10:43 AM EDT, 09/02/2025 (MT Newswires) -- Highwoods Properties ( HIW ) offers a "better-than-average" risk-reward profile within a less attractive office sector with slow job growth and higher long-term interest rates, Truist Securities said in a note Tuesday.

Analysts said they modeled an 86.4% occupancy rate at Highwoods properties at year-end, slightly above 85.6% in Q2 and reflecting an average occupancy of 85.9% for 2025, in line with guidance for 85% to 86.5%.

The firm also assumes a "slightly positive" market rent growth and a positive GAAP rent spread over the next several quarters. Recent acquisitions and dispositions have been factored in, including the parking garage purchase and planned $75 million of acquisitions balanced by $75 million of dispositions by the end of the year, according to the note.

Truist increased its 2025 funds from operations estimate to $3.42 per share from $3.41, and lowering its 2026 estimate to $3.57 from $3.61, implying a 5.4% year-over-year decline in normalized FFO in 2025, followed by a 4.2% growth in 2026.

Truist raised its price target to $33 from $32, and maintained its hold rating on the stock.

Price: 31.10, Change: -0.43, Percent Change: -1.36