Highwoods Properties, Inc. (HIW): Marketing Mix Analysis [Dec-2025 Updated]

You're looking for a clear, late-2025 snapshot of Highwoods Properties, Inc.'s (HIW) marketing mix, and honestly, the four P's here are all about their Sunbelt-focused, high-quality office strategy. After two decades analyzing real estate, I can tell you their move to Class A 'work-placemaking' environments is paying off, evidenced by second-generation GAAP rent growth hitting a strong 18.3% in Q3 2025 and their in-service occupancy holding steady near 85.3%. We'll look at how their 'commute-worthy' promotion and disciplined asset recycling support their raised FFO per share guidance of up to $3.45. Stick with me; I've distilled their entire strategy-Product, Place, Promotion, and Price-so you can see exactly where the value is being created right now.

Highwoods Properties, Inc. (HIW) - Marketing Mix: Product

Highwoods Properties, Inc. offers ownership, development, acquisition, leasing, and management of properties primarily in the best business districts (BBDs) across the Southern United States. The company is in the work-placemaking business, aiming to create environments and experiences that inspire customers to achieve more together.

The product offering centers on premier office properties, with a strategic emphasis on high-growth Sunbelt markets. As of March 31, 2025, the total in-service portfolio size stood at approximately 26.7 million square feet. More than 95% of the net operating income is contributed by these Sunbelt markets.

Key metrics defining the product portfolio and pipeline as of late 2025 data points:

Highwoods Properties, Inc. executes a disciplined capital-recycling strategy, disposing of older, CapEx-intensive properties to redeploy capital into premium assets. During the third quarter of 2025, the company sold a non-core office building in Richmond, VA, encompassing 107,000 square feet, for $16 million. This followed the sale of three non-core buildings in Tampa, FL, for $145 million subsequent to the fourth quarter of 2024. Proceeds were used for acquisitions, such as the $111.5 million purchase of the Legacy Union Parking Garage in Charlotte in Q3 2025. Management had projected up to $150 million in additional dispositions for 2025.

The development pipeline is a key component for securing future NOI growth. As of Q3 2025, the pipeline aggregates $474 million at the HIW share and is 72% pre-leased. This leasing momentum includes signing 122,000 square feet of first-generation leases in the development pipeline during the third quarter alone. The development projects are projected to contribute $30 million in annual net operating income above the 2025 outlook once stabilized. For instance, the 2827 Peachtree development in Atlanta was 93.7% leased and 88.4% occupied as of Q1 2025.

• Second-generation leasing activity was robust, with over 1 million square feet signed in Q3 2025.
• Net effective rents for second-generation leasing reached new highs in Q3 2025.
• The company signed 47 total expansions year-to-date 2025, the highest number since before the pandemic.

Highwoods Properties, Inc. (HIW) - Marketing Mix: Place

The Place strategy for Highwoods Properties, Inc. centers on the physical location and accessibility of its office assets, which are strategically concentrated in high-growth U.S. Sunbelt markets, specifically within Best Business Districts (BBDs) to maximize tenant attraction and retention.

Highwoods Properties, Inc. maintains a portfolio of approximately 26.7 million square feet as of the first quarter of 2025. The distribution strategy is heavily weighted toward the Sunbelt, with over 95% of the company's Net Operating Income (NOI) derived from this region as of the first quarter of 2025. This concentration reflects a deliberate choice to place assets where demographic and employment trends have historically shown superior growth compared to the national average.

The company's operational footprint focuses on key, high-growth Sunbelt cities. For instance, as of the third quarter of 2025 investor presentation proforma, Dallas showed a significant concentration, with 41% of its local NOI derived from the Central Business District (CBD) component. The overall portfolio occupancy rate stood at 85.6% at the end of the second quarter of 2025, indicating the current level of product availability.

The distribution strategy is reinforced by strategic capital deployment in core locations. Highwoods Properties, Inc. recently completed the acquisition of the Legacy Union Parking Garage in Charlotte for a total investment of $111.5 million, including planned near-term building improvements. This asset, which contains 3,057 spaces, directly supports 1.2 million square feet of Highwoods-owned office space at Legacy Union. The acquired garage is estimated to generate cash and GAAP net operating income of $8.0 million in the first four quarters following closing.

The following table outlines the key markets that form the core of Highwoods Properties, Inc.'s distribution strategy:

Highwoods Properties, Inc.'s commitment to the Best Business Districts (BBDs) is a core tenet of its Place strategy, ensuring assets are situated in areas that attract and retain high-quality tenants. This focus is evident across the portfolio, which includes properties in the following Sunbelt markets:

• Atlanta (ATL)
• Austin (AUS)
• Charlotte (CLT)
• Dallas (DAL)
• Houston (HOU)
• Nashville (NAS)
• Orlando (ORL)
• Phoenix (PHX)
• Raleigh (RAL)
• Tampa (TAM)

The company's distribution channel is direct, as Highwoods Properties, Inc. is a fully-integrated office real estate investment trust that owns, develops, acquires, leases, and manages its properties directly for its customers.

Highwoods Properties, Inc. (HIW) - Marketing Mix: Promotion

You're looking at how Highwoods Properties, Inc. (HIW) communicates the value of its office space to tenants as of late 2025. The promotion strategy centers on highlighting the quality and location of its assets to drive office utilization.

The core message emphasizes a commute-worthy strategy, positioning properties within Best Business Districts (BBDs) as essential destinations to justify the return to the office for their customers. This focus on location and experience is a key differentiator in their promotional narrative.

Investor relations maintains open and transparent communications with stakeholders, evidenced by consistent updates on operational progress. For instance, the Funds From Operations (FFO) outlook for 2025 was raised for the third consecutive quarter, with the midpoint of the outlook now higher than initially forecasted in February 2025. Furthermore, year-end occupancy growth was projected to be 70 basis points in the final three months of 2025.

Leasing activity has been a major promotional success story, showing strong momentum for eight consecutive quarters through Q3 2025. This sustained activity supports the narrative that demand for their high-quality space remains robust across key markets like Dallas, Nashville, Charlotte, and Tampa.

The active leasing of the development pipeline is a critical promotional focus, showcasing future growth. Over 70% of the $30 million stabilized annual future Net Operating Income (NOI) upside from the four completed but not yet stabilized development properties has been secured via signed leases as of Q3 2025. This is supported by securing 122,000 square feet of first-generation leases in the development pipeline during Q3 2025 alone.

The use of spec suite programs helps attract and close new leases quickly, a tactic management noted as having continued success. This is part of a broader leasing effort that saw second-generation leasing volume of over 1 million square feet signed in Q3 2025.

Here are the key statistical and financial metrics related to these promotional and leasing efforts:

The leasing economics are strong, with net effective rents in Q3 2025 being 21.8% higher than the average of the preceding five quarters. You can see the leasing volume highlights below:

• Leased over 1 million square feet of second-generation space in Q3 2025.
• Signed 326,000 square feet of new second-generation leases in Q3 2025.
• Net expansion leases signed year-to-date reached approximately 70,000 square feet, the highest year since before the pandemic.

Highwoods Properties, Inc. (HIW) - Marketing Mix: Price

Price, in the context of Highwoods Properties, Inc. (HIW), centers on the rental rates, lease economics, and forward-looking guidance that signal the perceived value and accessibility of their office portfolio in the Best Business Districts (BBDs). This involves setting rental rates that reflect strong market demand, especially given the company's focus on high-quality assets.

The company's forward-looking financial expectations reflect confidence in their pricing power and operational execution. You see this clearly in the updated guidance:

• 2025 FFO per share guidance raised to a range of $3.41 to $3.45.
• The midpoint of this revised guidance lands at $3.43 per share.

The strength supporting this pricing outlook is evident in the leasing metrics achieved during the third quarter of 2025. Leasing economics were very strong, which directly supports the premium pricing Highwoods Properties, Inc. can command for its space.

Consider the key leasing performance indicators from Q3 2025:

Second-generation GAAP rent growth was a strong 18.3% in Q3 2025. Also, net effective rents hit a high watermark, recorded as 21.8% higher than the previous five-quarter average, marking the highest in the company's history. This ability to secure premium pricing on renewals and re-leases is a critical component of the price strategy.

The stability of the cash flow underpinning these prices is enhanced by longer lease commitments. The dollar-weighted average lease term for Q3 2025 second-gen leases was 6.7 years, providing defintely stable cash flow. This long-term commitment helps insulate the revenue stream from short-term market fluctuations.

Operational metrics also reflect the market's willingness to pay for Highwoods Properties, Inc.'s product, even as occupancy levels fluctuate slightly around a trough. In-service occupancy was 85.3% at Q3 2025, with a projected year-end range of 85.7% to 86.3%. This suggests that the pricing achieved on new and renewed leases is strong enough to drive the occupancy trajectory upward from the reported trough.

To give you a clearer picture of the pricing power demonstrated through recent leasing activity, here is a comparison of key leasing and rent metrics:

The pricing strategy is clearly focused on maximizing the value derived from their high-quality, commute-worthy portfolio in the Sunbelt BBDs. The ability to secure a 6.7 years weighted average term on second-generation leases, coupled with double-digit GAAP rent growth, shows customers are paying a premium for the product. Finance: draft 13-week cash view by Friday.