HIW After the Print: Shorts Trim but Bears Stay Put

Highwoods Properties has just reported Q3 results, and the immediate read from the lending market is that short sellers are easing off slightly but far from retreating.

Short interest slipped a fraction on the day of the print, falling to 10.8% of the free float from a recent peak closer to 11%, a trim of less than 1% in daily terms. Over the past week it is still up 1.2%, meaning the net position heading into earnings was larger than a week ago. The ORTEX short score of 67.2 remains elevated, ranking in the bottom 6th percentile for short score across the universe, and it has barely moved over the past fortnight despite the stock adding 2.1% on the week. Borrow conditions explain why shorts are comfortable holding: the cost to borrow, while up 50% week-on-week, is still a negligible 0.48%, and availability is loose at 321%, well above even its 52-week tightest reading of 197%. There is no squeeze pressure here. Bears can hold cheaply for as long as they choose.

The options market adds a mild note of caution without being alarming. The put/call ratio has edged up to 0.081, running about 1.8 standard deviations above its 20-day average of 0.077. That sounds elevated, but the absolute level is still very low: the 52-week high on this ratio is 0.62, so in historical terms options traders are nowhere near defensive. The modest drift higher in puts over recent sessions is better read as a gentle hedge into the print than any real conviction on the downside.

The Street's posture is consistent with cautious neutrality rather than active bearishness. Every recent analyst action from Wells Fargo, Citigroup, Morgan Stanley, Mizuho, and Truist has been a target raise, not a rating change. Targets have moved from the low-to-mid $20s earlier in the year to a consensus mean of around $31. The stock at $29.82 is roughly 5% below that mean, which is not a wide gap. All of those firms maintained neutral-equivalent ratings (Equal-Weight, Neutral, Hold) as they lifted targets, a pattern that reads as: the business is better than feared, but the entry point for a positive rating has not arrived. The bear case centres on FFO headwinds, a projected 5.4% decline in 2025 and only 4.2% recovery in 2026, plus rate sensitivity. The bull case leans on Sun Belt market rent growth and a resilient government and blue-chip tenant base. Neither side is moving the dial on ratings.

The ownership picture has one notable feature. BlackRock lifted its stake to 19% of shares, according to its most recent 13G/A filed in July, up from 14.1% previously. Cohen and Steers, a specialist REIT manager, holds another 15.3%. Together those two own more than a third of the company. No activist filings on the 13D register have appeared, so there is no pressure-campaign angle here. The concentrated passive and REIT-specialist ownership base does mean that any large rebalancing from either firm would move the stock materially, a structural fact worth watching when index weights shift.

The earnings history data shows only one prior reaction with a recorded price move: last quarter's Q2 print produced a negligible gain of 0.5% on the day but a 3.6% decline over the subsequent five sessions. Whether today's Q3 numbers produce a similar delayed reaction, or something different, will become clearer as the week progresses and any guidance revision is absorbed by the Street. The next scheduled print is not until February 2027, so the post-earnings drift over the next five sessions is the immediate thing to watch.