO?

Vikram Malhotra: Good morning. Thanks for the question. I guess, Brendan, I just wanted to go back to be clear on your comments around sort of the unaffected rate, I mean, the FFO run rate not being affected as we go into 2027, just thinking about the positive benefits from the land sales that's one-time versus the dilution or the run rate occupancy from the acquisition trending up. Do you mind just sort of going over that math again just so we understand as we go from Q4 2026 into Q1 2027, kind of that step up that you're alluding to versus maybe what we have modeled for 2027 FFO?

Speaker #4: Just thinking about the positive benefits from the land sales that's one-time, versus the dilution or the run-rate occupancy from the acquisition trending up.

Speaker #4: Do you mind just sort of going over that math again just so we understand as we go from 4Q26 into 1Q27, kind of that step-up that you're alluding to versus maybe what we have modeled for 2027 FFO?

Speaker #3: Yeah, Vikram. So I guess what the NOI that we have for I'll break it down into kind of the three items. The NOI that we have at 600, we disclosed when we acquired the building, our expectation for gap NOI in 2026 is 10 million dollars.

Brian Leary: Yeah, Vikram. So I guess the NOI that we have. For, I'll break it down into kind of the three items. The NOI that we have at 600, we disclosed when we acquired the building: our expectation for GAAP NOI in 2026 is $10 million. That number, we think, will be greater than $18 million in 2027. And there's really not a lot of leases that we need to do at this point to achieve that NOI projection for 2027. NOI there will be low throughout the majority of 2025, but it will build a little bit as we progress throughout the year. So it's not going to be $2.5 million a quarter. It's going to start a little bit lower than that. But the largest lease that is not currently in occupancy is American Express, which Brian mentioned.

Brendan Maiorana: Yeah, Vikram. So I guess the NOI that we have. For, I'll break it down into kind of the three items. The NOI that we have at 600, we disclosed when we acquired the building: our expectation for GAAP NOI in 2026 is $10 million. That number, we think, will be greater than $18 million in 2027. And there's really not a lot of leases that we need to do at this point to achieve that NOI projection for 2027. NOI there will be low throughout the majority of 2025, but it will build a little bit as we progress throughout the year. So it's not going to be $2.5 million a quarter. It's going to start a little bit lower than that. But the largest lease that is not currently in occupancy is American Express, which Brian mentioned.

Speaker #3: That number we think will be greater than 18 million dollars in 2027. And there's really not a lot of leases that we need to do at this point to achieve that NOI projection for 2027.

Speaker #3: NOI will be low throughout the majority of 2025, but it will build a little bit as we progress throughout the year. So it's not going to be $2.5 million a quarter.

Speaker #3: It's going to start a little bit lower than that. But the largest lease that is not currently in occupancy is the American Express, which Brian mentioned.

Speaker #3: And that comes into occupancy on December 1 of ’26. So we really don't get a lot of benefit from that. So most of that $8 million annual increase will kind of show up early in 2027 relative to 2026.

Brian Leary: And that comes into occupancy on December 1, 2026. So we really don't get a lot of benefit from that. So most of that $8 million annual increase will kind of show up early in 2027 relative to 2026. So you're going to get most of that kind of in 2027. And then we're going to be fairly inefficient from a capital standpoint based on our projections as the disposition proceeds come in the door. And we'll have cash on hand for much of 2026, at least based on our current expectations. We will use that cash and then likely borrowing on the credit facility to repay the March 2027 bond. So whereas that probably in your outlook for 2027, three to four months ago, you probably had some refi headwind in that number.

Brendan Maiorana: And that comes into occupancy on December 1, 2026. So we really don't get a lot of benefit from that. So most of that $8 million annual increase will kind of show up early in 2027 relative to 2026. So you're going to get most of that kind of in 2027. And then we're going to be fairly inefficient from a capital standpoint based on our projections as the disposition proceeds come in the door. And we'll have cash on hand for much of 2026, at least based on our current expectations. We will use that cash and then likely borrowing on the credit facility to repay the March 2027 bond. So whereas that probably in your outlook for 2027, three to four months ago, you probably had some refi headwind in that number.

Speaker #3: So you're going to get most of that kind of in 27. And then we're going to be fairly inefficient from a capital standpoint based on our projections as the disposition proceeds come in the door.

Speaker #3: And we'll have cash on hand for much of 2026, at least based on our current expectations. We will use that cash and then likely borrowing on the credit facility to repay the March 2027 bond.

Speaker #3: So whereas that probably in your outlook for 2027, 3 to 4 months ago, you probably had some refi headwind in that number. Now, in all likelihood, that's not going to be much of a headwind because kind of between cash and borrowing rate on the line, that's roughly in line with kind of where the interest rate is on that.

Brian Leary: Now, in all likelihood, that's not going to be much of a headwind because kind of between cash and borrowing rate on the line, that's roughly in line with kind of where the interest rate is on that. So those items kind of give you sort of built-in growth in 2027. And then we're obviously moving occupancy up throughout the year. The development properties are going to build in terms of the NOI contribution that they have throughout the year. So the combination of kind of all of those things drives a lot of build as we migrate throughout 2026 and then into 2027.

Brendan Maiorana: Now, in all likelihood, that's not going to be much of a headwind because kind of between cash and borrowing rate on the line, that's roughly in line with kind of where the interest rate is on that. So those items kind of give you sort of built-in growth in 2027. And then we're obviously moving occupancy up throughout the year. The development properties are going to build in terms of the NOI contribution that they have throughout the year. So the combination of kind of all of those things drives a lot of build as we migrate throughout 2026 and then into 2027.

Speaker #3: So those items kind of give you sort of built-in growth in '27. And then we're obviously moving occupancy up throughout the year. The development properties are going to build in terms of the NOI contribution that they have throughout the year.

Speaker #3: So the combination of kind of all of those things drives a lot of build as we migrate throughout 2026 and then into

Speaker #3: 2027. That's helpful.

Dave Rodgers: That's helpful. And just on that occupancy build, do you mind just walking through any large expirations or new known move-outs either this year or next year that could potentially cause that occupancy to take a step back just relative to the last few years when you've had bigger move-outs? I'm just trying to get a sense of what the next two years look like. Thanks.

Vikram Malhotra: That's helpful. And just on that occupancy build, do you mind just walking through any large expirations or new known move-outs either this year or next year that could potentially cause that occupancy to take a step back just relative to the last few years when you've had bigger move-outs? I'm just trying to get a sense of what the next two years look like. Thanks.

Speaker #4: And just on that occupancy build, do you mind just walking through any large expirations or new known move-outs either this year or next year that could potentially cause that occupancy to take a step back just relative to the last few years when you've had bigger move-outs?

Speaker #4: I'm just trying to get a sense of what the next few years look like. Thanks.

Speaker #5: Hey, Vikram. It’s Ted. The nice thing is, our forward—I'd say, three-year outlook on expirations—it doesn’t look anything like what it did in the last three years.

Ted Klinck: Hey, Vikram. It's Ted. The nice thing is our forward, I'd say, three-year outlook on expirations; it doesn't look anything like what it did the last three years. So we feel really good about where we are. I mean, we don't have any expiration or known move-out greater than 100,000 sq ft, any expiration greater than 100,000 sq ft until mid-2027. And there's only one that's greater than 100,000. That one we have is the only one we have throughout all of 2027. And we think that's a decent chance of renewing that one. So again, we feel really good with we have a few known move-outs that are in that 50,000 to 60,000 sq ft, but we've already backfilled half to two-thirds, even all of it, on some of those. So I think we feel really good about where we stand today about our forward expirations.

Speaker #5: So we feel really good about where we are. I mean, we don't have any expiration or known move-out greater than 100,000 square feet. Any expiration greater than 100,000 square feet until mid-27.

Speaker #5: And there's only one that's greater than $100,000. That one we have is the only one we have throughout all of '27. And we think there's a decent chance of renewing that one.

Speaker #5: So again, we feel really good with—we have a few known move-outs that are in that 50,000 to 60,000 feet range, but we've already backfilled half, to two-thirds, to even all of it on some of those.

Speaker #5: So, I think we feel really good about where we stand today regarding our forward expirations.

Speaker #2: Thank you. Our next question comes to the line of Peter Abramowitz of Deutsche Bank. Your line is open.

Operator: Thank you. Our next question comes from the line of Peter Abramowitz of Deutsche Bank. Your line is open.

Speaker #6: Yeah, thank you for taking the question. Just wondering if you could talk about the expected pricing on asset sales—not only what you closed so far in the fourth quarter and subsequent to year-end, but also the $200 million or so that you're going to close over the next six months.

Peter Abramowitz: Yeah. Thank you for taking the question. Just wondering if you could talk about the expected pricing on asset sales, not only what you closed so far in Q4 and subsequent to year-end, but also the $200 million or so that you're going to close over the next six months. Just from a modeling perspective, kind of what's the NOI impact or Cap Rate on that?

Speaker #6: Just from a modeling perspective, kind of what's the NOI impact or cap rate on that?

Speaker #5: Maybe I'll start, then Brendan can jump in with any details. But look, as you alluded to, we've sold 270 million in 2025 and the first month or so of this year.

Ted Klinck: Maybe I'll start, then Brendan can jump in with any details. But look, as you alluded to, we've sold $270 million in 2025 and the first month or so of this year. The blended cap rate there was sub-8%. It was a mix of assets. Really, we sold 8 assets to users last year. So we feel good about getting user pricing. We sold 1 to a Triple Net Lease buyer. We sold 1 to a 1031 guy. So it's been a variety of assets and a variety of buyers. Sub-8% cap rate on that $270 million. I think it's going to be similar or maybe a little bit better than that on the remaining $200 million.

Speaker #5: And the blended cap rate there was sub-8%. It was a mix of assets. We sold—really, we sold eight assets to users last year.

Speaker #5: So we feel good about getting user pricing. We sold one to a triple net lease buyer. Sold one to a 1031 guy. So it's been a variety of assets and a variety of buyers.

Speaker #5: So, sub-8% cap rate on that $270 million. And I think it's going to be similar, or maybe a little bit better than that, on the remaining couple hundred million.

Speaker #6: All right. Thanks, Ted. And then maybe one for Brian. Just wondering if you could kind of go around the horn to some of the major markets and talk about concessions to bring tenants into occupancy there.

Peter Abramowitz: All right. Thanks, Ted. And then maybe one for Brian. Just wondering if you could kind of go around the horn to some of the major markets and talk about concessions to bring tenants into occupancy there. Are they generally stable or still increasing or even declining? Just any color you can provide there would be helpful.

Speaker #6: Are they generally stable, or are they still increasing, or even declining? Just any color you can provide there would be—

Speaker #6: helpful. Sure, Peter.

Brian Leary: Sure, Peter. Thanks for the question. I would say, in general, they are stabilized. What we are seeing is that customers want the best space. And it costs more than it did before. So they're willing to kind of commit to term to do that. So that's sort of how Brendan mentioned the amount of CapEx that's associated with leasing over the last year. So I think we're seeing that, and we're happy to trade that. Just going through the markets, though, I'll tell you, Charlotte, Dallas, Nashville, and Tampa, very competitive. Any space we might have available in Charlotte, we're getting looks well in advance of folks sort of jockeying for it. You heard in my prepared remarks the amount of job growth in Charlotte. There's really no space left for prime and top-tier Class A in Uptown South End or South Park.

Speaker #3: Thanks for the question. I would say in general, they are. Stabilized. What we are seeing is that customers want the best space. And that cost, it costs more than it did before.

Speaker #3: So they're willing to kind of commit to term to do that. So that's sort of how Brendan mentioned the amount of capex that's associated with leasing over the last year or so.

Speaker #3: I think we're seeing that, and we're happy to trade that. Just going through the markets, though, I'll tell you: Charlotte, Dallas, Nashville, and Tampa are very competitive.

Speaker #3: Any space we might have available in Charlotte, we're getting looks well in advance, with folks sort of jockeying for it. You heard in my prepared remarks the amount of job growth in Charlotte.

Speaker #3: There's really no space left for prime and top-tier Class A in Uptown, South End, or SouthPark. So that does help moderate that kind of pressure on concessions.

Brian Leary: So that does help moderate that kind of pressure on concessions. Dallas, we're very fortunate in Dallas, obviously, being Uptown with the top of the market building that's delivered and available now at 23Springs. Preston Center with our new addition at The Terraces is full, 100%, as Ted mentioned, recently signed. And that's the lowest vacant BBD in the entire market. We will continue to lean in on the Granite Park 6 lease-up there. We underwrote it from a development standpoint to do that. So maybe that BBD at Legacy's got bigger kind of spaces and typical bigger users. And we've been very, very happy with the development delivery at Midtown East and Tampa. We're looking at triple net rents now into the 50s. So now, I'll tell you, it's competitive out there.

Speaker #3: Dallas, we're very fortunate in Dallas, obviously, being Uptown with the top-of-the-market building that's delivered and available now at 23 Springs. Preston Center, with our new addition at The Terraces, is full, 100%, as Ted mentioned—recently signed.

Speaker #3: And that's the lowest vacant BBD in the entire market. We will continue to lean in on Granite Park 6 and lease up there.

Speaker #3: We underwrote it from a development standpoint to do that. So maybe that BBD at Legacy's got bigger kind of spaces and typically bigger users.

Speaker #3: And we've been very, very happy with the development delivery of Midtown East and Tampa. We're looking at triple-net rents now into the $50s now.

Speaker #3: I'll tell you, it's competitive out there. We are still committed to occupancy. But we are able to move rate and obviously moderate concessions across the board and reduce them where we were most

Brian Leary: We are still committed to occupancy, but we are able to move rate and obviously moderate concessions across the board and reduce them where we were most competitive.

Speaker #3: competitive. All right.

Peter Abramowitz: All right. Thanks for the time. Appreciate it.

Speaker #6: Thanks for the time. Appreciate it.

Speaker #2: Thank you. There are currently no questions waiting at this time. So as another reminder, it is STAR 1 to ask your question. There seem to be no questions waiting at this time.

Operator: Thank you. There are currently no questions waiting at this time. So as another reminder, it is star one to ask your question. There seem to be no questions waiting at this time. So I'll pass it back over to management for any closing or further remarks.

Speaker #2: So, I'll pass it back over to management for any closing or further remarks.

Speaker #5: Well, thank you, everybody, for joining the call today. We appreciate your time and your questions. If you have any follow-up questions, please feel free to reach out to us.

Ted Klinck: Well, thank you, everybody, for joining the call today. We appreciate your time and your questions. If you have any follow-up questions, please feel free to reach out to us. Have a great day.

Speaker #5: Have a great

Speaker #5: day. Thank

Operator: Thank you. That will conclude today's call. Thank you for your participation. You may now disconnect your line.

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