Ladies and gentlemen, welcome to the 2026 annual meeting of shareholders of Highwoods Properties. This is Carlos Evans, Chairman of the company's board of directors. It is my honor to preside over this virtual shareholder meeting. The meeting will now come to order. The other participants in today's meeting are Ted Klinck, our President and Chief Executive Officer, and Jeff Miller, our Executive Vice President, General Counsel, and Secretary. Before we start with the business aspect of the meeting, I would like to welcome the rest of our board members, all of whom are joining us today. First of all, Chuck Anderson, who joined our board in 2014. Chuck serves on the Investment Committee. David Gadis, who joined our board in 2021. David serves on the Audit Committee. David Hartzell, who joined our board in 2009.
Dave serves on the Audit and Investment Committees. Anne Lloyd, who joined our board in 2018. Anne chairs our Audit Committee and also serves on the Executive Committee and the Compensation and Governance Committee. Candice Todd, who joined our board in 2024. Candice serves on the Audit Committee. We are also pleased to welcome Chris Bell, representing Deloitte, our independent auditor. After the formal meeting has been adjourned, Ted will give a brief update about our company, and then we will provide time for shareholders to ask general questions of management, the board, and Deloitte. Only validated shareholders will be able to ask questions in the designated field on the web portal. Please note that this meeting is being recorded. However, no one attending via the webcast or telephone is permitted to use any audio recording device. Jeff, are we ready to proceed with the business portion of the meeting?
Yes, we are, Carlos. The record date for this meeting was March 3, 2026. There were 110,259,099 shares of common stock outstanding on the record date. Each share entitles the holder to one vote at this meeting. The holders of a majority of these shares are present in person or by proxy.
Based on Jeff's report, I can confirm that a quorum is in attendance at the meeting. As described in the annual meeting notice that was sent to shareholders in March, the purposes of this meeting are to, one, elect seven directors for a one-year term, two, ratify the appointment of Deloitte as our independent auditor for 2026, and to vote on an advisory proposal regarding executive compensation. The polls are now open. Any shareholder who hasn't yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Shareholders who have sent in proxies or voted via telephone or internet and do not want to change their vote do not need to take any further action.
Now that everyone has had the opportunity to vote, I now declare the polls for the 2026 Highwoods Properties annual shareholder meeting closed. Jeff, are you ready to report on the voting?
Yes, I am, Carlos. The nominees for election to the board have been duly elected. The appointment of Deloitte as our auditor for 2026 has been ratified, and the compensation of the named executive officers has been approved by advisory vote. The complete record of the vote will be filed as part of the minutes of this meeting and will be described in a Form 8-K that will be filed with the SEC after this meeting.
With no further business, I now declare the business portion of this annual meeting adjourned. I will now turn the meeting over to Jeff to review a cautionary statement regarding forward-looking information and then to Ted, who will provide a high-level update on 2025 and the company's optimistic outlook.
Thank you, Carlos. Forward-looking statements made during Ted's presentation are subject to risks and uncertainties, which are discussed at length in our SEC filings. As you know, actual events and results can differ materially from these forward-looking statements, and the company does not undertake a duty to update any forward-looking statements. With that, I'll turn the call over to Ted.
Thank you, Jeff and Carlos. Thanks to everyone joining us today for the call for our 2026 shareholder meeting. A recording of this call, including the slides, will be made available on our website later today. As I do each year, I first want to start with our strategy. Why we do what we do. We are not just an owner and operator of office buildings. Our vision is to be a leader in the evolution of commercial real estate for the benefit of our customers, our communities, and those who invest with us. Our mission is to create environments and experiences that inspire our teammates and our customers to achieve more together. We are in the workplace making business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates, and in turn, our shareholders.
Our simple and straightforward strategy is to, one, own and operate high-quality workplaces in what we call the BBDs, or Best Business Districts, of high-growth markets in the Sun Belt. Two, maintain a strong balance sheet to be opportunistic through economic cycles. Three, employ a talented and dedicated team. Four, communicate transparently with all stakeholders. Now, I'd like to begin by highlighting some of the reasons why we're upbeat about the next few years for Highwoods. First, the fundamental backdrop across our core Sun Belt BBDs is as strong as it's been in many years. There's limited to no new supply across our markets and dwindling blocks of available high-quality space. New users continue to migrate to the Sun Belt, and even with mixed signals about the health of the overall economy, many existing companies in our footprint continue to grow their businesses.
This dynamic has created rental rate growth, not just in face rates, but growth in net effective rents, including rent spikes in our best BBDs. Given limited development starts forecasted for the foreseeable future, well-capitalized landlords with high-quality office and BBD locations in the Sun Belt are positioned to drive meaningful growth in rents. Second, the convergence of occupancy gains, rental rate growth, and stabilization of our development pipeline should enable Highwoods to deliver outsized cash flow and earnings growth the next few years. Third and finally, we are positioned to invest at attractive risk-adjusted returns. We've invested approximately $800 million, or $600 million at our share, over the last 15 months.
These acquisitions, which were in the strongest BBDs of Charlotte, Raleigh, and Dallas, have a weighted average vintage of four years, an initial lease rate of 93.5%, weighted average lease term of nine years, rents approximately 15% below market, and projected stabilized cash yields of roughly 8%. A combination of strong fundamentals for high-quality BBD office and limited buyer pools creates an excellent opportunity for us to deploy capital at risk-adjusted returns. These items, combined with our proven track record and strong balance sheet, gives us confidence that we're well-positioned to grow for the foreseeable future. From an overall perspective, Highwoods performed very well in 2025. We delivered solid FFO results of $3.48 per share.
Excluding land gains, full-year per share FFO was $0.07 higher than the midpoint of our original outlook provided at the beginning of 2025. We also enjoyed solid leasing metrics and strengthening cash flows, all while improving the quality and resiliency of our portfolio, fortifying our strong balance sheet, and laying the groundwork for additional long-term growth. Turning to our portfolio on page 4, at year-end 2025, our 26.8 million sq ft portfolio was 89.2% leased and had a weighted average lease term of 5.7 years. We generate over 95% of our net operating income from Sun Belt markets. With respect to population and employment growth, our Sun Belt markets continue to grow at a materially faster rate than both gateway markets and the U.S. overall.
Page 5 shows how our portfolio is a blend of CBD, infill, and suburban markets. As I mentioned, our strategy is to be in the BBDs of each of our markets, which includes both suburban and urban locations. This purposeful diversification has served us well through many economic cycles. Here on page 6, you can see we are even more diversified today than ever, whether it be by industry, by market, or by customer. Our largest market is Raleigh, with 24% of our total NOI. Our largest customer, Bank of America, is 4.3% of total revenues. Our largest industry group, financial services, is only 19% of our revenues. Page 7 shows how strong our operations continue to be.
Net effective rents over the past four quarters are up over 20% and are over 30% higher than the trough just a few years ago. Rents on our new investments over the past six years have increased 21% compared to our original underwriting. GAAP rent spreads on leases signed in 2025 on our existing portfolio were the highest since 2019. The new construction pipeline has continued to significantly decline and has all but dried up in our markets. Turning to page 8, we have long believed it is a mistake to paint all office buildings with the same wide brush. Location, portfolio quality, and poorly capitalized REIT owners have dramatically underperformed over the past several years. Our occupancy in general has historically outpaced the market, and this gap has significantly widened in the past five years.
We believe this will continue, particularly as undercapitalized landlords struggle to fund TIs and other capital projects to make their buildings competitive. As of year-end 2025, our portfolio is outperforming the U.S. occupancy average by over 560 basis points. We also have very manageable lease expirations over the next three years, and with limited new construction underway, we believe we are well positioned to grow occupancy, NOI, and cash flow as we move through 2026 and thereafter. Page 9 illustrates our ongoing goal of continuous portfolio improvement. We've been an active asset recycler for many years, which has resulted in us having a higher quality and more resilient portfolio today. As you can see with the dark blue bar, we were active on the acquisition front in 2025 and early 2026.
We acquired $473 million in 2025. In January of this year, we acquired two buildings in the BBDs of Raleigh and a building in Dallas for a total expected investment of $318 million, of which our share was $108 million, plus $13 million of preferred equity. Development activity has been slow over the past few years. Based on opportunities we are now seeing, we are optimistic we'll have a development opportunity or two to talk about in the coming quarters. Pages 10-17 show the acquisitions we have closed on over the past 15 months or so and demonstrates our proven track record of acquiring high-quality office buildings at attractive risk-adjusted prices.
We were excited to add two high-quality assets to our Legacy Union portfolio in uptown Charlotte in 2025, in addition to high-quality buildings in downtown Raleigh and Preston Center in Dallas. Our outlook for the rest of 2026 is up to $200 million of additional acquisitions atop the Block 83 and Terraces transactions that closed earlier this year. As shown on pages 18 and 19, we have also continued to exit non-core buildings and land and selective properties where value has been maximized. In 2025, we sold $228 million of non-core properties and recycled the proceeds into higher quality, higher growth, and less capital-intensive commute-worthy office buildings.
We expect to continue this strategy in 2026 and are forecasting at least an additional $190 million-$210 million of dispositions during the next several months on top of the $42 million already sold to date. Monetizing non-office land continues to be a priority for us as well, as you can see on page 19. On page 20, development continues to be a driver of growth for Highwoods. You can see pictures of what our prototypical new developments look like in the post-COVID world. As of year-end 2025, our $474 million development pipeline consisted of 1.4 million sq ft that was 80% leased. We expect these developments to provide over $40 million of NOI growth in future years as they stabilize.
Turning to 2026, page 21 shows our current FFO outlook, which is $3.40- $3.68 per share. While we are not immune to the macroeconomic and geopolitical headwinds, we firmly believe that high-quality landlords like Highwoods, with high-quality portfolios in high-growth markets and BBDs, will outperform throughout economic cycles. We have long believed that being transparent about our cash flows and driving them higher over the long term should be a key priority for Highwoods and an important way for investors to evaluate all office REITs. Slide 22 shows that we have been consistent in delivering sustained cash flow growth over the past 15+ years. 2025 and 2026 are foundational years that will reset our cash flow trajectory to resume its steady march higher in future years.
Moving to page 23. We've continued to maintain a strong balance sheet with ample liquidity, which has served us well for many years and allowed us to be opportunistic with investment opportunities. We maintain an investment-grade rating from S&P and Moody's. We have a well-laddered maturity schedule over the next several years, including no consolidated debt maturities until March 2027. We remain highly committed to the long-term resiliency of our business. Here on page 24, we show our sustainability goals and our progress so far. A few of our accomplishments in 2025 were, w e reduced our energy consumption by 4% and our GHG emissions by 2% year-over-year. We strengthened our Heart of Highwoods initiatives by rolling out a new onboarding ambassador program, welcoming 24 new members to our REAL Mentorship program, and contributing to over 50 nonprofit organizations.
We were recognized by Cigna as a gold-level healthy workforce designation for the third year in a row. We invite you to read more about these efforts in our 2025 Corporate Resiliency Report, which we published yesterday and is now available on our website. I'd like to conclude with a few comments on why we're bullish about the future of Highwoods. First, given strong fundamentals across our markets, pricing power is shifting towards well-capitalized landlords who own high-quality buildings. Second, the organic growth potential embedded in the Highwoods portfolio will be realized primarily through occupancy gains in our operating portfolio and the stabilization of our development pipeline.
Third, given our track record, we expect to continue to deploy capital at attractive risk-adjusted returns that enhance our long-term growth outlook, increase our portfolio quality, and strengthen our cash flows. These factors, combined with our strong balance sheet and strong platform, provide the foundation for sizable momentum over the next few years. Before I turn it back to Carlos, I would like to thank our board, our senior management team, and my over 300 dedicated teammates for your continued engagement, hard work, and commitment. As a result of this good work, Highwoods is well-positioned for success for years to come. Finally, I'd like to thank you, our shareholders, for your continued support and continued interest in Highwoods. We remain focused on delivering strong results for you. Carlos.
Thank you, Ted. At this time, we would like to open things up for shareholder questions that are entered today on the web portal. Please note we will attempt to answer as many questions as time allows, but only questions that are germane to the meeting will be addressed. Jeff, do we have any questions?
No, Carlos, we do not.
Before we wrap up, I want to thank management, our directors and employees across the organization for their dedication and hard work over this past year. The board and I totally share Ted's view that with our strong balance sheet, high-quality portfolio, and talented employees that we believe are the best in the business, we believe that we are well-positioned with a solid foundation for continued success and the ability to take advantage of future opportunities. I also thank each of you for your attendance, for your interest in the company, and for your continued belief and support of Highwoods Properties as shareholders. The meeting is now adjourned.
This concludes today's call. You may now disconnect.