UPDATE 1-Highwoods Properties Q2 FFO beats Street view

* Q2 FFO/shr $0.64 vs est $0.61

* Sees FY10 FFO/shr of $2.40-$2.48

July 29 (Reuters) - Real Estate Investment Trust Highwoods Properties Inc (HIW.N) second-quarter funds from operations (FFO) beat market estimates, helped by its sale of non-core office, industrial assets and an equity interest in May.

Highwoods posted second-quarter FFO of $48.7 million, or 64 cents a share, compared with $49.3 million, or 70 cents a share, a year ago.

Analysts on average expected the company to post FFO of 61 cents a share, according to Thomson Reuters I/B/E/S.

FFO,is a key performance metric for REITs, as it removes the profit-reducing effect of depreciation, a non-cash accounting item.

Highwoods said its profits rose due to the disposition of 1.3 million square feet of non-core office and industrial assets for $25 million, and from its equity sale in the Des Moines joint venture in May. The real estate service provider, which acquired the Crescent center in Memphis in May, said the buy would immediately add to FFO.

The operator of suburban office properties tightened its full-year FFO forecast to a range of $2.40 per share to $2.48 per share from its previous forecast of $2.31 a share to $2.49 a share.

Highwoods also expects year-end occupancy to range between 88.5 percent and 90 percent.

Shares of the Raleigh, North Carolina-based company closed at $30.49 Wednesday on the New York Stock Exchange. (Reporting by Siddharth Cavale in Bangalore; Editing by Roshni Menon)