HIW · 10-Q · 2026Q1 · Full report

Rental Rate / Leasing Spreads

HIGHWOODS PROPERTIES, INC. · 2026-04-28 · Importance 48 · Surprise 40

Annual combined GAAP rents for new and renewal office leases signed in Q1 2026 were $39.45 per rentable square foot, which management states is 19.4% higher compared to previous leases in the same office spaces. In Q1 2026 Highwoods signed 923,604 rentable square feet of second generation office leases (306,315 new and 617,289 renewals) with a weighted average GAAP rent of $39.45 per rentable square foot. The weighted average tenant improvement cost for these leases was $5.01 per rentable square foot and average lease term was 7.4 years, indicating capital and lease-term commitments tied to the higher rents. Management reported that annualized rental revenues from second generation leases expiring in any year are typically less than 15% of total annual rental revenues, which limits short-term revenue concentration from lease turnover.

Key facts

• Annual combined GAAP rents for new and renewal leases signed in the first quarter were 19.4% higher compared to previous leases in the same office spaces.
• Annual combined GAAP rents for new and renewal leases signed in the first quarter were $39.45 per rentable square foot.
• Base rents for second generation office leases signed in Q1 2026 averaged $41.44 per rentable square foot (new $41.72; renewal $41.31).
• GAAP rents per rentable square foot for new leases in Q1 2026 averaged $39.30 and for renewals averaged $39.53.
• Rent concessions per rentable square foot for Q1 2026 second generation leases averaged $(1.99) overall ($(2.42) new; $(1.78) renewal).
• Tenant improvements per rentable square foot for Q1 2026 second generation leases averaged $5.01 overall ($7.38 new; $3.83 renewal).
• Leasing commissions per rentable square foot for Q1 2026 second generation leases averaged $1.56 overall ($1.83 new; $1.42 renewal).