HIGHWOODS PROPERTIES, INC., 10-Q filed on 7/29/2014
Quarterly Report
Document and Entity Information Document
6 Months Ended
Jun. 30, 2014
Jul. 21, 2014
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-Q 
 
Document Period End Date
Jun. 30, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
90,361,707 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Highwoods Realty Limited Partnership [Member]
 
 
Entity Information [Line Items]
 
 
Entity Registrant Name
HIGHWOODS REALTY LIMITED PARTNERSHIP 
 
Entity Central Index Key
0000941713 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2014 
 
Document Fiscal Year Focus
2014 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Real estate assets, at cost:
 
 
Land
$ 382,575 
$ 393,602 
Buildings and tenant improvements
3,724,554 
3,748,869 
Development in process
114,790 
44,621 
Land held for development
104,873 
110,374 
Total real estate assets
4,326,792 
4,297,466 
Less-accumulated depreciation
(1,011,477)
(985,244)
Net real estate assets
3,315,315 
3,312,222 
Real estate and other assets, net, held for sale
68,159 
Cash and cash equivalents
18,699 
10,184 
Restricted cash
10,602 
14,169 
Accounts receivable, net of allowance of $1,390 and $1,648, respectively
27,972 
26,430 
Mortgages and notes receivable, net of allowance of $275 and $302, respectively
10,140 
26,409 
Accrued straight-line rents receivable, net of allowance of $798 and $1,063, respectively
132,051 
126,014 
Investments in unconsolidated affiliates
30,387 
29,901 
Deferred financing and leasing costs, net of accumulated amortization of $102,430 and $92,220, respectively
218,022 
222,211 
Prepaid expenses and other assets, net of accumulated amortization of $13,466 and $12,905, respectively
45,453 
39,561 
Total Assets
3,876,800 
3,807,101 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity:
 
 
Mortgages and notes payable
2,058,972 
1,956,299 
Accounts payable, accrued expenses and other liabilities
219,296 
218,962 
Financing obligations
24,672 
26,664 
Total Liabilities
2,302,940 
2,201,925 
Commitments and contingencies
   
   
Noncontrolling interests in the Operating Partnership
123,205 
106,480 
Equity:
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares; 8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share; 29,077 shares issued and outstanding)
29,077 
29,077 
Common Stock, $.01 par value, 200,000,000 authorized shares; 90,361,707 and 89,920,915 shares issued and outstanding, respectively
904 
899 
Additional paid-in capital
2,366,281 
2,370,368 
Distributions in excess of net income available for common stockholders
(962,205)
(920,433)
Accumulated other comprehensive loss
(4,719)
(2,611)
Total Stockholders’ Equity
1,429,338 
1,477,300 
Noncontrolling interests in consolidated affiliates
21,317 
21,396 
Total Equity
1,450,655 
1,498,696 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
3,876,800 
3,807,101 
Highwoods Realty Limited Partnership [Member]
 
 
Real estate assets, at cost:
 
 
Land
382,575 
393,602 
Buildings and tenant improvements
3,724,554 
3,748,869 
Development in process
114,790 
44,621 
Land held for development
104,873 
110,374 
Total real estate assets
4,326,792 
4,297,466 
Less-accumulated depreciation
(1,011,477)
(985,244)
Net real estate assets
3,315,315 
3,312,222 
Real estate and other assets, net, held for sale
68,159 
Cash and cash equivalents
18,793 
10,281 
Restricted cash
10,602 
14,169 
Accounts receivable, net of allowance of $1,390 and $1,648, respectively
27,972 
26,430 
Mortgages and notes receivable, net of allowance of $275 and $302, respectively
10,140 
26,409 
Accrued straight-line rents receivable, net of allowance of $798 and $1,063, respectively
132,051 
126,014 
Investments in unconsolidated affiliates
30,387 
29,901 
Deferred financing and leasing costs, net of accumulated amortization of $102,430 and $92,220, respectively
218,022 
222,211 
Prepaid expenses and other assets, net of accumulated amortization of $13,466 and $12,905, respectively
45,383 
39,561 
Total Assets
3,876,824 
3,807,198 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity:
 
 
Mortgages and notes payable
2,058,972 
1,956,299 
Accounts payable, accrued expenses and other liabilities
219,250 
218,887 
Financing obligations
24,672 
26,664 
Total Liabilities
2,302,894 
2,201,850 
Commitments and contingencies
   
   
Redeemable Operating Partnership Units:
 
 
Common Units, 2,936,955 and 2,943,872 outstanding, respectively
123,205 
106,480 
Series A Preferred Units (liquidation preference $1,000 per unit), 29,077 units issued and outstanding
29,077 
29,077 
Total Redeemable Operating Partnership Units
152,282 
135,557 
Equity:
 
 
General partner Common Units, 928,899 and 924,560 outstanding, respectively
14,048 
14,508 
Limited partner Common Units, 89,024,000 and 88,587,546 outstanding, respectively
1,391,002 
1,436,498 
Accumulated other comprehensive loss
(4,719)
(2,611)
Noncontrolling interests in consolidated affiliates
21,317 
21,396 
Total Equity
1,421,648 
1,469,791 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
$ 3,876,824 
$ 3,807,198 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended 12 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Assets:
 
 
Accounts receivable allowance
$ 1,390 
$ 1,648 
Mortgages and notes receivable allowance
275 
302 
Accrued straight-line rents receivable allowance
798 
1,063 
Deferred financing and leasing costs, accumulated amortization
102,430 
92,220 
Prepaid expenses and other assets, accumulated amortization
13,466 
12,905 
Equity:
 
 
Series A Preferred Stock, dividend rate percentage (in hundredths)
8.625% 
8.625% 
Series A Preferred Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Series A Preferred Stock, authorized shares (in shares)
50,000,000 
50,000,000 
Series A Preferred Stock, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Stock, shares issued (in shares)
29,077 
29,077 
Series A Preferred Stock, shares outstanding (in shares)
29,077 
29,077 
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)
90,361,707 
89,920,915 
Common Stock, shares outstanding (in shares)
90,361,707 
89,920,915 
Highwoods Realty Limited Partnership [Member]
 
 
Assets:
 
 
Accounts receivable allowance
1,390 
1,648 
Mortgages and notes receivable allowance
275 
302 
Accrued straight-line rents receivable allowance
798 
1,063 
Deferred financing and leasing costs, accumulated amortization
102,430 
92,220 
Prepaid expenses and other assets, accumulated amortization
$ 13,466 
$ 12,905 
Redeemable Operating Partnership Units: [Abstract]
 
 
Redeemable Common Units outstanding (in shares)
2,936,955 
2,943,872 
Series A Preferred Units, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Units, issued (in shares)
29,077 
29,077 
Series A Preferred Units, outstanding (in shares)
29,077 
29,077 
Common Units: [Abstract]
 
 
General partners' capital account, units outstanding (in shares)
928,899 
924,560 
Limited partners' capital account, units outstanding (in shares)
89,024,000 
88,587,546 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Rental and other revenues
$ 152,722 
$ 132,618 
$ 301,175 
$ 262,995 
Operating expenses:
 
 
 
 
Rental property and other expenses
55,275 
47,317 
111,665 
93,911 
Depreciation and amortization
50,443 
40,624 
98,608 
80,712 
Impairments of real estate assets
588 
588 
General and administrative
8,733 
8,397 
19,447 
18,979 
Total operating expenses
115,039 
96,338 
230,308 
193,602 
Interest expense:
 
 
 
 
Contractual
20,640 
22,398 
41,390 
45,196 
Amortization of deferred financing costs
799 
948 
1,451 
1,897 
Financing obligations
(226)
(60)
(266)
61 
Total interest expense
21,213 
23,286 
42,575 
47,154 
Other income:
 
 
 
 
Interest and other income
1,410 
1,617 
2,809 
3,400 
Gains/(losses) on debt extinguishment
18 
18 
(164)
Total other income
1,428 
1,617 
2,827 
3,236 
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates
17,898 
14,611 
31,119 
25,475 
Gains/(losses) on disposition of property
5,947 
(37)
5,947 
(37)
Equity in earnings of unconsolidated affiliates
667 
913 
638 
1,349 
Income from continuing operations
24,512 
15,487 
37,704 
26,787 
Discontinued operations:
 
 
 
 
Income from discontinued operations
1,995 
4,339 
Impairments of real estate assets
(1,066)
(2,194)
Net gains on disposition of discontinued operations
13,163 
384 
14,407 
Total discontinued operations
14,092 
384 
16,552 
Net income
24,512 
29,579 
38,088 
43,339 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(742)
(1,243)
(1,140)
(1,824)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(438)
(187)
(861)
(390)
Dividends on Preferred Stock
(627)
(627)
(1,254)
(1,254)
Net income available for common stockholders
22,705 
27,522 
34,833 
39,871 
Earnings per Common Share – basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common stockholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Weighted average Common Shares outstanding - basic (in shares)
90,254 1 2
82,811 1 2
90,111 1 2
81,925 1 2
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common stockholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Weighted average Common Shares outstanding - diluted (in shares)
93,312 1 2
86,631 1 2
93,172 1 2
85,752 1 2
Dividends declared per Common Share (in dollars per share)
$ 0.425 
$ 0.425 
$ 0.850 
$ 0.850 
Net income available for common stockholders:
 
 
 
 
Income from continuing operations available for common stockholders
22,705 
14,033 
34,461 
24,031 
Income from discontinued operations available for common stockholders
13,489 
372 
15,840 
Net income available for common stockholders
22,705 
27,522 
34,833 
39,871 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Rental and other revenues
152,722 
132,618 
301,175 
262,995 
Operating expenses:
 
 
 
 
Rental property and other expenses
55,258 
47,295 
111,632 
93,915 
Depreciation and amortization
50,443 
40,624 
98,608 
80,712 
Impairments of real estate assets
588 
588 
General and administrative
8,750 
8,419 
19,480 
18,975 
Total operating expenses
115,039 
96,338 
230,308 
193,602 
Interest expense:
 
 
 
 
Contractual
20,640 
22,398 
41,390 
45,196 
Amortization of deferred financing costs
799 
948 
1,451 
1,897 
Financing obligations
(226)
(60)
(266)
61 
Total interest expense
21,213 
23,286 
42,575 
47,154 
Other income:
 
 
 
 
Interest and other income
1,410 
1,617 
2,809 
3,400 
Gains/(losses) on debt extinguishment
18 
18 
(164)
Total other income
1,428 
1,617 
2,827 
3,236 
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates
17,898 
14,611 
31,119 
25,475 
Gains/(losses) on disposition of property
5,947 
(37)
5,947 
(37)
Equity in earnings of unconsolidated affiliates
667 
916 
638 
1,299 
Income from continuing operations
24,512 
15,490 
37,704 
26,737 
Discontinued operations:
 
 
 
 
Income from discontinued operations
1,995 
4,339 
Impairments of real estate assets
(1,066)
(2,194)
Net gains on disposition of discontinued operations
13,163 
384 
14,407 
Total discontinued operations
14,092 
384 
16,552 
Net income
24,512 
29,582 
38,088 
43,289 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(438)
(187)
(861)
(390)
Distributions on Preferred Units
(627)
(627)
(1,254)
(1,254)
Net income available for common unitholders
23,447 
28,768 
35,973 
41,645 
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common unitholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Weighted average Common Units outstanding - basic (in shares)
92,782 1 3
86,090 1 3
92,640 1 3
85,223 1 3
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common unitholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Weighted average Common Units outstanding - diluted (in shares)
92,903 1 3
86,222 1 3
92,763 1 3
85,343 1 3
Distributions declared per Common Unit (in dollars per unit)
$ 0.425 
$ 0.425 
$ 0.850 
$ 0.850 
Net income available for common unitholders:
 
 
 
 
Income from continuing operations available for common unitholders
23,447 
14,676 
35,589 
25,093 
Income from discontinued operations available for common unitholders
14,092 
384 
16,552 
Net income available for common unitholders
$ 23,447 
$ 28,768 
$ 35,973 
$ 41,645 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Comprehensive income:
 
 
 
 
Net income
$ 24,512 
$ 29,579 
$ 38,088 
$ 43,339 
Other comprehensive income/(loss):
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
105 
(91)
270 
299 
Unrealized gains/(losses) on cash flow hedges
(2,846)
6,319 
(4,250)
6,599 
Amortization of cash flow hedges
944 
800 
1,872 
1,588 
Total other comprehensive income/(loss)
(1,797)
7,028 
(2,108)
8,486 
Total comprehensive income
22,715 
36,607 
35,980 
51,825 
Less-comprehensive (income) attributable to noncontrolling interests
(1,180)
(1,430)
(2,001)
(2,214)
Comprehensive income attributable to common stockholders/Comprehensive income attributable to common unitholders
21,535 
35,177 
33,979 
49,611 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Comprehensive income:
 
 
 
 
Net income
24,512 
29,582 
38,088 
43,289 
Other comprehensive income/(loss):
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
105 
(91)
270 
299 
Unrealized gains/(losses) on cash flow hedges
(2,846)
6,319 
(4,250)
6,599 
Amortization of cash flow hedges
944 
800 
1,872 
1,588 
Total other comprehensive income/(loss)
(1,797)
7,028 
(2,108)
8,486 
Total comprehensive income
22,715 
36,610 
35,980 
51,775 
Less-comprehensive (income) attributable to noncontrolling interests
(438)
(187)
(861)
(390)
Comprehensive income attributable to common stockholders/Comprehensive income attributable to common unitholders
$ 22,277 
$ 36,423 
$ 35,119 
$ 51,385 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance at Dec. 31, 2012
$ 1,164,893 
$ 1,135,033 
$ 803 
$ 29,077 
$ 11,427 
$ 1,131,481 
$ 2,040,306 
$ (12,628)
$ (12,628)
$ 4,753 
$ 4,753 
$ (897,418)
Balance (in shares) at Dec. 31, 2012
 
 
80,311,437 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net of units redeemed for tax withholdings
 
122,490 
 
 
1,225 
121,265 
 
 
 
 
Distributions paid on Common Units
 
(72,355)
 
 
(724)
(71,631)
 
 
 
 
Distributions paid on Preferred Units
 
(1,254)
 
 
(13)
(1,241)
 
 
 
 
Issuances of Common Stock - Shares
 
 
3,434,687 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net of shares redeemed for tax withholdings
122,490 
 
34 
 
 
122,456 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
72,471 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
2,851 
 
 
 
2,851 
 
 
Dividends on Common Stock
(69,563)
 
 
 
 
 
(69,563)
Dividends on Preferred Stock
(1,254)
 
 
 
 
 
(1,254)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(9,649)
 
 
 
(9,649)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(408)
(408)
(408)
(408)
Issuances of restricted stock - shares
 
 
151,630 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Share-based compensation expense, net of forfeitures - Shares
 
 
(1,813)
 
 
 
 
 
 
 
 
 
Share-based compensation expense, net of forfeitures
4,737 
4,737 
47 
4,690 
4,734 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(5,986)
 
 
(59)
(5,927)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,824)
 
 
 
 
 
(1,824)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(4)
(386)
390 
390 
(390)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
43,339 
43,289 
433 
42,856 
43,339 
Other comprehensive income/(loss)
8,486 
8,486 
8,486 
8,486 
Total comprehensive income
51,825 
51,775 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2013
1,264,098 
1,234,032 
840 
29,077 
12,332 
1,221,107 
2,160,698 
(4,142)
(4,142)
4,735 
4,735 
(927,110)
Balance (in shares) at Jun. 30, 2013
 
 
83,968,412 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2013
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,243)
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
29,579 
29,582 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss)
7,028 
7,028 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
36,607 
36,610 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2013
1,264,098 
1,234,032 
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2013
1,498,696 
1,469,791 
899 
29,077 
14,508 
1,436,498 
2,370,368 
(2,611)
(2,611)
21,396 
21,396 
(920,433)
Balance (in shares) at Dec. 31, 2013
89,920,915 
 
89,920,915 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net of units redeemed for tax withholdings
 
8,712 
 
 
87 
8,625 
 
 
 
 
Redemptions of Common Units
 
(93)
 
 
(1)
(92)
 
 
 
 
Distributions paid on Common Units
 
(78,754)
 
 
(788)
(77,966)
 
 
 
 
Distributions paid on Preferred Units
 
(1,254)
 
 
(13)
(1,241)
 
 
 
 
Issuances of Common Stock - Shares
 
 
281,992 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net of shares redeemed for tax withholdings
8,712 
 
 
 
8,709 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
4,417 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
162 
 
 
 
162 
 
 
Dividends on Common Stock
(76,605)
 
 
 
 
 
(76,605)
Dividends on Preferred Stock
(1,254)
 
 
 
 
 
(1,254)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(18,337)
 
 
 
(18,337)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(940)
(940)
(940)
(940)
Issuances of restricted stock - shares
 
 
154,383 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Share-based compensation expense, net of forfeitures
5,381 
5,381 
54 
5,327 
5,379 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(17,175)
 
 
(171)
(17,004)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,140)
 
 
 
 
 
(1,140)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(9)
(852)
861 
861 
(861)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
38,088 
38,088 
381 
37,707 
38,088 
Other comprehensive income/(loss)
(2,108)
(2,108)
(2,108)
(2,108)
Total comprehensive income
35,980 
35,980 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2014
1,450,655 
1,421,648 
904 
29,077 
14,048 
1,391,002 
2,366,281 
(4,719)
(4,719)
21,317 
21,317 
(962,205)
Balance (in shares) at Jun. 30, 2014
90,361,707 
 
90,361,707 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(742)
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
24,512 
24,512 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss)
(1,797)
(1,797)
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
22,715 
22,715 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2014
$ 1,450,655 
$ 1,421,648 
 
 
 
 
 
 
 
 
 
 
Balance (in shares) at Jun. 30, 2014
90,361,707 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Operating activities:
 
 
Net income
$ 38,088 
$ 43,339 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
98,608 
84,767 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
234 
(198)
Share-based compensation expense
5,381 
4,737 
Allowance for losses on accounts and accrued straight-line rents receivable
1,278 
380 
Accrued interest on mortgages and notes receivable
(232)
Amortization of deferred financing costs
1,451 
1,897 
Amortization of cash flow hedges
1,872 
1,588 
Amortization of mortgages and notes payable fair value adjustments
(902)
Impairments of real estate assets
588 
2,194 
(Gains)/losses on debt extinguishment
(18)
164 
Net gains on disposition of property
(6,331)
(14,370)
Equity in earnings of unconsolidated affiliates
(638)
(1,349)
Changes in financing obligations
(628)
(391)
Distributions of earnings from unconsolidated affiliates
1,216 
2,827 
Changes in operating assets and liabilities:
 
 
Accounts receivable
1,491 
2,295 
Prepaid expenses and other assets
(4,962)
(2,284)
Accrued straight-line rents receivable
(10,365)
(8,009)
Accounts payable, accrued expenses and other liabilities
(11,597)
(661)
Net cash provided by operating activities
114,534 
116,926 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(228,461)
Investments in development in process
(69,928)
(11,499)
Investments in tenant improvements and deferred leasing costs
(54,794)
(42,343)
Investments in building improvements
(28,877)
(26,466)
Net proceeds from disposition of real estate assets
8,975 
60,381 
Distributions of capital from unconsolidated affiliates
468 
435 
Investments in mortgages and notes receivable
(234)
(432)
Repayments of mortgages and notes receivable
16,817 
276 
Investments in unconsolidated affiliates
(6,225)
(429)
Changes in restricted cash and other investing activities
686 
7,853 
Net cash (used in) investing activities
(133,112)
(240,685)
Financing activities:
 
 
Dividends on Common Stock
(76,605)
(69,563)
Redemptions of Common Units
(93)
Dividends on Preferred Stock
(1,254)
(1,254)
Distributions to noncontrolling interests in the Operating Partnership
(2,497)
(3,140)
Distributions to noncontrolling interests in consolidated affiliates
(940)
(408)
Proceeds from the issuance of Common Stock
11,404 
126,738 
Costs paid for the issuance of Common Stock
(42)
(1,711)
Repurchase of shares related to tax withholdings
(2,650)
(2,537)
Borrowings on revolving credit facility
302,100 
346,300 
Repayments of revolving credit facility
(360,800)
(233,900)
Borrowings on mortgages and notes payable
296,949 
Repayments of mortgages and notes payable
(134,648)
(39,610)
Payments on financing obligations
(1,364)
(575)
Additions to deferred financing costs and other financing activities
(2,467)
(242)
Net cash provided by financing activities
27,093 
120,098 
Net increase/(decrease) in cash and cash equivalents
8,515 
(3,661)
Cash and cash equivalents at beginning of the period
10,184 
13,783 
Cash and cash equivalents at end of the period
18,699 
10,122 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
41,468 
40,480 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains/(losses) on cash flow hedges
(4,250)
6,599 
Conversions of Common Units to Common Stock
162 
2,851 
Changes in accrued capital expenditures
10,726 
12,618 
Write-off of fully depreciated real estate assets
16,994 
17,732 
Write-off of fully amortized deferred financing and leasing costs
13,273 
11,363 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
210 
312 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
18,337 
9,649 
Unrealized gains on tax increment financing bond
270 
299 
Receivable related to redemption of investment in unconsolidated affiliate
4,660 
Highwoods Realty Limited Partnership [Member]
 
 
Operating activities:
 
 
Net income
38,088 
43,289 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
98,608 
84,767 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
234 
(198)
Share-based compensation expense
5,381 
4,737 
Allowance for losses on accounts and accrued straight-line rents receivable
1,278 
380 
Accrued interest on mortgages and notes receivable
(232)
Amortization of deferred financing costs
1,451 
1,897 
Amortization of cash flow hedges
1,872 
1,588 
Amortization of mortgages and notes payable fair value adjustments
(902)
Impairments of real estate assets
588 
2,194 
(Gains)/losses on debt extinguishment
(18)
164 
Net gains on disposition of property
(6,331)
(14,370)
Equity in earnings of unconsolidated affiliates
(638)
(1,299)
Changes in financing obligations
(628)
(391)
Distributions of earnings from unconsolidated affiliates
1,216 
2,814 
Changes in operating assets and liabilities:
 
 
Accounts receivable
1,491 
2,295 
Prepaid expenses and other assets
(4,892)
(2,189)
Accrued straight-line rents receivable
(10,365)
(8,009)
Accounts payable, accrued expenses and other liabilities
(11,568)
(587)
Net cash provided by operating activities
114,633 
117,082 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(228,461)
Investments in development in process
(69,928)
(11,499)
Investments in tenant improvements and deferred leasing costs
(54,794)
(42,343)
Investments in building improvements
(28,877)
(26,466)
Net proceeds from disposition of real estate assets
8,975 
60,381 
Distributions of capital from unconsolidated affiliates
468 
435 
Investments in mortgages and notes receivable
(234)
(432)
Repayments of mortgages and notes receivable
16,817 
276 
Investments in unconsolidated affiliates
(6,225)
(429)
Changes in restricted cash and other investing activities
686 
7,853 
Net cash (used in) investing activities
(133,112)
(240,685)
Financing activities:
 
 
Distributions on Common Units
(78,754)
(72,355)
Redemptions of Common Units
(93)
Distributions on Preferred Units
(1,254)
(1,254)
Distributions to noncontrolling interests in consolidated affiliates
(940)
(408)
Proceeds from the issuance of Common Units
11,404 
126,738 
Costs paid for the issuance of Common Units
(42)
(1,711)
Repurchase of units related to tax withholdings
(2,650)
(2,537)
Borrowings on revolving credit facility
302,100 
346,300 
Repayments of revolving credit facility
(360,800)
(233,900)
Borrowings on mortgages and notes payable
296,949 
Repayments of mortgages and notes payable
(134,648)
(39,610)
Payments on financing obligations
(1,364)
(575)
Additions to deferred financing costs and other financing activities
(2,917)
(747)
Net cash provided by financing activities
26,991 
119,941 
Net increase/(decrease) in cash and cash equivalents
8,512 
(3,662)
Cash and cash equivalents at beginning of the period
10,281 
13,867 
Cash and cash equivalents at end of the period
18,793 
10,205 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
41,468 
40,480 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains/(losses) on cash flow hedges
(4,250)
6,599 
Changes in accrued capital expenditures
10,726 
12,618 
Write-off of fully depreciated real estate assets
16,994 
17,732 
Write-off of fully amortized deferred financing and leasing costs
13,273 
11,363 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
210 
312 
Adjustment of Redeemable Common Units to fair value
16,725 
5,482 
Unrealized gains on tax increment financing bond
270 
299 
Receivable related to redemption of investment in unconsolidated affiliate
$ 4,660 
$ 0 
Description of Business and Significant Accounting Policies
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 June 30, 2014, we owned or had an interest in 32.1 million rentable square feet of in-service office, industrial and retail properties, 0.9 million rentable square feet of office properties under development and approximately 600 acres of development land.
 
The Company is the sole general partner of the Operating Partnership. At June 30, 2014, the Company owned all of the Preferred Units and 90.0 million, or 96.9%, of the Common Units in the Operating Partnership. Limited partners own the remaining 2.9 million Common Units. During the six months ended June 30, 2014, the Company redeemed 2,500 Common Units for less than $0.1 million in cash and redeemed 4,417 Common Units for a like number of shares of Common Stock.

Common Stock Offerings
 
During the three and six months ended June 30, 2014, the Company issued 50,293 and 73,877 shares of Common Stock, respectively, under its equity sales agreements at an average gross sales price of $38.38 and $38.35 per share, respectively, and received net proceeds, after sales commissions, of $1.9 million and $2.8 million, respectively. As a result of this activity and the redemptions discussed above, the percentage of Common Units owned by the Company increased from 96.8% at December 31, 2013 to 96.9% at June 30, 2014.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Statements of Income for the three and six months ended June 30, 2013 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties classified as discontinued operations.

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. All intercompany transactions and accounts have been eliminated. At June 30, 2014 and December 31, 2013, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 3).

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have condensed or omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2013 Annual Report on Form 10-K.

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 the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.


1.    Description of Business and Significant Accounting Policies – Continued
Recently Issued Accounting Standards

The Financial Accounting Standards Board ("FASB") recently issued an accounting standard update that requires only those real estate asset sales representing a strategic shift in operations (e.g., a disposal of a major geographic area or a major line of business) to be reflected in discontinued operations. This accounting standard update is required to be adopted in 2015. Early adoption is permitted, but only for real estate asset sales that have not been previously reflected as discontinued operations. We elected to early adopt the accounting standard update as of April 1, 2014, resulting in the operations of current period dispositions and property classified as held for sale at June 30, 2014 being included in continuing operations on our Consolidated Statements of Income.  Prior to adoption, we were generally required to reflect all real estate asset sales as discontinued operations, which required reclassification of the earnings of the sold assets from continuing operations for all periods presented.

The FASB recently issued an accounting standard update that requires the use of a new five-step model to recognize revenue from customer contracts. 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 will also be required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The accounting standard update is required to be adopted in 2017. Retrospective application is required either to all periods presented or with the cumulative effect of initial adoption recognized in the period of adoption. We are in the process of evaluating this accounting standard update.
Real Estate Assets
Real Estate Assets
Real Estate Assets

Dispositions

During the second quarter of 2014, we sold two land parcels in Atlanta, GA in separate transactions for an aggregate sale price of $9.5 million and recorded aggregate gains on disposition of property of $5.9 million.

Impairments

During the second quarter of 2014, we recorded impairments of real estate assets of $0.6 million on an office property in Greensboro, NC. This impairment was due to a change in the assumed timing of future disposition and leasing assumptions, which reduced the future expected cash flows from the impaired property.
Mortgages and Notes Receivable
Mortgages and Notes Receivable
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
June 30,
2014
 
December 31,
2013
Seller financing (first mortgages)
$

 
$
16,454

Less allowance

 

 

 
16,454

Mortgage receivable
9,901

 
9,435

Less allowance

 

 
9,901

 
9,435

Promissory notes
514

 
822

Less allowance
(275
)
 
(302
)
 
239

 
520

Mortgages and notes receivable, net
$
10,140

 
$
26,409



During 2010, we provided seller financing in conjunction with two disposition transactions. We accounted for these dispositions using the installment method, whereby a gain on disposition of property was deferred until the seller financing was repaid. During the first quarter of 2014, the $16.5 million of seller financing was fully repaid and we recorded the $0.4 million gain on disposition of property.

During 2012, we provided secured acquisition financing to a third party. We also agreed to loan such third party $8.4 million on a secured basis to fund future infrastructure development. As of June 30, 2014, $0.5 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

We evaluate the ability to collect our mortgages and notes receivable by monitoring the leasing statistics and/or market fundamentals of these assets. As of June 30, 2014, our mortgages and notes receivable were not in default and there were no other indicators of impairment.

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Beginning notes receivable allowance
$
300

 
$
437

 
$
302

 
$
182

Recoveries/write-offs/other
(25
)
 
(61
)
 
(27
)
 
194

Total notes receivable allowance
$
275

 
$
376

 
$
275

 
$
376

Investments In Affiliates
Investments In Affiliates
Investments in 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 their operating and financial policies.

The following table sets forth the summarized income statements of our unconsolidated affiliates:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
12,845

 
$
23,935

 
$
25,278

 
$
47,451

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
6,236

 
11,739

 
12,439

 
22,948

Depreciation and amortization
3,328

 
6,227

 
6,817

 
12,373

Impairments of real estate assets

 

 

 
4,790

Interest expense
2,301

 
4,689

 
4,512

 
9,428

Total expenses
11,865

 
22,655

 
23,768

 
49,539

Income/(loss) before disposition of properties
980

 
1,280

 
1,510

 
(2,088
)
Gains on disposition of properties

 
43

 
1,949

 
67

Net income/(loss)
$
980

 
$
1,323

 
$
3,459

 
$
(2,021
)
Our share of:
 
 
 
 
 
 
 
Depreciation and amortization
$
923

 
$
2,092

 
$
1,954

 
$
4,107

Impairments of real estate assets
$

 
$

 
$

 
$
1,020

Interest expense
$
764

 
$
1,732

 
$
1,540

 
$
3,484

Gains on disposition of properties
$

 
$
10

 
$
955

 
$
431

Net income
$
491

 
$
571

 
$
1,646

 
$
575

 
 
 
 
 
 
 
 
Our share of net income
$
491

 
$
571

 
$
1,646

 
$
575

Adjustments for management and other fees
176

 
342

 
345

 
774

Impairment of investment in unconsolidated affiliate

 

 
(1,353
)
 

Equity in earnings of unconsolidated affiliates
$
667

 
$
913

 
$
638

 
$
1,349



Board of Trade Investment Company ("Board of Trade")

During the first quarter of 2014, Board of Trade sold an office property to an unrelated third party for gross proceeds of $8.3 million and recorded a gain of $1.9 million. As our cost basis was different from the basis reflected at the entity level, we recorded a net impairment charge on our investment of $0.4 million. This charge represented the other-than-temporary decline in the fair value below the carrying value of our investment. During the second quarter of 2014, our 49.0% interest in Board of Trade was redeemed in exchange for $4.7 million.

Highwoods KC Glenridge Office, LLC (“KC Glenridge”)

During the second quarter of 2014, KC Glenridge paid at maturity the remaining $14.9 million balance on a secured mortgage loan with an effective interest rate of 4.84%.
Intangible Assets and Below Market Lease Liabilities
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:
 
 
June 30,
2014
 
December 31,
2013
Assets:
 
 
 
Deferred financing costs
$
19,567

 
$
17,363

Less accumulated amortization
(6,434
)
 
(5,204
)
 
13,133

 
12,159

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
300,885

 
297,068

Less accumulated amortization
(95,996
)
 
(87,016
)
 
204,889

 
210,052

Deferred financing and leasing costs, net
$
218,022

 
$
222,211

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
54,903

 
$
55,323

Less accumulated amortization
(11,080
)
 
(8,478
)
 
$
43,823

 
$
46,845


The following table sets forth amortization of intangible assets and below market lease liabilities:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Amortization of deferred financing costs
$
799

 
$
948

 
$
1,451

 
$
1,897

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
10,050

 
$
7,888

 
$
19,978

 
$
15,963

Amortization of lease incentives (in rental and other revenues)
$
399

 
$
340

 
$
750

 
$
716

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
1,114

 
$
484

 
$
2,230

 
$
950

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
139

 
$
139

 
$
276

 
$
276

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,500
)
 
$
(1,031
)
 
$
(3,022
)
 
$
(2,153
)


5.    Intangible Assets and Below Market Lease Liabilities - Continued
 
The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:
 
 
 
Amortization of Deferred Financing Costs
 
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)
July 1 through December 31, 2014
 
$
1,558

 
$
18,266

 
$
689

 
$
2,107

 
$
277

 
$
(2,979
)
2015
 
3,087

 
34,839

 
1,135

 
3,619

 
553

 
(5,718
)
2016
 
2,823

 
29,299

 
934

 
2,810

 
553

 
(5,427
)
2017
 
2,529

 
25,379

 
843

 
2,269

 
553

 
(5,164
)
2018
 
1,404

 
21,095

 
748

 
1,426

 
553

 
(5,016
)
Thereafter
 
1,732

 
49,508

 
2,580

 
3,768

 
1,086

 
(19,519
)
 
 
$
13,133

 
$
178,386

 
$
6,929

 
$
15,999

 
$
3,575

 
$
(43,823
)
Weighted average remaining amortization periods as of June 30, 2014 (in years)
 
4.8

 
6.5

 
8.2

 
6.6

 
6.5

 
8.7



Mortgages and Notes Payable
Mortgages and Notes Payable
Mortgages and Notes Payable
 
The following table sets forth our mortgages and notes payable:
 
 
June 30,
2014
 
December 31,
2013
Secured indebtedness
$
352,857

 
$
488,664

Unsecured indebtedness
1,706,115

 
1,467,635

Total mortgages and notes payable
$
2,058,972

 
$
1,956,299


 
At June 30, 2014, our secured mortgage loans were collateralized by real estate assets with an aggregate undepreciated book value of $652.4 million.
 
Our $475.0 million unsecured revolving credit facility is scheduled to mature in January 2018 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. The interest rate at our current credit ratings is LIBOR plus 110 basis points and the annual facility fee is 20 basis points. There was $157.0 million and $181.0 million outstanding under our revolving credit facility at June 30, 2014 and July 21, 2014, respectively. At both June 30, 2014 and July 21, 2014, we had $0.1 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 June 30, 2014 and July 21, 2014 was $317.9 million and $293.9 million, respectively.
 
During the second quarter of 2014, the Operating Partnership issued $300 million aggregate principal amount of 3.20% Notes due June 15, 2021, less original issue discount of $3.1 million. These notes were priced at 98.983% for an effective yield of 3.363%. Underwriting fees and other expenses were incurred that aggregated $2.4 million; these costs were deferred and will be amortized over the term of the notes.

6.    Mortgages and Notes Payable - Continued

During the second quarter of 2014, we prepaid without penalty the remaining $123.7 million balance on a secured mortgage loan with an effective interest rate of 3.11% that was originally scheduled to mature in July 2014.
 
During the second quarter of 2014, we prepaid the remaining $7.2 million balance on a secured mortgage loan with an effective interest rate of 3.32% that was originally scheduled to mature in August 2014. We recorded less than $0.1 million of gain on debt extinguishment related to this prepayment.

We are currently in compliance with financial covenants and other requirements with respect to our consolidated debt.
Derivative Financial Instruments
Derivative Financial Instruments
Derivative Financial Instruments
 
Our interest rate swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the six months ended June 30, 2014. We have no collateral requirements related to our interest rate swaps.
 
Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from July 1, 2014 through June 30, 2015, we estimate that $3.4 million will be reclassified to interest expense.
 
The following table sets forth the gross fair value of our derivatives:
 
 
June 30,
2014
 
December 31,
2013
Derivatives:
 
 
 
Derivatives designated as cash flow hedges in prepaid expenses and other assets:
 
 
 
Interest rate swaps
$

 
$
301

Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
2,744

 
$
510



The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(2,846
)
 
$
6,319

 
$
(4,250
)
 
$
6,599

Amount of losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
944

 
$
800

 
$
1,872

 
$
1,588

Noncontrolling Interests
Noncontrolling Interests
Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates
 
At June 30, 2014, our noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties in Richmond, VA. Our joint venture partner is an unrelated third party.

Noncontrolling Interests in the Operating Partnership

The following table sets forth the Company's noncontrolling interests in the Operating Partnership:
 
 
Six Months Ended
June 30,
 
2014
 
2013
Beginning noncontrolling interests in the Operating Partnership
$
106,480

 
$
124,869

Adjustment of noncontrolling interests in the Operating Partnership to fair value
18,337

 
9,649

Conversions of Common Units to Common Stock
(162
)
 
(2,851
)
Redemptions of Common Units
(93
)
 

Net income attributable to noncontrolling interests in the Operating Partnership
1,140

 
1,824

Distributions to noncontrolling interests in the Operating Partnership
(2,497
)
 
(3,140
)
Total noncontrolling interests in the Operating Partnership
$
123,205

 
$
130,351


The following table sets forth net income available for common stockholders and transfers from the Company's noncontrolling interests in the Operating Partnership:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net income available for common stockholders
$
22,705

 
$
27,522

 
$
34,833

 
$
39,871

Increase in additional paid in capital from conversions of Common Units
to Common Stock

 
2,500

 
162

 
2,851

Change from net income available for common stockholders and transfers from noncontrolling interests
$
22,705

 
$
30,022

 
$
34,995

 
$
42,722



Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments

The following summarizes the three levels of inputs that we use to measure fair value.

Level 1.  Quoted prices in active markets for identical assets or liabilities.

Our Level 1 asset is our investments in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan. Our Level 1 liability is our non-qualified deferred compensation obligation. The Company's Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Our Level 2 assets include the fair value of certain of our mortgages and notes receivable and certain of our interest rate swaps. Our Level 2 liabilities include the fair value of our mortgages and notes payable and the remainder of our interest rate swaps.

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.
 
Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
 
Our Level 3 assets include (1) certain of our mortgages and notes receivable, which were estimated by the income approach utilizing internal cash flow projections and market interest rates to estimate the price that would be paid in an orderly transaction between market participants, (2) our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds, and (3) any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using the terms of definitive sales contracts or the sales comparison approach and substantiated with internal cash flow projections.
 
Our Level 3 liabilities include the fair value of our contingent consideration to acquire real estate assets and financing obligations, which were estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.


9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth our assets and liabilities and the Company's noncontrolling interests in the Operating Partnership that are measured at fair value within the fair value hierarchy.
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
 
Total
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Fair Value at June 30, 2014:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
 
$
10,144

 
$

 
$
239

 
$
9,905

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
3,869

 
3,869

 

 

Impaired real estate assets
 
4,922

 

 

 
4,922

Tax increment financing bond (in prepaid expenses and other assets)
 
13,673

 

 

 
13,673

Total Assets
 
$
32,608

 
$
3,869

 
$
239

 
$
28,500

Noncontrolling Interests in the Operating Partnership
 
$
123,205

 
$
123,205

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
 
$
2,152,505

 
$

 
$
2,152,505

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
 
2,744

 

 
2,744

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
3,869

 
3,869

 

 

Financing obligations, at fair value (1)
 
22,466

 

 

 
22,466

Total Liabilities
 
$
2,181,584

 
$
3,869

 
$
2,155,249

 
$
22,466

Fair Value at December 31, 2013:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
 
$
26,485

 
$

 
$
17,029

 
$
9,456

Interest rate swaps (in prepaid expenses and other assets)
 
301

 

 
301

 

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
3,996

 
3,996

 

 

Tax increment financing bond (in prepaid expenses and other assets)
 
13,403

 

 

 
13,403

Total Assets
 
$
44,185

 
$
3,996

 
$
17,330

 
$
22,859

Noncontrolling Interests in the Operating Partnership
 
$
106,480

 
$
106,480

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
 
$
2,037,385

 
$

 
$
2,037,385

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
 
510

 

 
510

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
3,996

 
3,996

 

 

Financing obligations, at fair value (1)
 
22,478

 

 

 
22,478

Total Liabilities
 
$
2,064,369

 
$
3,996

 
$
2,037,895

 
$
22,478


__________
(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at June 30, 2014 and December 31, 2013.
9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
13,568

 
$
14,324

 
$
13,403

 
$
14,496

Principal repayment

 

 

 
(562
)
Unrealized gains/(losses) (in AOCL)
105

 
(91
)
 
270

 
299

Ending balance
$
13,673

 
$
14,233

 
$
13,673

 
$
14,233

Liability:
 
 
 
 
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
 
 
 
 
Beginning balance
$

 
$
375

 
$

 
$
563

Unrecognized (gains)/losses (in general and administrative expenses)

 
9

 

 
(179
)
Ending balance
$

 
$
384

 
$

 
$
384



During 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at June 30, 2014 was $0.8 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.4 million lower or $0.4 million higher, respectively, as of June 30, 2014. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three and six months ended June 30, 2014 and 2013. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.
 
The impaired real estate assets that were measured in the second quarter of 2014 at fair value and deemed to be Level 3 assets were valued based primarily on market-based inputs and our assumptions about the use of the assets, as observable inputs were not available. In the absence of observable inputs, we estimate the fair value of real estate using unobservable data such as estimated discount and capitalization rates. We also utilize local and national industry market data such as comparable sales, sales contracts and appraisals to assist us in our estimation of fair value. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.

The following table sets forth quantitative information about the unobservable input of our Level 3 assets, which are recorded at fair value on our Consolidated Balance Sheets:
 
 
 
Valuation
Technique
 
Unobservable
Input
 
Rate
Assets:
 
 
 
 
 
 
Tax increment financing bond
 
Income approach
 
Discount rate
 
9.0%
Impaired real estate assets
 
Income approach
 
Capitalization rate
 
9.5%
 
 
 
 
Discount rate
 
10.0%
Share-Based Payments
Share-Based Payments
Share-Based Payments
 
During the six months ended June 30, 2014, the Company granted 166,081 stock options with an exercise price equal to the closing market price of a share of Common Stock on the date of grant. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $6.89. During the six months ended June 30, 2014, the Company also granted 87,373 shares of time-based restricted stock and 67,010 shares of total return-based restricted stock with weighted average grant date fair values per share of $37.63 and $35.25, respectively. We recorded share-based compensation expense of $1.1 million and $1.3 million during the three months ended June 30, 2014 and 2013, respectively, and $5.4 million and $4.7 million during the six months ended June 30, 2014 and 2013, respectively. At June 30, 2014, there was $5.5 million of total unrecognized share-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.5 years.
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss
 
The following table sets forth the components of AOCL:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Tax increment financing bond:
 
 
 
 
 
 
 
Beginning balance
$
(864
)
 
$
(1,508
)
 
$
(1,029
)
 
$
(1,898
)
Unrealized gains/(losses) on tax increment financing bond
105

 
(91
)
 
270

 
299

Ending balance
(759
)
 
(1,599
)
 
(759
)
 
(1,599
)
Cash flow hedges:
 
 
 
 
 
 
 
Beginning balance
(2,058
)
 
(9,662
)
 
(1,582
)
 
(10,730
)
Unrealized gains/(losses) on cash flow hedges
(2,846
)
 
6,319

 
(4,250
)
 
6,599

Amortization of cash flow hedges (1)
944

 
800

 
1,872

 
1,588

Ending balance
(3,960
)
 
(2,543
)
 
(3,960
)
 
(2,543
)
Total accumulated other comprehensive loss
$
(4,719
)

$
(4,142
)
 
$
(4,719
)
 
$
(4,142
)
__________
(1)    Amounts reclassified out of AOCL into contractual interest expense.
Real Estate and Other Assets Held For Sale and Discontinued Operations
Real Estate and Other Assets Held For Sale and Discontinued Operations
Real Estate and Other Assets Held For Sale and Discontinued Operations

The following table sets forth the major classes of assets of our real estate and other assets, net, held for sale:

 
June 30,
2014
 
December 31,
2013
Assets:
 
 
 
Land
$
11,488

 
$

Buildings and tenant improvements
81,936

 

Land held for development
2,597

 

Less-accumulated depreciation
(34,281
)
 

Net real estate assets
61,740

 

Accrued straight-line rents receivable, net
3,873

 

Deferred leasing costs, net
1,825

 

Prepaid expenses and other assets
721

 

Real estate and other assets, net, held for sale
$
68,159

 
$



The following table sets forth our operations that were classified as discontinued operations prior to the adoption of the accounting standard update discussed in Note 1:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Rental and other revenues
$

 
$
6,262

 
$

 
$
13,260

Operating expenses:
 
 
 
 
 
 
 
Rental property and other expenses

 
2,416

 

 
4,866

Depreciation and amortization

 
1,851

 

 
4,055

Total operating expenses

 
4,267

 

 
8,921

Income from discontinued operations

 
1,995

 

 
4,339

Impairments of real estate assets

 
(1,066
)
 

 
(2,194
)
Net gains on disposition of discontinued operations

 
13,163

 
384

 
14,407

Total discontinued operations
$

 
$
14,092

 
$
384

 
$
16,552



As of June 30, 2014, real estate and other assets, net, held for sale consisted of 11 office properties in Richmond, VA and five office properties and a land parcel in Raleigh, NC. None of these properties were classified as discontinued operations during the six months ended June 30, 2014. As of December 31, 2013, there were no real estate and other assets, net, held for sale.
Earnings Per Share/Unit
Earnings Per Share/Unit
Earnings Per Share and Per Unit

The following table sets forth the computation of basic and diluted earnings per share of the Company:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Earnings per Common Share - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,487

 
$
37,704

 
$
26,787

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(742
)
 
(640
)
 
(1,128
)
 
(1,112
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common stockholders
22,705

 
14,033

 
34,461

 
24,031

Income from discontinued operations

 
14,092

 
384

 
16,552

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations

 
(603
)
 
(12
)
 
(712
)
Income from discontinued operations available for common stockholders

 
13,489

 
372

 
15,840

Net income available for common stockholders
$
22,705

 
$
27,522

 
$
34,833

 
$
39,871

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares
90,254

 
82,811

 
90,111

 
81,925

Earnings per Common Share - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common stockholders

 
0.16

 
0.01

 
0.19

Net income available for common stockholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,487

 
$
37,704

 
$
26,787

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
23,447

 
14,673

 
35,589

 
25,143

Income from discontinued operations available for common stockholders

 
14,092

 
384

 
16,552

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
23,447

 
$
28,765

 
$
35,973

 
$
41,695

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares
90,254

 
82,811

 
90,111

 
81,925

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
121

 
132

 
123

 
120

Noncontrolling interests Common Units
2,937

 
3,688

 
2,938

 
3,707

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1) (2)
93,312

 
86,631

 
93,172

 
85,752

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common stockholders

 
0.16

 
0.01

 
0.19

Net income available for common stockholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

__________

13.
Earnings Per Share and Per Unit - Continued
(1)
There were 0.3 million options outstanding during the three months ended June 30, 2013 and 0.2 million and 0.3 million options outstanding during the six months ended June 30, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive. There were no such options outstanding during the three months ended June 30, 2014.
(2)
Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,490

 
$
37,704

 
$
26,737

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common unitholders
23,447

 
14,676

 
35,589

 
25,093

Income from discontinued operations available for common unitholders

 
14,092

 
384

 
16,552

Net income available for common unitholders
$
23,447

 
$
28,768

 
$
35,973

 
$
41,645

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units
92,782

 
86,090

 
92,640

 
85,223

Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common unitholders

 
0.16

 
0.01

 
0.19

Net income available for common unitholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,490

 
$
37,704

 
$
26,737

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common unitholders
23,447

 
14,676

 
35,589

 
25,093

Income from discontinued operations available for common unitholders

 
14,092

 
384

 
16,552

Net income available for common unitholders
$
23,447

 
$
28,768

 
$
35,973

 
$
41,645

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units
92,782

 
86,090

 
92,640

 
85,223

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
121

 
132

 
123

 
120

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1) (2)
92,903

 
86,222

 
92,763

 
85,343

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common unitholders

 
0.16

 
0.01

 
0.19

Net income available for common unitholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

__________
(1)
There were 0.3 million options outstanding during the three months ended June 30, 2013 and 0.2 million and 0.3 million options outstanding during the six months ended June 30, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive. There were no such options outstanding during the three months ended June 30, 2014.
(2)
Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
Segment Information
Segment Information
Segment Information

The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Rental and Other Revenues:
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
23,627

 
$
17,933

 
$
46,604

 
$
35,100

Greenville, SC
767

 
855

 
1,608

 
1,706

Kansas City, MO
4,086

 
4,033

 
8,183

 
8,002

Memphis, TN
10,055

 
9,653

 
19,890

 
19,033

Nashville, TN
20,182

 
14,188

 
39,787

 
28,258

Orlando, FL
9,148

 
2,230

 
18,068

 
4,451

Piedmont Triad, NC
6,580

 
6,516

 
13,030

 
12,893

Pittsburgh, PA
14,014

 
13,951

 
27,771

 
27,639

Raleigh, NC
22,538

 
21,719

 
44,029

 
42,379

Richmond, VA
12,020

 
11,856

 
23,763

 
23,628

Tampa, FL
17,129

 
17,394

 
33,756

 
34,828

Total Office Segment
140,146

 
120,328

 
276,489

 
237,917

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
204

 
211

 
408

 
414

Piedmont Triad, NC
3,006

 
3,117

 
5,694

 
6,239

Total Industrial Segment
3,210

 
3,328

 
6,102

 
6,653

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,366

 
8,962

 
18,584

 
18,425

Total Retail Segment
9,366

 
8,962

 
18,584

 
18,425

Total Rental and Other Revenues
$
152,722

 
$
132,618

 
$
301,175

 
$
262,995


14.
Segment Information - Continued

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net Operating Income:
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
14,321

 
$
11,170

 
$
28,018

 
$
22,063

Greenville, SC
390

 
475

 
865

 
971

Kansas City, MO
2,698

 
2,636

 
5,303

 
5,198

Memphis, TN
5,789

 
5,298

 
11,396

 
10,927

Nashville, TN
13,999

 
10,030

 
27,152

 
19,715

Orlando, FL
5,346

 
1,070

 
10,722

 
2,148

Piedmont Triad, NC
4,249

 
4,256

 
8,247

 
8,355

Pittsburgh, PA
7,988

 
7,902

 
15,181

 
15,320

Raleigh, NC
16,326

 
15,675

 
31,358

 
30,299

Richmond, VA
8,265

 
8,242

 
15,941

 
16,355

Tampa, FL
10,031

 
10,472

 
20,066

 
21,691

Total Office Segment
89,402

 
77,226

 
174,249

 
153,042

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
122

 
120

 
244

 
239

Piedmont Triad, NC
2,161

 
2,364

 
4,028

 
4,609

Total Industrial Segment
2,283

 
2,484

 
4,272

 
4,848

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,764

 
5,607

 
11,029

 
11,228

Total Retail Segment
5,764

 
5,607

 
11,029

 
11,228

Corporate and other
(2
)
 
(16
)
 
(40
)
 
(34
)
Total Net Operating Income
97,447

 
85,301

 
189,510

 
169,084

Reconciliation to income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(50,443
)
 
(40,624
)
 
(98,608
)
 
(80,712
)
Impairments of real estate assets
(588
)
 

 
(588
)
 

General and administrative expenses
(8,733
)
 
(8,397
)
 
(19,447
)
 
(18,979
)
Interest expense
(21,213
)
 
(23,286
)
 
(42,575
)
 
(47,154
)
Other income
1,428

 
1,617

 
2,827

 
3,236

Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates
$
17,898

 
$
14,611

 
$
31,119

 
$
25,475

Subsequent Events
Subsequent Events
Subsequent Events

On July 1, 2014, we received $4.7 million in cash in connection with the second quarter redemption of our former investment in Board of Trade.

On July 1, 2014, we prepaid the remaining $36.9 million balance on a secured mortgage loan with an effective interest rate of 3.34% that was originally scheduled to mature in April 2015. We expect to record $0.3 million of loss on debt extinguishment related to this prepayment.

On July 29, 2014, we sold five office properties and a land parcel in a single transaction in Raleigh, NC for a sale price of $58.7 million and expect to record a gain on disposition of property of $11.7 million.
Description of Business and Significant Accounting Policies (Policies)
Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Statements of Income for the three and six months ended June 30, 2013 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties classified as discontinued operations.

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. All intercompany transactions and accounts have been eliminated. At June 30, 2014 and December 31, 2013, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 3).

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 the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.
Mortgages and Notes Receivable (Tables)
The following table sets forth our mortgages and notes receivable:

 
June 30,
2014
 
December 31,
2013
Seller financing (first mortgages)
$

 
$
16,454

Less allowance

 

 

 
16,454

Mortgage receivable
9,901

 
9,435

Less allowance

 

 
9,901

 
9,435

Promissory notes
514

 
822

Less allowance
(275
)
 
(302
)
 
239

 
520

Mortgages and notes receivable, net
$
10,140

 
$
26,409

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Beginning notes receivable allowance
$
300

 
$
437

 
$
302

 
$
182

Recoveries/write-offs/other
(25
)
 
(61
)
 
(27
)
 
194

Total notes receivable allowance
$
275

 
$
376

 
$
275

 
$
376

Investments In Affiliates (Tables)
Schedule of Equity Method Investments Summarized Income Statement Information [Table Text Block]
The following table sets forth the summarized income statements of our unconsolidated affiliates:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
12,845

 
$
23,935

 
$
25,278

 
$
47,451

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
6,236

 
11,739

 
12,439

 
22,948

Depreciation and amortization
3,328

 
6,227

 
6,817

 
12,373

Impairments of real estate assets

 

 

 
4,790

Interest expense
2,301

 
4,689

 
4,512

 
9,428

Total expenses
11,865

 
22,655

 
23,768

 
49,539

Income/(loss) before disposition of properties
980

 
1,280

 
1,510

 
(2,088
)
Gains on disposition of properties

 
43

 
1,949

 
67

Net income/(loss)
$
980

 
$
1,323

 
$
3,459

 
$
(2,021
)
Our share of:
 
 
 
 
 
 
 
Depreciation and amortization
$
923

 
$
2,092

 
$
1,954

 
$
4,107

Impairments of real estate assets
$

 
$

 
$

 
$
1,020

Interest expense
$
764

 
$
1,732

 
$
1,540

 
$
3,484

Gains on disposition of properties
$

 
$
10

 
$
955

 
$
431

Net income
$
491

 
$
571

 
$
1,646

 
$
575

 
 
 
 
 
 
 
 
Our share of net income
$
491

 
$
571

 
$
1,646

 
$
575

Adjustments for management and other fees
176

 
342

 
345

 
774

Impairment of investment in unconsolidated affiliate

 

 
(1,353
)
 

Equity in earnings of unconsolidated affiliates
$
667

 
$
913

 
$
638

 
$
1,349



Intangible Assets and Below Market Lease Liabilities (Tables)
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
June 30,
2014
 
December 31,
2013
Assets:
 
 
 
Deferred financing costs
$
19,567

 
$
17,363

Less accumulated amortization
(6,434
)
 
(5,204
)
 
13,133

 
12,159

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
300,885

 
297,068

Less accumulated amortization
(95,996
)
 
(87,016
)
 
204,889

 
210,052

Deferred financing and leasing costs, net
$
218,022

 
$
222,211

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
54,903

 
$
55,323

Less accumulated amortization
(11,080
)
 
(8,478
)
 
$
43,823

 
$
46,845

The following table sets forth amortization of intangible assets and below market lease liabilities:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Amortization of deferred financing costs
$
799

 
$
948

 
$
1,451

 
$
1,897

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
10,050

 
$
7,888

 
$
19,978

 
$
15,963

Amortization of lease incentives (in rental and other revenues)
$
399

 
$
340

 
$
750

 
$
716

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
1,114

 
$
484

 
$
2,230

 
$
950

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
139

 
$
139

 
$
276

 
$
276

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,500
)
 
$
(1,031
)
 
$
(3,022
)
 
$
(2,153
)

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:
 
 
 
Amortization of Deferred Financing Costs
 
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)
July 1 through December 31, 2014
 
$
1,558

 
$
18,266

 
$
689

 
$
2,107

 
$
277

 
$
(2,979
)
2015
 
3,087

 
34,839

 
1,135

 
3,619

 
553

 
(5,718
)
2016
 
2,823

 
29,299

 
934

 
2,810

 
553

 
(5,427
)
2017
 
2,529

 
25,379

 
843

 
2,269

 
553

 
(5,164
)
2018
 
1,404

 
21,095

 
748

 
1,426

 
553

 
(5,016
)
Thereafter
 
1,732

 
49,508

 
2,580

 
3,768

 
1,086

 
(19,519
)
 
 
$
13,133

 
$
178,386

 
$
6,929

 
$
15,999

 
$
3,575

 
$
(43,823
)
Weighted average remaining amortization periods as of June 30, 2014 (in years)
 
4.8

 
6.5

 
8.2

 
6.6

 
6.5

 
8.7

Mortgages and Notes Payable (Tables)
Schedule of Consolidated Mortgages and Notes Payable [Table Text Block]
The following table sets forth our mortgages and notes payable:
 
 
June 30,
2014
 
December 31,
2013
Secured indebtedness
$
352,857

 
$
488,664

Unsecured indebtedness
1,706,115

 
1,467,635

Total mortgages and notes payable
$
2,058,972

 
$
1,956,299

Derivative Financial Instruments (Tables)
The following table sets forth the gross fair value of our derivatives:
 
 
June 30,
2014
 
December 31,
2013
Derivatives:
 
 
 
Derivatives designated as cash flow hedges in prepaid expenses and other assets:
 
 
 
Interest rate swaps
$

 
$
301

Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
2,744

 
$
510

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(2,846
)
 
$
6,319

 
$
(4,250
)
 
$
6,599

Amount of losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
944

 
$
800

 
$
1,872

 
$
1,588

Noncontrolling Interests (Tables) (Highwoods Properties, Inc. [Member])
The following table sets forth the Company's noncontrolling interests in the Operating Partnership:
 
 
Six Months Ended
June 30,
 
2014
 
2013
Beginning noncontrolling interests in the Operating Partnership
$
106,480

 
$
124,869

Adjustment of noncontrolling interests in the Operating Partnership to fair value
18,337

 
9,649

Conversions of Common Units to Common Stock
(162
)
 
(2,851
)
Redemptions of Common Units
(93
)
 

Net income attributable to noncontrolling interests in the Operating Partnership
1,140

 
1,824

Distributions to noncontrolling interests in the Operating Partnership
(2,497
)
 
(3,140
)
Total noncontrolling interests in the Operating Partnership
$
123,205

 
$
130,351


The following table sets forth net income available for common stockholders and transfers from the Company's noncontrolling interests in the Operating Partnership:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net income available for common stockholders
$
22,705

 
$
27,522

 
$
34,833

 
$
39,871

Increase in additional paid in capital from conversions of Common Units
to Common Stock

 
2,500

 
162

 
2,851

Change from net income available for common stockholders and transfers from noncontrolling interests
$
22,705

 
$
30,022

 
$
34,995

 
$
42,722



Disclosure About Fair Value of Financial Instruments (Tables)
The following table sets forth our assets and liabilities and the Company's noncontrolling interests in the Operating Partnership that are measured at fair value within the fair value hierarchy.
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
 
Total
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Fair Value at June 30, 2014:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
 
$
10,144

 
$

 
$
239

 
$
9,905

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
3,869

 
3,869

 

 

Impaired real estate assets
 
4,922

 

 

 
4,922

Tax increment financing bond (in prepaid expenses and other assets)
 
13,673

 

 

 
13,673

Total Assets
 
$
32,608

 
$
3,869

 
$
239

 
$
28,500

Noncontrolling Interests in the Operating Partnership
 
$
123,205

 
$
123,205

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
 
$
2,152,505

 
$

 
$
2,152,505

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
 
2,744

 

 
2,744

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
3,869

 
3,869

 

 

Financing obligations, at fair value (1)
 
22,466

 

 

 
22,466

Total Liabilities
 
$
2,181,584

 
$
3,869

 
$
2,155,249

 
$
22,466

Fair Value at December 31, 2013:
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
 
$
26,485

 
$

 
$
17,029

 
$
9,456

Interest rate swaps (in prepaid expenses and other assets)
 
301

 

 
301

 

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
3,996

 
3,996

 

 

Tax increment financing bond (in prepaid expenses and other assets)
 
13,403

 

 

 
13,403

Total Assets
 
$
44,185

 
$
3,996

 
$
17,330

 
$
22,859

Noncontrolling Interests in the Operating Partnership
 
$
106,480

 
$
106,480

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
 
$
2,037,385

 
$

 
$
2,037,385

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
 
510

 

 
510

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
3,996

 
3,996

 

 

Financing obligations, at fair value (1)
 
22,478

 

 

 
22,478

Total Liabilities
 
$
2,064,369

 
$
3,996

 
$
2,037,895

 
$
22,478


__________
(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at June 30, 2014 and December 31, 2013.
The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
13,568

 
$
14,324

 
$
13,403

 
$
14,496

Principal repayment

 

 

 
(562
)
Unrealized gains/(losses) (in AOCL)
105

 
(91
)
 
270

 
299

Ending balance
$
13,673

 
$
14,233

 
$
13,673

 
$
14,233

Liability:
 
 
 
 
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
 
 
 
 
Beginning balance
$

 
$
375

 
$

 
$
563

Unrecognized (gains)/losses (in general and administrative expenses)

 
9

 

 
(179
)
Ending balance
$

 
$
384

 
$

 
$
384

The following table sets forth quantitative information about the unobservable input of our Level 3 assets, which are recorded at fair value on our Consolidated Balance Sheets:
 
 
 
Valuation
Technique
 
Unobservable
Input
 
Rate
Assets:
 
 
 
 
 
 
Tax increment financing bond
 
Income approach
 
Discount rate
 
9.0%
Impaired real estate assets
 
Income approach
 
Capitalization rate
 
9.5%
 
 
 
 
Discount rate
 
10.0%
Accumulated Other Comprehensive Loss (Tables)
Components of Accumulated Other Comprehensive Loss [Table Text Block]
The following table sets forth the components of AOCL:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Tax increment financing bond:
 
 
 
 
 
 
 
Beginning balance
$
(864
)
 
$
(1,508
)
 
$
(1,029
)
 
$
(1,898
)
Unrealized gains/(losses) on tax increment financing bond
105

 
(91
)
 
270

 
299

Ending balance
(759
)
 
(1,599
)
 
(759
)
 
(1,599
)
Cash flow hedges:
 
 
 
 
 
 
 
Beginning balance
(2,058
)
 
(9,662
)
 
(1,582
)
 
(10,730
)
Unrealized gains/(losses) on cash flow hedges
(2,846
)
 
6,319

 
(4,250
)
 
6,599

Amortization of cash flow hedges (1)
944

 
800

 
1,872

 
1,588

Ending balance
(3,960
)
 
(2,543
)
 
(3,960
)
 
(2,543
)
Total accumulated other comprehensive loss
$
(4,719
)

$
(4,142
)
 
$
(4,719
)
 
$
(4,142
)
__________
(1)    Amounts reclassified out of AOCL into contractual interest expense.
Real Estate and Other Assets Held For Sale and Discontinued Operations (Tables)
The following table sets forth the major classes of assets of our real estate and other assets, net, held for sale:

 
June 30,
2014
 
December 31,
2013
Assets:
 
 
 
Land
$
11,488

 
$

Buildings and tenant improvements
81,936

 

Land held for development
2,597

 

Less-accumulated depreciation
(34,281
)
 

Net real estate assets
61,740

 

Accrued straight-line rents receivable, net
3,873

 

Deferred leasing costs, net
1,825

 

Prepaid expenses and other assets
721

 

Real estate and other assets, net, held for sale
$
68,159

 
$

The following table sets forth our operations that were classified as discontinued operations prior to the adoption of the accounting standard update discussed in Note 1:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Rental and other revenues
$

 
$
6,262

 
$

 
$
13,260

Operating expenses:
 
 
 
 
 
 
 
Rental property and other expenses

 
2,416

 

 
4,866

Depreciation and amortization

 
1,851

 

 
4,055

Total operating expenses

 
4,267

 

 
8,921

Income from discontinued operations

 
1,995

 

 
4,339

Impairments of real estate assets

 
(1,066
)
 

 
(2,194
)
Net gains on disposition of discontinued operations

 
13,163

 
384

 
14,407

Total discontinued operations
$

 
$
14,092

 
$
384

 
$
16,552



Earnings Per Share/Unit (Tables)
The following table sets forth the computation of basic and diluted earnings per share of the Company:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Earnings per Common Share - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,487

 
$
37,704

 
$
26,787

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(742
)
 
(640
)
 
(1,128
)
 
(1,112
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common stockholders
22,705

 
14,033

 
34,461

 
24,031

Income from discontinued operations

 
14,092

 
384

 
16,552

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations

 
(603
)
 
(12
)
 
(712
)
Income from discontinued operations available for common stockholders

 
13,489

 
372

 
15,840

Net income available for common stockholders
$
22,705

 
$
27,522

 
$
34,833

 
$
39,871

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares
90,254

 
82,811

 
90,111

 
81,925

Earnings per Common Share - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common stockholders

 
0.16

 
0.01

 
0.19

Net income available for common stockholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,487

 
$
37,704

 
$
26,787

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
23,447

 
14,673

 
35,589

 
25,143

Income from discontinued operations available for common stockholders

 
14,092

 
384

 
16,552

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
23,447

 
$
28,765

 
$
35,973

 
$
41,695

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares
90,254

 
82,811

 
90,111

 
81,925

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
121

 
132

 
123

 
120

Noncontrolling interests Common Units
2,937

 
3,688

 
2,938

 
3,707

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1) (2)
93,312

 
86,631

 
93,172

 
85,752

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common stockholders

 
0.16

 
0.01

 
0.19

Net income available for common stockholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

__________

13.
Earnings Per Share and Per Unit - Continued
(1)
There were 0.3 million options outstanding during the three months ended June 30, 2013 and 0.2 million and 0.3 million options outstanding during the six months ended June 30, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive. There were no such options outstanding during the three months ended June 30, 2014.
(2)
Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,490

 
$
37,704

 
$
26,737

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common unitholders
23,447

 
14,676

 
35,589

 
25,093

Income from discontinued operations available for common unitholders

 
14,092

 
384

 
16,552

Net income available for common unitholders
$
23,447

 
$
28,768

 
$
35,973

 
$
41,645

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units
92,782

 
86,090

 
92,640

 
85,223

Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common unitholders

 
0.16

 
0.01

 
0.19

Net income available for common unitholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
24,512

 
$
15,490

 
$
37,704

 
$
26,737

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438
)
 
(187
)
 
(861
)
 
(390
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,254
)
 
(1,254
)
Income from continuing operations available for common unitholders
23,447

 
14,676

 
35,589

 
25,093

Income from discontinued operations available for common unitholders

 
14,092

 
384

 
16,552

Net income available for common unitholders
$
23,447

 
$
28,768

 
$
35,973

 
$
41,645

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units
92,782

 
86,090

 
92,640

 
85,223

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
121

 
132

 
123

 
120

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1) (2)
92,903

 
86,222

 
92,763

 
85,343

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.25

 
$
0.17

 
$
0.38

 
$
0.30

Income from discontinued operations available for common unitholders

 
0.16

 
0.01

 
0.19

Net income available for common unitholders
$
0.25

 
$
0.33

 
$
0.39

 
$
0.49

__________
(1)
There were 0.3 million options outstanding during the three months ended June 30, 2013 and 0.2 million and 0.3 million options outstanding during the six months ended June 30, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive. There were no such options outstanding during the three months ended June 30, 2014.
(2)
Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
Segment Information (Tables)
Segment Information [Table Text Block]
The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments:

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Rental and Other Revenues:
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
23,627

 
$
17,933

 
$
46,604

 
$
35,100

Greenville, SC
767

 
855

 
1,608

 
1,706

Kansas City, MO
4,086

 
4,033

 
8,183

 
8,002

Memphis, TN
10,055

 
9,653

 
19,890

 
19,033

Nashville, TN
20,182

 
14,188

 
39,787

 
28,258

Orlando, FL
9,148

 
2,230

 
18,068

 
4,451

Piedmont Triad, NC
6,580

 
6,516

 
13,030

 
12,893

Pittsburgh, PA
14,014

 
13,951

 
27,771

 
27,639

Raleigh, NC
22,538

 
21,719

 
44,029

 
42,379

Richmond, VA
12,020

 
11,856

 
23,763

 
23,628

Tampa, FL
17,129

 
17,394

 
33,756

 
34,828

Total Office Segment
140,146

 
120,328

 
276,489

 
237,917

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
204

 
211

 
408

 
414

Piedmont Triad, NC
3,006

 
3,117

 
5,694

 
6,239

Total Industrial Segment
3,210

 
3,328

 
6,102

 
6,653

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,366

 
8,962

 
18,584

 
18,425

Total Retail Segment
9,366

 
8,962

 
18,584

 
18,425

Total Rental and Other Revenues
$
152,722

 
$
132,618

 
$
301,175

 
$
262,995


14.
Segment Information - Continued

 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2014
 
2013
 
2014
 
2013
Net Operating Income:
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
14,321

 
$
11,170

 
$
28,018

 
$
22,063

Greenville, SC
390

 
475

 
865

 
971

Kansas City, MO
2,698

 
2,636

 
5,303

 
5,198

Memphis, TN
5,789

 
5,298

 
11,396

 
10,927

Nashville, TN
13,999

 
10,030

 
27,152

 
19,715

Orlando, FL
5,346

 
1,070

 
10,722

 
2,148

Piedmont Triad, NC
4,249

 
4,256

 
8,247

 
8,355

Pittsburgh, PA
7,988

 
7,902

 
15,181

 
15,320

Raleigh, NC
16,326

 
15,675

 
31,358

 
30,299

Richmond, VA
8,265

 
8,242

 
15,941

 
16,355

Tampa, FL
10,031

 
10,472

 
20,066

 
21,691

Total Office Segment
89,402

 
77,226

 
174,249

 
153,042

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
122

 
120

 
244

 
239

Piedmont Triad, NC
2,161

 
2,364

 
4,028

 
4,609

Total Industrial Segment
2,283

 
2,484

 
4,272

 
4,848

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,764

 
5,607

 
11,029

 
11,228

Total Retail Segment
5,764

 
5,607

 
11,029

 
11,228

Corporate and other
(2
)
 
(16
)
 
(40
)
 
(34
)
Total Net Operating Income
97,447

 
85,301

 
189,510

 
169,084

Reconciliation to income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(50,443
)
 
(40,624
)
 
(98,608
)
 
(80,712
)
Impairments of real estate assets
(588
)
 

 
(588
)
 

General and administrative expenses
(8,733
)
 
(8,397
)
 
(19,447
)
 
(18,979
)
Interest expense
(21,213
)
 
(23,286
)
 
(42,575
)
 
(47,154
)
Other income
1,428

 
1,617

 
2,827

 
3,236

Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates
$
17,898

 
$
14,611

 
$
31,119

 
$
25,475

Description of Business and Significant Accounting Policies (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
sqft
acre
Jun. 30, 2013
Jun. 30, 2014
Highwoods Properties, Inc. [Member]
Jun. 30, 2013
Highwoods Properties, Inc. [Member]
Dec. 31, 2013
Highwoods Properties, Inc. [Member]
Jun. 30, 2014
Highwoods Properties, Inc. [Member]
ATM Equity Offering [Member]
Jun. 30, 2014
Highwoods Properties, Inc. [Member]
ATM Equity Offering [Member]
Jun. 30, 2014
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2013
Highwoods Realty Limited Partnership [Member]
Description of Business and Significant Accounting Policies [Line Items]
 
 
 
 
 
 
 
 
 
Rentable square feet of commercial real estate property (in sq feet)
32,100,000 
 
 
 
 
 
 
 
 
Rentable square feet of commercial real estate properties under development (in sq feet)
900,000 
 
 
 
 
 
 
 
 
Undeveloped land suitable for development (in acres)
600 
 
 
 
 
 
 
 
 
Common Units of partnership owned by the Company (in shares)
 
 
90,000,000 
 
 
 
 
 
 
Percentage of ownership of Common Units
 
 
96.90% 
 
96.80% 
 
 
 
 
Common Units of partnership not owned by the Company (in shares)
 
 
 
 
 
 
 
2,900,000 
 
Common Units redeemed for cash (in shares)
2,500 
 
 
 
 
 
 
 
 
Redemption of Common Units
$ 93 
$ 0 
$ 93 
$ 0 
 
 
 
$ 93 
$ 0 
Common Units redeemed for a like number of common shares of stock (in shares)
4,417 
 
 
 
 
 
 
 
 
Number of Common Stock sold during the period (in shares)
 
 
 
 
 
50,293 
73,877 
 
 
Average price of Common Stock sold during the period (in dollars per share)
 
 
 
 
 
$ 38.38 
$ 38.35 
 
 
Net proceeds of Common Stock sold during the period
$ 8,712 
$ 122,490 
 
 
 
$ 1,900 
$ 2,800 
 
 
Real Estate Assets (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dispositions [Abstract]
 
 
 
 
Gain on disposition of property
$ 5,947,000 
$ (37,000)
$ 5,947,000 
$ (37,000)
Impairments [Abstract]
 
 
 
 
Impairments of real estate assets
588,000 
588,000 
Atlanta, GA Land Disposition (6/2014) [Member]
 
 
 
 
Dispositions [Abstract]
 
 
 
 
Number of land parcels sold
 
 
Proceeds received from sale of real estate
9,500,000 
 
 
 
Gain on disposition of property
5,900,000 
 
 
 
Greensboro, NC Office Property Impairment (6/2014) [Member]
 
 
 
 
Impairments [Abstract]
 
 
 
 
Impairments of real estate assets
$ 600,000 
 
 
 
Mortgages and Notes Receivable (Details) (USD $)
6 Months Ended 3 Months Ended 12 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Mar. 31, 2014
Seller Financing [Member]
Dec. 31, 2010
Seller Financing [Member]
transactions
Jun. 30, 2014
Seller Financing [Member]
Dec. 31, 2013
Seller Financing [Member]
Jun. 30, 2014
Mortgage Receivable [Member]
Dec. 31, 2013
Mortgage Receivable [Member]
Dec. 31, 2012
Mortgage Receivable [Member]
Jun. 30, 2014
Promissory Notes [Member]
Jun. 30, 2013
Promissory Notes [Member]
Jun. 30, 2014
Promissory Notes [Member]
Jun. 30, 2013
Promissory Notes [Member]
Dec. 31, 2013
Promissory Notes [Member]
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgages and notes receivable, gross
 
 
 
 
 
$ 0 
$ 16,454,000 
$ 9,901,000 
$ 9,435,000 
 
$ 514,000 
 
$ 514,000 
 
$ 822,000 
Mortgages and notes receivable, allowance
(275,000)
 
 
 
 
 
 
 
(275,000)
(376,000)
(275,000)
(376,000)
 
Mortgages and notes receivable, net
10,140,000 
 
26,409,000 
 
 
16,454,000 
9,901,000 
9,435,000 
 
239,000 
 
239,000 
 
520,000 
Number of transactions with seller financing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Repayment of seller financing
16,817,000 
276,000 
 
16,500,000 
 
 
 
 
 
 
 
 
 
 
 
Deferred gain on sale of real estate
 
 
 
400,000 
 
 
 
 
 
 
 
 
 
 
 
Additional loan commitment to third party
 
 
 
 
 
 
 
 
 
8,400,000 
 
 
 
 
 
Cumulative funds for future infrastructure disbursed to third party
 
 
 
 
 
 
 
500,000 
 
 
 
 
 
 
 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning notes receivable allowance
302,000 
 
 
 
 
 
 
300,000 
437,000 
302,000 
182,000 
 
Recoveries/write-offs/other
 
 
 
 
 
 
 
 
 
 
(25,000)
(61,000)
(27,000)
194,000 
 
Total notes receivable allowance
$ 275,000 
 
 
 
 
$ 0 
 
$ 0 
 
 
$ 275,000 
$ 376,000 
$ 275,000 
$ 376,000 
 
Investments In Affiliates (Details) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Board of Trade Investment Company [Member]
Mar. 31, 2014
Board of Trade Investment Company [Member]
Jun. 30, 2014
Highwoods KC Glenridge Office, LLC Joint Venture [Member]
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$ 12,845,000 
$ 23,935,000 
$ 25,278,000 
$ 47,451,000 
 
 
 
Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
6,236,000 
11,739,000 
12,439,000 
22,948,000 
 
 
 
Depreciation and amortization
3,328,000 
6,227,000 
6,817,000 
12,373,000 
 
 
 
Impairments of real estate assets
4,790,000 
 
 
 
Interest expense
2,301,000 
4,689,000 
4,512,000 
9,428,000 
 
 
 
Total expenses
11,865,000 
22,655,000 
23,768,000 
49,539,000 
 
 
 
Income/(loss) before disposition of properties
980,000 
1,280,000 
1,510,000 
(2,088,000)
 
 
 
Gains on disposition of properties
43,000 
1,949,000 
67,000 
 
1,900,000 
 
Net income/(loss)
980,000 
1,323,000 
3,459,000 
(2,021,000)
 
 
 
Our share of:
 
 
 
 
 
 
 
Depreciation and amortization
923,000 
2,092,000 
1,954,000 
4,107,000 
 
 
 
Impairments of real estate assets
1,020,000 
 
 
 
Interest expense
764,000 
1,732,000 
1,540,000 
3,484,000 
 
 
 
Gains on disposition of properties
10,000 
955,000 
431,000 
 
 
 
Net income
491,000 
571,000 
1,646,000 
575,000 
 
 
 
Our share of net income
491,000 
571,000 
1,646,000 
575,000 
 
 
 
Adjustments for management and other fees
176,000 
342,000 
345,000 
774,000 
 
 
 
Impairment of investment in unconsolidated affiliate
(1,353,000)
 
 
 
Equity in earnings of unconsolidated affiliates
667,000 
913,000 
638,000 
1,349,000 
 
 
 
Percentage of equity interest in joint ventures, maximum (in hundredths)
50.00% 
 
50.00% 
 
49.00% 
 
 
Proceeds received from disposition of property
 
 
 
 
 
8,300,000 
 
Gains on disposition of properties
43,000 
1,949,000 
67,000 
 
1,900,000 
 
Net impairment charge on our investment in unconsolidated affiliates
 
 
 
 
 
400,000 
 
Receivable related to redemption of investment in unconsolidated affiliate
 
 
4,660,000 
4,700,000 
 
 
Repayment of debt at maturity
 
 
 
 
 
 
$ 14,900,000 
Current interest rate (in hundredths)
 
 
 
 
 
 
4.84% 
Intangible Assets and Below Market Lease Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, accumulated amortization
$ (102,430)
 
$ (102,430)
 
$ (92,220)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
218,022 
 
218,022 
 
222,211 
Deferred Financing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
19,567 
 
19,567 
 
17,363 
Deferred financing and leasing costs, accumulated amortization
(6,434)
 
(6,434)
 
(5,204)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
13,133 
 
13,133 
 
12,159 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
799 
948 
1,451 
1,897 
 
Deferred Leasing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
300,885 
 
300,885 
 
297,068 
Deferred financing and leasing costs, accumulated amortization
(95,996)
 
(95,996)
 
(87,016)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
204,889 
 
204,889 
 
210,052 
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
178,386 
 
178,386 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
10,050 
7,888 
19,978 
15,963 
 
Lease Incentives [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,929 
 
6,929 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
399 
340 
750 
716 
 
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
15,999 
 
15,999 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
1,114 
484 
2,230 
950 
 
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
3,575 
 
3,575 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
139 
139 
276 
276 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Acquisition-related below market lease liabilities, gross
54,903 
 
54,903 
 
55,323 
Acquisition-related below market lease liabilities, accumulated amortization
(11,080)
 
(11,080)
 
(8,478)
Acquisition-related below market lease liabilities, net
43,823 
 
43,823 
 
46,845 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of acquisition-related below market lease liabilities
$ (1,500)
$ (1,031)
$ (3,022)
$ (2,153)
 
Intangible Assets and Below Market Lease Liabilities - Scheduled Future Amortization (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Scheduled future amortization of intangible assets [Abstract]
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
$ 218,022 
$ 222,211 
Deferred Financing Costs [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
July 1, 2014 through December 31, 2014
1,558 
 
2015
3,087 
 
2016
2,823 
 
2017
2,529 
 
2018
1,404 
 
Thereafter
1,732 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
13,133 
12,159 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
4 years 9 months 20 days 
 
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
July 1, 2014 through December 31, 2014
18,266 
 
2015
34,839 
 
2016
29,299 
 
2017
25,379 
 
2018
21,095 
 
Thereafter
49,508 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
178,386 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
6 years 6 months 
 
Lease Incentives [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
July 1, 2014 through December 31, 2014
689 
 
2015
1,135 
 
2016
934 
 
2017
843 
 
2018
748 
 
Thereafter
2,580 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,929 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
8 years 2 months 13 days 
 
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
July 1, 2014 through December 31, 2014
2,107 
 
2015
3,619 
 
2016
2,810 
 
2017
2,269 
 
2018
1,426 
 
Thereafter
3,768 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
15,999 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
6 years 7 months 7 days 
 
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
July 1, 2014 through December 31, 2014
277 
 
2015
553 
 
2016
553 
 
2017
553 
 
2018
553 
 
Thereafter
1,086 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
3,575 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
6 years 6 months 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
Scheduled future amortization of below market lease liabilities [Abstract]
 
 
July 1, 2014 through December 31, 2014
(2,979)
 
2015
(5,718)
 
2016
(5,427)
 
2017
(5,164)
 
2018
(5,016)
 
Thereafter
(19,519)
 
Total scheduled future amortization of acquisition-related below market lease liabilities
$ (43,823)
$ (46,845)
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived below market lease liabilities, average useful life (in years)
8 years 8 months 15 days 
 
Mortgages and Notes Payable (Details) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2014
Revolving Credit Facility due 2018 [Member]
extensions
Jun. 30, 2014
Revolving Credit Facility due 2018 [Member]
Jun. 30, 2014
3.20% (3.363% effective rate) Notes due 2021 [Member]
Jun. 30, 2014
5.21% (3.11% effective rate) Mortgage Loan due 2014 [Member]
Jun. 30, 2014
5.94% (3.32% effective rate) Mortgage Loan due 2014 [Member]
Jun. 30, 2014
Secured indebtedness [Member]
Dec. 31, 2013
Secured indebtedness [Member]
Jun. 30, 2014
Unsecured indebtedness [Member]
Dec. 31, 2013
Unsecured indebtedness [Member]
Jul. 21, 2014
Revolving Credit Facility due 2018 [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgages and notes payable
$ 2,058,972,000 
 
$ 2,058,972,000 
 
$ 1,956,299,000 
 
 
 
 
 
$ 352,857,000 
$ 488,664,000 
$ 1,706,115,000 
$ 1,467,635,000 
 
Aggregate undepreciated book value of secured real estate assets
 
 
 
 
 
 
 
 
 
 
652,400,000 
 
 
 
 
Maximum borrowing capacity on revolving credit facility
 
 
 
 
 
475,000,000 
475,000,000 
 
 
 
 
 
 
 
 
Maturity date on revolving credit facility
 
 
 
 
 
 
Jan. 01, 2018 
 
 
 
 
 
 
 
 
Additional borrowing capacity on revolving credit facility
 
 
 
 
 
75,000,000 
75,000,000 
 
 
 
 
 
 
 
 
Interest rate, basis
 
 
 
 
 
LIBOR plus 110 basis points 
 
 
 
 
 
 
 
 
 
Interest rate (in hundredths)
 
 
 
 
 
1.10% 
 
3.20% 
 
 
 
 
 
 
 
Annual facility fee (in hundredths)
 
 
 
 
 
0.20% 
 
 
 
 
 
 
 
 
 
Term of optional extension
 
 
 
 
 
6 months 
 
 
 
 
 
 
 
 
 
Number of additional maturity extensions
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amount outstanding on revolving credit facility
 
 
 
 
 
157,000,000 
157,000,000 
 
 
 
 
 
 
 
181,000,000 
Outstanding letters of credit on revolving credit facility
 
 
 
 
 
93,000 
93,000 
 
 
 
 
 
 
 
93,000 
Unused borrowing capacity on revolving credit facility
 
 
 
 
 
317,907,000 
317,907,000 
 
 
 
 
 
 
 
293,907,000 
Principal amount of debt
 
 
 
 
 
 
 
300,000,000 
 
 
 
 
 
 
 
Debt instrument maturity date
 
 
 
 
 
 
 
Jun. 15, 2021 
Jul. 01, 2014 
Aug. 01, 2014 
 
 
 
 
 
Original issuance discount
 
 
 
 
 
 
 
3,100,000 
 
 
 
 
 
 
 
Purchase price of debt (in hundredths)
 
 
 
 
 
 
 
98.983% 
 
 
 
 
 
 
 
Effective percentage rate (in hundredths)
 
 
 
 
 
 
 
3.363% 
 
 
 
 
 
 
 
Deferred financing fees
 
 
 
 
 
 
 
2,400,000 
 
 
 
 
 
 
 
Early repayment of debt
 
 
 
 
 
 
 
 
123,700,000 
7,200,000 
 
 
 
 
 
Current interest rate (in hundredths)
 
 
 
 
 
 
 
 
3.11% 
3.32% 
 
 
 
 
 
Gains/(losses) on debt extinguishment
$ 18,000 
$ 0 
$ 18,000 
$ (164,000)
 
 
 
 
 
$ 100,000 
 
 
 
 
 
Derivative Financial Instruments (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
 
 
 
 
 
Expected increase to interest expense
$ 3,400,000 
 
$ 3,400,000 
 
 
Derivatives designated as cash flow hedges in prepaid expenses and other assets l [Abstract]
 
 
 
 
 
Interest rate swaps
 
 
301,000 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities [Abstract]
 
 
 
 
 
Interest rate swaps
2,744,000 
 
2,744,000 
 
510,000 
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
(2,846,000)
6,319,000 
(4,250,000)
6,599,000 
 
Amount of losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
$ 944,000 
$ 800,000 
$ 1,872,000 
$ 1,588,000 
 
Noncontrolling Interests (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Noncontrolling Interests in the Operating Partnership [Roll Forward]
 
 
 
 
Beginning noncontrolling interests in the Operating Partnership
 
 
$ 106,480 
 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
 
 
18,337 
9,649 
Conversions of Common Units to Common Stock
 
 
(162)
(2,851)
Redemptions of Common Units
 
 
(93)
Net income attributable to noncontrolling interests in the Operating Partnership
742 
1,243 
1,140 
1,824 
Distributions to noncontrolling interests in the Operating Partnership
 
 
(2,497)
(3,140)
Total noncontrolling interests in the Operating Partnership
123,205 
 
123,205 
 
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
 
 
 
 
Net income available for common stockholders
22,705 
27,522 
34,833 
39,871 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
50.00% 
 
Highwoods Properties, Inc. [Member]
 
 
 
 
Noncontrolling Interests in the Operating Partnership [Roll Forward]
 
 
 
 
Beginning noncontrolling interests in the Operating Partnership
 
 
106,480 
124,869 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
 
 
18,337 
9,649 
Conversions of Common Units to Common Stock
 
 
(162)
(2,851)
Redemptions of Common Units
 
 
(93)
Net income attributable to noncontrolling interests in the Operating Partnership
 
 
1,140 
1,824 
Distributions to noncontrolling interests in the Operating Partnership
 
 
(2,497)
(3,140)
Total noncontrolling interests in the Operating Partnership
123,205 
130,351 
123,205 
130,351 
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
 
 
 
 
Net income available for common stockholders
22,705 
27,522 
34,833 
39,871 
Increase in additional paid in capital from conversions of Common Units to Common Stock
2,500 
162 
2,851 
Change from net income available for common stockholders and transfers from noncontrolling interests
$ 22,705 
$ 30,022 
$ 34,995 
$ 42,722 
Disclosure About Fair Value of Financial Instruments - Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Assets:
 
 
Mortgages and notes receivable, at fair value
$ 10,144 1
$ 26,485 1
Interest rate swaps (in prepaid expenses and other assets)
 
301 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,869 
3,996 
Impaired real estate assets
4,922 
 
Tax increment financing bond (in prepaid expenses and other assets)
13,673 
13,403 
Total Assets
32,608 
44,185 
Liabilities:
 
 
Mortgages and notes payable, at fair value
2,152,505 1
2,037,385 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,744 
510 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,869 
3,996 
Financing obligations, at fair value
22,466 1
22,478 1
Total Liabilities
2,181,584 
2,064,369 
Level 1 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
Interest rate swaps (in prepaid expenses and other assets)
 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,869 
3,996 
Impaired real estate assets
 
Tax increment financing bond (in prepaid expenses and other assets)
Total Assets
3,869 
3,996 
Liabilities:
 
 
Mortgages and notes payable, at fair value
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,869 
3,996 
Financing obligations, at fair value
Total Liabilities
3,869 
3,996 
Level 2 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
239 
17,029 
Interest rate swaps (in prepaid expenses and other assets)
 
301 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Impaired real estate assets
 
Tax increment financing bond (in prepaid expenses and other assets)
Total Assets
239 
17,330 
Liabilities:
 
 
Mortgages and notes payable, at fair value
2,152,505 
2,037,385 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,744 
510 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
2,155,249 
2,037,895 
Level 3 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
9,905 
9,456 
Interest rate swaps (in prepaid expenses and other assets)
 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Impaired real estate assets
4,922 
 
Tax increment financing bond (in prepaid expenses and other assets)
13,673 
13,403 
Total Assets
28,500 
22,859 
Liabilities:
 
 
Mortgages and notes payable, at fair value
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
22,466 
22,478 
Total Liabilities
22,466 
22,478 
Highwoods Properties, Inc. [Member]
 
 
Assets:
 
 
Noncontrolling Interests in the Operating Partnership
123,205 
106,480 
Highwoods Properties, Inc. [Member] |
Level 1 [Member]
 
 
Assets:
 
 
Noncontrolling Interests in the Operating Partnership
123,205 
106,480 
Highwoods Properties, Inc. [Member] |
Level 2 [Member]
 
 
Assets:
 
 
Noncontrolling Interests in the Operating Partnership
Highwoods Properties, Inc. [Member] |
Level 3 [Member]
 
 
Assets:
 
 
Noncontrolling Interests in the Operating Partnership
$ 0 
$ 0 
Disclosure About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Unrealized gains/(losses) (in AOCL)
 
 
$ 270,000 
$ 299,000 
Contingent Consideration to Acquire Real Estate Assets [Member]
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
375,000 
563,000 
Unrecognized (gains)/losses (in general and administrative)
9,000 
(179,000)
Ending balance
384,000 
384,000 
Tax Increment Financing Bond [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
13,568,000 
14,324,000 
13,403,000 
14,496,000 
Principal repayment
(562,000)
Unrealized gains/(losses) (in AOCL)
105,000 
(91,000)
270,000 
299,000 
Ending balance
13,673,000 
14,233,000 
13,673,000 
14,233,000 
Maturity date
 
 
Dec. 20, 2020 
 
Amount by which outstanding principal amount exceeds estimated fair value
800,000 
 
 
 
Change in discount rate (in hundredths)
1.00% 
 
 
 
Discount rate (in hundredths)
 
 
9.00% 
 
Tax Increment Financing Bond [Member] |
Minimum [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Change in fair value of bond if discount rate changes
400,000 
 
400,000 
 
Tax Increment Financing Bond [Member] |
Maximum [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Change in fair value of bond if discount rate changes
$ 400,000 
 
$ 400,000 
 
Real Estate Assets [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Discount rate (in hundredths)
 
 
10.00% 
 
Impaired real estate assets [Abstract]
 
 
 
 
Capitalization rate (in hundredths)
 
 
9.50% 
 
Share-Based Payments (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 1,119,000 
$ 1,297,000 
$ 5,381,000 
$ 4,737,000 
Total unrecognized stock-based compensation costs
$ 5,500,000 
 
$ 5,500,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
 
 
2 years 6 months 
 
Highwoods Properties, Inc. [Member] |
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock options granted
 
 
166,081 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
 
 
$ 6.89 
 
Highwoods Properties, Inc. [Member] |
Time-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
87,373 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 37.63 
 
Highwoods Properties, Inc. [Member] |
Total Return-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
67,010 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 35.25 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Jun. 30, 2013
Jun. 30, 2014
Tax Increment Financing Bond [Member]
Jun. 30, 2013
Tax Increment Financing Bond [Member]
Jun. 30, 2014
Tax Increment Financing Bond [Member]
Jun. 30, 2013
Tax Increment Financing Bond [Member]
Jun. 30, 2014
Cash Flow Hedges [Member]
Jun. 30, 2013
Cash Flow Hedges [Member]
Jun. 30, 2014
Cash Flow Hedges [Member]
Jun. 30, 2013
Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) Calculation [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$ (4,719)
$ (2,611)
$ (4,142)
$ (864)
$ (1,508)
$ (1,029)
$ (1,898)
$ (2,058)
$ (9,662)
$ (1,582)
$ (10,730)
Unrealized gains/(losses)
 
 
 
105 
(91)
270 
299 
(2,846)
6,319 
(4,250)
6,599 
Amortization reclassified out of AOCL
 
 
 
 
 
 
 
944 
800 
1,872 
1,588 
Ending balance
(4,719)
(2,611)
(4,142)
(759)
(1,599)
(759)
(1,599)
(3,960)
(2,543)
(3,960)
(2,543)
Total accumulated other comprehensive loss
$ (4,719)
$ (2,611)
$ (4,142)
$ (759)
$ (1,599)
$ (759)
$ (1,599)
$ (3,960)
$ (2,543)
$ (3,960)
$ (2,543)
Real Estate and Other Assets Held For Sale and Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Assets, held for sale [Abstract]
 
 
 
 
 
Land
$ 11,488 
 
$ 11,488 
 
$ 0 
Buildings and tenant improvements
81,936 
 
81,936 
 
Land held for development
2,597 
 
2,597 
 
Less accumulated depreciation
(34,281)
 
(34,281)
 
Net real estate assets
61,740 
 
61,740 
 
Accrued straight line rents receivable
3,873 
 
3,873 
 
Deferred leasing costs, net
1,825 
 
1,825 
 
Prepaid expenses and other assets
721 
 
721 
 
Real estate and other assets, net, held for sale
68,159 
 
68,159 
 
Discontinued operations [Abstract]
 
 
 
 
 
Rental and other revenues
6,262 
13,260 
 
Operating expenses:
 
 
 
 
 
Rental property and other expenses
2,416 
4,866 
 
Depreciation and amortization
1,851 
4,055 
 
Total operating expenses
4,267 
8,921 
 
Income from discontinued operations
1,995 
4,339 
 
Impairment of real estate assets
(1,066)
(2,194)
 
Net gains on disposition of discontinued operations
13,163 
384 
14,407 
 
Total discontinued operations
$ 0 
$ 14,092 
$ 384 
$ 16,552 
 
Richmond, VA Office Properties Disposition (6/2014) [Member]
 
 
 
 
 
Operating expenses:
 
 
 
 
 
Number of office properties included in real estate and other assets, net, held for sale
11 
 
11 
 
 
Raleigh, NC Office Properties Disposition (6/2014) [Member]
 
 
 
 
 
Operating expenses:
 
 
 
 
 
Number of office properties included in real estate and other assets, net, held for sale
 
 
 
Earnings Per Share/Unit (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Numerator:
 
 
 
 
Income from continuing operations
$ 24,512 
$ 15,487 
$ 37,704 
$ 26,787 
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(742)
(640)
(1,128)
(1,112)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438)
(187)
(861)
(390)
Dividends on Preferred Stock
(627)
(627)
(1,254)
(1,254)
Income from continuing operations available for common stockholders
22,705 
14,033 
34,461 
24,031 
Income from discontinued operations
14,092 
384 
16,552 
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(603)
(12)
(712)
Income from discontinued operations available for common stockholders
13,489 
372 
15,840 
Net income available for common stockholders
22,705 
27,522 
34,833 
39,871 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
90,254,000 1 2
82,811,000 1 2
90,111,000 1 2
81,925,000 1 2
Earnings per Common Share - basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common stockholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Numerator:
 
 
 
 
Income from continuing operations
24,512 
15,487 
37,704 
26,787 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(438)
(187)
(861)
(390)
Dividends on Preferred Stock
(627)
(627)
(1,254)
(1,254)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
23,447 
14,673 
35,589 
25,143 
Income from discontinued operations available for common stockholders
14,092 
384 
16,552 
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
23,447 
28,765 
35,973 
41,695 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
90,254,000 1 2
82,811,000 1 2
90,111,000 1 2
81,925,000 1 2
Stock options using the treasury method
121,000 
132,000 
123,000 
120,000 
Noncontrolling interests Common Units
2,937,000 
3,688,000 
2,938,000 
3,707,000 
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares)
93,312,000 1 2
86,631,000 1 2
93,172,000 1 2
85,752,000 1 2
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common stockholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Earnings per Common Unit - diluted:
 
 
 
 
Number of anti-dilutive options and warrants not included in earnings per share (in shares)
 
300,000 
200,000 
300,000 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Numerator:
 
 
 
 
Income from continuing operations
24,512 
15,490 
37,704 
26,737 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(438)
(187)
(861)
(390)
Distributions on Preferred Units
(627)
(627)
(1,254)
(1,254)
Income from continuing operations available for common unitholders
23,447 
14,676 
35,589 
25,093 
Income from discontinued operations available for common unitholders
14,092 
384 
16,552 
Net income available for common unitholders
23,447 
28,768 
35,973 
41,645 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
92,782,000 1 3
86,090,000 1 3
92,640,000 1 3
85,223,000 1 3
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common unitholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Numerator:
 
 
 
 
Income from continuing operations
24,512 
15,490 
37,704 
26,737 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(438)
(187)
(861)
(390)
Distributions on Preferred Units
(627)
(627)
(1,254)
(1,254)
Income from continuing operations available for common unitholders
23,447 
14,676 
35,589 
25,093 
Income from discontinued operations available for common unitholders
14,092 
384 
16,552 
Net income available for common unitholders
$ 23,447 
$ 28,768 
$ 35,973 
$ 41,645 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
92,782,000 1 3
86,090,000 1 3
92,640,000 1 3
85,223,000 1 3
Stock options using the treasury method
121,000 
132,000 
123,000 
120,000 
Denominator for diluted earnings per Common Unit - adjusted weighted average units and assumed conversions (in shares)
92,903,000 1 3
86,222,000 1 3
92,763,000 1 3
85,343,000 1 3
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.25 
$ 0.17 
$ 0.38 
$ 0.30 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.00 
$ 0.16 
$ 0.01 
$ 0.19 
Net income available for common unitholders (in dollars per share)
$ 0.25 
$ 0.33 
$ 0.39 
$ 0.49 
Number of anti-dilutive options and warrants not included in earnings per share (in shares)
 
300,000 
200,000 
300,000 
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
$ 152,722 
$ 132,618 
$ 301,175 
$ 262,995 
Total Net Operating Income
97,447 
85,301 
189,510 
169,084 
Reconciliation to income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates:
 
 
 
 
Depreciation and amortization
(50,443)
(40,624)
(98,608)
(80,712)
Impairments of real estate assets
(588)
(588)
General and administrative expenses
(8,733)
(8,397)
(19,447)
(18,979)
Interest expense
(21,213)
(23,286)
(42,575)
(47,154)
Other income
1,428 
1,617 
2,827 
3,236 
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates
17,898 
14,611 
31,119 
25,475 
Total Office Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
140,146 
120,328 
276,489 
237,917 
Total Net Operating Income
89,402 
77,226 
174,249 
153,042 
Office Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
23,627 
17,933 
46,604 
35,100 
Total Net Operating Income
14,321 
11,170 
28,018 
22,063 
Office Greenville, SC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
767 
855 
1,608 
1,706 
Total Net Operating Income
390 
475 
865 
971 
Office Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
4,086 
4,033 
8,183 
8,002 
Total Net Operating Income
2,698 
2,636 
5,303 
5,198 
Office Memphis, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
10,055 
9,653 
19,890 
19,033 
Total Net Operating Income
5,789 
5,298 
11,396 
10,927 
Office Nashville, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
20,182 
14,188 
39,787 
28,258 
Total Net Operating Income
13,999 
10,030 
27,152 
19,715 
Office Orlando, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,148 
2,230 
18,068 
4,451 
Total Net Operating Income
5,346 
1,070 
10,722 
2,148 
Office Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
6,580 
6,516 
13,030 
12,893 
Total Net Operating Income
4,249 
4,256 
8,247 
8,355 
Office Pittsburgh, PA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,014 
13,951 
27,771 
27,639 
Total Net Operating Income
7,988 
7,902 
15,181 
15,320 
Office Raleigh, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
22,538 
21,719 
44,029 
42,379 
Total Net Operating Income
16,326 
15,675 
31,358 
30,299 
Office Richmond, VA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
12,020 
11,856 
23,763 
23,628 
Total Net Operating Income
8,265 
8,242 
15,941 
16,355 
Office Tampa, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
17,129 
17,394 
33,756 
34,828 
Total Net Operating Income
10,031 
10,472 
20,066 
21,691 
Total Industrial Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,210 
3,328 
6,102 
6,653 
Total Net Operating Income
2,283 
2,484 
4,272 
4,848 
Industrial Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
204 
211 
408 
414 
Total Net Operating Income
122 
120 
244 
239 
Industrial Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,006 
3,117 
5,694 
6,239 
Total Net Operating Income
2,161 
2,364 
4,028 
4,609 
Total Retail Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,366 
8,962 
18,584 
18,425 
Total Net Operating Income
5,764 
5,607 
11,029 
11,228 
Retail Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,366 
8,962 
18,584 
18,425 
Total Net Operating Income
5,764 
5,607 
11,029 
11,228 
Corporate and Other [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Net Operating Income
$ (2)
$ (16)
$ (40)
$ (34)
Subsequent Events (Details) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 0 Months Ended 1 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Jul. 3, 2014
Subsequent Event [Member]
3.50% (3.34% effective rate) Mortgage Loan due 2015 [Member]
Jul. 2, 2014
Subsequent Event [Member]
3.50% (3.34% effective rate) Mortgage Loan due 2015 [Member]
Jul. 2, 2014
Subsequent Event [Member]
Board of Trade Investment Company [Member]
Jul. 29, 2014
Subsequent Event [Member]
Raleigh, NC Office Properties Disposition (7/2014) [Member]
property
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
Cash received related to redemption of investment in unconsolidated affiliate
 
 
 
 
 
 
$ 4,700,000 
 
Early repayment of debt
 
 
 
 
36,900,000 
 
 
 
Current interest rate (in hundredths)
 
 
 
 
 
3.34% 
 
 
Debt instrument maturity date
 
 
 
 
Apr. 01, 2015 
 
 
 
Loss on debt extinguishment
18,000 
18,000 
(164,000)
300,000 
 
 
 
Number of office properties sold
 
 
 
 
 
 
 
Proceeds received from sale of real estate
 
 
 
 
 
 
 
58,700,000 
Gain on disposition of property
$ 5,947,000 
$ (37,000)
$ 5,947,000 
$ (37,000)
 
 
 
$ 11,700,000