HIGHWOODS PROPERTIES, INC., 10-K filed on 2/5/2019
Annual Report
v3.10.0.1
Document and Entity Information - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2018
Jan. 25, 2019
Jun. 30, 2018
Entity Information [Line Items]      
Entity Registrant Name HIGHWOODS PROPERTIES INC.    
Entity Central Index Key 0000921082    
Current Fiscal Year End Date --12-31    
Entity Filer Category Large Accelerated Filer    
Document Type 10-K    
Document Period End Date Dec. 31, 2018    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Common Stock, Shares Outstanding   103,559,065  
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Emerging Growth Company false    
Entity Small Business false    
Entity Shell Company false    
Entity Public Float     $ 5.2
Highwoods Realty Limited Partnership [Member]      
Entity Information [Line Items]      
Entity Registrant Name HIGHWOODS REALTY LTD PARTNERSHIP    
Entity Central Index Key 0000941713    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Document Type 10-K    
Document Period End Date Dec. 31, 2018    
Document Fiscal Year Focus 2018    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Emerging Growth Company false    
Entity Small Business false    
Entity Shell Company false    
v3.10.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Real estate assets, at cost:    
Land $ 491,441 $ 485,956
Buildings and tenant improvements 4,676,862 4,590,490
Development in-process 165,537 88,452
Land held for development 128,248 74,765
Total real estate assets 5,462,088 5,239,663
Less-accumulated depreciation (1,296,562) (1,202,424)
Net real estate assets 4,165,526 4,037,239
Real estate and other assets, net, held for sale 0 14,118
Cash and cash equivalents 3,769 3,272
Restricted cash 6,374 85,061
Accounts receivable, net of allowance of $1,166 and $753, respectively 25,952 24,397
Mortgages and notes receivable, net of allowance of $44 and $72, respectively 5,599 6,425
Accrued straight-line rents receivable, net of allowance of $641 and $819, respectively 220,088 200,131
Investments in and advances to unconsolidated affiliates 23,585 23,897
Deferred leasing costs, net of accumulated amortization of $149,275 and $143,512, respectively 195,273 200,679
Prepaid expenses and other assets, net of accumulated depreciation of $18,074 and $19,092, respectively 28,843 28,572
Total Assets 4,675,009 4,623,791
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 2,085,831 2,014,333
Accounts payable, accrued expenses and other liabilities 218,922 228,215
Total Liabilities 2,304,753 2,242,548
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 105,960 144,009
Equity/Capital:    
Preferred Stock, $.01 par value, 50,000,000 authorized shares; 8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 28,877 and 28,892 shares issued and outstanding, respectively 28,877 28,892
Common Stock, $.01 par value, 200,000,000 authorized shares; 103,557,065 and 103,266,875 shares issued and outstanding, respectively 1,036 1,033
Additional paid-in capital 2,976,197 2,929,399
Distributions in excess of net income available for common stockholders (769,303) (747,344)
Accumulated other comprehensive income 9,913 7,838
Total Stockholders’ Equity 2,246,720 2,219,818
Noncontrolling interests in consolidated affiliates 17,576 17,416
Total Equity/Capital: 2,264,296 2,237,234
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital 4,675,009 4,623,791
Highwoods Realty Limited Partnership [Member]    
Real estate assets, at cost:    
Land 491,441 485,956
Buildings and tenant improvements 4,676,862 4,590,490
Development in-process 165,537 88,452
Land held for development 128,248 74,765
Total real estate assets 5,462,088 5,239,663
Less-accumulated depreciation (1,296,562) (1,202,424)
Net real estate assets 4,165,526 4,037,239
Real estate and other assets, net, held for sale 0 14,118
Cash and cash equivalents 3,769 3,272
Restricted cash 6,374 85,061
Accounts receivable, net of allowance of $1,166 and $753, respectively 25,952 24,397
Mortgages and notes receivable, net of allowance of $44 and $72, respectively 5,599 6,425
Accrued straight-line rents receivable, net of allowance of $641 and $819, respectively 220,088 200,131
Investments in and advances to unconsolidated affiliates 23,585 23,897
Deferred leasing costs, net of accumulated amortization of $149,275 and $143,512, respectively 195,273 200,679
Prepaid expenses and other assets, net of accumulated depreciation of $18,074 and $19,092, respectively 28,843 28,572
Total Assets 4,675,009 4,623,791
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 2,085,831 2,014,333
Accounts payable, accrued expenses and other liabilities 218,922 228,215
Total Liabilities 2,304,753 2,242,548
Commitments and contingencies
Redeemable Operating Partnership Units:    
Common Units, 2,738,703 and 2,828,704 outstanding, respectively 105,960 144,009
Series A Preferred Units (liquidation preference $1,000 per unit), 28,877 and 28,892 units issued and outstanding, respectively 28,877 28,892
Total Redeemable Operating Partnership Units 134,837 172,901
Equity/Capital:    
General partner Common Units, 1,058,870 and 1,056,868 outstanding, respectively 22,078 21,830
Limited partner Common Units, 102,089,386 and 101,801,198 outstanding, respectively 2,185,852 2,161,258
Accumulated other comprehensive income 9,913 7,838
Noncontrolling interests in consolidated affiliates 17,576 17,416
Total Equity/Capital: 2,235,419 2,208,342
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital $ 4,675,009 $ 4,623,791
v3.10.0.1
Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2018
Dec. 31, 2017
Assets:    
Accounts receivable allowance $ 1,166 $ 753
Mortgages and notes receivable allowance 44 72
Accrued straight-line rents receivable allowance 641 819
Deferred leasing costs, accumulated amortization 149,275 143,512
Prepaid expenses and other assets, accumulated amortization $ 18,074 $ 19,092
Equity/Capital:    
Preferred Stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred Stock, authorized shares (in shares) 50,000,000 50,000,000
Preferred Stock, liquidation preference (in dollars per share) $ 1,000 $ 1,000
Preferred Stock, shares issued (in shares) 28,877 28,892
Preferred Stock, shares outstanding (in shares) 28,877 28,892
Common Stock, par value (in dollars per share) $ 0.01 $ 0.01
Common Stock, authorized shares (in shares) 200,000,000 200,000,000
Common Stock, shares issued (in shares) 103,557,065 103,266,875
Common Stock, shares outstanding (in shares) 103,557,065 103,266,875
Highwoods Realty Limited Partnership [Member]    
Assets:    
Accounts receivable allowance $ 1,166 $ 753
Mortgages and notes receivable allowance 44 72
Accrued straight-line rents receivable allowance 641 819
Deferred leasing costs, accumulated amortization 149,275 143,512
Prepaid expenses and other assets, accumulated amortization $ 18,074 $ 19,092
Redeemable Operating Partnership Units:    
Redeemable Common Units, outstanding (in shares) 2,738,703 2,828,704
Preferred Units liquidation preference (in dollars per share) $ 1,000 $ 1,000
Series A Preferred Units, issued (in shares) 28,877 28,892
Series A Preferred Units, outstanding (in shares) 28,877 28,892
Common Units:    
General partners' capital account, units outstanding (in shares) 1,058,870 1,056,868
Limited partners' capital account, units outstanding (in shares) 102,089,386 101,801,198
v3.10.0.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Rental and other revenues $ 720,035 $ 702,737 $ 665,634
Operating expenses:      
Rental property and other expenses 242,415 236,888 231,085
Depreciation and amortization 229,955 227,832 220,140
Impairments of real estate assets 423 1,445 0
General and administrative 40,006 39,648 38,153
Total operating expenses 512,799 505,813 489,378
Interest expense:      
Contractual 68,565 65,939 73,142
Amortization of debt issuance costs 2,857 3,166 3,506
Total interest expense 71,422 69,105 76,648
Other income:      
Interest and other income 1,940 2,309 2,338
Losses on debt extinguishment 0 (26) 0
Total other income 1,940 2,283 2,338
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 137,754 130,102 101,946
Gains on disposition of property 37,638 54,157 14,807
Equity in earnings of unconsolidated affiliates 2,238 7,404 5,793
Income from continuing operations 177,630 191,663 122,546
Discontinued operations:      
Income from discontinued operations 0 0 4,097
Net gains on disposition of discontinued operations 0 0 414,496
Total income from discontinued operations 0 0 418,593
Net income 177,630 191,663 541,139
Net (income) attributable to noncontrolling interests in the Operating Partnership (4,588) (5,059) (15,596)
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,207) (1,239) (1,253)
Dividends on Preferred Stock (2,492) (2,492) (2,501)
Net income available for common stockholders $ 169,343 $ 182,873 $ 521,789
Earnings per Common Share - basic:      
Income from continuing operations available for common stockholders (in dollars per share) $ 1.64 $ 1.78 $ 1.17
Income from discontinued operations available for common stockholders (in dollars per share) 0.00 0.00 4.13
Net income available for common stockholders (in dollars per share) $ 1.64 $ 1.78 $ 5.30
Weighted average Common Shares outstanding - basic (in shares) 103,439 102,682 98,439
Earnings per Common Share - diluted:      
Income from continuing operations available for common stockholders (in dollars per share) $ 1.64 $ 1.78 $ 1.17
Income from discontinued operations available for common stockholders (in dollars per share) 0.00 0.00 4.13
Net income available for common stockholders (in dollars per share) $ 1.64 $ 1.78 $ 5.30
Weighted average Common Shares outstanding - diluted (in shares) 106,268 105,594 101,398
Net income available for common stockholders:      
Income from continuing operations available for common stockholders $ 169,343 $ 182,873 $ 115,461
Income from discontinued operations available for common stockholders 0 0 406,328
Net income available for common stockholders 169,343 182,873 521,789
Highwoods Realty Limited Partnership [Member]      
Rental and other revenues 720,035 702,737 665,634
Operating expenses:      
Rental property and other expenses 242,415 236,888 231,085
Depreciation and amortization 229,955 227,832 220,140
Impairments of real estate assets 423 1,445 0
General and administrative 40,006 39,648 38,153
Total operating expenses 512,799 505,813 489,378
Interest expense:      
Contractual 68,565 65,939 73,142
Amortization of debt issuance costs 2,857 3,166 3,506
Total interest expense 71,422 69,105 76,648
Other income:      
Interest and other income 1,940 2,309 2,338
Losses on debt extinguishment 0 (26) 0
Total other income 1,940 2,283 2,338
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 137,754 130,102 101,946
Gains on disposition of property 37,638 54,157 14,807
Equity in earnings of unconsolidated affiliates 2,238 7,404 5,793
Income from continuing operations 177,630 191,663 122,546
Discontinued operations:      
Income from discontinued operations 0 0 4,097
Net gains on disposition of discontinued operations 0 0 414,496
Total income from discontinued operations 0 0 418,593
Net income 177,630 191,663 541,139
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,207) (1,239) (1,253)
Distributions on Preferred Units (2,492) (2,492) (2,501)
Net income available for common unitholders $ 173,931 $ 187,932 $ 537,385
Earnings per Common Unit - basic:      
Income from continuing operations available for common unitholders (in dollars per share) $ 1.64 $ 1.79 $ 1.18
Income from discontinued operations available for common unitholders (in dollars per share) 0.00 0.00 4.15
Net income available for common unitholders (in dollars per share) $ 1.64 $ 1.79 $ 5.33
Weighted average Common Units outstanding - basic (in shares) 105,826 105,106 100,902
Earnings per Common Unit - diluted:      
Income from continuing operations available for common unitholders (in dollars per share) $ 1.64 $ 1.79 $ 1.18
Income from discontinued operations available for common unitholders (in dollars per share) 0.00 0.00 4.14
Net income available for common unitholders (in dollars per share) $ 1.64 $ 1.79 $ 5.32
Weighted average Common Units outstanding - diluted (in shares) 105,859 105,185 100,989
Net income available for common unitholders:      
Income from continuing operations available for common unitholders $ 173,931 $ 187,932 $ 118,792
Total income from discontinued operations 0 0 418,593
Net income available for common unitholders $ 173,931 $ 187,932 $ 537,385
v3.10.0.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Comprehensive income:      
Net income $ 177,630 $ 191,663 $ 541,139
Other comprehensive income:      
Unrealized gains on cash flow hedges 4,161 1,732 5,703
Amortization of cash flow hedges (2,086) 1,157 3,057
Total other comprehensive income 2,075 2,889 8,760
Total comprehensive income 179,705 194,552 549,899
Less-comprehensive (income) attributable to noncontrolling interests (5,795) (6,298) (16,849)
Comprehensive income attributable to common stockholders/unitholders 173,910 188,254 533,050
Highwoods Realty Limited Partnership [Member]      
Comprehensive income:      
Net income 177,630 191,663 541,139
Other comprehensive income:      
Unrealized gains on cash flow hedges 4,161 1,732 5,703
Amortization of cash flow hedges (2,086) 1,157 3,057
Total other comprehensive income 2,075 2,889 8,760
Total comprehensive income 179,705 194,552 549,899
Less-comprehensive (income) attributable to noncontrolling interests (1,207) (1,239) (1,253)
Comprehensive income attributable to common stockholders/unitholders $ 178,498 $ 193,313 $ 548,646
v3.10.0.1
Consolidated Statements of Equity - USD ($)
$ in Thousands
Total
Highwoods Realty Limited Partnership [Member]
Special Dividend [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Common Stock [Member]
Special Dividend [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Special Dividend [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
General Partner Common Units [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-In Capital [Member]
Additional Paid-In Capital [Member]
Special Dividend [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Special Dividend [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Special Dividend [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Special Dividend [Member]
Balance (in shares) at Dec. 31, 2015         96,091,932                                      
Balance at Dec. 31, 2015 $ 1,619,282 $ 1,590,232     $ 961   $ 29,050   $ 15,759   $ 1,560,309   $ 2,598,242   $ (3,811) $ (3,811)     $ 17,975 $ 17,975     $ (1,023,135)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   256,380             2,564   253,816         0       0        
Distributions on Common Units   (171,054)   $ (83,149)         (1,710) $ (832) (169,344) $ (82,317)       0   $ 0   0   $ 0    
Distributions on Preferred Units   (2,501)             (25)   (2,476)         0       0        
Issuances of Common Stock - Shares         5,390,710                                      
Issuances of Common Stock, net of issuance costs and tax withholdings 256,380       $ 54   0           256,326   0       0       0  
Conversions of Common Units to Common Stock - Shares         61,048                                      
Conversions of Common Units to Common Stock 3,057       $ 0   0           3,057   0       0       0  
Dividends on Common Stock (166,861)   $ (81,205)   0 $ 0 0 $ 0         0 $ 0 0   $ 0   0   $ 0   (166,861) $ (81,205)
Dividends on Preferred Stock (2,501)       0   0           0   0       0       (2,501)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value (12,993)       0   0           (12,993)   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,267) (1,267)     $ 0   0   0   0   0   0 0     (1,267) (1,267)     0  
Issuances of restricted stock - Shares         130,752                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (130)       $ 0   (130)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         (8,888)                                      
Share-based compensation expense, net of forfeitures 6,251 6,251     $ 2   0   63   6,188   6,249   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   (19,395)             (194)   (19,201)         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (15,596)       0   0           0   0       0       (15,596)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (13)   (1,240)   0   0 0     1,253 1,253     (1,253)  
Comprehensive income:                                                
Net income 541,139 541,139     0   0   5,411   535,728   0   0 0     0 0     541,139  
Other comprehensive income 8,760 8,760     0   0   0   0   0   8,760 8,760     0 0     0  
Total comprehensive income 549,899 549,899                                            
Balance at Dec. 31, 2016 2,154,316 2,125,396     $ 1,017   28,920   21,023   2,081,463   2,850,881   4,949 4,949     17,961 17,961     (749,412)  
Balance (in shares) at Dec. 31, 2016         101,665,554                                      
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   70,977             710   70,267         0       0        
Distributions on Common Units   (185,072)             (1,851)   (183,221)         0       0        
Distributions on Preferred Units   (2,492)             (25)   (2,467)         0       0        
Issuances of Common Stock - Shares         1,480,573                                      
Issuances of Common Stock, net of issuance costs and tax withholdings 70,977       $ 15   0           70,962   0       0       0  
Conversions of Common Units to Common Stock - Shares         10,000                                      
Conversions of Common Units to Common Stock 511       $ 0   0           511   0       0       0  
Dividends on Common Stock (180,805)       0   0           0   0       0       (180,805)  
Dividends on Preferred Stock (2,492)       0   0           0   0       0       (2,492)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value 354       0   0           354   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,784) (1,784)     $ 0   0   0   0   0   0 0     (1,784) (1,784)     0  
Issuances of restricted stock - Shares         110,748                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (28)       $ 0   (28)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         0                                      
Share-based compensation expense, net of forfeitures 6,692 6,692     $ 1   0   67   6,625   6,691   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   73             1   72         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (5,059)       0   0           0   0       0       (5,059)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (12)   (1,227)   0   0 0     1,239 1,239     (1,239)  
Comprehensive income:                                                
Net income 191,663 191,663     0   0   1,917   189,746   0   0 0     0 0     191,663  
Other comprehensive income 2,889 2,889     0   0   0   0   0   2,889 2,889     0 0     0  
Total comprehensive income 194,552 194,552                                            
Balance at Dec. 31, 2017 $ 2,237,234 2,208,342     $ 1,033   28,892   21,830   2,161,258   2,929,399   7,838 7,838     17,416 17,416     (747,344)  
Balance (in shares) at Dec. 31, 2017 103,266,875       103,266,875                                      
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   1,865             19   1,846         0       0        
Distributions on Common Units   (195,712)             (1,957)   (193,755)         0       0        
Distributions on Preferred Units   (2,492)             (25)   (2,467)         0       0        
Issuances of Common Stock - Shares         33,652                                      
Issuances of Common Stock, net of issuance costs and tax withholdings $ 1,865       $ 0   0           1,865   0       0       0  
Conversions of Common Units to Common Stock - Shares         90,001                                      
Conversions of Common Units to Common Stock 4,043       $ 0   0           4,043   0       0       0  
Dividends on Common Stock (191,302)       0   0           0   0       0       (191,302)  
Dividends on Preferred Stock (2,492)       0   0           0   0       0       (2,492)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value 33,427       0   0           33,427   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,047) (1,047)     $ 0   0   0   0   0   0 0     (1,047) (1,047)     0  
Issuances of restricted stock - Shares         172,440                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (15)       $ 0   (15)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         (5,903)                                      
Share-based compensation expense, net of forfeitures 7,466 7,466     $ 3   0   75   7,391   7,463   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   37,292             372   36,920         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (4,588)       0   0           0   0       0       (4,588)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (12)   (1,195)   0   0 0     1,207 1,207     (1,207)  
Comprehensive income:                                                
Net income 177,630 177,630     0   0   1,776   175,854   0   0 0     0 0     177,630  
Other comprehensive income 2,075 2,075     0   0   0   0   0   2,075 2,075     0 0     0  
Total comprehensive income 179,705 179,705                                            
Balance at Dec. 31, 2018 $ 2,264,296 $ 2,235,419     $ 1,036   $ 28,877   $ 22,078   $ 2,185,852   $ 2,976,197   $ 9,913 $ 9,913     $ 17,576 $ 17,576     $ (769,303)  
Balance (in shares) at Dec. 31, 2018 103,557,065       103,557,065                                      
v3.10.0.1
Consolidated Statements of Equity (Parentheticals) - $ / shares
3 Months Ended 12 Months Ended
Dec. 31, 2016
Dec. 31, 2018
Dec. 31, 2017
Dec. 31, 2016
Series A Cumulative Redeemable Preferred Shares [Member]        
Dividends on Preferred Stock (per share)/Distributions on Preferred Units (per unit)   $ 86.25 $ 86.25 $ 86.25
Highwoods Properties, Inc. [Member]        
Dividends on Common Stock (per share)   1.85 1.76 1.70
Highwoods Properties, Inc. [Member] | Special Dividend [Member]        
Dividends on Common Stock (per share) $ 0.80     2.50
Highwoods Properties, Inc. [Member] | Series A Cumulative Redeemable Preferred Shares [Member]        
Dividends on Preferred Stock (per share)/Distributions on Preferred Units (per unit)   86.25 86.25 86.25
Highwoods Realty Limited Partnership [Member]        
Distributions on Common Units (per unit)   1.85 1.76 1.70
Highwoods Realty Limited Partnership [Member] | Special Dividend [Member]        
Distributions on Common Units (per unit) $ 0.80     2.50
Highwoods Realty Limited Partnership [Member] | Series A Cumulative Redeemable Preferred Shares [Member]        
Dividends on Preferred Stock (per share)/Distributions on Preferred Units (per unit)   $ 86.25 $ 86.25 $ 86.25
v3.10.0.1
Consolidated Statements of Cash Flows
$ in Thousands
12 Months Ended
Dec. 31, 2018
USD ($)
Dec. 31, 2017
USD ($)
Dec. 31, 2016
USD ($)
Operating activities:      
Net income $ 177,630 $ 191,663 $ 541,139
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 229,955 227,832 220,140
Amortization of lease incentives and acquisition-related intangible assets and liabilities (1,943) (1,172) (1,996)
Share-based compensation expense 7,466 6,692 6,251
Allowance for losses on accounts and accrued straight-line rents receivable 1,212 1,508 2,001
Accrued interest on mortgages and notes receivable (451) (509) (502)
Amortization of debt issuance costs 2,857 3,166 3,506
Amortization of cash flow hedges (2,086) 1,157 3,057
Amortization of mortgages and notes payable fair value adjustments 1,449 705 (234)
Impairments of real estate assets 423 1,445 0
Losses on debt extinguishment 0 26 0
Net gains on disposition of property (37,638) (54,157) (429,303)
Equity in earnings of unconsolidated affiliates (2,238) (7,404) (5,793)
Distributions of earnings from unconsolidated affiliates 2,104 5,078 4,424
Settlement of cash flow hedges 7,216 7,322 0
Changes in operating assets and liabilities:      
Accounts receivable 1,759 (4,974) 3,401
Prepaid expenses and other assets 1,217 7,908 (4,423)
Accrued straight-line rents receivable (23,203) (32,234) (24,245)
Accounts payable, accrued expenses and other liabilities (7,101) (1,520) (11,618)
Net cash provided by operating activities 358,628 352,532 305,805
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (50,649) (1,840) (110,249)
Investments in development in-process (150,310) (150,944) (177,875)
Investments in tenant improvements and deferred leasing costs (121,534) (109,742) (91,423)
Investments in building improvements (68,256) (63,780) (80,672)
Net proceeds from disposition of real estate assets 88,813 129,503 684,371
Distributions of capital from unconsolidated affiliates 105 11,670 2,766
Investments in mortgages and notes receivable 0 0 (7,934)
Repayments of mortgages and notes receivable 1,312 2,917 1,699
Investments in and advances to unconsolidated affiliates 0 (10,063) (105)
Repayments from unconsolidated affiliates 0 0 448
Changes in other investing activities (6,230) (8,023) (4,764)
Net cash provided by/(used in) investing activities (306,749) (200,302) 216,262
Financing activities:      
Dividends on Common Stock (191,302) (180,805) (166,861)
Special dividend on Common Stock 0 (81,205) 0
Redemptions/repurchases of Preferred Stock (15) (28) (130)
Dividends on Preferred Stock (2,492) (2,492) (2,501)
Distributions to noncontrolling interests in the Operating Partnership (5,167) (4,987) (4,888)
Special distribution to noncontrolling interests in the Operating Partnership 0 (2,271) 0
Distributions to noncontrolling interests in consolidated affiliates (1,047) (1,784) (1,267)
Proceeds from the issuance of Common Stock 3,637 76,268 264,769
Costs paid for the issuance of Common Stock (95) (1,283) (3,973)
Repurchase of shares related to tax withholdings (1,677) (4,008) (4,416)
Borrowings on revolving credit facility 438,900 780,300 287,600
Repayments of revolving credit facility (501,900) (535,300) (586,600)
Borrowings on mortgages and notes payable 345,863 656,001 150,000
Repayments of mortgages and notes payable (211,803) (832,553) (395,993)
Payments of debt extinguishment costs 0 (57) 0
Changes in debt issuance costs and other financing activities (2,971) (8,324) (981)
Net cash used in financing activities (130,069) (142,528) (465,241)
Net increase/(decrease) in cash and cash equivalents and restricted cash (78,190) 9,702 56,826
Cash and cash equivalents and restricted cash at beginning of the period 88,333 78,631 21,805
Cash and cash equivalents and restricted cash at end of the period 10,143 88,333 78,631
Reconciliation of cash and cash equivalents and restricted cash:      
Cash and cash equivalents at end of the period 3,769 3,272 49,490
Restricted cash at end of the period 6,374 85,061 29,141
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 67,235 68,207 72,847
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains on cash flow hedges 4,161 1,732 5,703
Conversions of Common Units to Common Stock 4,043 511 3,057
Changes in accrued capital expenditures (165) (1,912) 8,580
Write-off of fully depreciated real estate assets 76,558 59,108 39,262
Write-off of fully amortized leasing costs 34,191 40,517 25,569
Write-off of fully amortized debt issuance costs 2,733 11,724 964
Adjustment of noncontrolling interests in the Operating Partnership to fair value (33,427) (354) 12,993
Contingent consideration in connection with the acquisition of land 0 750 0
Special dividend on Common Stock declared 0 0 (81,205)
Special distribution to noncontrolling interests in the Operating Partnership declared 0 0 (2,271)
Highwoods Realty Limited Partnership [Member]      
Operating activities:      
Net income 177,630 191,663 541,139
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 229,955 227,832 220,140
Amortization of lease incentives and acquisition-related intangible assets and liabilities (1,943) (1,172) (1,996)
Share-based compensation expense 7,466 6,692 6,251
Allowance for losses on accounts and accrued straight-line rents receivable 1,212 1,508 2,001
Accrued interest on mortgages and notes receivable (451) (509) (502)
Amortization of debt issuance costs 2,857 3,166 3,506
Amortization of cash flow hedges (2,086) 1,157 3,057
Amortization of mortgages and notes payable fair value adjustments 1,449 705 (234)
Impairments of real estate assets 423 1,445 0
Losses on debt extinguishment 0 26 0
Net gains on disposition of property (37,638) (54,157) (429,303)
Equity in earnings of unconsolidated affiliates (2,238) (7,404) (5,793)
Distributions of earnings from unconsolidated affiliates 2,104 5,078 4,011
Settlement of cash flow hedges 7,216 7,322 0
Changes in operating assets and liabilities:      
Accounts receivable 1,759 (4,974) 3,401
Prepaid expenses and other assets 1,217 7,908 (4,423)
Accrued straight-line rents receivable (23,203) (32,234) (24,245)
Accounts payable, accrued expenses and other liabilities (7,101) (1,520) (11,618)
Net cash provided by operating activities 358,628 352,532 305,392
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (50,649) (1,840) (110,249)
Investments in development in-process (150,310) (150,944) (177,875)
Investments in tenant improvements and deferred leasing costs (121,534) (109,742) (91,423)
Investments in building improvements (68,256) (63,780) (80,672)
Net proceeds from disposition of real estate assets 88,813 129,503 684,371
Distributions of capital from unconsolidated affiliates 105 11,670 3,179
Investments in mortgages and notes receivable 0 0 (7,934)
Repayments of mortgages and notes receivable 1,312 2,917 1,699
Investments in and advances to unconsolidated affiliates 0 (10,063) (105)
Repayments from unconsolidated affiliates 0 0 448
Changes in other investing activities (6,230) (8,023) (4,764)
Net cash provided by/(used in) investing activities (306,749) (200,302) 216,675
Financing activities:      
Distributions on Common Units (195,712) (185,072) (171,054)
Special distribution on Common Units 0 (83,149) 0
Redemptions/repurchases of Preferred Units (15) (28) (130)
Distributions on Preferred Units (2,492) (2,492) (2,501)
Distributions to noncontrolling interests in consolidated affiliates (1,047) (1,784) (1,267)
Proceeds from the issuance of Common Units 3,637 76,268 264,769
Costs paid for the issuance of Common Units (95) (1,283) (3,973)
Repurchase of units related to tax withholdings (1,677) (4,008) (4,416)
Borrowings on revolving credit facility 438,900 780,300 287,600
Repayments of revolving credit facility (501,900) (535,300) (586,600)
Borrowings on mortgages and notes payable 345,863 656,001 150,000
Repayments of mortgages and notes payable (211,803) (832,553) (395,993)
Payments of debt extinguishment costs 0 (57) 0
Changes in debt issuance costs and other financing activities (3,728) (9,371) (1,676)
Net cash used in financing activities (130,069) (142,528) (465,241)
Net increase/(decrease) in cash and cash equivalents and restricted cash (78,190) 9,702 56,826
Cash and cash equivalents and restricted cash at beginning of the period 88,333 78,631 21,805
Cash and cash equivalents and restricted cash at end of the period 10,143 88,333 78,631
Reconciliation of cash and cash equivalents and restricted cash:      
Cash and cash equivalents at end of the period 3,769 3,272 49,490
Restricted cash at end of the period 6,374 85,061 29,141
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 67,235 68,207 72,847
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains on cash flow hedges 4,161 1,732 5,703
Changes in accrued capital expenditures (165) (1,912) 8,580
Write-off of fully depreciated real estate assets 76,558 59,108 39,262
Write-off of fully amortized leasing costs 34,191 40,517 25,569
Write-off of fully amortized debt issuance costs 2,733 11,724 964
Adjustment of Redeemable Common Units to fair value (38,049) (793) 18,373
Contingent consideration in connection with the acquisition of land 0 750 0
Special distribution on Common Units declared $ 0 $ 0 $ (83,149)
v3.10.0.1
Description of Business and Significant Accounting Policies
12 Months Ended
Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc. (the “Company”) is a fully integrated real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At December 31, 2018, we owned or had an interest in 30.5 million rentable square feet of in-service properties, 1.8 million rentable square feet of properties under development and approximately 350 acres of development land.

The Company is the sole general partner of the Operating Partnership. At December 31, 2018, the Company owned all of the Preferred Units and 103.1 million, or 97.4%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds of the issuance are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is obligated to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of Common Stock based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company, at its option, may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During 2018, the Company redeemed 90,001 Common Units for a like number of shares of Common Stock.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. We consolidate joint venture investments, such as interests in partnerships and limited liability companies, when we control the major operating and financial policies of the investment through majority ownership, in our capacity as a general partner or managing member or through some other contractual right. At December 31, 2018, three properties owned through a joint venture investment were consolidated.

All intercompany transactions and accounts have been eliminated.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in our Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.

Insurance

Beginning in 2018, we are primarily self-insured for health care claims for participating employees. We have stop-loss coverage to limit our exposure to significant claims on a per claim and annual aggregate basis. We determine our liabilities for claims, including incurred but not reported losses, based on all relevant information, including actuarial estimates of claim liabilities. At December 31, 2018, a reserve of $0.5 million was recorded to cover estimated reported and unreported claims.


1.    Description of Business and Significant Accounting Policies – Continued

Real Estate and Related Assets

Real estate and related assets are recorded at cost and stated at cost less accumulated depreciation. Renovations, replacements and other expenditures that improve or extend the life of assets are capitalized and depreciated over their estimated useful lives. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful life of 40 years for buildings and depreciable land infrastructure costs, 15 years for building improvements and five to seven years for furniture, fixtures and equipment. Tenant improvements are amortized using the straight-line method over initial fixed terms of the respective leases, which generally are from three to 10 years. Depreciation expense for real estate assets was $191.0 million, $184.4 million and $173.1 million for the years ended December 31, 2018, 2017 and 2016, respectively.

Expenditures directly related to the development and construction of real estate assets are included in net real estate assets and are stated at depreciated cost. Development expenditures include pre-construction costs essential to the development of properties, development and construction costs, interest costs on qualifying assets, real estate taxes, development personnel salaries and related costs and other costs incurred during the period of development. Interest and other carrying costs are capitalized until the building is ready for its intended use, but not later than a year from cessation of major construction activity. We consider a construction project as substantially completed and ready for its intended use upon the completion of tenant improvements. We cease capitalization on the portion that is substantially completed and occupied or held available for occupancy, and capitalize only those costs associated with the portion under construction.

Expenditures directly related to the leasing of properties are included in deferred leasing costs and are stated at amortized cost. Such expenditures are part of the investment necessary to execute leases and, therefore, are classified as investment activities in the statement of cash flows. All leasing commissions paid to third parties for new leases or lease renewals are capitalized. Internal leasing costs, which consist primarily of compensation, benefits and other costs, such as legal fees related to leasing activities, that are incurred in connection with successfully obtaining leases of properties are also capitalized. Capitalized leasing costs are amortized on a straight-line basis over the initial fixed terms of the respective leases, which generally are from three to 10 years. Estimated costs related to unsuccessful activities are expensed as incurred.

We record liabilities for the performance of asset retirement activities when the obligation to perform such activities is probable even when uncertainty exists about the timing and/or method of settlement.

Upon the acquisition of real estate assets, we assess the fair value of acquired tangible assets such as land, buildings and tenant improvements, intangible assets and liabilities such as above and below market leases, acquired in-place leases, customer relationships and other identifiable intangible assets and assumed liabilities. We assess fair value based on estimated cash flow projections that utilize discount and/or capitalization rates as well as available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. 

The above and below market rate portions of leases acquired in connection with property acquisitions are recorded in deferred leasing costs and in accounts payable, accrued expenses and other liabilities, respectively, at fair value and amortized into rental revenue over the remaining term of the respective leases as described below. Fair value is calculated as the present value of the difference between (1) the contractual amounts to be paid pursuant to each in-place lease and (2) our estimate of fair market lease rates for each corresponding in-place lease, using a discount rate that reflects the risks associated with the leases acquired and measured over a period equal to the remaining initial term of the lease for above-market leases and the remaining initial term plus the term of any renewal option that the customer would be economically compelled to exercise for below-market leases.

In-place leases acquired are recorded at fair value in deferred leasing costs and are amortized to depreciation and amortization expense over the remaining term of the respective lease. The value of in-place leases is based on our evaluation of the specific characteristics of each customer's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, current market conditions, the customer's credit quality and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, we consider tenant improvements, leasing commissions and legal and other related expenses.

1.    Description of Business and Significant Accounting Policies – Continued
 
Real estate and other assets are classified as long-lived assets held for use or as long-lived assets held for sale. Real estate is classified as held for sale when the sale of the asset is probable, has been duly approved by the Company, a legally enforceable contract has been executed and the buyer's due diligence period, if any, has expired.

Impairments of Real Estate Assets and Investments in Unconsolidated Affiliates

With respect to assets classified as held for use, we perform an impairment analysis if events or changes in circumstances indicate that the carrying value may be impaired, such as a significant decline in occupancy, identification of materially adverse legal or environmental factors, change in our designation of an asset from core to non-core, which may impact the anticipated holding period, or a decline in market value to an amount less than cost. This analysis is generally performed at the property level, except when an asset is part of an interdependent group such as an office park, and consists of determining whether the asset's carrying amount will be recovered from its undiscounted estimated future operating and residual cash flows. These cash flows are estimated based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for customers, changes in market rental rates, costs to operate each property and expected ownership periods. For properties under development, the cash flows are based on expected service potential of the asset or asset group when development is substantially complete.

If the carrying amount of a held for use asset exceeds the sum of its undiscounted future operating and residual cash flows, an impairment loss is recorded for the difference between estimated fair value of the asset and the carrying amount. We generally estimate the fair value of assets held for use by using discounted cash flow analyses. In some instances, appraisal information may be available and is used in addition to a discounted cash flow analysis. As the factors used in generating these cash flows are difficult to predict and are subject to future events that may alter our assumptions, the discounted and/or undiscounted future operating and residual cash flows estimated by us in our impairment analyses or those established by appraisal may not be achieved and we may be required to recognize future impairment losses on properties held for use.
 
We record assets held for sale at the lower of the carrying amount or estimated fair value. Fair value of assets held for sale is equal to the estimated or contracted sales price with a potential buyer, less costs to sell. The impairment loss is the amount by which the carrying amount exceeds the estimated fair value.
 
We also analyze our investments in unconsolidated affiliates for impairment. This analysis consists of determining whether an expected loss in market value of an investment is other than temporary by evaluating the length of time and the extent to which the market value has been less than cost, the financial condition and near-term prospects of the investment, and our intent and ability to retain our investment for a period of time sufficient to allow for any anticipated recovery in market value. As the factors used in this analysis are difficult to predict and are subject to future events that may alter our assumptions, we may be required to recognize future impairment losses on our investments in unconsolidated affiliates.

Sales of Real Estate
 
For sales of real estate where we have collected the consideration to which we are entitled in exchange for transferring the real estate, the related assets and liabilities are removed from the balance sheet and the resultant gain or loss is recorded in the period the transaction closes. Any post sale involvement is accounted for as separate performance obligations and when the separate performance obligations are satisfied, the sales price allocated to each is recognized.


1.    Description of Business and Significant Accounting Policies – Continued

Rental and Other Revenues
 
Minimum contractual rents from leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue is commenced when the customer assumes control of the leased premises. Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue, such as percentage rent, is accrued when the contingency is removed. Termination fee income is recognized at the later of when the customer has vacated the space or the lease has expired and a fully executed lease termination agreement has been delivered, the amount of the fee is determinable and collectability of the fee is reasonably assured.

Cost recovery income is determined on a calendar year and a lease-by-lease basis. The most common types of cost recovery income in our leases are common area maintenance (“CAM”) and real estate taxes, for which a customer typically pays its pro-rata share of operating and administrative expenses and real estate taxes in excess of the costs incurred during a contractually specified base year. The computation of cost recovery income is complex and involves numerous judgments, including the interpretation of lease provisions. Leases are not uniform in dealing with such cost recovery income and there are many variations in the computation. Many customers make monthly fixed payments of CAM, real estate taxes and other cost reimbursement items. We accrue income related to these payments each month. We make quarterly accrual adjustments, positive or negative, to cost recovery income to adjust the recorded amounts to our best estimate of the final annual amounts to be billed and collected. After the end of the calendar year, we compute each customer's final cost recovery income and, after considering amounts paid by the customer during the year, issue a bill or credit for the appropriate amount to the customer. The differences between the amounts billed less previously received payments and the accrual adjustment are recorded as increases or decreases to cost recovery income when the final bills are prepared, which occurs during the first half of the subsequent year.
 
Allowance for Doubtful Accounts
 
Accounts receivable, accrued straight-line rents receivable and mortgages and notes receivable are reduced by an allowance for amounts that may become uncollectible in the future. We regularly evaluate the adequacy of our allowance for doubtful accounts. The evaluation primarily consists of reviewing past due account balances and considering such factors as the credit quality of our customer, historical trends of the customer and changes in customer payment terms. Additionally, with respect to customers in bankruptcy, we estimate the probable recovery through bankruptcy claims and adjust the allowance for amounts deemed uncollectible. If our assumptions regarding the collectability of receivables prove incorrect, we could experience losses in excess of our allowance for doubtful accounts. The allowance and its related receivable are written-off when we have concluded there is a low probability of collection and we have discontinued collection efforts.

Discontinued Operations
 
Properties that are sold or classified as held for sale are classified as discontinued operations provided that the disposal represents a strategic shift that has (or will have) a major effect on our operations and financial results. Interest expense is included in discontinued operations if a related loan securing the sold property is to be paid off or assumed by the buyer in connection with the sale.

Lease Incentives
 
Lease incentive costs, which are payments made to or on behalf of a customer as an incentive to sign a lease, are capitalized in deferred leasing costs and amortized on a straight-line basis over the respective lease terms as a reduction of rental revenues.

1.    Description of Business and Significant Accounting Policies – Continued

Investments in Unconsolidated Affiliates
 
We account for our joint venture investments using the equity method of accounting when our interests represent a general partnership interest but substantive participating rights or substantive kick out rights have been granted to the limited partners or when our interests do not represent a general partnership interest and we do not control the major operating and financial policies of the investment. These investments are initially recorded at cost as investments in unconsolidated affiliates and are subsequently adjusted for our share of earnings and cash contributions and distributions. To the extent our cost basis at formation of the joint venture is different than the basis reflected at the joint venture level, the basis difference is amortized over the life of the related assets and included in our share of equity in earnings of unconsolidated affiliates.

Cash Equivalents

We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Restricted Cash
 
Restricted cash represents cash deposits that are legally restricted or held by third parties on our behalf, such as construction-related escrows, property disposition proceeds set aside and designated or intended to fund future tax-deferred exchanges of qualifying real estate investments and escrows and reserves for debt service, real estate taxes and property insurance established pursuant to certain mortgage financing arrangements.

Redeemable Common Units and Preferred Units
 
Limited partners holding Common Units other than the Company (“Redeemable Common Units”) have the right to put any and all of the Common Units to the Operating Partnership and the Company has the right to put any and all of the Preferred Units to the Operating Partnership in exchange for their liquidation preference plus accrued and unpaid distributions in the event of a corresponding redemption by the Company of the underlying Preferred Stock. Consequently, these Redeemable Common Units and Preferred Units are classified outside of permanent partners’ capital in the Operating Partnership's accompanying balance sheets. The recorded value of the Redeemable Common Units is based on fair value at the balance sheet date as measured by the closing price of Common Stock on that date multiplied by the total number of Redeemable Common Units outstanding. The recorded value of the Preferred Units is based on their redemption value.

Income Taxes
 
The Company has elected and expects to continue to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). A corporate REIT is a legal entity that holds real estate assets and, through the payment of dividends to stockholders, is generally permitted to reduce or avoid the payment of federal and state income taxes at the corporate level. To maintain qualification as a REIT, the Company is required to pay dividends to its stockholders equal to at least 90.0% of its annual REIT taxable income, excluding net capital gains. The partnership agreement requires the Operating Partnership to pay economically equivalent distributions on outstanding Common Units at the same time that the Company pays dividends on its outstanding Common Stock.

Other than income taxes related to its taxable REIT subsidiary, the Operating Partnership does not reflect any federal income taxes in its financial statements, since as a partnership the taxable effects of its operations are attributed to its partners. The Operating Partnership does record state income tax for states that tax partnership income directly.
 
We conduct certain business activities through a taxable REIT subsidiary, as permitted under the Code. The taxable REIT subsidiary is subject to federal, state and local income taxes on its taxable income. We record provisions for income taxes based on its income recognized for financial statement purposes, including the effects of differences between such income and the amount recognized for tax purposes.
 

1.    Description of Business and Significant Accounting Policies – Continued

Concentration of Credit Risk
 
At December 31, 2018, properties that we wholly own were leased to 1,654 customers. The geographic locations that comprise greater than 10.0% of our rental and other revenues are Raleigh, Atlanta, Tampa and Nashville. Our customers engage in a wide variety of businesses. No single customer generated more than 5% of our consolidated revenues during 2018.
 
We maintain our cash and cash equivalents and our restricted cash at financial or other intermediary institutions. The combined account balances at each institution may exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Additionally, from time to time in connection with tax-deferred 1031 transactions, our restricted cash balances may be commingled with other funds being held by any such intermediary institution, which would subject our balance to the credit risk of the institution.

Derivative Financial Instruments
 
We borrow funds at a combination of fixed and variable rates. Borrowings under our revolving credit facility and bank term loans bear interest at variable rates. Our long-term debt typically bears interest at fixed rates. Our interest rate risk management objectives are to limit generally the impact of interest rate changes on earnings and cash flows and lower our overall borrowing costs. To achieve these objectives, from time to time, we enter into interest rate hedge contracts such as collars, swaps, caps and treasury lock agreements in order to mitigate our interest rate risk with respect to existing and prospective debt instruments. We generally do not hold or issue these derivative contracts for trading or speculative purposes. The interest rate on all of our variable rate debt is generally adjusted at one or three month intervals, subject to settlements under these interest rate hedge contracts.

Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income/(loss) and is subsequently reclassified into interest expense in the period that the hedged forecasted transaction affects earnings.
 
We account for terminated derivative instruments by recognizing the related accumulated comprehensive income/(loss) balance in current earnings, unless the hedged forecasted transaction continues as originally planned, in which case we continue to amortize the accumulated comprehensive income/(loss) into earnings over the originally designated hedge period.

Earnings Per Share and Per Unit
 
Basic earnings per share of the Company is computed by dividing net income available for common stockholders by the weighted Common Shares outstanding - basic. Diluted earnings per share is computed by dividing net income available to common stockholders (inclusive of noncontrolling interests in the Operating Partnership) by the weighted Common Shares outstanding - basic plus the dilutive effect of options, warrants and convertible securities outstanding, including Common Units, using the treasury stock method. Weighted Common Shares outstanding - basic includes all unvested restricted stock where dividends received on such restricted stock are non-forfeitable.

Basic earnings per unit of the Operating Partnership is computed by dividing net income available for common unitholders by the weighted Common Units outstanding - basic. Diluted earnings per unit is computed by dividing net income available to common unitholders by the weighted Common Units outstanding - basic plus the dilutive effect of options and warrants, using the treasury stock method. Weighted Common Units outstanding - basic includes all of the Company's unvested restricted stock where distributions received on such restricted stock are non-forfeitable.
 

1.    Description of Business and Significant Accounting Policies – Continued
 
Recently Issued Accounting Standards
 
The Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that superseded the revenue recognition requirements under previous guidance, which we adopted as of January 1, 2018. Several updates have been issued subsequently that are intended to promote a more consistent interpretation and application of the principles outlined in the ASU. The ASU requires the use of a new five-step model to recognize revenue from contracts with customers. The five-step model requires that we identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when we satisfy the performance obligations. We are also required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. In analyzing our contracts with customers, we determined that the most material potential impact from the adoption of this ASU would be in how revenue is recognized for sales of real estate with post sale involvement. Prior to the adoption of this ASU, profit for such sales transactions was recognized and then reduced by the maximum exposure to loss related to the nature of the post sale involvement at the time of sale. Upon adoption of this ASU, any post sale involvement must be accounted for as a separate performance obligation in the contract and a portion of the sales price allocated to each performance obligation. When the post sale involvement performance obligation is satisfied, the portion of the sales price allocated to it will be recognized. We had no sales of real estate with continuing involvement during the year ended December 31, 2018 or prior periods; however, we will use such methodology for any future real estate sales with continuing involvement. Our internal controls with respect to accounting for such sales have been updated accordingly. Adoption of this ASU resulted in no other changes with respect to the timing of revenue recognition or internal controls related to contracts such as management, development and construction fees and transient parking income, all of which are not material to our Consolidated Financial Statements. As such, there is no cumulative-effect adjustment from the adoption of this ASU reflected in our Consolidated Financial Statements.
 
The FASB issued an ASU that requires entities to show changes in total cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning of period and end of period balances rather than presented as transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. We adopted the ASU as of January 1, 2018 with retrospective application to our Consolidated Statements of Cash Flows. Accordingly, our Consolidated Statements of Cash Flows present a reconciliation of the changes in cash and cash equivalents and restricted cash. The effect of the adoption resulted in a $55.9 million decrease in net cash used in investing activities for the year ended December 31, 2017 and a $12.4 million increase in net cash provided by investing activities for the year ended December 31, 2016.
 
The FASB issued an ASU that clarifies and narrows the definition of a business used in determining whether to account for a transaction as an asset acquisition or business combination. The guidance requires evaluation of the fair value of the assets acquired to determine if it is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transferred assets would not be a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. We adopted the ASU prospectively as of January 1, 2018. We expect that the majority of our future acquisitions would not meet the definition of a business; therefore, the related acquisition costs would be capitalized as part of the purchase price.
 
The FASB issued an ASU that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance requires modification accounting if the value, vesting conditions or classification of the award changes. We adopted the ASU as of January 1, 2018 with no effect on our Consolidated Financial Statements.


1.    Description of Business and Significant Accounting Policies – Continued
 
The FASB issued an ASU that sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. In addition, the guidance requires lessors to capitalize and amortize only incremental direct leasing costs. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease, respectively. A lessee is also required to record a right of use asset and a lease liability for all leases with a term of greater than a year regardless of their classification. Leases with a term of a year or less will be accounted for in the same manner as operating leases today. The guidance supersedes previously issued guidance under ASC Topic 840 “Leases.”

An entity may elect a package of practical expedients, which allows for the following:
 
An entity need not reassess whether any expired or existing contracts are or contain leases;
 
An entity need not reassess the lease classification for any expired or existing leases; and
 
An entity need not reassess initial direct costs for any existing leases.
 
This package of practical expedients is available as a single election that must be consistently applied to all existing leases at the date of adoption.

Furthermore, the FASB finalized an amendment that allows entities to present comparative periods, in the year of adoption, under ASC 840, which effectively allows for an initial date of adoption of January 1, 2019. The amendment also provides a practical expedient to lessors that removes the requirement to separate lease and non-lease components, provided certain conditions are met.

Our analysis of our leases indicates that the lease component is the predominant component, that the timing and pattern of transfer of our material non-lease components (primarily cost recovery income) are the same as the lease components and the lease component, if it were accounted for separately, would be classified as an operating lease. As such, we believe the adoption of the ASU will not significantly change the accounting or the related internal controls for rental and other revenues from operating leases where we are the lessor, and that such leases will be accounted for in a manner similar to existing standards with the underlying leased asset being reported and recognized as a real estate asset. Upon the adoption of the ASU, we will no longer capitalize and amortize certain leasing related costs and instead will expense these costs as incurred. Such capitalized costs have averaged approximately $2.5 million annually.

Leases where we are the lessee include primarily our operating ground leases. We currently believe that existing ground leases executed before the adoption date will continue to be accounted for as operating leases and the new guidance will not have a material impact on our recognition of ground lease expense or our results of operations. However, we will be required to recognize a right of use asset and a lease liability on our Consolidated Balance Sheets equal to the present value of the minimum lease payments required under each ground lease, which we believe will range from $31 million to $36 million. See Note 7 for information regarding our ground lease commitments.

We will adopt the new ASU effective January 1, 2019 using the modified retrospective approach and will elect the use of all practical expedients provided by the ASU and related amendments as mentioned above.

The FASB issued an ASU that eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item when the hedged item affects earnings. The ASU is required to be adopted in 2019 using a modified retrospective approach. We do not expect such adoption to have a material effect on our Consolidated Financial Statements.

1.    Description of Business and Significant Accounting Policies – Continued
 
The FASB issued an ASU that requires, among other things, the use of a new current expected credit loss ("CECL") model in determining our allowances for doubtful accounts with respect to accounts receivable, accrued straight-line rents receivable and mortgages and notes receivable. The FASB recently finalized its proposal to exclude operating lease receivables from the scope of this ASU. As such, we do not expect the adoption of this ASU in 2020 to have a material effect on our Consolidated Financial Statements.

The FASB issued an ASU that changes certain disclosure requirements for fair value measurements. The ASU is required to be adopted in 2020 and applied prospectively. We do not expect such adoption to have a material effect on our Notes to Consolidated Financial Statements.
v3.10.0.1
Real Estate Assets
12 Months Ended
Dec. 31, 2018
Real Estate [Abstract]  
Real Estate Assets
Real Estate Assets
 
Acquisitions

During 2018, we acquired two development parcels totaling approximately nine acres in Nashville for an aggregate purchase price, including capitalized acquisition costs, of $50.6 million.

During 2017, we acquired fee simple title to land in Raleigh that was previously subject to a ground lease for a purchase price, including capitalized acquisition costs and contingent consideration, of $2.6 million.

During 2016, we acquired a building in Raleigh, which encompasses 243,000 rentable square feet, for a net purchase price of $76.9 million. We expensed $0.3 million of acquisition costs (included in general and administrative expenses) related to this acquisition. The assets acquired and liabilities assumed were recorded at fair value as determined by management, with the assistance of third party specialists, based on information available at the acquisition date and on current assumptions as to future operations.

During 2016, we also acquired:

fee simple title to the land underneath one of our buildings in Pittsburgh that was previously subject to a ground lease for a purchase price of $18.5 million. We expensed $0.5 million of acquisition costs (included in general and administrative expenses) related to this acquisition;

an acre of development land in Raleigh for a purchase price, including capitalized acquisition costs, of $5.8 million; and

14 acres of development land in Nashville for a purchase price, including capitalized acquisition costs, of $9.1 million.

Dispositions

During 2018, we sold a total of three buildings and various land parcels for an aggregate sale price of $90.6 million and recorded aggregate gains on disposition of property of $37.6 million.
 
During 2017, we sold a total of 15 buildings and land for an aggregate sale price of $135.6 million (before closing credits to buyer of $3.7 million) and recorded aggregate gains on disposition of property of $54.2 million.

During 2016, we sold:

substantially all of our wholly-owned Country Club Plaza assets in Kansas City (which we refer to as the “Plaza assets”) for a sale price of $660.0 million (before closing credits to buyer of $4.8 million). We recorded gains on disposition of discontinued operations of $414.5 million and a gain on disposition of property of $1.3 million related to the land; and

2.     Real Estate Assets - Continued

a 32,000 square foot building for a sale price of $4.7 million (before closing credits to buyer of $0.1 million) and recorded a gain on disposition of property of $1.1 million. The buyer, which leased 79% of the building, is a family business controlled by a director of the Company. The sale price exceeded the value set forth in an appraisal performed by a reputable independent commercial real estate services firm that has no relationship with the director or any of his affiliates.

During 2016, we also sold two buildings and various land parcels for an aggregate sale price of $31.1 million (before closing credits to buyer of $0.5 million) and recorded aggregate gains on disposition of property of $12.4 million. We deferred $0.4 million of gain related to a land sale for a portion of the sale price that was escrowed for contingent future infrastructure work.

Impairments

We recorded aggregate impairments of real estate assets of $0.4 million and $1.4 million in 2018 and 2017, respectively. These impairments resulted from changes in market-based inputs and our assumptions about the use of the assets.
v3.10.0.1
Investments In and Advances To Affiliates
12 Months Ended
Dec. 31, 2018
Equity Method Investments and Joint Ventures [Abstract]  
Investments In and Advances To Affiliates
Investments in and Advances to Affiliates
 
Unconsolidated Affiliates
 
We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of the joint venture investment. The difference between the cost of these investments and the net book value of the underlying net assets was $0.6 million and $0.7 million at December 31, 2018 and 2017, respectively.
 
The following table sets forth our ownership in unconsolidated affiliates at December 31, 2018:
 
Joint Venture
 
Location
 
Ownership
Interest
Plaza Colonnade, Tenant-in-Common
 
Kansas City
 
50.0%
Kessinger/Hunter & Company, LC
 
Kansas City
 
26.5%
Highwoods DLF Forum, LLC
 
Raleigh
 
25.0%
Highwoods DLF 98/29, LLC
 
Orlando
 
22.8%

We receive development, management and leasing fees for services provided to certain of our joint ventures. These fees are recognized in income to the extent of our respective joint venture partner's interest. During the years ended December 31, 2018, 2017 and 2016, we recognized $0.4 million, $1.4 million and $0.8 million, respectively, of development/construction, management and leasing fees from our unconsolidated joint ventures. At both December 31, 2018 and 2017, we had receivables of $0.1 million related to these fees in accounts receivable.
 
Consolidated Affiliates
 
We have a 50.0% ownership interest in Highwoods-Markel Associates, LLC (“Markel”), a consolidated joint venture. We are the manager and leasing agent for Markel's properties, which are located in Richmond in exchange for customary management and leasing fees. We consolidate Markel since we are the managing member and control the major operating and financial policies of the entity. As controlling member, we have an obligation to cause this property-owning entity to distribute proceeds of liquidation to the noncontrolling interest member in these partially owned properties only if the net proceeds received by the entity from the sale of any of Markel's assets warrant a distribution as determined by the agreement governing the joint venture. We estimate the value of such noncontrolling interest distributions would have been $30.1 million had the entity been liquidated at December 31, 2018. This estimated settlement value is based on the fair value of the underlying properties which is based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for customers, changes in market rental rates and costs to operate each property. If the entity's underlying assets are worth less than the underlying liabilities on the date of such liquidation, we would have no obligation to remit any consideration to the noncontrolling interest holder.
v3.10.0.1
Intangible Assets and Below Market Leaes Liabilities
12 Months Ended
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Below Market Lease Liabilities
Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
December 31,
 
2018
 
2017
Assets:
 
 
 
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
$
344,548

 
$
344,191

Less accumulated amortization
(149,275
)
 
(143,512
)
 
$
195,273

 
$
200,679

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
57,955

 
$
59,947

Less accumulated amortization
(32,307
)
 
(28,214
)
 
$
25,648

 
$
31,733


The following table sets forth amortization of intangible assets and below market lease liabilities:
 
 
Year Ended December 31,
 
2018
 
2017
 
2016
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
36,486

 
$
41,187

 
$
44,968

Amortization of lease incentives (in rental and other revenues)
$
1,908

 
$
1,765

 
$
1,779

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
1,677

 
$
2,921

 
$
3,851

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
557

 
$
557

 
$
557

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(6,085
)
 
$
(6,415
)
 
$
(8,183
)

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:
 
Years Ending December 31,
 
Amortization
of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)
 
Amortization
of Lease Incentives (in Rental and Other Revenues)
 
Amortization
of Acquisition-Related Intangible Assets (in Rental and Other Revenues)
 
Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses)
 
Amortization
of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
2019
 
$
35,862

 
$
1,730

 
$
1,261

 
$
553

 
$
(5,405
)
2020
 
31,285

 
1,445

 
957

 
514

 
(5,135
)
2021
 
26,702

 
1,205

 
631

 

 
(4,331
)
2022
 
22,392

 
982

 
462

 

 
(3,258
)
2023
 
18,972

 
914

 
308

 

 
(2,878
)
Thereafter
 
43,147

 
4,851

 
1,100

 

 
(4,641
)
 
 
$
178,360

 
$
11,127

 
$
4,719

 
$
1,067

 
$
(25,648
)
Weighted average remaining amortization periods as of December 31, 2018 (in years)
 
7.3

 
10.1

 
6.5

 
2.0

 
5.9

v3.10.0.1
Mortgages and Notes Payable
12 Months Ended
Dec. 31, 2018
Debt Disclosure [Abstract]  
Mortgages and Notes Payable
Mortgages and Notes Payable
 
Our mortgages and notes payable consist of the following:
 
 
December 31,
 
2018
 
2017
Secured indebtedness: (1)
 
 
 
4.00% mortgage loan due 2029
$
97,179

 
$
98,981

 
97,179

 
98,981

Unsecured indebtedness:
 
 
 
7.50% notes due 2018 (2)

 
200,000

3.20% (3.363% effective rate) notes due 2021 (3)
298,936

 
298,504

3.625% (3.752% effective rate) notes due 2023 (4)
248,938

 
248,675

3.875% (4.038% effective rate) notes due 2027 (5)
296,734

 
296,334

4.125% (4.271% effective rate) notes due 2028 (6)
346,208

 

Variable rate term loan due 2018 (2)

 
10,000

Variable rate term loan due 2020 (7)
225,000

 
225,000

Variable rate term loan due 2022 (8)
200,000

 
200,000

Variable rate term loan due 2022 (9)
200,000

 
200,000

Revolving credit facility due 2022 (10)
182,000

 
245,000

 
1,997,816

 
1,923,513

Less-unamortized debt issuance costs
(9,164
)
 
(8,161
)
Total mortgages and notes payable, net
$
2,085,831

 
$
2,014,333

__________
(1)
Our secured mortgage loan was collateralized by real estate assets with an undepreciated book value of $147.6 million at December 31, 2018. Our fixed rate mortgage loans generally are either locked out to prepayment for all or a portion of their term or are prepayable subject to certain conditions including prepayment penalties.
(2)
This debt was repaid in 2018.
(3)
Net of unamortized original issuance discount of $1.1 million and $1.5 million as of December 31, 2018 and 2017, respectively.
(4)
Net of unamortized original issuance discount of $1.1 million and $1.3 million as of December 31, 2018 and 2017, respectively.
(5)
Net of unamortized original issuance discount of $3.3 million and $3.7 million as of December 31, 2018 and 2017, respectively.
(6)
Net of unamortized original issuance discount of $3.8 million as of December 31, 2018.
(7)
As more fully described in Note 6, we entered into floating-to-fixed interest rate swaps that effectively fixed LIBOR for $225.0 million of this loan through January 11, 2019. Accordingly, the equivalent fixed rate of this amount was 2.78%.
(8)
As more fully described in Note 6, we entered into floating-to-fixed interest rate swaps that effectively fix LIBOR for $50.0 million of this loan through January 2022. Accordingly, the equivalent fixed rate of this amount is 2.79%. The interest rate on the remaining $150.0 million was 3.45% at December 31, 2018.
(9)
The interest rate was 3.61% at December 31, 2018.
(10)
The interest rate was 3.46% at December 31, 2018.

5.    Mortgages and Notes Payable - Continued

The following table sets forth scheduled future principal payments, including amortization, due on our mortgages and notes payable at December 31, 2018:

Years Ending December 31,
 
Principal Amount
2019
 
$
367

2020
 
225,444

2021
 
300,757

2022
 
583,038

2023
 
251,376

Thereafter
 
734,013

Less-unamortized debt issuance costs
 
(9,164
)
 
 
$
2,085,831


During 2017, we entered into a new $600.0 million unsecured revolving credit facility, which replaced our previously existing $475.0 million revolving credit facility, and includes an accordion feature that allows for an additional $400.0 million of borrowing capacity subject to additional lender commitments. Our new revolving credit facility is scheduled to mature in January 2022. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. The interest rate on the new facility at our current credit ratings is LIBOR plus 100 basis points and the annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor’s Ratings Services. The financial and other covenants under the new facility are similar to our previous credit facility. We incurred $3.5 million of debt issuance costs, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility. We recorded $0.1 million of loss on debt extinguishment. There was $182.0 million and $191.0 million outstanding under our new revolving credit facility at December 31, 2018 and January 25, 2019, respectively. At both December 31, 2018 and January 25, 2019, we had $0.2 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at December 31, 2018 and January 25, 2019 was $417.8 million and $408.8 million, respectively.

During 2018, we paid off at maturity $200.0 million principal amount of 7.5% unsecured notes. We also paid down $1.8 million of secured loan balances through principal amortization during 2018.
 
During 2018, the Operating Partnership issued $350.0 million aggregate principal amount of 4.125% notes due 2028, less original issuance discount of $4.1 million. These notes were priced to yield 4.271%. Underwriting fees and other expenses were incurred that aggregated $2.9 million; these costs were deferred and will be amortized over the term of the notes.
 
During 2017, we prepaid without penalty a secured mortgage loan with a fair market value of $108.2 million with an effective interest rate of 4.22%. We recorded $0.4 million of gain on debt extinguishment related to this prepayment.

During 2017, we modified our $200.0 million, five-year unsecured bank term loan, which was originally scheduled to mature in January 2019. The modified term loan is now scheduled to mature in November 2022 and the interest rate, based on current credit ratings, was reduced from LIBOR plus 120 basis points to LIBOR plus 110 basis points. We incurred $1.1 million of debt issuance costs, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of the modified loan. We recorded $0.4 million of loss on debt extinguishment.

During 2017, we obtained a $100.0 million secured mortgage loan from a third party lender with an effective interest rate of 4.0%. This loan is scheduled to mature in May 2029. We incurred $0.8 million of debt issuance costs in connection with this loan, which will be amortized over the term of the loan.

5.    Mortgages and Notes Payable - Continued
 
During 2017, the Operating Partnership issued $300.0 million aggregate principal amount of 3.875% notes due 2027, less original issuance discount of $4.0 million. These notes were priced to yield 4.038%. Underwriting fees and other expenses were incurred that aggregated $2.5 million; these costs were deferred and will be amortized over the term of the notes.

During 2017, we paid off at maturity $379.7 million principal amount of 5.85% unsecured notes.

We previously amended our $225.0 million, seven-year unsecured bank term loan, which was scheduled to mature in January 2019. We increased the borrowed amount to $350.0 million. The amended term loan is scheduled to mature in June 2020 and the interest rate, based on our current credit ratings, was reduced from LIBOR plus 175 basis points to LIBOR plus 110 basis points. We incurred $1.3 million of debt issuance costs in connection with this amendment, which will be amortized along with existing unamortized debt issuance costs over the remaining term of the new loan. During 2017, we prepaid without penalty $125.0 million on this $350.0 million unsecured bank term loan. We recorded $0.4 million of loss on debt extinguishment related to this prepayment.

We previously acquired our joint venture partner’s 77.2% interest in a building in Orlando. Simultaneously with this acquisition, the joint venture's previously existing mortgage note was restructured into a new $18.0 million first mortgage note and a $10.2 million subordinated note, both of which were scheduled to mature in July 2017. The first mortgage and subordinated notes had effective interest rates of 5.36% and 8.6%, respectively. The subordinated note and accrued interest thereon was satisfied upon payment of a "waterfall payment." During 2017, both notes were retired upon payment of the $18.0 million principal balance on the first mortgage note and a $0.5 million waterfall payment relating to the subordinated note, which resulted in $0.4 million of gain on debt extinguishment.
 
During 2016, we prepaid without penalty the remaining $43.6 million balance on a secured mortgage loan with an effective interest rate of 7.5% that was originally scheduled to mature in August 2016.

During 2016, we borrowed an aggregate of $150.0 million under an unsecured bank term loan that is originally scheduled to mature in January 2022. The interest rate on the term loan at our current credit ratings is LIBOR plus 110 basis points. During 2017, we amended our $150.0 million unsecured bank term loan by increasing the borrowed amount to $200.0 million. We incurred $0.3 million of debt issuance costs in connection with this amendment, which will be amortized along with existing unamortized debt issuance costs over the remaining term.

We previously obtained a $350.0 million, six-month unsecured bridge facility. The interest rate on the bridge facility at our current credit ratings was LIBOR plus 110 basis points. During 2016, we prepaid without penalty the full balance on this unsecured bridge facility.

Our revolving credit facility and bank term loans require us to comply with customary operating covenants and various financial requirements. Upon an event of default on the revolving credit facility, the lenders having at least 51.0% of the total commitments under the revolving credit facility can accelerate all borrowings then outstanding, and we could be prohibited from borrowing any further amounts under our revolving credit facility, which would adversely affect our ability to fund our operations. In addition, certain of our unsecured debt agreements contain cross-default provisions giving the unsecured lenders the right to declare a default if we are in default under more than $30.0 million with respect to other loans in some circumstances.

We are currently in compliance with financial covenants with respect to our consolidated debt.


5.    Mortgages and Notes Payable - Continued

The Operating Partnership has $298.9 million carrying amount of 2021 notes outstanding, $248.9 million carrying amount of 2023 notes outstanding, $296.7 million