Highwoods Properties handily beat Wall Street estimates for the third quarter as the company leased 1.7 million square feet of space.
The Raleigh real-estate investment trust 32.7-million-square-foot portfolio was 89.9 percent occupied at the end of September.
Occupancy was down compared to the prior quarter as a result of Highwoods making one of its boldest acquisitions in recent memory in September.
The company spent $300 million acquiring seven buildings in Atlanta and Pitsburgh.
The buildings included about 2 million square feet of space that was 83 percent leased at the time of purchase.
The Pittsburgh properties represent the first new market that Highwoods, one of the largest office landlords in the Southeast, has entered in more than a decade.
Highwoods reported funds from operations, a profitability measure for REITs, of 65 cents per share for the quarter, compared to the 57 cents per share the company reported in the third quarter of 2010.
That beat the consensus of Wall Street analysts by 5 cents.
The 1.7 million square feet leased during the quarter included 1.1 million of HIghwoods older space, called second-generation space.
That was the largest amount of second-generation space that Highwoods has leased in a single quarter since the third quarter of 2007.
Highwoods also reported today that it has signed leases for 60,000 square feet of space in the Pittsburgh and Atlanta buildings since the third quarter ended.
The company has been steadily remaking its portfolio over the last eight years, shedding older assets while adding newer properties in markets where it projects strong growth.
CEO Ed Fritsch indicated in today's release that the approach would continue. Fritsch said two noncore properties in Orlando are now 96 percent leased, and will be put up for sale.
Highwoods shares closed up $1.22 at $31.54 today.