Office real estate investment trust (REIT) Highwoods Properties (NYSE: HIW) has increased its dividend annually for five consecutive years. That may not sound impressive, but it includes dividend hikes in 2020 and 2021, right in the middle of the coronavirus pandemic. So why has the stock fallen 16% so far in 2023, pushing the yield up to a historically high 8.6%?

Highwoods Properties reported funds from operations (FFO), which is like earnings for a REIT, of $4.03 in 2022, up from $3.86 in 2021. It collected around $829 million in rent during the year, up from $768 million the year before. Occupancy ended the year at 91.1%, down just 0.1 percentage points versus the end of 2021. And the average rent per square foot increased to $30.51 in 2022 from $29.63 in the prior year.

Those aren't exactly hard numbers to read and, in fact, might even be considered pretty good given the upheaval in the office sector during the coronavirus pandemic. Part of the reason for the REIT's solid business performance is its location, which is in the Sun Belt. This region has seen in-migration and, thus, continued strong demand for properties of all types, including offices. Moreover, Highwoods Properties has been buying new assets and developing new properties, thus expanding its business.

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Source Fool.com