RALEIGH – Highwoods Properties Inc. (HIW) on Tuesday reported a key measure of profitability in its third quarter. The results and that for revenue topped Wall Street expectations.

“Our third quarter performance reflects the strong activity we continue to see across our markets,” said Ted Klinck, president and CEO. “We leased over one million square feet of second gen office, including 518,000 square feet of new leases, our highest volume of new leasing since 2014, with net effective rents that were more than 20% above our prior five-quarter average. Importantly, we substantially backfilled our largest 2023 lease expiration. In addition to healthy operating metrics, we once again delivered excellent financial results.”

The Raleigh-based real estate investment trust said it had funds from operations of $111.6 million, or $1.04 per share, in the period.

The average estimate of five analysts surveyed by Zacks Investment Research was for funds from operations of 97 cents per share.

Funds from operations is a closely watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization.

The company said it had net income of $38.3 million, or 36 cents per share.

The real estate investment trust posted revenue of $207 million in the period, also beating Street forecasts. Four analysts surveyed by Zacks expected $204.5 million.

Highwoods Properties expects full-year funds from operations to be $4.02 to $4.04 per share.