Highwoods Properties (HIW): Valuation After $223M Charlotte Tower Acquisition and Active Portfolio Shifts

Highwoods Properties has completed its $223 million purchase of 6Hundred at Legacy Union, a 24-story office tower in Charlotte's Uptown business district. This acquisition introduces a large, modern property with strong leasing fundamentals and notable planned upgrades.

See our latest analysis for Highwoods Properties.

Highwoods Properties’ acquisition of 6Hundred at Legacy Union follows $37 million in recent non-core asset sales, supporting a strategy that balances ambitious expansion with targeted portfolio management. The company’s 1-day and 7-day share price returns have increased slightly, but some longer-term momentum has slowed. This is shown by a year-to-date share price return of -9.07% and a 1-year total shareholder return of -8.02%. However, shareholders who have held for over three years have seen a total return of 17.85%, emphasizing the stock’s long-term resilience.

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With recent returns looking mixed and the stock trading at nearly a 10% discount to analyst price targets, the key question is whether Highwoods Properties is undervalued or if the market has already factored in future growth prospects.

Most Popular Narrative: 12% Undervalued

According to the most popular narrative, Highwoods Properties' fair value sits notably above the last close price of $27.88, indicating a sizable discount energized by long-term expectations. Investors are watching closely as the narrative's higher valuation weaves together optimism about future cash flows and resilience in evolving market conditions.

The company's strategic focus on high-quality Sunbelt business districts, markets benefiting from robust population and job growth and limited new supply, positions Highwoods to capitalize on secular migration trends. This is driving above-average demand and rental rate increases, thus improving net operating income (NOI).

Read the complete narrative.

Wondering what forces are fueling this bullish call? There's a tight interplay between growth assumptions and shrinking margins, plus a profit multiple that's rare among office REITs. Can you guess which forecasts put Highwoods in value territory? Uncover the hidden drivers and judge for yourself.

Result: Fair Value of $31.70 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, strong leasing activity and a robust pipeline of signed leases could drive occupancy gains. This challenges the view that office fundamentals will keep eroding.

Find out about the key risks to this Highwoods Properties narrative.

Build Your Own Highwoods Properties Narrative

If you'd rather take the data into your own hands or trust your own perspective, crafting a personal narrative takes less than three minutes. Do it your way

A great starting point for your Highwoods Properties research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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