Brian Leary
Thanks, Ted, and good morning everyone.
Our Sun Belt BBD strategy has proven resilient over the past several years, and we believe we're well positioned to continue this outperformance amid the economic uncertainty of government cutbacks, global tariffs, and the potential of a looming recession, just to name a few. We recognize that our markets and business are not sheltered from these headwinds on the whole, but on the margin. We can report that today they have not deterred our customers and prospects from executing leases and committing to office space.
Because of this, our leasing pipeline is full, and we've made substantial progress backfilling our long communicated non move outs and pre-leasing our development pipeline.
We completed this volume of work at Strong leasing Economics for the 1st quarter.
Our team signed 88 deals for a total of 700,000 square feet with expansions outpacing contractions 4 to 1.
Net effective rents grew to $20.56 with average annual rent escalations of 2.7%, and GAAP rent growth of 12.8%. While our average term of 5.3 years was lower than recent quarters. It includes a number of early as is renewals that kept lease concessions low and drove strong net effective rents.
In addition, activity remains strong across our $474 million development pipeline. As Ted mentioned, we signed 97,000 square feet of first-generation leases, including 48,000 square feet at GlenLake Three. Our mixed-use development in Raleigh, which is now 78% leased, and 43,000 square feet at Granite Park Six, our joint venture development with Granite Properties in Dallas's Plano BBD, which is now 58% leased.
Both of these developments are forecast to stabilize in the first quarter of 2026. And we are pleased with the continued prospect pipeline. During the quarter, we delivered $272 million of development with the completion of 23Springs in Dallas and Midtown East in Tampa. These projects were delivered on time and on budget at a combined 58% pre-lease.
As a reminder, we forecast 23Springs to stabilize in early 2028. In Midtown East in mid-2026. We remain confident in our ability to lease up both of these projects at or before scheduled stabilization. The Sun Belt continues its positive momentum with its talent attractive and open for business environment.
The region dominates a list of distinctions such as utilize emerging trends markets to watch, and site selection magazine's best dates for business. With these tailwinds, our markets and BBDs are outperforming national trends and our portfolio is outperforming locally.
In Raleigh, the Milken Institute named the City of Oaks the number 1 best performing large city in the United States, highlighting its robust job growth, wage increases, and thriving tech sector. Here we own almost 6 million square feet and sign the most volume in the quarter with 316,000 square feet of second-generation space.
CBRE noted that for the first time since 2011, 14 years ago, the construction pipeline is empty. This dearth of new supply benefits our recently delivered GlenLake Three development and the balance of our best-in-class portfolio.
Moving south to Tampa, where JLR highlighted the downtown submarket's vacancy rate at 9.8%, making it the lowest office vacancy among major US CBDs. During the quarter, the region heralded Foot Locker's Fortune 500 relocation out of New York and major lease signings by Fisher Investments and by GEICO, who with their lease announcement committed to adding 1,000 jobs at its new campus.
Our recently delivered 143,000 square foot Midtown East mixed-use JV Development, is 39% lease, welcomed its first customer move and has prospects for the balance of the building. With this completion, there are no buildings under construction in the Tampa market.
Across our operating portfolio, the Tampa team signed 18 second generation leases in the quarter for a total of 95,000 square feet, of which almost half represented new leases. Rounding out our markets in Nashville in just a few months after a long communicated move out, we have backfilled over two-third of this vacancy with a 145,000 square foot customer new to Highwood's portfolio at our Symphony Place tower downtown.
The market response to our highertizing plans which are now underway has been exceptional and has generated healthy additional interest. This progress, coupled with the prospect pipeline at Westwood South and Park West in the Brentwood and Cool Springs BBDs respectively, provides confidence in the long-term embedded NOI growth potential of the existing portfolio.
We are not naive to the reality that economic uncertainty is a headwind to decision making, but in the present our current leasing activity and pipeline bears little evidence to the expected cause and effect.
I would provide the caveat that all meaningful construction scopes and bids are now qualified but not yet escalating with regard to tariffs if and when that chicken comes home to roost. The question is, will construction costs for office fit-ups be able to bear the brunt of any increases, or will potential escalations be mitigated with construction pipelines at all-time lows. Time will tell.
In the meantime, our leasing pipeline is healthy, and we are pleased by the progress of our development portfolio. We are confident that we will continue to drive organic growth by leaning in with our exceptional people, portfolio, and positioning, Brendan.
Brendan Maiorana
Thanks, Brian. In the first quarter, we delivered net income of $97.4 million or $0.91 per share, an FFO of $91.7 million or $0.83 per share. The quarter included a large property sale gain from our disposition in Tampa that was included in net income but not included in FFO.
During the quarter we received a term fee for a net $1.8 million as part of an early give back which was factored into our original FFO outlook. This fee will be partially offset by downtime in 2025 before rent commences with a new Highwoods customer who fully backfilled this early give back plus took additional space.
Otherwise there were no unusual items in the quarter. We are pleased with our first quarter financial results which demonstrate the resiliency of our operations and cash flows. Even more consequential were the quarter's investment activity and leasing results which positioned us for future growth.
Our balance sheet remains in excellent shape. We didn't issue any shares on the ATM and had $710 million of available liquidity at the end of the quarter. We only have approximately $125 million left to fund on our development pipeline and no debt maturities until May of 2026.
As Ted mentioned, we have updated our 2025 FFO outlook to $3.31 to $3.47 per share, which equates to a $0.04 increase at the midpoint. There are always a few moving parts when we update our outlook, but at a high level, $0.03 is attributable to partial year impact from the advanced auto parts tower acquisition, and $0.01 is from operations.
In our initial 2025 outlook in February, we provided detail around what our same property and occupancy outlook would be excluding four operating properties where vacancy is elevated this year. Similar to our overall same property and occupancy outlooks, our view of this adjusted same property growth outlook hasn't changed since February, nor have our expectations for occupancy.
We offered this additional color in February given the outsized impact of a few select assets to our overall NOI growth and occupancy metrics. However, our preference is to present results on the full portfolio rather than on an adjusted basis that excludes certain properties. Therefore, we remove these adjusted metrics in our updated outlook and don't plan to include them in future updates.
We're off to a strong start so far in 2025, locking in some of our forecasted organic growth potential of the $25 million of NOI growth upside we have on the four core operating assets Ted discussed, we have signed but not yet commenced the leases for over 40% of this total. The biggest component of this future growth is a combined 250,000 square feet across two leases at Tul Alliance Center and Symphony Place, with both leases projected to start mid to late Q2 2026.
Our GlenLake Three and Granite Park Six developments are projected to generate over $10 million of additional upside compared to our 2025 outlook, with over 60% already secured via leases that are signed but haven't yet commenced. Most of this $6 million of annual upside will be in place by the middle of 2026.
While we've provided a road map of the upside potential from these six specific properties, it's important to note we still expect additional growth in occupancy and NOI from the remainder of our operating portfolio over the next few years, plus meaningful NOI from the two development properties we delivered this quarter.
Lastly, I'd like to touch on our asset recycling performance and future outlook. As Ted mentioned, since 2019, we've sold over $1.5 billion of mostly non-core buildings and land and acquired $1.8 billion of commute-worthy properties. On average, the dispositions carried a nominal exit cap rate roughly 50 basis points higher than the year one acquisition cap rates.
While this rotation of capital caused a modest headwind to short-term FFO, it has significantly strengthened our cash flows both in the near and long term and is a large component that drove over $150 million of cumulative free cash flow above our healthy dividend payout since the onset of the pandemic.
As the office business is CapEx intensive, which is why we're focused on driving our risk adjusted cash flows higher over the long term. We expect our asset recycling efforts will continue to strengthen our cash flows and improve our portfolio quality, thereby making our NOI more resilient over the long term, all while maintaining a low levered balance sheet.
To wrap up, we're ahead of plan executing on our embedded growth drivers with the potential to secure more of this upside over the next few quarters. Further, our asset recycling playbook has a demonstrated track record of success, and we're encouraged about future investment opportunities. We believe we have the market's portfolio, balance sheet, and team to realize the meaningful growth potential available to us over the next few years.
Operator, we are now ready for questions.
Operator
(Operator Instructions)
Robert Stevenson, Janney.
Robert Stevenson
Thank you. Good morning, guys. Ted, would you do any significant level of incremental dispositions from here without a corresponding acquisition lined up or those separate discussions in terms of your thoughts?
Theodore Klinck
Hey, Rob, good morning. Sure, no, I think if you saw on our guidance, we've left, we've closed the, obviously the $145 million sale. We've got another up to $150 of additional dispose. We've got a couple assets that are out in the market right now, dispose, nothing of size, but we are prepping a few others to bring the market. I think all of these are going to be second half, 25 closings.
So yeah, we're going to, whether we find something or not, we're going to continue to recycle a non-core asset. We want to create some dry power.
Robert Stevenson
Okay. And then even given the macro uncertainty, are you guys sensing any reluctance from tenants to engage on the 2026 expirations early here where they want to wait and see whether or not we're in a recession, etc.
Before they make commitments to maintain or how much space they would downsize or upsize?
Theodore Klinck
Yeah, Rob, I think that's a great question. We ask that internally all the time when we're leasing agents and we have to a person, we've not seen any of that. We haven't seen any impact. Obviously, we're seeing the terrorists and economic uncertainty, maybe have an investor confidence, maybe impact investor confidence, but in our business and our leasing, we haven't lost any deals.
Our deal flow hasn't slowed down, or tour activity hasn't slowed down. So, we have not seen that, but we are, we ask ourselves that as well.
Robert Stevenson
Okay. And then, last one for me, is the second quarter '26 occupancy on the two Alliance Center and Symphony Place leases due to expiration of their existing leases, or is there a more extensive time frame that's going to take you guys to do the improvements there?
Theodore Klinck
No, we're in the process of doing the improvements now. So, the customer, as I think you said Alliance Center, so the former customer moved out last fall, and then the new customer backfield of a big law firm, they'll take occupancy in the second quarter of next year. So, they're in the process of starting to build out now.
Robert Stevenson
Okay, and Brendon, how significant is the CapEx and the TI's for these leasing that you've done thus far in April? Is it meaningful in terms of the spend for 2025 here or is it just as per usual? How heavy is that?
Brendan Maiorana
Yeah, Rob, it, it's not unusual given the sense that it's a long-term lease and we've done the one size of a lease in Nashville is a long-term lease for 145,000 square feet. So that TI is very much kind of in line with what you would probably expect in terms of market, and then the other new leasing that we disclosed another, over 50,000 square feet is also kind of in line with.
With what you would expect, but I would say I think our expectation is you will see leasing capital higher over the next, the balance of this year and likely into 2026 as well, just given the occupancy bill that we expect and all of the leasing that we've done. So, I think we expect leasing capital to be higher in terms of spend, for the next several quarters.
Robert Stevenson
Okay, that's helpful. Thanks guys, I appreciate the time this morning.
Operator
Vikram Malhotra, Mizuho.
Vikram Malhotra
Thanks so much for doing the question. Brendon, maybe I can just start, you earlier were referenced sort of roughing occupancy and more so FFO growth kind of in the, I think it was either first quarter or first half. Can you just give us a sense of how you think, how the cadence will go based on, the puts and takes of your client in the new guide?
Brendan Maiorana
Yeah, Vikram, good morning and good question. It's what we've talked about and I would say, things aren't too much different in terms of the updated outlook relative to what we provided initially in February is, we thought first half would below both in terms of, occupancy and then generally FFO sort of tracks occupancy without some unusual items on either the financing side or investment side.
And then will grow kind of late in the year, and I think that still holds. There's probably a little bit more movement in the occupancy trends over maybe the second and third quarter than what we expected in February, but I still think that that year-end outlook of what we talked about last quarter between 86% and 87%, I think it's still a good guide for year-end.
Vikram Malhotra
Okay, and just to clarify, what level of new leasing have you baked in to kind of hit your occupancy guide?
Brendan Maiorana
There's some new leasing that is required. There's some spec leasing that is required to get to that year-end occupancy guide, but I would say what's in 2025 is fairly limited. I think as you're thinking about the occupancy ramp and the level of new leasing activity that. It's done over the balance of '25. Most of that, if we're able to be successful and lease up is going to drive occupancy higher in 2026.
And so what we've kind of talked about as a good marker for driving occupancy higher over time is usually somewhere in the neighbourhood of. 300,000 square feet of new per quarter on average puts us well positioned, we think, to drive occupancy higher, and I think if we're able to do that during 2025, it should position us well to grow occupancy as we migrate throughout 2026.
Vikram Malhotra
Okay, great. And this last one, I guess, that big picture, I mean with all the tariffs and economic concerns now any update you can share from your conversations with kind of the local economic councils that are sort of the gatekeepers for, migration or expansion into your markets.
Brendan Maiorana
Sure, Vikram, it's very positive. I think the last couple of years, while they've been very busy, it's largely been more manufacturing and industrial related, inquiries from, in migration from out of state, but we're starting to see more office inquiries, which I think is fantastic.
None of the ones, well, there's a few big ones out there that are poking around that project names are multi-market, multi-market searches that just take a long time. But there's a lot of singles and doubles out there, that might be a floor or two floors. So, I'm encouraged, just in general by the activity and what we're hearing from the economic development folks.
Operator
Blaine Heck, Wells Fargo.
Blaine Heck
Great, thanks. Good morning. I guess just digging in a little bit more on your tenant conversations, have you seen any tenants shift kind of relocation plans or expansion plans with an increased pre preference to sign short term renewals in place to kind of wait out some of the uncertainty in the market, or are you not even seeing that yet?
Brian Leary
Hey Blaine, it' Brian. I can take the first shot at that.
Generally, no, we still always have a few folks who might be consolidating their company, moving in and looking to short term three years to kind of figure that out, but that's not a specific response to necessarily at least what they're telling us, the economy.
But it, our wall that came through on this latest amount of releasing the commitment in Nashville Symphony Place is a long term one, so we're getting some pretty good conviction from our customers and prospects around term with the fundamental belief that they want their people to gather under one roof and creating value.
Theodore Klinck
And then look, the only thing I would add is, our expansions are outnumbering our contractions, four to one, this quarter and we had 20 expansions, only 5 contractions, and that 20, just the count, the second highest count we've had in over five years, since 2019. So our customers are expanding, they're growing, and they are willing to take, make space commitments.
Brian Leary
One other little nuance I'll add, Blaine, is that the Pipeline for new construction, new deliveries is basically stopped, but for maybe two markets, Dallas and maybe Charlotte and then a small building elsewhere. And so I think what we're seeing from many customers is realizing their options will be dwindling, particularly on Best in class, commute worthy space and so they feel like the idea of making a decision sooner locking something and maybe locking even build out pricing and least pricing before if and when things change, that's basically what we're seeing.
Blaine Heck
Okay, great, thanks for that color, Brian and Ted. And just to follow up on one of Rob's questions, Brendan, you talked about elevated leasing capital over the next several quarters. How do you see that impacting FFO or cash flow and kind of related to that? Can you just touch on your comfort with the dividend level here?
Brian Leary
Yeah, maybe I'll start and let Ted, follow up. So yeah, as you mentioned, I think, firstly, what I would say is, as we talked about in the prepared remarks, we're really focused on driving risk adjusted free cash flow higher over time. So, I think that's been the focus of the company for a long time, and we continue to think about growing the business by growing risk adjusted free cash flow.
But with that, we recognize. That we're in a cyclical and CapEx intensive business and capital spend is going to be lumpy from quarter to quarter and year to year. So we really program that in to just thinking about the business over the cycle, and that goes into both balance sheet strategy, but then also planning capital projects, or highertizing projects as we think about reinvesting within the portfolio.
But with all of that, we understand that capital. Is going to be lumpy and it's going to cause cash flow to be lumpy and so we just programmed that in, and so we think that, cash flow will be lower over the next couple of years than it has been over the past few years, but that's just a normal part of the business and that's going to happen as you're driving occupancy higher because obviously you're spending that leasing capital upfront before you get the corresponding revenue as leases commence.
Theodore Klinck
The only thing I would add, Blaine, is, Brendan mentioned it in his prepared remarks that over since the onset of the pandemic, we've generated over $150 million of free cash flow above our dividend. So it is going to be lumpy with the big move outs to release the space, but we feel comfortable with where we are.
Brian Leary
Yeah, and sorry, I forgot to mention just the $150 million in cash flow, that's a true free cash flow metric. So, I think you mentioned FFO. When we really think about generating cash flow for the business, we think about what you would consider growth cap.
In that number because that's a normal part of the business and we typically reinvest within our portfolio. So that's included in that number. So even with that capital factored in, we still generated over $150 million of retained cash flow above the dividend over the past few years.
Blaine Heck
Okay, very helpful. Thanks guys.
Operator
Peter Abramowitz, Jefferies
Peter Abramowitz
Yes, thank you for taking the question. Just wondering if you could comment on the rents on the new lease at Symphony Place and, mark the market, how it compares to where Bass Berry's rents work.
Theodore Klinck
Yeah, it's essentially flat, Peter.
Peter Abramowitz
Okay, got it.
That's helpful. And then elsewhere on the core for, so you, you've made the progress here at Symphony, and some progress down at to Alliance Center just wondering if you could comment on sort of the other assets, we're sort of, tenant requirements you're seeing on the space, how much leasing coverage you have would be helpful?
Theodore Klinck
Sure, yeah, you alluded to obviously backfill down to aligned center, vast majority of the novella space. We touched on, Pinnacle Symphony Place, that backfield Bass Berry, 68% of that. The other ones are Westwood South. It's a building in Nashville. So that's a, we had an earlier this year, we had a 128,000 square foot customer vacate.
And we've got a lot of prospects for that space. We've got a full building user, we've got a user that would take 70% to 80% of the building, and then we've also got some smaller guys we're sort of just putting, sort of waiting to see how these other two, to play out.
So we're very confident and excited about the activity that we have at Westwood South and then down at Cool Springs. The former activity building, we've leased 40% of that and we've got prospects for I'll tell you, probably more than the remaining vacancy there again it's nothing signed yet, but the tour activity, just the highertizing the response we're getting to the highertizing efforts down there it really spurred demand. So we're incredibly excited and optimistic about the activity we're seeing across the board in the core 4.
Peter Abramowitz
That's helpful, Ted, and one more if I can, so you touched on, sort of, it would be naive to think you won't see an impact, to your conversations eventually from for the uncertainty that's been introduced to the macro outlook, but you're not necessarily seeing it yet.
So that's helpful on, I guess the leasing side. Curious kind of what you're seeing just more broadly across your markets on the capital market and transaction side, and sort of, has does it seem like deal velocity has changed much, since liberation day, and kind of just general thoughts on the transaction market, in the Sun Belt?
Theodore Klinck
Sure, look, the office capital markets, I think we're starting to see them open up a little bit, certainly when the calendar turned this year we have seen it. The debt capital markets are starting to open up and that helps deal flow, CMBS is open to office now. Certainly the SASB market within CMBS is very active, but you're also starting to see some life companies and some banks come back and start looking at office loans, which is great then on the equity capital side.
But there's been a ton of dry powder the last several years, looking to invest. I think office, they're being more constructive on now, starting to underwrite office now. So, I think that's all good for the office capital markets. I think you’re; you've seen a few deals close.
I think you're going to see a few more. So, I think that the office capital markets are thawing and I'm optimistic you're going to see a higher transaction volume this year than we have in the last few years.
Peter Abramowitz
All right, that's helpful. Thanks for the time.
Operator
Nick Thillman, Baird.
Nick Thillman
Hey, good morning, guys. So, congrats on the partial backfill at Symphony Place. I guess that's the two large law firm you guys’ kind of have landed within the portfolio in recent months. So what, what's the behavior kind of seeing there?
Are they downsizing from their initial footprints, and I guess what's really appealing about your sort of assets in these markets is it lack of availability, or just location, a little bit more commentary there would be helpful.
Brian Leary
Hey Nick, it's Brian. I'll take the first shot on your very specific question about kind of space needs and appetite, and I don't want to speak for our new customer, but they spoke to the local paper overnight and what they said is that while they are taking less square feet, they are growing as a firm because this is a much more efficient location for them and how they're now working.
So they are growing with attorneys and teammates, but actually taking less square feet technically from where they were to where they're coming with us from Symphony place. So that's, there's also some kind of M&A activity across a number of these law firms, folks moving around, folks getting bigger.
In fact, the customer that we recruited to Symphony Place is sort of a mainstay, long known pillar of the community in Nashville, but is now part of an international Top 20 law firm on the planet, so that's a kind of a good thing.
Brendan Maiorana
Yeah, Nick, the only thing that I would just add to that is, we've seen, as Ted and Brian mentioned earlier, we've seen good expansion activity across the portfolio. So the large lease that we did, in the quarter was, a large financial services user who expanded during the quarter and then we had another fortune 500 company who was new came in, new to market growth.
So while there's been two prominent deals that are law firm deals within our portfolio in the core for, if you will, I think we've seen a pretty broad based growth across our customer base.
Nick Thillman
No, that's very helpful. And then I just wanted to touch a little bit on 2026. You said 2025 retention a little bit lower, but 26 you felt like that the renewal activity was going to be there and pretty high retention. So is that still the case and is our kind of is spec leasing overall kind of tracking with your initial outlook for '25 as well?
Brendan Maiorana
Yes, I would say so with respect to '25, I think we're kind of right on track with what we thought, probably early part of the early part of the year I'd say maybe even a little bit ahead, and then, I think what that means in terms of the renewal activity, for the conversations that we're having on 2026, I think that those all feel constructive.
As well, I think we'll be back to more normalized levels of retention in 2026 relative to kind of where we've been late in '24 and then in '25. So I think that positions us given the limited role that we have and then more normalized levels of retention and then the new leasing volume, I think that creates a good environment where we ought to be able to grow occupancy as we migrate through our '26.
Nick Thillman
Very helpful. Thank you.
Operator
Dylan Brzezinski, Green Street.
Dylan Brzezinski
Hey guys, thanks for taking the question. I guess just sort of going back to the Peter's line of question around capital markets changes. That, I think you mentioned having, smaller assets in the market today. Have you seen any changes it relates to the pricing expectations or buyer appetite since sort of April 2nd liberation day?
Theodore Klinck
Not at all, Dylan. Again, we don't have a lot of data points on our, we don't have anything of size out in the market. We've got a couple small buildings, but there's plenty of investor interest in the couple of buildings we have out there, but it wouldn't surprise me, just to your point, again, we'll have to wait and see the next 30, 60 days or whatever, but to date we haven't really seen an appetite.
We're having people continue to all of us, whether it be users or local buyers that want to, that are interested in assets, some of our assets we don't even have on the market, which is so similar to what happened last year with BayCbare and we sold those buildings, that was an inbound call.
So we're continuing to field calls from users as well as potential buyers that are looking to transact. So I think there's a lot of money on the sidelines it's looking to invest in office buildings these days.
Dylan Brzezinski
Great, appreciate those comments, Ted, and I guess just going back to, the demand side not changing as well, but are you starting to see any cracks on, free rent periods moving higher TI packages being higher? I know you guys commented on this net effective in the quarter being higher than they were five quarters ago, but any change in the last several weeks as it relates to just leasing economics.
Theodore Klinck
Not really. In fact, I would tell you the concessions in many of our submarkets are starting to level off. I think we've probably hit peak TIs and peak free rent. So, depending on the submarket. And in some cases, the specific deal and location, you're starting to see, concessions subside a little bit even.
So which is again, that's encouraging for the overall office market, especially given there's no new deliveries in the next couple of years or very few. We think that things are going to tighten up. Vacancy rates have probably peaked in our markets and concessions we think they have as well, so. We're encouraged about the overall fundamental picture improving over the next couple of years as well.
Dylan Brzezinski
Perfect. Thanks.
Operator
Omotayo Okusanya, Deutsche Bank.
Omotayo Tejumade Okusanya
Yes, good morning, everyone. Again, congrats on a solid quarter and a great momentum there. Wanted to understand guidance a little bit better. You talked about a $0.01 increase from operations, but there really are no big changes to your guidance assumptions, so trying to understand maybe something's happening on the non-[repa] store pool and then the $0.03 associated with acquisitions.
Again, I think your initial guidance had up to $300 million of acquisitions. You've done 138 so far calling for potential additional 150. So, acquisition guidance doesn't seem like it's changed much as well, but you're expecting the $0.03 pick up on that end as well. So, if you could just help us kind of understand the 4% increase, that would be helpful.
Brendan Maiorana
Yeah, hey, Omotayo, it's Brandon. I'll take that. Thanks for the question. So just, firstly on the acquisition, so we provide the guidance in terms of color on acquisition activity, but we don't include that in the FFO number.
And so what happened with the February outlook is we had sold the assets in Tampa that $145 million so that was that dilution, if you will, was kind of. In that number, but we hadn't closed on advanced auto parts tower. We closed on that a month or so after we had provided that initial outlook.
So the closing of that, then that obviously goes into the number and that's $0.03 there if you just take, roughly nine months of ownership in that asset relative to the cost of capital to pay for that. And then the penny of better operations.
I mean, could you move the numbers around a little bit in terms of the metrics? Sure, but you know we've got a 200-basis point range on same store, that's $10 million to $12 million of kind of play in there. I didn't think it was kind of updating those numbers same with occupancy, what we did move up and really this kind of goes, maybe to your question a little bit is you saw the straight line number move up a couple million.
And bucks, so really you kind of have some of that is just in play there as well. So doesn't impact cash same property and why, which is where we are, but we did take the same property number up a little bit and there's a variety of reasons for that, but a bunch of stuff moves around, but I think the general parameters of same store guide, occupancy guide, not much really has changed there.
Omotayo Tejumade Okusanya
Gotcha. That's helpful.
Operator
Donald Camden, Morgan Stanley.
Donald Camden
Hey, just two quick ones for me, I think one on the, just the potential additional dispositions and acquisitions not included in guidance.
I know you talked about some dispositions being prepped, but any updated thoughts on the Pittsburgh assets and what you're thinking is, there would be helpful and similarly on the acquisition side, is it all speculative at this point or are there sort of deals that you guys are sort of looking evaluating, closing and all things?
Theodore Klinck
Sure. Hey, Donald. First on Pittsburgh, really no update on Pittsburgh. We continue to monitor the situation just like we have in the last couple of years and I think that when the capital markets open up more for large, assets like the ones we own, we'll be, we'll find the right time to sell those assets.
So really no update there. And then on the acquisition front, we're underwriting stuff where our pencils are, we're underwriting various opportunities, but really nothing to talk about and, we'll just see how things play out, but, it's just nice to have acquisition opportunities that are out there right now, but really nothing to talk about.
Donald Camden
Great. And then my second one was just on the cadence for the same store, the midpoint is 3%, which is where you sort of were in one queue. Should we be expecting sort of a dip in two and then recovery in the back half of the year just, how should we think about how that's going to trend?
Brendan Maiorana
Yeah, Ron, it's Brendan, good question. Yeah, I think it's likely to be, if you go back and look at last year, right, we were higher in Q2 and then higher again in Q3 so obviously anniversarying against those prior quarters is a challenging comp.
So I would expect it to be week in Q2 week in Q3 and then as we had occupancy down in Q4 last year, I think we'll do better on a relative basis in Q4 of this year. So I think that's, in in terms of expectations on same property guidance, I think that's a good way to think about it.
Donald Camden
Great, thanks so much.
Operator
Seth Bergie, Citi.
Hi, thanks for taking my question. I just kind of want to go back to some of the discussion around acquisitions. How is kind of the uncertainty out there? Has that changed kind of the yields or IRRs you guys are underwriting to? And then, are there any markets you're kind of looking you would look to kind of grow in or, any color that would be helpful as well?
Theodore Klinck
Sure, hey, Seth, look, I don't think necessarily uncertainty is impacting us a whole lot. We look at the fundamentals of when we underwrite deals, whether it's a core plus value add opportunity, we look at the submarket and, what kind of rent growth can we get, what kind of so can we have if there's vacant space.
So there's a lot of levers that go into coming up with our overall underwriting assumptions. So, but I don't think we've changed a whole lot in the last 30 days or so. It just, but it's very micro as we look at the asset in the submarket 42.
Oh, [Martin], I'm sorry, Seth on Mars, the second part.
Yes, second part of the markets, well, look, we've entered Charlotte five years ago, Dallas three years ago, so I think we like our footprint right now, we poke around other markets, but, we're sort of pretty pleased with the markets we're in right now.
Great, thanks.
Operator
There are no more questions register again if you like to ask a question, it is followed by one or your telephone keypad.
Theodore Klinck
All right, doesn't look like we have any additional questions. So, thank you all for joining the call today. Thanks for your interest in Highwoods. We look forward to seeing everybody in May, in early June.
Thank you.
Operator
That will conclude today's conference call. Thank you for your participation and enjoy the rest of your day.
