Muted Growth, Rising Leverage, and Execution Risk Justify Sell Rating on Highwoods Properties

Ronald Kamdem, an analyst from Morgan Stanley, maintained the Sell rating on Highwoods Properties. The associated price target remains the same with $24.00.

Ronald Kamdem has given his Sell rating due to a combination of factors that, in his view, limit Highwoods Properties’ risk‑reward outlook. While reported FFO beat consensus, much of the strength was driven by non-recurring land sale gains and financing impacts, rather than a broad-based improvement in the underlying office portfolio. Guidance for 2026 FFO is slightly ahead of expectations, but same‑store cash NOI is projected to remain flat, signaling limited organic growth despite anticipated occupancy gains.

In addition, leverage has moved higher and the company is depending on roughly $200 million of asset sales and potential new developments to support balance sheet repair and capital recycling, which introduces execution risk. Leasing metrics show some positives, such as first‑quarter second‑generation leasing and a well‑leased development pipeline, but overall activity is decelerating versus prior periods. Taken together, muted internal growth, rising leverage, and reliance on transactions to meet targets underpin Kamdem’s view that the stock’s upside is constrained, justifying a Sell rating.