HIGHWOODS PROPERTIES, INC., 10-Q filed on 7/26/2012
Quarterly Report
Document and Entity Information Document
6 Months Ended
Jun. 30, 2012
Jul. 19, 2012
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, 2012 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q2 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
76,070,588 
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 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Real estate assets, at cost:
 
 
Land
$ 366,925 
$ 364,022 
Buildings and tenant improvements
3,117,730 
3,078,308 
Development in process
6,094 
Land held for development
102,482 
105,206 
Total real estate assets
3,593,231 
3,547,536 
Less-accumulated depreciation
(913,016)
(877,383)
Net real estate assets
2,680,215 
2,670,153 
For-sale residential condominiums
2,434 
4,751 
Real estate and other assets, net, held for sale
36,751 
50,335 
Cash and cash equivalents
6,527 
11,188 
Restricted cash
20,757 
26,666 
Accounts receivable, net of allowance of $3,262 and $3,548, respectively
21,882 
30,093 
Mortgages and notes receivable, net of allowance of $118 and $61, respectively
17,056 
18,600 
Accrued straight-line rents receivable, net of allowance of $866 and $1,294, respectively
113,695 
104,284 
Investments in and advances to unconsolidated affiliates
77,089 
100,367 
Deferred financing and leasing costs, net of accumulated amortization of $70,572 and $62,319, respectively
126,680 
127,774 
Prepaid expenses and other assets
41,907 
36,781 
Total Assets
3,144,993 
3,180,992 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity: [Abstract]
 
 
Mortgages and notes payable
1,823,128 
1,903,213 
Accounts payable, accrued expenses and other liabilities
137,108 
148,821 
Financing obligations
30,822 
31,444 
Total Liabilities
1,991,058 
2,083,478 
Commitments and contingencies
   
   
Noncontrolling interests in the Operating Partnership
124,880 
110,655 
Equity: [Abstract]
 
 
8.625% Series A Cumulative Redeemable Preferred Shares, $.01 par value, 50,000,000 authorized 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; 75,619,288 and 72,647,697 shares issued and outstanding, respectively
756 
726 
Additional paid-in capital
1,884,392 
1,803,997 
Distributions in excess of net income available for common stockholders
(878,984)
(845,853)
Accumulated other comprehensive loss
(10,779)
(5,734)
Total Stockholders' Equity
1,024,462 
982,213 
Noncontrolling interests in consolidated affiliates
4,593 
4,646 
Total Equity
1,029,055 
986,859 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
3,144,993 
3,180,992 
Highwoods Realty Limited Partnership [Member]
 
 
Real estate assets, at cost:
 
 
Land
366,925 
364,022 
Buildings and tenant improvements
3,117,730 
3,078,308 
Development in process
6,094 
Land held for development
102,482 
105,206 
Total real estate assets
3,593,231 
3,547,536 
Less-accumulated depreciation
(913,016)
(877,383)
Net real estate assets
2,680,215 
2,670,153 
For-sale residential condominiums
2,434 
4,751 
Real estate and other assets, net, held for sale
36,751 
50,335 
Cash and cash equivalents
6,631 
11,151 
Restricted cash
20,757 
26,666 
Accounts receivable, net of allowance of $3,262 and $3,548, respectively
21,882 
30,093 
Mortgages and notes receivable, net of allowance of $118 and $61, respectively
17,056 
18,600 
Accrued straight-line rents receivable, net of allowance of $866 and $1,294, respectively
113,695 
104,284 
Investments in and advances to unconsolidated affiliates
76,037 
99,296 
Deferred financing and leasing costs, net of accumulated amortization of $70,572 and $62,319, respectively
126,680 
127,774 
Prepaid expenses and other assets
41,826 
36,781 
Total Assets
3,143,964 
3,179,884 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity: [Abstract]
 
 
Mortgages and notes payable
1,823,128 
1,903,213 
Accounts payable, accrued expenses and other liabilities
137,047 
148,821 
Financing obligations
30,822 
31,444 
Total Liabilities
1,990,997 
2,083,478 
Commitments and contingencies
   
   
Redeemable Operating Partnership Units: [Abstract]
 
 
Common Units, 3,711,152 and 3,729,518 outstanding, respectively
124,880 
110,655 
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
153,957 
139,732 
Equity: [Abstract]
 
 
General partner Common Units, 789,216 and 759,684 outstanding, respectively
10,049 
9,575 
Limited partner Common Units, 74,421,263 and 71,479,204 outstanding, respectively
995,147 
948,187 
Accumulated other comprehensive loss
(10,779)
(5,734)
Noncontrolling interests in consolidated affiliates
4,593 
4,646 
Total Equity
999,010 
956,674 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
$ 3,143,964 
$ 3,179,884 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2012
Dec. 31, 2011
Assets: [Abstract]
 
 
Accounts receivable allowance
$ 3,262 
$ 3,548 
Mortgages and notes receivable allowance
118 
61 
Accrued straight-line rents receivable allowance
866 
1,294 
Deferred financing and leasing costs, accumulated amortization
70,572 
62,319 
Equity: [Abstract]
 
 
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)
75,619,288 
72,647,697 
Common Stock, shares outstanding (in shares)
75,619,288 
72,647,697 
Highwoods Realty Limited Partnership [Member]
 
 
Assets: [Abstract]
 
 
Accounts receivable allowance
3,262 
3,548 
Mortgages and notes receivable allowance
118 
61 
Accrued straight-line rents receivable allowance
866 
1,294 
Deferred financing and leasing costs, accumulated amortization
$ 70,572 
$ 62,319 
Equity: [Abstract]
 
 
Common Stock, par value (in dollars per share)
$ 0.01 
 
Redeemable Operating Partnership Units: [Abstract]
 
 
Redeemable Common Units outstanding (in shares)
3,711,152 
3,729,518 
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)
789,216 
759,684 
Limited partners' capital account, units outstanding (in shares)
74,421,263 
71,479,204 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Rental and other revenues
$ 130,735 
$ 114,651 
$ 258,768 
$ 226,981 
Operating expenses:
 
 
 
 
Rental property and other expenses
47,089 
39,931 
92,288 
79,838 
Depreciation and amortization
40,276 
32,684 
78,105 
65,621 
General and administrative
8,900 
7,978 
18,573 
15,771 
Total operating expenses
96,265 
80,593 
188,966 
161,230 
Interest expense:
 
 
 
 
Contractual
23,643 
22,940 
47,591 
45,371 
Amortization of deferred financing costs
900 
821 
1,802 
1,642 
Financing obligations
(48)
146 
(96)
437 
Total interest expense
24,495 
23,907 
49,297 
47,450 
Other income:
 
 
 
 
Interest and other income
1,737 
1,899 
3,967 
3,772 
Losses on debt extinguishment
(973)
(24)
(973)
(24)
Total other income
764 
1,875 
2,994 
3,748 
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
10,739 
12,026 
23,499 
22,049 
Gains on disposition of property
200 
200 
Gains on for-sale residential condominiums
110 
116 
175 
154 
Equity in earnings of unconsolidated affiliates
1,508 
1,353 
1,346 
2,820 
Income from continuing operations
12,357 
13,695 
25,020 
25,223 
Discontinued operations:
 
 
 
 
Income from discontinued operations
756 
739 
1,291 
1,654 
Net gains on disposition of discontinued operations
1,385 
6,519 
Total discontinued operations
2,141 
739 
7,810 
1,654 
Net income
14,498 
14,434 
32,830 
26,877 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(686)
(623)
(1,513)
(1,130)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(223)
(182)
(407)
(305)
Dividends on Preferred Stock
(627)
(1,622)
(1,254)
(3,299)
Excess of Preferred Stock redemption/repurchase cost over carrying value
(1,895)
(1,895)
Net income available for common stockholders
12,962 
10,112 
29,656 
20,248 
Earnings per Common Share - basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.13 
$ 0.30 
$ 0.26 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.02 
$ 0.01 
$ 0.10 
$ 0.02 
Net income available for common stockholders (in dollars per share)
$ 0.17 
$ 0.14 
$ 0.40 
$ 0.28 
Weighted average Common Shares outstanding - basic (in shares)
74,662 1 2
72,211 1 2
73,749 1 2
72,015 1 2
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.13 
$ 0.30 
$ 0.26 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.02 
$ 0.01 
$ 0.10 
$ 0.02 
Net income available for common stockholders (in dollars per share)
$ 0.17 
$ 0.14 
$ 0.40 
$ 0.28 
Weighted average Common Shares outstanding - diluted (in shares)
78,521 1
76,197 1
77,601 1
75,987 1
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
10,923 
9,410 
22,226 
18,677 
Income from discontinued operations available for common stockholders
2,039 
702 
7,430 
1,571 
Net income available for common stockholders
12,962 
10,112 
29,656 
20,248 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Rental and other revenues
130,735 
114,651 
258,768 
226,981 
Operating expenses:
 
 
 
 
Rental property and other expenses
47,030 
39,868 
92,167 
79,924 
Depreciation and amortization
40,276 
32,684 
78,105 
65,621 
General and administrative
8,959 
8,041 
18,694 
15,685 
Total operating expenses
96,265 
80,593 
188,966 
161,230 
Interest expense:
 
 
 
 
Contractual
23,643 
22,940 
47,591 
45,371 
Amortization of deferred financing costs
900 
821 
1,802 
1,642 
Financing obligations
(48)
146 
(96)
437 
Total interest expense
24,495 
23,907 
49,297 
47,450 
Other income:
 
 
 
 
Interest and other income
1,737 
1,899 
3,967 
3,772 
Losses on debt extinguishment
(973)
(24)
(973)
(24)
Total other income
764 
1,875 
2,994 
3,748 
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
10,739 
12,026 
23,499 
22,049 
Gains on disposition of property
200 
200 
Gains on for-sale residential condominiums
110 
116 
175 
154 
Equity in earnings of unconsolidated affiliates
1,511 
1,357 
1,351 
2,832 
Income from continuing operations
12,360 
13,699 
25,025 
25,235 
Discontinued operations:
 
 
 
 
Income from discontinued operations
756 
739 
1,291 
1,654 
Net gains on disposition of discontinued operations
1,385 
6,519 
Total discontinued operations
2,141 
739 
7,810 
1,654 
Net income
14,501 
14,438 
32,835 
26,889 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(223)
(182)
(407)
(305)
Distributions on Preferred Units
(627)
(1,622)
(1,254)
(3,299)
Excess of Preferred Unit redemption/repurchase cost over carrying value
(1,895)
(1,895)
Net income available for common unitholders
13,651 
10,739 
31,174 
21,390 
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.15 
$ 0.13 
$ 0.30 
$ 0.26 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.03 
$ 0.01 
$ 0.10 
$ 0.02 
Net income available for common unitholders (in dollars per share)
$ 0.18 
$ 0.14 
$ 0.40 
$ 0.28 
Weighted average Common Units outstanding - basic (in shares)
77,971 1 2
75,586 1 2
77,063 1 2
75,393 1 2
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.15 
0.13 
0.30 
0.26 
Income from discontinued operations available for common unitholders (in dollars per share)
0.02 
0.01 
0.10 
0.02 
Net income available for common unitholders (in dollars per share)
0.17 
0.14 
0.40 
0.28 
Weighted average Common Units outstanding - diluted (in shares)
78,112 1
75,788 1
77,192 1
75,578 1
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
11,510 
10,000 
23,364 
19,736 
Income from discontinued operations available for common unitholders
2,141 
739 
7,810 
1,654 
Net income available for common unitholders
$ 13,651 
$ 10,739 
$ 31,174 
$ 21,390 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Comprehensive income/(loss):
 
 
 
 
Net income
$ 14,498 
$ 14,434 
$ 32,830 
$ 26,877 
Other comprehensive income/(loss):
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
296 
(336)
583 
(471)
Unrealized losses on cash flow hedges
(7,481)
(7,087)
Amortization of cash flow hedges
782 
(29)
1,459 
(58)
Total other comprehensive loss
(6,403)
(365)
(5,045)
(529)
Total comprehensive income
8,095 
14,069 
27,785 
26,348 
Less-comprehensive (income) attributable to noncontrolling interests
(909)
(805)
(1,920)
(1,435)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership
7,186 
13,264 
25,865 
24,913 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Comprehensive income/(loss):
 
 
 
 
Net income
14,501 
14,438 
32,835 
26,889 
Other comprehensive income/(loss):
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
296 
(336)
583 
(471)
Unrealized losses on cash flow hedges
(7,481)
(7,087)
Amortization of cash flow hedges
782 
(29)
1,459 
(58)
Total other comprehensive loss
(6,403)
(365)
(5,045)
(529)
Total comprehensive income
8,098 
14,073 
27,790 
26,360 
Less-comprehensive (income) attributable to noncontrolling interests
(223)
(182)
(407)
(305)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership
$ 7,875 
$ 13,891 
$ 27,383 
$ 26,055 
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]
Series B 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, 2010
$ 1,088,222 
$ 1,005,466 
$ 717 
$ 29,092 
$ 52,500 
$ 10,044 
$ 994,610 
$ 1,766,886 
$ (3,648)
$ (3,648)
$ 4,460 
$ 4,460 
$ (761,785)
Balance (in shares) at Dec. 31, 2010
 
 
71,690,487 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
16,984 
 
 
 
170 
16,814 
 
 
 
 
Distributions paid on Common Units
 
(63,936)
 
 
 
(640)
(63,296)
 
 
 
 
Distributions paid on Preferred Units
 
(3,299)
 
 
 
(33)
(3,266)
 
 
 
 
Issuances of Common Stock - Shares
 
 
556,652 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
16,984 
 
 
 
16,978 
 
 
Conversion of Common Units to Common Stock - Shares
 
 
18,737 
 
 
 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
635 
 
 
 
635 
 
 
Dividends on Common Stock
(61,069)
 
 
 
 
 
(61,069)
Dividends on Preferred Stock
(3,299)
 
 
 
 
 
(3,299)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(6,957)
 
 
 
(6,957)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(319)
(319)
(319)
(319)
Issuances of restricted stock - Shares
 
 
133,552 
 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Redemptions/repurchases of Preferred Stock
(52,505)
 
(5)
(52,500)
 
 
1,895 
 
 
(1,895)
Share-based compensation expense
3,453 
3,453 
35 
3,418 
3,452 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(4,817)
 
 
 
(48)
(4,769)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,130)
 
 
 
 
 
(1,130)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(3)
(302)
305 
305 
(305)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
26,877 
26,889 
269 
26,620 
26,877 
Other comprehensive loss
(529)
(529)
(529)
(529)
Total comprehensive income
26,348 
26,360 
 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2011
1,010,363 
979,892 
724 
29,087 
9,794 
969,829 
1,782,889 
(4,177)
(4,177)
4,446 
4,446 
(802,606)
Balance (in shares) at Jun. 30, 2011
 
 
72,399,428 
 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(623)
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
14,434 
14,438 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss
(365)
(365)
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
14,069 
14,073 
 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2011
1,010,363 
979,892 
 
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2011
986,859 
956,674 
726 
29,077 
 
9,575 
948,187 
1,803,997 
(5,734)
(5,734)
4,646 
4,646 
(845,853)
Balance (in shares) at Dec. 31, 2011
72,647,697 
 
72,647,697 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
91,836 
 
 
 
918 
90,918 
 
 
 
 
Distributions paid on Common Units
 
(65,597)
 
 
 
(656)
(64,941)
 
 
 
 
Distributions paid on Preferred Units
 
(1,254)
 
 
 
(13)
(1,241)
 
 
 
 
Issuances of Common Stock - Shares
 
 
2,794,340 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
91,836 
 
28 
 
 
 
91,808 
 
 
Conversion of Common Units to Common Stock - Shares
 
 
18,366 
 
 
 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
631 
 
 
 
 
631 
 
 
Dividends on Common Stock
(62,787)
 
 
 
 
 
 
(62,787)
Dividends on Preferred Stock
(1,254)
 
 
 
 
 
 
(1,254)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(16,501)
 
 
 
 
(16,501)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(460)
(460)
 
(460)
(460)
Issuances of restricted stock - Shares
 
 
158,885 
 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
 
Share-based compensation expense
4,459 
4,459 
 
45 
4,414 
4,457 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(14,438)
 
 
 
(144)
(14,294)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,513)
 
 
 
 
 
 
(1,513)
Net (income) attributable to noncontrolling interests in consolidated affiliates
 
(4)
(403)
   
407 
407 
(407)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
32,830 
32,835 
 
328 
32,507 
32,830 
Other comprehensive loss
(5,045)
(5,045)
 
(5,045)
(5,045)
Total comprehensive income
27,785 
27,790 
 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2012
1,029,055 
999,010 
756 
29,077 
 
10,049 
995,147 
1,884,392 
(10,779)
(10,779)
4,593 
4,593 
(878,984)
Balance (in shares) at Jun. 30, 2012
75,619,288 
 
75,619,288 
 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(686)
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
14,498 
14,501 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive loss
(6,403)
(6,403)
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
8,095 
8,098 
 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2012
$ 1,029,055 
$ 999,010 
 
 
 
 
 
 
 
 
 
 
 
Balance (in shares) at Jun. 30, 2012
75,619,288 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Operating activities:
 
 
Net income
$ 32,830 
$ 26,877 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
79,113 
67,274 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
180 
968 
Share-based compensation expense
4,459 
3,453 
Allowance for losses on accounts and accrued straight-line rents receivable
538 
1,029 
Amortization of deferred financing costs
1,802 
1,642 
Amortization of cash flow hedges
1,459 
(58)
Losses on debt extinguishment
973 
24 
Net gains on disposition of property
(6,519)
(200)
Gains on for-sale residential condominiums
(175)
(154)
Equity in earnings of unconsolidated affiliates
(1,346)
(2,820)
Changes in financing obligations
(584)
(245)
Distributions of earnings from unconsolidated affiliates
2,225 
2,162 
Changes in operating assets and liabilities:
 
 
Accounts receivable
7,298 
(1,821)
Prepaid expenses and other assets
(3,158)
(644)
Accrued straight-line rents receivable
(9,415)
(6,098)
Accounts payable, accrued expenses and other liabilities
(16,352)
(3,794)
Net cash provided by operating activities
93,328 
87,595 
Investing activities:
 
 
Investment in acquired real estate and related intangible assets, net of cash acquired
(7,761)
Investment in development in process
(1,531)
(2,598)
Investment in tenant improvements and deferred leasing costs
(43,851)
(28,456)
Investment in building improvements
(19,758)
(5,632)
Net proceeds from disposition of real estate assets
19,898 
2,063 
Net proceeds from disposition of for-sale residential condominiums
2,492 
2,401 
Distributions of capital from unconsolidated affiliates
901 
632 
Repayments of mortgages and notes receivable
1,544 
235 
Investments in and advances to unconsolidated affiliates
(2,750)
(39,402)
Changes in restricted cash and other investing activities
4,031 
(395)
Net cash used in investing activities
(39,024)
(78,913)
Financing activities:
 
 
Dividends on Common Stock
(62,787)
(61,069)
Redemptions/repurchases of Preferred Stock
(52,505)
Dividends on Preferred Stock
(1,254)
(3,299)
Distributions to noncontrolling interests in the Operating Partnership
(3,158)
(3,215)
Distributions to noncontrolling interests in consolidated affiliates
(460)
(319)
Proceeds from the issuance of Common Stock
95,289 
16,984 
Costs paid for the issuance of Common Stock
(1,316)
Repurchase of shares related to tax withholdings
(2,137)
Borrowings on revolving credit facility
106,300 
124,700 
Repayments of revolving credit facility
(392,800)
(79,300)
Borrowings on mortgages and notes payable
225,000 
200,000 
Repayments of mortgages and notes payable
(19,359)
(153,522)
Payments on financing obligations
(38)
Additions to deferred financing costs and other financing activities
(2,245)
(2,104)
Net cash used in financing activities
(58,965)
(13,649)
Net decrease in cash and cash equivalents
(4,661)
(4,967)
Cash and cash equivalents at beginning of the period
11,188 
14,206 
Cash and cash equivalents at end of the period
6,527 
9,239 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
48,063 
44,948 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized losses on cash flow hedges
(7,087)
Conversion of Common Units to Common Stock
631 
635 
Changes in accrued capital expenditures
(2,448)
1,525 
Write-off of fully depreciated real estate assets
28,629 
23,352 
Write-off of fully amortized deferred financing and leasing costs
8,765 
8,247 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
216 
210 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
16,501 
6,957 
Unrealized gains/(losses) on tax increment financing bond
583 
(471)
Reduction of advances to unconsolidated affiliates related to acquisition activities
26,000 
Highwoods Realty Limited Partnership [Member]
 
 
Operating activities:
 
 
Net income
32,835 
26,889 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
79,113 
67,274 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
180 
968 
Share-based compensation expense
4,459 
3,453 
Allowance for losses on accounts and accrued straight-line rents receivable
538 
1,029 
Amortization of deferred financing costs
1,802 
1,642 
Amortization of cash flow hedges
1,459 
(58)
Losses on debt extinguishment
973 
24 
Net gains on disposition of property
(6,519)
(200)
Gains on for-sale residential condominiums
(175)
(154)
Equity in earnings of unconsolidated affiliates
(1,351)
(2,832)
Changes in financing obligations
(584)
(245)
Distributions of earnings from unconsolidated affiliates
2,211 
2,150 
Changes in operating assets and liabilities:
 
 
Accounts receivable
7,298 
(1,821)
Prepaid expenses and other assets
(3,077)
(544)
Accrued straight-line rents receivable
(9,415)
(6,098)
Accounts payable, accrued expenses and other liabilities
(16,413)
(3,794)
Net cash provided by operating activities
93,334 
87,683 
Investing activities:
 
 
Investment in acquired real estate and related intangible assets, net of cash acquired
(7,761)
Investment in development in process
(1,531)
(2,598)
Investment in tenant improvements and deferred leasing costs
(43,851)
(28,456)
Investment in building improvements
(19,758)
(5,632)
Net proceeds from disposition of real estate assets
19,898 
2,063 
Net proceeds from disposition of for-sale residential condominiums
2,492 
2,401 
Distributions of capital from unconsolidated affiliates
901 
632 
Repayments of mortgages and notes receivable
1,544 
235 
Investments in and advances to unconsolidated affiliates
(2,750)
(39,402)
Changes in restricted cash and other investing activities
4,031 
(395)
Net cash used in investing activities
(39,024)
(78,913)
Financing activities:
 
 
Distributions on Common Units
(65,597)
(63,936)
Redemptions/repurchases of Preferred Units
(52,505)
Distributions on Preferred Units
(1,254)
(3,299)
Distributions to noncontrolling interests in consolidated affiliates
(460)
(319)
Proceeds from the issuance of Common Units
95,289 
16,984 
Costs paid for the issuance of Common Units
(1,316)
Repurchase of units related to tax withholdings
(2,137)
Borrowings on revolving credit facility
106,300 
124,700 
Repayments of revolving credit facility
(392,800)
(79,300)
Borrowings on mortgages and notes payable
225,000 
200,000 
Repayments of mortgages and notes payable
(19,359)
(153,522)
Payments on financing obligations
(38)
Additions to deferred financing costs and other financing activities
(2,458)
(2,684)
Net cash used in financing activities
(58,830)
(13,881)
Net decrease in cash and cash equivalents
(4,520)
(5,111)
Cash and cash equivalents at beginning of the period
11,151 
14,198 
Cash and cash equivalents at end of the period
6,631 
9,087 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
48,063 
44,948 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized losses on cash flow hedges
(7,087)
Changes in accrued capital expenditures
(2,448)
1,525 
Write-off of fully depreciated real estate assets
28,629 
23,352 
Write-off of fully amortized deferred financing and leasing costs
8,765 
8,247 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
216 
210 
Adjustment of Redeemable Common Units to fair value
14,225 
4,237 
Unrealized gains/(losses) on tax increment financing bond
583 
(471)
Reduction of advances to unconsolidated affiliates related to acquisition activities
$ 26,000 
$ 0 
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity 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 virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2012, the Company and/or the Operating Partnership wholly owned: 304 in-service office, industrial and retail properties, comprising 29.5 million square feet; nine for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At June 30, 2012, the Company owned all of the Preferred Units and 75.2 million, or 95.3%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months ended June 30, 2012, the Company redeemed 18,366 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.3% at June 30, 2012.

Common Stock Offerings
 
The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and six months ended June 30, 2012, the Company issued 1,836,976 and 2,622,476 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.72 and $33.45 per share, respectively, raising net proceeds, after sales commissions and expenses, of $61.0 million and $86.4 million, respectively.

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 Balance Sheet at December 31, 2011 was recast from previously reported amounts to reflect in real estate and other assets, net, held for sale those properties which qualified as held for sale during the three months ended June 30, 2012. Our Consolidated Statements of Income for the three and six months ended June 30, 2011 were recast from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations. Prior period amounts related to capital expenditures in our Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

Our Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which we have the controlling financial interest. All intercompany transactions and accounts have been eliminated. At June 30, 2012 and December 31, 2011, we had involvement with no entities that we concluded to be variable interest entities.

1.    Description of Business and Significant Accounting Policies – Continued

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 omitted certain notes and other information from the interim consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2011 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.

Recently Issued Accounting Standards
 
As a result of adopting certain new or amended accounting pronouncements in the first quarter of 2012, we have enhanced our disclosure of assets and liabilities measured at fair value and elected to continue use of credit valuation adjustments on a net basis by counterparty as part of the calculation to determine the fair value of our derivatives. Our disclosures now include: (1) significant transfers between Levels 1 and 2 of the fair value hierarchy, if any; (2) additional quantitative and qualitative information regarding fair value measurements categorized as Level 3 of the fair value hierarchy; and (3) the hierarchy classification for items whose fair value is not recorded on our Consolidated Balance Sheets but was disclosed previously in our Notes to Consolidated Financial Statements. Additionally, we have presented comprehensive income in a separate financial statement entitled Consolidated Statements of Comprehensive Income.
1.    Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity 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 virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2012, the Company and/or the Operating Partnership wholly owned: 304 in-service office, industrial and retail properties, comprising 29.5 million square feet; nine for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At June 30, 2012, the Company owned all of the Preferred Units and 75.2 million, or 95.3%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months ended June 30, 2012, the Company redeemed 18,366 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.3% at June 30, 2012.

Common Stock Offerings
 
The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and six months ended June 30, 2012, the Company issued 1,836,976 and 2,622,476 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.72 and $33.45 per share, respectively, raising net proceeds, after sales commissions and expenses, of $61.0 million and $86.4 million, respectively.

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 Balance Sheet at December 31, 2011 was revised from previously reported amounts to reflect in real estate and other assets, net, held for sale those properties which qualified as held for sale during the three months ended June 30, 2012. Our Consolidated Statements of Income for the three and six months ended June 30, 2011 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations. Prior period amounts related to capital expenditures in our Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

Our Consolidated Financial Statements include wholly owned subsidiaries and those entities in which we have the controlling financial interest. All intercompany transactions and accounts have been eliminated. At June 30, 2012 and December 31, 2011, we had involvement with no entities that we concluded to be variable interest entities.

1.    Description of Business and Significant Accounting Policies – Continued

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 omitted certain notes and other information from the interim consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2011 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.

Recently Issued Accounting Standards
 
As a result of adopting certain new or amended accounting pronouncements in the first quarter of 2012, we have enhanced our disclosure of assets and liabilities measured at fair value and elected to continue use of credit valuation adjustments on a net basis by counterparty as part of the calculation to determine the fair value of our derivatives. Our disclosures now include: (1) significant transfers between Levels 1 and 2 of the fair value hierarchy, if any; (2) additional quantitative and qualitative information regarding fair value measurements categorized as Level 3 of the fair value hierarchy; and (3) the hierarchy classification for items whose fair value is not recorded on our Consolidated Balance Sheets but was disclosed previously in our Notes to Consolidated Financial Statements. Additionally, we have presented comprehensive income in a separate financial statement entitled Consolidated Statements of Comprehensive Income.
Real Estate Assets
Real Estate Assets
 
Acquisitions
 
During the second quarter of 2012, we acquired a 178,300 square foot office property in Cary, NC from our DLF I joint venture for an agreed upon value of $26.0 million by reducing the balance of the advance due to us from the joint venture.
 
Dispositions
 
During the second quarter of 2012, we sold a non-core office property in Pinellas County, FL for gross proceeds of $9.5 million. We recorded gain on disposition of discontinued operations of $1.4 million related to this disposition.
 
During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.
Real Estate Assets
 
Acquisitions
 
During the second quarter of 2012, we acquired a 178,300 square foot office property in Cary, NC from our DLF I joint venture for an agreed upon value of $26.0 million by reducing the balance of the advance due to us from the joint venture.
 
Dispositions
 
During the second quarter of 2012, we sold a non-core office property in Pinellas County, FL for gross proceeds of $9.5 million. We recorded gain on disposition of discontinued operations of $1.4 million related to this disposition.
 
During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.
Mortgages and Notes Receivable
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
June 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,321

 
1,481

Less allowance
(118
)
 
(61
)
 
1,203

 
1,420

Mortgages and notes receivable, net
$
17,056

 
$
18,600



3.    Mortgages and Notes Receivable - Continued

Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010. This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectibility of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of June 30, 2012, the payments on both mortgages receivable were current and there were no other indications of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value.

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,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
122

 
$
497

 
$
61

 
$
868

Bad debt expense

 
162

 

 
184

Recoveries/write-offs/other
(4
)
 
(42
)
 
57

 
(435
)
Total notes receivable allowance
$
118

 
$
617

 
$
118

 
$
617


Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
June 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,321

 
1,481

Less allowance
(118
)
 
(61
)
 
1,203

 
1,420

Mortgages and notes receivable, net
$
17,056

 
$
18,600



3.    Mortgages and Notes Receivable - Continued

Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010. This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectibility of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of June 30, 2012, the payments on both mortgages receivable were current and there were no other indications of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value.

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,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
122

 
$
497

 
$
61

 
$
868

Bad debt expense

 
162

 

 
184

Recoveries/write-offs/other
(4
)
 
(42
)
 
57

 
(435
)
Total notes receivable allowance
$
118

 
$
617

 
$
118

 
$
617

Investments In and Advances To Affiliates
Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures on the purchase accounting basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
26,049

 
$
24,779

 
$
50,869

 
$
49,996

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
12,666

 
10,774

 
24,082

 
22,771

Depreciation and amortization
5,919

 
6,295

 
12,484

 
12,911

Impairment of real estate assets

 

 
7,180

 

Interest expense
5,267

 
5,858

 
11,097

 
11,865

Total expenses
23,852

 
22,927

 
54,843

 
47,547

Income/(loss) before disposition of properties
2,197

 
1,852

 
(3,974
)
 
2,449

Gains on disposition of properties
6,275

 

 
6,275

 

Net income
$
8,472


$
1,852

 
$
2,301

 
$
2,449

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
1,675

 
$
2,033

 
$
3,773

 
$
4,126

Impairment of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,843

 
$
2,033

 
$
3,823

 
$
4,194

Net income
$
1,133

 
$
749

 
$
338

 
$
1,670

 
 
 
 
 
 
 
 
Our share of net income
$
1,133

 
$
749

 
$
338

 
$
1,670

Management and other fees adjustments
375

 
604

 
1,008

 
1,150

Equity in earnings of unconsolidated affiliates
$
1,508

 
$
1,353

 
$
1,346

 
$
2,820




4.    Investments in and Advances to Affiliates - Continued

In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months ended June 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months ended June 30, 2012 and 2011, respectively.

In the second quarter of 2012, our DLF II joint venture obtained a $50.0 million, three-year secured mortgage loan from a third party lender, bearing a fixed interest rate of 3.5% on $39.1 million of the loan and a floating interest rate of LIBOR plus 250 basis points on $10.9 million of the loan, which was used by the joint venture to repay a secured loan at maturity to a third party lender.

During the first quarter of 2012, we recorded $1.0 million as our share of impairment of real estate assets on two office properties in our DLF I joint venture, due to a decline in projected occupancy and a change in the assumed holding period of those assets, which reduced the expected future cash flows from the properties.
Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures on the purchase accounting basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
25,057

 
$
23,756

 
$
48,854

 
$
47,958

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
12,076

 
10,155

 
22,877

 
21,526

Depreciation and amortization
5,607

 
6,053

 
11,861

 
12,299

Impairment of real estate assets

 

 
7,180

 

Interest expense
5,103

 
5,683

 
10,766

 
11,508

Total expenses
22,786

 
21,891

 
52,684

 
45,333

Income/(loss) before disposition of properties
2,271

 
1,865

 
(3,830
)
 
2,625

Gains on disposition of properties
6,275

 

 
6,275

 

Net income
$
8,546

 
$
1,865

 
$
2,445

 
$
2,625

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
1,636

 
$
1,995

 
$
3,695

 
$
4,050

Impairment of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,823

 
$
2,012

 
$
3,782

 
$
4,149

Net income
$
1,142

 
$
759

 
$
356

 
$
1,694

 
 
 
 
 
 
 
 
Our share of net income
$
1,142

 
$
759

 
$
356

 
$
1,694

Management and other fees adjustments
369

 
598

 
995

 
1,138

Equity in earnings of unconsolidated affiliates
$
1,511

 
$
1,357

 
$
1,351

 
$
2,832



4.    Investments in and Advances to Affiliates - Continued
 
In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months ended June 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months ended June 30, 2012 and 2011, respectively.
 
In the second quarter of 2012, our DLF II joint venture obtained a $50.0 million, three-year secured mortgage loan from a third party lender, bearing a fixed interest rate of 3.5% on $39.1 million of the loan and a floating interest rate of LIBOR plus 250 basis points on $10.9 million of the loan, which was used by the joint venture to repay a secured loan at maturity to a third party lender.
 
During the first quarter of 2012, we recorded $1.0 million as our share of impairment of real estate assets on two office properties in our DLF I joint venture, due to a decline in projected occupancy and a change in the assumed holding period of those assets, which reduced the expected future cash flows from the properties.
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,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,112

 
$
18,044

Less accumulated amortization
(7,488
)
 
(5,797
)
 
12,624

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
177,140

 
172,049

Less accumulated amortization
(63,084
)
 
(56,522
)
 
114,056

 
115,527

Deferred financing and leasing costs, net
$
126,680

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,346

 
$
16,441

Less accumulated amortization
(1,966
)
 
(971
)
 
$
14,380

 
$
15,470

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
900

 
$
821

 
$
1,802

 
$
1,642

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
7,266

 
$
4,401

 
$
13,706

 
$
8,757

Amortization of lease incentives (in rental and other revenues)
$
340

 
$
303

 
$
683

 
$
641

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
324

 
$
191

 
$
594

 
$
377

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(553
)
 
$
(25
)
 
$
(1,097
)
 
$
(50
)


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 Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012
 
$
2,234

 
$
14,242

 
$
772

 
$
579

 
$
(1,229
)
2013
 
3,262

 
21,834

 
1,167

 
765

 
(2,081
)
2014
 
2,987

 
17,877

 
1,013

 
504

 
(2,005
)
2015
 
2,264

 
13,879

 
779

 
328

 
(1,768
)
2016
 
957

 
10,880

 
608

 
280

 
(1,498
)
Thereafter
 
920

 
25,453

 
2,379

 
717

 
(5,799
)
 
 
$
12,624

 
$
104,165

 
$
6,718

 
$
3,173

 
$
(14,380
)


The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 3.8 years, 6.2 years, 7.8 years, 5.7 years and 8.9 years, respectively, as of June 30, 2012.

In connection with the acquisition of an office property in Cary, NC in the second quarter of 2012, we recorded $2.7 million of in-place lease intangible assets with a weighted average amortization period of 6.3 years at the date of the acquisition. The contractual rents of the in-place lease acquired were determined to be at market.

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,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,112

 
$
18,044

Less accumulated amortization
(7,488
)
 
(5,797
)
 
12,624

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
177,140

 
172,049

Less accumulated amortization
(63,084
)
 
(56,522
)
 
114,056

 
115,527

Deferred financing and leasing costs, net
$
126,680

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,346

 
$
16,441

Less accumulated amortization
(1,966
)
 
(971
)
 
$
14,380

 
$
15,470


 
The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
900

 
$
821

 
$
1,802

 
$
1,642

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
7,266

 
$
4,401

 
$
13,706

 
$
8,757

Amortization of lease incentives (in rental and other revenues)
$
340

 
$
303

 
$
683

 
$
641

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
324

 
$
191

 
$
594

 
$
377

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(553
)
 
$
(25
)
 
$
(1,097
)
 
$
(50
)

 

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 Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012
 
$
2,234

 
$
14,242

 
$
772

 
$
579

 
$
(1,229
)
2013
 
3,262

 
21,834

 
1,167

 
765

 
(2,081
)
2014
 
2,987

 
17,877

 
1,013

 
504

 
(2,005
)
2015
 
2,264

 
13,879

 
779

 
328

 
(1,768
)
2016
 
957

 
10,880

 
608

 
280

 
(1,498
)
Thereafter
 
920

 
25,453

 
2,379

 
717

 
(5,799
)
 
 
$
12,624

 
$
104,165

 
$
6,718

 
$
3,173

 
$
(14,380
)


The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 3.8 years, 6.2 years, 7.8 years, 5.7 years and 8.9 years, respectively, as of June 30, 2012.

In connection with the acquisition of an office property in Cary, NC in the second quarter of 2012, we recorded $2.7 million of in-place lease intangible assets with a weighted average amortization period of 6.3 years at the date of the acquisition. The contractual rents of the in-place lease acquired were determined to be at market.
Mortgages and Notes Payable
Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

 
June 30,
2012
 
December 31,
2011
Secured indebtedness
$
743,492

 
$
750,049

Unsecured indebtedness
1,079,636

 
1,153,164

Total mortgages and notes payable
$
1,823,128

 
$
1,903,213



At June 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 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 an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, 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, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

6.    Mortgages and Notes Payable - Continued

In the second quarter of 2012, we repurchased $12.1 million principal amount of unsecured notes due March 2017 bearing interest of 5.85% for a purchase price of 107.5% of par value. We recorded $1.0 million of loss on debt extinguishment related to this repurchase.

In the first quarter of 2012, we obtained a $225.0 million, seven-year unsecured bank term loan bearing interest of LIBOR plus 190 basis points. This floating interest rate effectively was fixed by the interest rate swaps discussed in Note 7. The proceeds were used to pay off amounts then outstanding under our revolving credit facility.

We are currently in compliance with the debt covenants and other requirements with respect to our outst
Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

 
June 30,
2012
 
December 31,
2011
Secured indebtedness
$
743,492

 
$
750,049

Unsecured indebtedness
1,079,636

 
1,153,164

Total mortgages and notes payable
$
1,823,128

 
$
1,903,213



At June 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 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 an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, 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, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

6.    Mortgages and Notes Payable - Continued

In the second quarter of 2012, we repurchased $12.1 million principal amount of unsecured notes due March 2017 bearing interest of 5.85% for a purchase price of 107.5% of par value. We recorded $1.0 million of loss on debt extinguishment related to this repurchase.
 
In the first quarter of 2012, we obtained a $225.0 million, seven-year unsecured bank term loan bearing interest of LIBOR plus 190 basis points. This floating interest rate effectively was fixed by the interest rate swaps discussed in Note 7. The proceeds were used to pay off amounts then outstanding under our revolving credit facility.

We are currently in compliance with the debt covenants and other requirements with respect to our outstanding debt.
Derivative Financial Instruments
Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. These 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, 2012. As of June 30, 2012, we have not posted any collateral related to our interest rate swap liability.

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, 2012 through June 30, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.

The following table sets forth the fair value of our derivative instruments:

 
June 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
7,763

 
$
2,202



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,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(7,481
)
 
$

 
$
(7,087
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
782

 
$
(29
)
 
$
1,459

 
$
(58
)
Derivative Financial Instruments
 
We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. These 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, 2012. As of June 30, 2012, we have not posted any collateral related to our interest rate swap liability.
 
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, 2012 through June 30, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.
 
The following table sets forth the fair value of our derivative instruments:
 
 
June 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
7,763

 
$
2,202



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,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(7,481
)
 
$

 
$
(7,087
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
782

 
$
(29
)
 
$
1,459

 
$
(58
)
Noncontrolling Interests
Noncontrolling Interests

Noncontrolling Interests in the Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. Net income attributable to noncontrolling interests in the Operating Partnership is computed by applying the weighted average percentage of Common Units not owned by the Company during the period, as a percent of the total number of outstanding Common Units, to the Operating Partnership’s net income for the period after deducting distributions on Preferred Units.

The following table sets forth noncontrolling interests in the Operating Partnership:

 
Six Months Ended June 30,
 
2012
 
2011
Beginning noncontrolling interests in the Operating Partnership
$
110,655

 
$
120,838

Adjustments of noncontrolling interests in the Operating Partnership to fair value
16,501

 
6,957

Conversion of Common Units to Common Stock
(631
)
 
(635
)
Net income attributable to noncontrolling interests in the Operating Partnership
1,513

 
1,130

Distributions to noncontrolling interests in the Operating Partnership
(3,158
)
 
(3,215
)
Total noncontrolling interests in the Operating Partnership
$
124,880

 
$
125,075


The following table sets forth net income available for common stockholders and transfers from noncontrolling interests in the Operating Partnership:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net income available for common stockholders
$
12,962

 
$
10,112

 
$
29,656

 
$
20,248

Increase in additional paid in capital from conversion of Common Units to Common Stock
568

 
449

 
631

 
635

Change from net income available for common stockholders and transfers from noncontrolling interests
$
13,530

 
$
10,561

 
$
30,287

 
$
20,883


Noncontrolling Interests in Consolidated Affiliates

At June 30, 2012, noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties located in Richmond, VA. Our joint venture partner is an unrelated third party.

Noncontrolling Interests
 
Noncontrolling Interests in Consolidated Affiliates
 
At June 30, 2012, noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties located in Richmond, VA. Our joint venture partner is an unrelated third party.
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, as well as the assets, noncontrolling interests in the Operating Partnership and liabilities that we recognize at fair value using those levels of inputs.

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

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

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.

9.
Disclosure About Fair Value of Financial Instruments - Continued

Our Level 2 asset is the fair value of our mortgages and notes receivable, which was 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.

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was 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 and (2) interest rate swaps whose fair value 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 our 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 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, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was 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.

The following tables set forth the assets, noncontrolling interests in the Operating Partnership and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

 
 
 
Level 1
 
Level 2
 
Level 3
 
June 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,330

 
$

 
$
17,330

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099

 
3,099

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,371

 

 

 
15,371

Total Assets
$
35,800

 
$
3,099

 
$
17,330

 
$
15,371

Noncontrolling Interests in the Operating Partnership
$
124,880

 
$
124,880

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,918,241

 
$

 
$
1,918,241

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763

 

 
7,763

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,099

 
3,099

 

 

Financing obligations, at fair value (1)
21,141

 

 

 
21,141

Total Liabilities
$
1,950,244

 
$
3,099

 
$
1,926,004

 
$
21,141



9.
Disclosure About Fair Value of Financial Instruments - Continued

 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$

 
$
18,990

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 

 

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Noncontrolling Interests in the Operating Partnership
$
110,655

 
$
110,655

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$

 
$
1,992,937

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 

 
2,202

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 

 

Financing obligations, at fair value (1)
18,866

 

 

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866


__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, respectively.

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,075

 
$
15,564

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
296

 
(336
)
 
583

 
(471
)
Ending balance
$
15,371

 
$
15,228

 
$
15,371

 
$
15,228



In 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, 2012 was $1.7 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 $0.6 million lower or $0.6 million higher, respectively, as of June 30, 2012. 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, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
June 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,371

 
Income approach
 
Discount rate
 
9.85
%
Disclosure About Fair Value of Financial Instruments

The following summarizes the three levels of inputs that we use to measure fair value, as well as the assets and liabilities that we recognize at fair value using those levels of inputs.

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

Our Level 1 assets are 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.

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 asset is the fair value of our mortgages and notes receivable, which was 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.

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was 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 and (2) interest rate swaps whose fair value 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 our 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 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, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was 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 tables set forth the assets and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

 
 
 
Level 1
 
Level 2
 
Level 3
 
June 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,330

 
$

 
$
17,330

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099

 
3,099

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,371

 

 

 
15,371

Total Assets
$
35,800

 
$
3,099

 
$
17,330

 
$
15,371

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,918,241

 
$

 
$
1,918,241

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763

 

 
7,763

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,099

 
3,099

 

 

Financing obligations, at fair value (1)
21,141

 

 

 
21,141

Total Liabilities
$
1,950,244

 
$
3,099

 
$
1,926,004

 
$
21,141



 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$

 
$
18,990

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 

 

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$

 
$
1,992,937

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 

 
2,202

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 

 

Financing obligations, at fair value (1)
18,866

 

 

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866

__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, respectively.

9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,075

 
$
15,564

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
296

 
(336
)
 
583

 
(471
)
Ending balance
$
15,371

 
$
15,228

 
$
15,371

 
$
15,228



In 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, 2012 was $1.7 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 $0.6 million lower or $0.6 million higher, respectively, as of June 30, 2012. 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, 2012 and 2011. 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 following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
June 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,371

 
Income approach
 
Discount rate
 
9.85
%
Share-Based Payments
Share-based Payments

During the six months ended June 30, 2012, we granted 190,886 stock options with an exercise price equal to the closing market price of a share of our Common Stock on the date of grant. The fair value of each option grant 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 $5.47. During the six months ended June 30, 2012, we also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.4 million during the three months ended June 30, 2012 and 2011, respectively, and $4.5 million and $3.5 million during the six months ended June 30, 2012 and 2011, respectively. At June 30, 2012, there was $7.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.6 years.
Share-based Payments

During the six months ended June 30, 2012, the Company granted 190,886 stock options with an exercise price equal to the closing market price of a share of its Common Stock on the date of grant. The fair value of each option grant 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 $5.47. During the six months ended June 30, 2012, the Company also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.4 million during the three months ended June 30, 2012 and 2011, respectively, and $4.5 million and $3.5 million during the six months ended June 30, 2012 and 2011, respectively. At June 30, 2012, there was $7.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.6 years.
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

 
Six Months Ended June 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains/(losses) on tax increment financing bond
583

 
(471
)
Ending balance
(1,726
)
 
(3,014
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(7,087
)
 

Amortization of cash flow hedges
1,459

 
(58
)
Ending balance
(9,053
)
 
(1,163
)
Total accumulated other comprehensive loss
$
(10,779
)
 
$
(4,177
)



Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

 
Six Months Ended June 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains/(losses) on tax increment financing bond
583

 
(471
)
Ending balance
(1,726
)
 
(3,014
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(7,087
)
 

Amortization of cash flow hedges
1,459

 
(58
)
Ending balance
(9,053
)
 
(1,163
)
Total accumulated other comprehensive loss
$
(10,779
)
 
$
(4,177
)
Discontinued Operations
Discontinued Operations

The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
2,044

 
$
2,907

 
$
4,383

 
$
6,169

Operating expenses:
 
 
 
 
 
 
 
Rental property and other expenses
966

 
1,390

 
2,084

 
2,862

Depreciation and amortization
322

 
778

 
1,008

 
1,653

Total operating expenses
1,288

 
2,168

 
3,092

 
4,515

Income from discontinued operations
756

 
739

 
1,291

 
1,654

Net gains on disposition of discontinued operations
1,385

 

 
6,519

 

Total discontinued operations
$
2,141

 
$
739

 
$
7,810

 
$
1,654


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

 
June 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
3,849

 
$
5,749

Buildings and tenant improvements
49,460

 
65,860

Accumulated depreciation
(18,743
)
 
(23,917
)
Net real estate assets
34,566

 
47,692

Accrued straight line rents receivable
1,490

 
1,726

Deferred leasing costs, net
678

 
811

Prepaid expenses and other assets
17

 
106

Real estate and other assets, net, held for sale
$
36,751

 
$
50,335

Tenant security deposits, deferred rents and accrued costs (1)
$
595

 
$
238

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.
Discontinued Operations

The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
2,044

 
$
2,907

 
$
4,383

 
$
6,169

Operating expenses:

 

 

 

Rental property and other expenses
966

 
1,390

 
2,084

 
2,862

Depreciation and amortization
322

 
778

 
1,008

 
1,653

Total operating expenses
1,288

 
2,168

 
3,092

 
4,515

Income from discontinued operations
756

 
739

 
1,291

 
1,654

Net gains on disposition of discontinued operations
1,385

 

 
6,519

 

Total discontinued operations
$
2,141

 
$
739

 
$
7,810

 
$
1,654



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

 
June 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
3,849

 
$
5,749

Buildings and tenant improvements
49,460

 
65,860

Accumulated depreciation
(18,743
)
 
(23,917
)
Net real estate assets
34,566

 
47,692

Accrued straight line rents receivable
1,490

 
1,726

Deferred leasing costs, net
678

 
811

Prepaid expenses and other assets
17

 
106

Real estate and other assets, net, held for sale
$
36,751

 
$
50,335

Tenant security deposits, deferred rents and accrued costs (1)
$
595

 
$
238

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.
Earnings Per Share
Earnings Per Share

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

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Share - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,357

 
$
13,695

 
$
25,020

 
$
25,223

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(584
)
 
(586
)
 
(1,133
)
 
(1,047
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Dividends on Preferred Stock
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common stockholders
10,923

 
9,410

 
22,226

 
18,677

Income from discontinued operations
2,141

 
739

 
7,810

 
1,654

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(102
)
 
(37
)
 
(380
)
 
(83
)
Income from discontinued operations available for common stockholders
2,039

 
702

 
7,430

 
1,571

Net income available for common stockholders
$
12,962

 
$
10,112

 
$
29,656

 
$
20,248

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
74,662

 
72,211

 
73,749

 
72,015

Earnings per Common Share - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common stockholders
0.02

 
0.01

 
0.10

 
0.02

Net income available for common stockholders
$
0.17

 
$
0.14

 
$
0.40

 
$
0.28

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,357

 
$
13,695

 
$
25,020

 
$
25,223

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Dividends on Preferred Stock
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
11,507

 
9,996

 
23,359

 
19,724

Income from discontinued operations available for common stockholders
2,141

 
739

 
7,810

 
1,654

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
13,648

 
$
10,735

 
$
31,169

 
$
21,378

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
74,662

 
72,211

 
73,749

 
72,015

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
141

 
202

 
129

 
185

Noncontrolling interests Common Units
3,718

 
3,784

 
3,723

 
3,787

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
78,521

 
76,197

 
77,601

 
75,987

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common stockholders
0.02

 
0.01

 
0.10

 
0.02

Net income available for common stockholders
$
0.17

 
$
0.14

 
$
0.40

 
$
0.28

__________

13.
Earnings Per Share - Continued

(1)
There were 0.5 million and 0.3 million options outstanding during the three months ended June 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months ended June 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.
Earnings Per Unit

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

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,360

 
$
13,699

 
$
25,025

 
$
25,235

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Distributions on Preferred Units
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common unitholders
11,510

 
10,000

 
23,364

 
19,736

Income from discontinued operations available for common unitholders
2,141

 
739

 
7,810

 
1,654

Net income available for common unitholders
$
13,651

 
$
10,739

 
$
31,174

 
$
21,390

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
77,971

 
75,586

 
77,063

 
75,393

Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common unitholders
0.03

 
0.01

 
0.10

 
0.02

Net income available for common unitholders
$
0.18

 
$
0.14

 
$
0.40

 
$
0.28

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,360

 
$
13,699

 
$
25,025

 
$
25,235

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Distributions on Preferred Units
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common unitholders
11,510

 
10,000

 
23,364

 
19,736

Income from discontinued operations available for common unitholders
2,141

 
739

 
7,810

 
1,654

Net income available for common unitholders
$
13,651

 
$
10,739

 
$
31,174

 
$
21,390

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
77,971

 
75,586

 
77,063

 
75,393

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
141

 
202

 
129

 
185

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
78,112

 
75,788

 
77,192

 
75,578

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common unitholders
0.02

 
0.01

 
0.10

 
0.02

Net income available for common unitholders
$
0.17

 
$
0.14

 
$
0.40

 
$
0.28

__________
(1)
There were 0.5 million and 0.3 million options outstanding during the three months ended June 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months ended June 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.
Segment Information
Segment Information

The following table summarizes the rental and other revenues and net operating income, the primary industry property-level performance metric which is defined as rental and other revenues less rental property and other expenses, for each reportable segment:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
16,209

 
$
12,341

 
$
31,993

 
$
24,242

Greenville, SC
3,489

 
3,437

 
6,993

 
6,942

Kansas City, MO
3,560

 
3,441

 
7,163

 
6,960

Memphis, TN
10,130

 
10,077

 
20,268

 
20,179

Nashville, TN
14,321

 
13,572

 
28,186

 
26,315

Orlando, FL
2,756

 
2,619

 
5,443

 
4,936

Piedmont Triad, NC
5,072

 
5,273

 
10,152

 
10,637

Pittsburgh, PA
9,113

 

 
18,199

 

Raleigh, NC
20,400

 
20,103

 
40,179

 
39,421

Richmond, VA
12,095

 
11,668

 
23,605

 
23,046

Tampa, FL
17,579

 
17,064

 
34,715

 
33,436

Total Office Segment
114,724

 
99,595

 
226,896

 
196,114

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,849

 
4,028

 
7,623

 
7,962

Piedmont Triad, NC
3,087

 
2,825

 
6,251

 
5,802

Total Industrial Segment
6,936

 
6,853

 
13,874

 
13,764

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,075

 
8,203

 
17,998

 
17,103

Total Retail Segment
9,075

 
8,203

 
17,998

 
17,103

Total Rental and Other Revenues
$
130,735

 
$
114,651

 
$
258,768

 
$
226,981


14.
Segment Information - Continued

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
10,426

 
$
7,973

 
$
20,821

 
$
15,464

Greenville, SC
2,051

 
2,067

 
4,183

 
4,142

Kansas City, MO
2,186

 
2,112

 
4,518

 
4,256

Memphis, TN
5,841

 
5,462

 
11,942

 
11,222

Nashville, TN
9,835

 
9,369

 
19,490

 
18,001

Orlando, FL
1,431

 
1,284

 
2,847

 
2,450

Piedmont Triad, NC
3,219

 
3,452

 
6,452

 
7,053

Pittsburgh, PA
4,627

 

 
8,910

 

Raleigh, NC
14,291

 
14,273

 
28,146

 
27,489

Richmond, VA
8,536

 
8,231

 
16,419

 
16,090

Tampa, FL
10,811

 
10,557

 
21,650

 
20,684

Total Office Segment
73,254

 
64,780

 
145,378

 
126,851

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,761

 
3,001

 
5,649

 
5,840

Piedmont Triad, NC
2,308

 
2,107

 
4,596

 
4,331

Total Industrial Segment
5,069

 
5,108

 
10,245

 
10,171

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,323

 
4,832

 
10,857

 
10,121

Total Retail Segment
5,323

 
4,832

 
10,857

 
10,121

Total Net Operating Income
83,646

 
74,720

 
166,480

 
147,143

Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(40,276
)
 
(32,684
)
 
(78,105
)
 
(65,621
)
General and administrative expense
(8,900
)
 
(7,978
)
 
(18,573
)
 
(15,771
)
Interest expense
(24,495
)
 
(23,907
)
 
(49,297
)
 
(47,450
)
Other income
764

 
1,875

 
2,994

 
3,748

Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
$
10,739

 
$
12,026

 
$
23,499

 
$
22,049

__________
(1)
Net of discontinued operations.
Segment Information

The following table summarizes the rental and other revenues and net operating income, the primary industry property-level performance metric which is defined as rental and other revenues less rental property and other expenses, for each reportable segment:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
16,209

 
$
12,341

 
$
31,993

 
$
24,242

Greenville, SC
3,489

 
3,437

 
6,993

 
6,942

Kansas City, MO
3,560

 
3,441

 
7,163

 
6,960

Memphis, TN
10,130

 
10,077

 
20,268

 
20,179

Nashville, TN
14,321

 
13,572

 
28,186

 
26,315

Orlando, FL
2,756

 
2,619

 
5,443

 
4,936

Piedmont Triad, NC
5,072

 
5,273

 
10,152

 
10,637

Pittsburgh, PA
9,113

 

 
18,199

 

Raleigh, NC
20,400

 
20,103

 
40,179

 
39,421

Richmond, VA
12,095

 
11,668

 
23,605

 
23,046

Tampa, FL
17,579

 
17,064

 
34,715

 
33,436

Total Office Segment
114,724

 
99,595

 
226,896

 
196,114

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,849

 
4,028

 
7,623

 
7,962

Piedmont Triad, NC
3,087

 
2,825

 
6,251

 
5,802

Total Industrial Segment
6,936

 
6,853

 
13,874

 
13,764

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,075

 
8,203

 
17,998

 
17,103

Total Retail Segment
9,075

 
8,203

 
17,998

 
17,103

Total Rental and Other Revenues
$
130,735

 
$
114,651

 
$
258,768

 
$
226,981



14.
Segment Information - Continued

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
10,435

 
$
7,980

 
$
20,837

 
$
15,456

Greenville, SC
2,052

 
2,069

 
4,186

 
4,140

Kansas City, MO
2,188

 
2,114

 
4,521

 
4,254

Memphis, TN
5,845

 
5,467

 
11,951

 
11,215

Nashville, TN
9,842

 
9,376

 
19,504

 
17,989

Orlando, FL
1,432

 
1,285

 
2,849

 
2,449

Piedmont Triad, NC
3,221

 
3,455

 
6,457

 
7,049

Pittsburgh, PA
4,630

 

 
8,911

 

Raleigh, NC
14,301

 
14,285

 
28,169

 
27,473

Richmond, VA
8,541

 
8,238

 
16,431

 
16,080

Tampa, FL
10,818

 
10,565

 
21,668

 
20,672

Total Office Segment
73,305

 
64,834

 
145,484

 
126,777

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,763

 
3,004

 
5,653

 
5,837

Piedmont Triad, NC
2,310

 
2,109

 
4,599

 
4,328

Total Industrial Segment
5,073

 
5,113

 
10,252

 
10,165

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,327

 
4,836

 
10,865

 
10,115

Total Retail Segment
5,327

 
4,836

 
10,865

 
10,115

Total Net Operating Income
83,705

 
74,783

 
166,601

 
147,057

Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(40,276
)
 
(32,684
)
 
(78,105
)
 
(65,621
)
General and administrative expense
(8,959
)
 
(8,041
)
 
(18,694
)
 
(15,685
)
Interest expense
(24,495
)
 
(23,907
)
 
(49,297
)
 
(47,450
)
Other income
764

 
1,875

 
2,994

 
3,748

Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
$
10,739

 
$
12,026

 
$
23,499

 
$
22,049

__________
(1)
Net of discontinued operations.
Subsequent Events
Subsequent Events

In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the second quarter of 2012 under our equity sales agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million.

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.
Subsequent Events

In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the second quarter of 2012 under our equity sales agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million.

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.
Description of Business and Significant Accounting Policies Significant Accounting Policies (Policies)
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.
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,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,321

 
1,481

Less allowance
(118
)
 
(61
)
 
1,203

 
1,420

Mortgages and notes receivable, net
$
17,056

 
$
18,600

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,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
122

 
$
497

 
$
61

 
$
868

Bad debt expense

 
162

 

 
184

Recoveries/write-offs/other
(4
)
 
(42
)
 
57

 
(435
)
Total notes receivable allowance
$
118

 
$
617

 
$
118

 
$
617


The following table sets forth our mortgages and notes receivable:

 
June 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,321

 
1,481

Less allowance
(118
)
 
(61
)
 
1,203

 
1,420

Mortgages and notes receivable, net
$
17,056

 
$
18,600

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,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
122

 
$
497

 
$
61

 
$
868

Bad debt expense

 
162

 

 
184

Recoveries/write-offs/other
(4
)
 
(42
)
 
57

 
(435
)
Total notes receivable allowance
$
118

 
$
617

 
$
118

 
$
617

Investments In and Advances To Affiliates (Tables)
We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures on the purchase accounting basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
26,049

 
$
24,779

 
$
50,869

 
$
49,996

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
12,666

 
10,774

 
24,082

 
22,771

Depreciation and amortization
5,919

 
6,295

 
12,484

 
12,911

Impairment of real estate assets

 

 
7,180

 

Interest expense
5,267

 
5,858

 
11,097

 
11,865

Total expenses
23,852

 
22,927

 
54,843

 
47,547

Income/(loss) before disposition of properties
2,197

 
1,852

 
(3,974
)
 
2,449

Gains on disposition of properties
6,275

 

 
6,275

 

Net income
$
8,472


$
1,852

 
$
2,301

 
$
2,449

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
1,675

 
$
2,033

 
$
3,773

 
$
4,126

Impairment of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,843

 
$
2,033

 
$
3,823

 
$
4,194

Net income
$
1,133

 
$
749

 
$
338

 
$
1,670

 
 
 
 
 
 
 
 
Our share of net income
$
1,133

 
$
749

 
$
338

 
$
1,670

Management and other fees adjustments
375

 
604

 
1,008

 
1,150

Equity in earnings of unconsolidated affiliates
$
1,508

 
$
1,353

 
$
1,346

 
$
2,820

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures on the purchase accounting basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
25,057

 
$
23,756

 
$
48,854

 
$
47,958

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
12,076

 
10,155

 
22,877

 
21,526

Depreciation and amortization
5,607

 
6,053

 
11,861

 
12,299

Impairment of real estate assets

 

 
7,180

 

Interest expense
5,103

 
5,683

 
10,766

 
11,508

Total expenses
22,786

 
21,891

 
52,684

 
45,333

Income/(loss) before disposition of properties
2,271

 
1,865

 
(3,830
)
 
2,625

Gains on disposition of properties
6,275

 

 
6,275

 

Net income
$
8,546

 
$
1,865

 
$
2,445

 
$
2,625

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
1,636

 
$
1,995

 
$
3,695

 
$
4,050

Impairment of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,823

 
$
2,012

 
$
3,782

 
$
4,149

Net income
$
1,142

 
$
759

 
$
356

 
$
1,694

 
 
 
 
 
 
 
 
Our share of net income
$
1,142

 
$
759

 
$
356

 
$
1,694

Management and other fees adjustments
369

 
598

 
995

 
1,138

Equity in earnings of unconsolidated affiliates
$
1,511

 
$
1,357

 
$
1,351

 
$
2,832

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,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,112

 
$
18,044

Less accumulated amortization
(7,488
)
 
(5,797
)
 
12,624

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
177,140

 
172,049

Less accumulated amortization
(63,084
)
 
(56,522
)
 
114,056

 
115,527

Deferred financing and leasing costs, net
$
126,680

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,346

 
$
16,441

Less accumulated amortization
(1,966
)
 
(971
)
 
$
14,380

 
$
15,470

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
900

 
$
821

 
$
1,802

 
$
1,642

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
7,266

 
$
4,401

 
$
13,706

 
$
8,757

Amortization of lease incentives (in rental and other revenues)
$
340

 
$
303

 
$
683

 
$
641

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
324

 
$
191

 
$
594

 
$
377

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(553
)
 
$
(25
)
 
$
(1,097
)
 
$
(50
)

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 Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012
 
$
2,234

 
$
14,242

 
$
772

 
$
579

 
$
(1,229
)
2013
 
3,262

 
21,834

 
1,167

 
765

 
(2,081
)
2014
 
2,987

 
17,877

 
1,013

 
504

 
(2,005
)
2015
 
2,264

 
13,879

 
779

 
328

 
(1,768
)
2016
 
957

 
10,880

 
608

 
280

 
(1,498
)
Thereafter
 
920

 
25,453

 
2,379

 
717

 
(5,799
)
 
 
$
12,624

 
$
104,165

 
$
6,718

 
$
3,173

 
$
(14,380
)
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
June 30,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,112

 
$
18,044

Less accumulated amortization
(7,488
)
 
(5,797
)
 
12,624

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
177,140

 
172,049

Less accumulated amortization
(63,084
)
 
(56,522
)
 
114,056

 
115,527

Deferred financing and leasing costs, net
$
126,680

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,346

 
$
16,441

Less accumulated amortization
(1,966
)
 
(971
)
 
$
14,380

 
$
15,470

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
900

 
$
821

 
$
1,802

 
$
1,642

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
7,266

 
$
4,401

 
$
13,706

 
$
8,757

Amortization of lease incentives (in rental and other revenues)
$
340

 
$
303

 
$
683

 
$
641

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
324

 
$
191

 
$
594

 
$
377

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(553
)
 
$
(25
)
 
$
(1,097
)
 
$
(50
)
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 Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012
 
$
2,234

 
$
14,242

 
$
772

 
$
579

 
$
(1,229
)
2013
 
3,262

 
21,834

 
1,167

 
765

 
(2,081
)
2014
 
2,987

 
17,877

 
1,013

 
504

 
(2,005
)
2015
 
2,264

 
13,879

 
779

 
328

 
(1,768
)
2016
 
957

 
10,880

 
608

 
280

 
(1,498
)
Thereafter
 
920

 
25,453

 
2,379

 
717

 
(5,799
)
 
 
$
12,624

 
$
104,165

 
$
6,718

 
$
3,173

 
$
(14,380
)
Mortgages and Notes Payable (Tables)
The following table sets forth our mortgages and notes payable:

 
June 30,
2012
 
December 31,
2011
Secured indebtedness
$
743,492

 
$
750,049

Unsecured indebtedness
1,079,636

 
1,153,164

Total mortgages and notes payable
$
1,823,128

 
$
1,903,213

The following table sets forth our mortgages and notes payable:

 
June 30,
2012
 
December 31,
2011
Secured indebtedness
$
743,492

 
$
750,049

Unsecured indebtedness
1,079,636

 
1,153,164

Total mortgages and notes payable
$
1,823,128

 
$
1,903,213

Derivative Financial Instruments (Tables)
The following table sets forth the fair value of our derivative instruments:

 
June 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
7,763

 
$
2,202


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,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(7,481
)
 
$

 
$
(7,087
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
782

 
$
(29
)
 
$
1,459

 
$
(58
)
The following table sets forth the fair value of our derivative instruments:
 
 
June 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
7,763

 
$
2,202

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,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(7,481
)
 
$

 
$
(7,087
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
782

 
$
(29
)
 
$
1,459

 
$
(58
)
Noncontrolling Interests (Tables)
The following table sets forth noncontrolling interests in the Operating Partnership:

 
Six Months Ended June 30,
 
2012
 
2011
Beginning noncontrolling interests in the Operating Partnership
$
110,655

 
$
120,838

Adjustments of noncontrolling interests in the Operating Partnership to fair value
16,501

 
6,957

Conversion of Common Units to Common Stock
(631
)
 
(635
)
Net income attributable to noncontrolling interests in the Operating Partnership
1,513

 
1,130

Distributions to noncontrolling interests in the Operating Partnership
(3,158
)
 
(3,215
)
Total noncontrolling interests in the Operating Partnership
$
124,880

 
$
125,075


The following table sets forth net income available for common stockholders and transfers from noncontrolling interests in the Operating Partnership:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net income available for common stockholders
$
12,962

 
$
10,112

 
$
29,656

 
$
20,248

Increase in additional paid in capital from conversion of Common Units to Common Stock
568

 
449

 
631

 
635

Change from net income available for common stockholders and transfers from noncontrolling interests
$
13,530

 
$
10,561

 
$
30,287

 
$
20,883


Disclosure About Fair Value of Financial Instruments (Tables)
The following tables set forth the assets, noncontrolling interests in the Operating Partnership and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

 
 
 
Level 1
 
Level 2
 
Level 3
 
June 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,330

 
$

 
$
17,330

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099

 
3,099

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,371

 

 

 
15,371

Total Assets
$
35,800

 
$
3,099

 
$
17,330

 
$
15,371

Noncontrolling Interests in the Operating Partnership
$
124,880

 
$
124,880

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,918,241

 
$

 
$
1,918,241

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763

 

 
7,763

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,099

 
3,099

 

 

Financing obligations, at fair value (1)
21,141

 

 

 
21,141

Total Liabilities
$
1,950,244

 
$
3,099

 
$
1,926,004

 
$
21,141



9.
Disclosure About Fair Value of Financial Instruments - Continued

 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$

 
$
18,990

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 

 

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Noncontrolling Interests in the Operating Partnership
$
110,655

 
$
110,655

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$

 
$
1,992,937

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 

 
2,202

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 

 

Financing obligations, at fair value (1)
18,866

 

 

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,075

 
$
15,564

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
296

 
(336
)
 
583

 
(471
)
Ending balance
$
15,371

 
$
15,228

 
$
15,371

 
$
15,228

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
June 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,371

 
Income approach
 
Discount rate
 
9.85
%
The following tables set forth the assets and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

 
 
 
Level 1
 
Level 2
 
Level 3
 
June 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,330

 
$

 
$
17,330

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099

 
3,099

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,371

 

 

 
15,371

Total Assets
$
35,800

 
$
3,099

 
$
17,330

 
$
15,371

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,918,241

 
$

 
$
1,918,241

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763

 

 
7,763

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,099

 
3,099

 

 

Financing obligations, at fair value (1)
21,141

 

 

 
21,141

Total Liabilities
$
1,950,244

 
$
3,099

 
$
1,926,004

 
$
21,141



 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$

 
$
18,990

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 

 

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$

 
$
1,992,937

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 

 
2,202

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 

 

Financing obligations, at fair value (1)
18,866

 

 

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866

__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, respectively.
The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,075

 
$
15,564

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
296

 
(336
)
 
583

 
(471
)
Ending balance
$
15,371

 
$
15,228

 
$
15,371

 
$
15,228

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
June 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,371

 
Income approach
 
Discount rate
 
9.85
%
Accumulated Other Comprehensive Loss (Tables)
The following table sets forth the components of accumulated other comprehensive loss:

 
Six Months Ended June 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains/(losses) on tax increment financing bond
583

 
(471
)
Ending balance
(1,726
)
 
(3,014
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(7,087
)
 

Amortization of cash flow hedges
1,459

 
(58
)
Ending balance
(9,053
)
 
(1,163
)
Total accumulated other comprehensive loss
$
(10,779
)
 
$
(4,177
)
The following table sets forth the components of accumulated other comprehensive loss:

 
Six Months Ended June 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains/(losses) on tax increment financing bond
583

 
(471
)
Ending balance
(1,726
)
 
(3,014
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(7,087
)
 

Amortization of cash flow hedges
1,459

 
(58
)
Ending balance
(9,053
)
 
(1,163
)
Total accumulated other comprehensive loss
$
(10,779
)
 
$
(4,177
)
Discontinued Operations (Tables)
The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
2,044

 
$
2,907

 
$
4,383

 
$
6,169

Operating expenses:
 
 
 
 
 
 
 
Rental property and other expenses
966

 
1,390

 
2,084

 
2,862

Depreciation and amortization
322

 
778

 
1,008

 
1,653

Total operating expenses
1,288

 
2,168

 
3,092

 
4,515

Income from discontinued operations
756

 
739

 
1,291

 
1,654

Net gains on disposition of discontinued operations
1,385

 

 
6,519

 

Total discontinued operations
$
2,141

 
$
739

 
$
7,810

 
$
1,654


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

 
June 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
3,849

 
$
5,749

Buildings and tenant improvements
49,460

 
65,860

Accumulated depreciation
(18,743
)
 
(23,917
)
Net real estate assets
34,566

 
47,692

Accrued straight line rents receivable
1,490

 
1,726

Deferred leasing costs, net
678

 
811

Prepaid expenses and other assets
17

 
106

Real estate and other assets, net, held for sale
$
36,751

 
$
50,335

Tenant security deposits, deferred rents and accrued costs (1)
$
595

 
$
238

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.
The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
2,044

 
$
2,907

 
$
4,383

 
$
6,169

Operating expenses:

 

 

 

Rental property and other expenses
966

 
1,390

 
2,084

 
2,862

Depreciation and amortization
322

 
778

 
1,008

 
1,653

Total operating expenses
1,288

 
2,168

 
3,092

 
4,515

Income from discontinued operations
756

 
739

 
1,291

 
1,654

Net gains on disposition of discontinued operations
1,385

 

 
6,519

 

Total discontinued operations
$
2,141

 
$
739

 
$
7,810

 
$
1,654

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

 
June 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
3,849

 
$
5,749

Buildings and tenant improvements
49,460

 
65,860

Accumulated depreciation
(18,743
)
 
(23,917
)
Net real estate assets
34,566

 
47,692

Accrued straight line rents receivable
1,490

 
1,726

Deferred leasing costs, net
678

 
811

Prepaid expenses and other assets
17

 
106

Real estate and other assets, net, held for sale
$
36,751

 
$
50,335

Tenant security deposits, deferred rents and accrued costs (1)
$
595

 
$
238

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.
Earnings Per Share (Tables)
The following table sets forth the computation of basic and diluted earnings per share:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Share - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,357

 
$
13,695

 
$
25,020

 
$
25,223

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(584
)
 
(586
)
 
(1,133
)
 
(1,047
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Dividends on Preferred Stock
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common stockholders
10,923

 
9,410

 
22,226

 
18,677

Income from discontinued operations
2,141

 
739

 
7,810

 
1,654

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(102
)
 
(37
)
 
(380
)
 
(83
)
Income from discontinued operations available for common stockholders
2,039

 
702

 
7,430

 
1,571

Net income available for common stockholders
$
12,962

 
$
10,112

 
$
29,656

 
$
20,248

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
74,662

 
72,211

 
73,749

 
72,015

Earnings per Common Share - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common stockholders
0.02

 
0.01

 
0.10

 
0.02

Net income available for common stockholders
$
0.17

 
$
0.14

 
$
0.40

 
$
0.28

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,357

 
$
13,695

 
$
25,020

 
$
25,223

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Dividends on Preferred Stock
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
11,507

 
9,996

 
23,359

 
19,724

Income from discontinued operations available for common stockholders
2,141

 
739

 
7,810

 
1,654

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
13,648

 
$
10,735

 
$
31,169

 
$
21,378

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
74,662

 
72,211

 
73,749

 
72,015

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
141

 
202

 
129

 
185

Noncontrolling interests Common Units
3,718

 
3,784

 
3,723

 
3,787

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
78,521

 
76,197

 
77,601

 
75,987

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common stockholders
0.02

 
0.01

 
0.10

 
0.02

Net income available for common stockholders
$
0.17

 
$
0.14

 
$
0.40

 
$
0.28

__________

13.
Earnings Per Share - Continued

(1)
There were 0.5 million and 0.3 million options outstanding during the three months ended June 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months ended June 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.
The following table sets forth the computation of basic and diluted earnings per unit:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,360

 
$
13,699

 
$
25,025

 
$
25,235

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Distributions on Preferred Units
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common unitholders
11,510

 
10,000

 
23,364

 
19,736

Income from discontinued operations available for common unitholders
2,141

 
739

 
7,810

 
1,654

Net income available for common unitholders
$
13,651

 
$
10,739

 
$
31,174

 
$
21,390

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
77,971

 
75,586

 
77,063

 
75,393

Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common unitholders
0.03

 
0.01

 
0.10

 
0.02

Net income available for common unitholders
$
0.18

 
$
0.14

 
$
0.40

 
$
0.28

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,360

 
$
13,699

 
$
25,025

 
$
25,235

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223
)
 
(182
)
 
(407
)
 
(305
)
Distributions on Preferred Units
(627
)
 
(1,622
)
 
(1,254
)
 
(3,299
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 
(1,895
)
 

 
(1,895
)
Income from continuing operations available for common unitholders
11,510

 
10,000

 
23,364

 
19,736

Income from discontinued operations available for common unitholders
2,141

 
739

 
7,810

 
1,654

Net income available for common unitholders
$
13,651

 
$
10,739

 
$
31,174

 
$
21,390

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
77,971

 
75,586

 
77,063

 
75,393

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
141

 
202

 
129

 
185

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
78,112

 
75,788

 
77,192

 
75,578

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.13

 
$
0.30

 
$
0.26

Income from discontinued operations available for common unitholders
0.02

 
0.01

 
0.10

 
0.02

Net income available for common unitholders
$
0.17

 
$
0.14

 
$
0.40

 
$
0.28

__________
(1)
There were 0.5 million and 0.3 million options outstanding during the three months ended June 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months ended June 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.
Segment Information (Tables)
The following table summarizes the rental and other revenues and net operating income, the primary industry property-level performance metric which is defined as rental and other revenues less rental property and other expenses, for each reportable segment:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
16,209

 
$
12,341

 
$
31,993

 
$
24,242

Greenville, SC
3,489

 
3,437

 
6,993

 
6,942

Kansas City, MO
3,560

 
3,441

 
7,163

 
6,960

Memphis, TN
10,130

 
10,077

 
20,268

 
20,179

Nashville, TN
14,321

 
13,572

 
28,186

 
26,315

Orlando, FL
2,756

 
2,619

 
5,443

 
4,936

Piedmont Triad, NC
5,072

 
5,273

 
10,152

 
10,637

Pittsburgh, PA
9,113

 

 
18,199

 

Raleigh, NC
20,400

 
20,103

 
40,179

 
39,421

Richmond, VA
12,095

 
11,668

 
23,605

 
23,046

Tampa, FL
17,579

 
17,064

 
34,715

 
33,436

Total Office Segment
114,724

 
99,595

 
226,896

 
196,114

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,849

 
4,028

 
7,623

 
7,962

Piedmont Triad, NC
3,087

 
2,825

 
6,251

 
5,802

Total Industrial Segment
6,936

 
6,853

 
13,874

 
13,764

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,075

 
8,203

 
17,998

 
17,103

Total Retail Segment
9,075

 
8,203

 
17,998

 
17,103

Total Rental and Other Revenues
$
130,735

 
$
114,651

 
$
258,768

 
$
226,981


14.
Segment Information - Continued

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
10,426

 
$
7,973

 
$
20,821

 
$
15,464

Greenville, SC
2,051

 
2,067

 
4,183

 
4,142

Kansas City, MO
2,186

 
2,112

 
4,518

 
4,256

Memphis, TN
5,841

 
5,462

 
11,942

 
11,222

Nashville, TN
9,835

 
9,369

 
19,490

 
18,001

Orlando, FL
1,431

 
1,284

 
2,847

 
2,450

Piedmont Triad, NC
3,219

 
3,452

 
6,452

 
7,053

Pittsburgh, PA
4,627

 

 
8,910

 

Raleigh, NC
14,291

 
14,273

 
28,146

 
27,489

Richmond, VA
8,536

 
8,231

 
16,419

 
16,090

Tampa, FL
10,811

 
10,557

 
21,650

 
20,684

Total Office Segment
73,254

 
64,780

 
145,378

 
126,851

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,761

 
3,001

 
5,649

 
5,840

Piedmont Triad, NC
2,308

 
2,107

 
4,596

 
4,331

Total Industrial Segment
5,069

 
5,108

 
10,245

 
10,171

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,323

 
4,832

 
10,857

 
10,121

Total Retail Segment
5,323

 
4,832

 
10,857

 
10,121

Total Net Operating Income
83,646

 
74,720

 
166,480

 
147,143

Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(40,276
)
 
(32,684
)
 
(78,105
)
 
(65,621
)
General and administrative expense
(8,900
)
 
(7,978
)
 
(18,573
)
 
(15,771
)
Interest expense
(24,495
)
 
(23,907
)
 
(49,297
)
 
(47,450
)
Other income
764

 
1,875

 
2,994

 
3,748

Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
$
10,739

 
$
12,026

 
$
23,499

 
$
22,049

__________
(1)
Net of discontinued operations.
The following table summarizes the rental and other revenues and net operating income, the primary industry property-level performance metric which is defined as rental and other revenues less rental property and other expenses, for each reportable segment:

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
16,209

 
$
12,341

 
$
31,993

 
$
24,242

Greenville, SC
3,489

 
3,437

 
6,993

 
6,942

Kansas City, MO
3,560

 
3,441

 
7,163

 
6,960

Memphis, TN
10,130

 
10,077

 
20,268

 
20,179

Nashville, TN
14,321

 
13,572

 
28,186

 
26,315

Orlando, FL
2,756

 
2,619

 
5,443

 
4,936

Piedmont Triad, NC
5,072

 
5,273

 
10,152

 
10,637

Pittsburgh, PA
9,113

 

 
18,199

 

Raleigh, NC
20,400

 
20,103

 
40,179

 
39,421

Richmond, VA
12,095

 
11,668

 
23,605

 
23,046

Tampa, FL
17,579

 
17,064

 
34,715

 
33,436

Total Office Segment
114,724

 
99,595

 
226,896

 
196,114

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,849

 
4,028

 
7,623

 
7,962

Piedmont Triad, NC
3,087

 
2,825

 
6,251

 
5,802

Total Industrial Segment
6,936

 
6,853

 
13,874

 
13,764

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,075

 
8,203

 
17,998

 
17,103

Total Retail Segment
9,075

 
8,203

 
17,998

 
17,103

Total Rental and Other Revenues
$
130,735

 
$
114,651

 
$
258,768

 
$
226,981



14.
Segment Information - Continued

 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
10,435

 
$
7,980

 
$
20,837

 
$
15,456

Greenville, SC
2,052

 
2,069

 
4,186

 
4,140

Kansas City, MO
2,188

 
2,114

 
4,521

 
4,254

Memphis, TN
5,845

 
5,467

 
11,951

 
11,215

Nashville, TN
9,842

 
9,376

 
19,504

 
17,989

Orlando, FL
1,432

 
1,285

 
2,849

 
2,449

Piedmont Triad, NC
3,221

 
3,455

 
6,457

 
7,049

Pittsburgh, PA
4,630

 

 
8,911

 

Raleigh, NC
14,301

 
14,285

 
28,169

 
27,473

Richmond, VA
8,541

 
8,238

 
16,431

 
16,080

Tampa, FL
10,818

 
10,565

 
21,668

 
20,672

Total Office Segment
73,305

 
64,834

 
145,484

 
126,777

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,763

 
3,004

 
5,653

 
5,837

Piedmont Triad, NC
2,310

 
2,109

 
4,599

 
4,328

Total Industrial Segment
5,073

 
5,113

 
10,252

 
10,165

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,327

 
4,836

 
10,865

 
10,115

Total Retail Segment
5,327

 
4,836

 
10,865

 
10,115

Total Net Operating Income
83,705

 
74,783

 
166,601

 
147,057

Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(40,276
)
 
(32,684
)
 
(78,105
)
 
(65,621
)
General and administrative expense
(8,959
)
 
(8,041
)
 
(18,694
)
 
(15,685
)
Interest expense
(24,495
)
 
(23,907
)
 
(49,297
)
 
(47,450
)
Other income
764

 
1,875

 
2,994

 
3,748

Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
$
10,739

 
$
12,026

 
$
23,499

 
$
22,049

__________
(1)
Net of discontinued operations.
Description of Business and Significant Accounting Policies (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
executives
acre
properties
sqft
property
Jun. 30, 2012
executives
acre
properties
sqft
property
Dec. 31, 2011
Description of Business and Significant Accounting Policies [Line Items]
 
 
 
In-service office, industrial and retail properties (in units)
304 
304 
 
Square footage of commercial property (in sq feet)
29,517,000 
29,517,000 
 
Residential condominiums for sale (in units)
 
Undeveloped land suitable for future development (in acres)
581 
581 
 
Undeveloped land considered core holdings (in acres)
518 
518 
 
Office properties under/planned for development (in units)
 
Common Units of partnership owned (in shares)
75,200,000 
75,200,000 
 
Percentage of ownership of Common Units
95.30% 
95.30% 
95.10% 
Number of officers of the Company who are also limited partners
 
Number of directors of the Company who are also limited partners
 
Common Units of partnership not owned by the Company (in shares)
3,700,000 
3,700,000 
 
Number of common units required to convert to one share of common stock (in shares)
 
Common Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
$ 0.01 
Number of trading days preceding Redemption Notice Date (in days)
 
10 days 
 
Common units redeemed for a like number of common shares of stock (in shares)
 
18,366 
 
Number of Common Stock sold at the market during period (in shares)
1,836,976 
2,622,476 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 33.72 
$ 33.45 
 
Net proceeds of Common Stock sold at the market during period
$ 61.0 
$ 86.4 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
Description of Business and Significant Accounting Policies [Line Items]
 
 
 
In-service office, industrial and retail properties (in units)
304 
304 
 
Square footage of commercial property (in sq feet)
29,517,000 
29,517,000 
 
Residential condominiums for sale (in units)
 
Undeveloped land suitable for future development (in acres)
581 
581 
 
Undeveloped land considered core holdings (in acres)
518 
518 
 
Office properties under/planned for development (in units)
 
Common Units of partnership owned (in shares)
75,200,000 
75,200,000 
 
Percentage of ownership of Common Units
95.30% 
95.30% 
95.10% 
Number of officers of the Company who are also limited partners
 
Number of directors of the Company who are also limited partners
 
Common Units of partnership not owned by the Company (in shares)
3,700,000 
3,700,000 
 
Number of common units required to convert to one share of common stock (in shares)
 
Common Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
 
Number of trading days preceding Redemption Notice Date (in days)
 
10 days 
 
Common units redeemed for a like number of common shares of stock (in shares)
 
18,366 
 
Number of Common Stock sold at the market during period (in shares)
1,836,976 
2,622,476 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 33.72 
$ 33.45 
 
Net proceeds of Common Stock sold at the market during period
$ 61.0 
$ 86.4 
 
Real Estate Assets (Details) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Mar. 31, 2012
Kansas City, MO Rental Residential Disposition [Member]
properties
Jun. 30, 2012
Cary, NC Office Property Acquisition [Member]
sqft
Jun. 30, 2012
Pinellas County, FL Office Property Disposition [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Kansas City, MO Rental Residential Disposition [Member]
properties
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Cary, NC Office Property Acquisition [Member]
sqft
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Pinellas County, FL Office Property Disposition [Member]
Acquisitions [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rentable square feet of acquisition (in sq. ft)
 
 
 
 
 
178,300 
 
 
 
 
 
 
178,300 
 
Acquisition purchase price
 
 
 
 
 
$ 26,000,000 
 
 
 
 
 
 
$ 26,000,000 
 
Dispositions [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of rental residential units
 
 
 
 
96 
 
 
 
 
 
 
96 
 
 
Gross proceeds from the sale of real estate
 
 
 
 
11,000,000 
 
9,500,000 
 
 
 
 
11,000,000 
 
9,500,000 
Gains on disposition of discontinued operations
$ 1,385,000 
$ 0 
$ 6,519,000 
$ 0 
$ 5,100,000 
 
$ 1,400,000 
$ 1,385,000 
$ 0 
$ 6,519,000 
$ 0 
$ 5,100,000 
 
$ 1,400,000 
Mortgages and Notes Receivable (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, allowance
$ (118)
$ (617)
$ (118)
$ (617)
 
Mortgages and notes receivable, net
17,056 
 
17,056 
 
18,600 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
122 
497 
61 
868 
 
Bad debt expense
162 
184 
 
Recoveries/write-offs/other
(4)
(42)
57 
(435)
 
Total notes receivable allowance
118 
617 
118 
617 
 
Seller Financing [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
15,853 
 
15,853 
 
17,180 
Mortgages and notes receivable, allowance
 
 
Mortgages and notes receivable, net
15,853 
 
15,853 
 
17,180 
Number of transactions with seller financing
 
 
 
 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
Total notes receivable allowance
 
 
Promissory Notes [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
1,321 
 
1,321 
 
1,481 
Mortgages and notes receivable, allowance
(118)
 
(118)
 
(61)
Mortgages and notes receivable, net
1,203 
 
1,203 
 
1,420 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
61 
Total notes receivable allowance
118 
 
118 
 
61 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, allowance
(118)
(617)
(118)
(617)
 
Mortgages and notes receivable, net
17,056 
 
17,056 
 
18,600 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
122 
497 
61 
868 
 
Bad debt expense
162 
184 
 
Recoveries/write-offs/other
(4)
(42)
57 
(435)
 
Total notes receivable allowance
118 
617 
118 
617 
 
Highwoods Realty Limited Partnership [Member] |
Seller Financing [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
15,853 
 
15,853 
 
17,180 
Mortgages and notes receivable, allowance
 
 
Mortgages and notes receivable, net
15,853 
 
15,853 
 
17,180 
Number of transactions with seller financing
 
 
 
 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
Total notes receivable allowance
 
 
Highwoods Realty Limited Partnership [Member] |
Promissory Notes [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
1,321 
 
1,321 
 
1,481 
Mortgages and notes receivable, allowance
(118)
 
(118)
 
(61)
Mortgages and notes receivable, net
1,203 
 
1,203 
 
1,420 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
61 
Total notes receivable allowance
$ 118 
 
$ 118 
 
$ 61 
Investments In and Advances To Affiliates (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Mar. 31, 2012
property
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Income Statements:
 
 
 
 
 
Rental and other revenues
$ 26,049,000 
 
$ 24,779,000 
$ 50,869,000 
$ 49,996,000 
Expenses:
 
 
 
 
 
Rental property and other expenses
12,666,000 
 
10,774,000 
24,082,000 
22,771,000 
Depreciation and amortization
5,919,000 
 
6,295,000 
12,484,000 
12,911,000 
Impairment of real estate assets
 
7,180,000 
Interest expense
5,267,000 
 
5,858,000 
11,097,000 
11,865,000 
Total expenses
23,852,000 
 
22,927,000 
54,843,000 
47,547,000 
Income/(loss) before disposition of properties
2,197,000 
 
1,852,000 
(3,974,000)
2,449,000 
Gains on disposition of properties
6,275,000 
 
6,275,000 
Net income/(loss)
8,472,000 
 
1,852,000 
2,301,000 
2,449,000 
Our share of:
 
 
 
 
 
Depreciation and amortization of real estate assets
1,675,000 
 
2,033,000 
3,773,000 
4,126,000 
Our share of impairment of real estate assets
 
1,002,000 
Interest expense
1,843,000 
 
2,033,000 
3,823,000 
4,194,000 
Net income/(loss)
1,133,000 
 
749,000 
338,000 
1,670,000 
Our share of net income/(loss)
1,133,000 
 
749,000 
338,000 
1,670,000 
Management and other fees adjustments
375,000 
 
604,000 
1,008,000 
1,150,000 
Equity in earnings of unconsolidated affiliates
1,508,000 
 
1,353,000 
1,346,000 
2,820,000 
Percentage of equity interest in joint ventures, maximum
50.00% 
 
 
50.00% 
 
Our share of impairment of real estate assets
 
1,002,000 
Highwoods DLF 98/29, LLC Joint Venture [Member]
 
 
 
 
 
Our share of:
 
 
 
 
 
Our share of impairment of real estate assets
 
1,000,000 
 
 
 
Advances to Affiliates loan amount
38,300,000 
 
 
 
 
Loan maturity date
Mar. 31, 2012 
 
 
 
 
Advances to affiliates, interest rate basis
LIBOR plus 500 basis points 
 
 
 
 
Current interest rate (in hundredths)
5.00% 
 
 
5.00% 
 
Extended loan maturity date
Sep. 30, 2012 
 
 
 
 
Interest income from loan to affiliate
200,000 
 
300,000 
700,000 
300,000 
Our share of impairment of real estate assets
 
1,000,000 
 
 
 
Number of impaired office properties
 
 
 
 
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
 
 
 
 
 
Our share of:
 
 
 
 
 
Joint venture principal amount of debt
50,000,000 
 
 
50,000,000 
 
Term of debt instrument (in years)
3 years 
 
 
3 years 
 
Fixed interest rate (in hundredths)
3.50% 
 
 
3.50% 
 
Amount of loan related to fixed interest rate
39,100,000 
 
 
39,100,000 
 
Floating interest rate, interest rate basis
LIBOR plus 250 basis points 
 
 
 
 
Current floating interest rate (in hundredths)
2.50% 
 
 
2.50% 
 
Amount of loan related to floating interest rate
10,900,000 
 
 
10,900,000 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Income Statements:
 
 
 
 
 
Rental and other revenues
25,057,000 
 
23,756,000 
48,854,000 
47,958,000 
Expenses:
 
 
 
 
 
Rental property and other expenses
12,076,000 
 
10,155,000 
22,877,000 
21,526,000 
Depreciation and amortization
5,607,000 
 
6,053,000 
11,861,000 
12,299,000 
Impairment of real estate assets
 
7,180,000 
Interest expense
5,103,000 
 
5,683,000 
10,766,000 
11,508,000 
Total expenses
22,786,000 
 
21,891,000 
52,684,000 
45,333,000 
Income/(loss) before disposition of properties
2,271,000 
 
1,865,000 
(3,830,000)
2,625,000 
Gains on disposition of properties
6,275,000 
 
6,275,000 
Net income/(loss)
8,546,000 
 
1,865,000 
2,445,000 
2,625,000 
Our share of:
 
 
 
 
 
Depreciation and amortization of real estate assets
1,636,000 
 
1,995,000 
3,695,000 
4,050,000 
Our share of impairment of real estate assets
 
1,002,000 
Interest expense
1,823,000 
 
2,012,000 
3,782,000 
4,149,000 
Net income/(loss)
1,142,000 
 
759,000 
356,000 
1,694,000 
Our share of net income/(loss)
1,142,000 
 
759,000 
356,000 
1,694,000 
Management and other fees adjustments
369,000 
 
598,000 
995,000 
1,138,000 
Equity in earnings of unconsolidated affiliates
1,511,000 
 
1,357,000 
1,351,000 
2,832,000 
Percentage of equity interest in joint ventures, maximum
50.00% 
 
 
50.00% 
 
Our share of impairment of real estate assets
 
1,002,000 
Highwoods Realty Limited Partnership [Member] |
Highwoods DLF 98/29, LLC Joint Venture [Member]
 
 
 
 
 
Our share of:
 
 
 
 
 
Our share of impairment of real estate assets
 
1,000,000 
 
 
 
Advances to Affiliates loan amount
38,300,000 
 
 
 
 
Loan maturity date
Mar. 31, 2012 
 
 
 
 
Advances to affiliates, interest rate basis
LIBOR plus 500 basis points 
 
 
 
 
Current interest rate (in hundredths)
5.00% 
 
 
5.00% 
 
Extended loan maturity date
Sep. 30, 2012 
 
 
 
 
Interest income from loan to affiliate
200,000 
 
300,000 
700,000 
300,000 
Our share of impairment of real estate assets
 
1,000,000 
 
 
 
Number of impaired office properties
 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
 
 
 
 
 
Our share of:
 
 
 
 
 
Joint venture principal amount of debt
50,000,000 
 
 
50,000,000 
 
Term of debt instrument (in years)
3 years 
 
 
3 years 
 
Fixed interest rate (in hundredths)
3.50% 
 
 
3.50% 
 
Amount of loan related to fixed interest rate
39,100,000 
 
 
39,100,000 
 
Floating interest rate, interest rate basis
LIBOR plus 250 basis points 
 
 
 
 
Current floating interest rate (in hundredths)
2.50% 
 
 
2.50% 
 
Amount of loan related to floating interest rate
$ 10,900,000 
 
 
$ 10,900,000 
 
Intangible Assets and Below Market Lease Liabilities (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, accumulated amortization
$ (70,572,000)
 
$ (70,572,000)
 
$ (62,319,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
126,680,000 
 
126,680,000 
 
127,774,000 
Acquired in-place lease intangible assets
2,700,000 
 
2,700,000 
 
 
Deferred Financing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
20,112,000 
 
20,112,000 
 
18,044,000 
Deferred financing and leasing costs, accumulated amortization
(7,488,000)
 
(7,488,000)
 
(5,797,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
12,624,000 
 
12,624,000 
 
12,247,000 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
900,000 
821,000 
1,802,000 
1,642,000 
 
Deferred Leasing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
177,140,000 
 
177,140,000 
 
172,049,000 
Deferred financing and leasing costs, accumulated amortization
(63,084,000)
 
(63,084,000)
 
(56,522,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
114,056,000 
 
114,056,000 
 
115,527,000 
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
104,165,000 
 
104,165,000 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
7,266,000 
4,401,000 
13,706,000 
8,757,000 
 
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
6,718,000 
 
6,718,000 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
340,000 
303,000 
683,000 
641,000 
 
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
3,173,000 
 
3,173,000 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
324,000 
191,000 
594,000 
377,000 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Acquisition-related below market lease liabilities, gross
16,346,000 
 
16,346,000 
 
16,441,000 
Acquisition-related below market lease liabilities, accumulated amortization
(1,966,000)
 
(1,966,000)
 
(971,000)
Acquisition-related below market lease liabilities, net
14,380,000 
 
14,380,000 
 
15,470,000 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of acquisition-related below market lease liabilities
(553,000)
(25,000)
(1,097,000)
(50,000)
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, accumulated amortization
(70,572,000)
 
(70,572,000)
 
(62,319,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
126,680,000 
 
126,680,000 
 
127,774,000 
Acquired in-place lease intangible assets
2,700,000 
 
2,700,000 
 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Financing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
20,112,000 
 
20,112,000 
 
18,044,000 
Deferred financing and leasing costs, accumulated amortization
(7,488,000)
 
(7,488,000)
 
(5,797,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
12,624,000 
 
12,624,000 
 
12,247,000 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
900,000 
821,000 
1,802,000 
1,642,000 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Leasing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
177,140,000 
 
177,140,000 
 
172,049,000 
Deferred financing and leasing costs, accumulated amortization
(63,084,000)
 
(63,084,000)
 
(56,522,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
114,056,000 
 
114,056,000 
 
115,527,000 
Highwoods Realty Limited Partnership [Member] |
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
104,165,000 
 
104,165,000 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
7,266,000 
4,401,000 
13,706,000 
8,757,000 
 
Highwoods Realty Limited Partnership [Member] |
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
6,718,000 
 
6,718,000 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
340,000 
303,000 
683,000 
641,000 
 
Highwoods Realty Limited Partnership [Member] |
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
3,173,000 
 
3,173,000 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
324,000 
191,000 
594,000 
377,000 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Acquisition-related below market lease liabilities, gross
16,346,000 
 
16,346,000 
 
16,441,000 
Acquisition-related below market lease liabilities, accumulated amortization
(1,966,000)
 
(1,966,000)
 
(971,000)
Acquisition-related below market lease liabilities, net
14,380,000 
 
14,380,000 
 
15,470,000 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of acquisition-related below market lease liabilities
$ (553,000)
$ (25,000)
$ (1,097,000)
$ (50,000)
 
Intangible Assets and Below Market Lease Liabilities Intangible Assets and Below Market Lease Liabilities - Scheduled Future Amortization (Details) (USD $)
In Thousands, unless otherwise specified
6 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 6 Months Ended 3 Months Ended
Jun. 30, 2012
Dec. 31, 2011
Jun. 30, 2012
Deferred Financing Costs [Member]
Dec. 31, 2011
Deferred Financing Costs [Member]
Jun. 30, 2012
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
Jun. 30, 2012
Lease Incentives [Member]
Jun. 30, 2012
Acquisition-Related Intangible Assets [Member]
Jun. 30, 2012
Acquisition-Related Below Market Lease Liabilities [Member]
Dec. 31, 2011
Acquisition-Related Below Market Lease Liabilities [Member]
Jun. 30, 2012
Leases, Acquired-in-Place [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Deferred Financing Costs [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Deferred Financing Costs [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Lease Incentives [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Acquisition-Related Intangible Assets [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Acquisition-Related Below Market Lease Liabilities [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Acquisition-Related Below Market Lease Liabilities [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Leases, Acquired-in-Place [Member]
Scheduled future amortization of intangible assets [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 1, 2012 through December 31, 2012
 
 
$ 2,234 
 
$ 14,242 
$ 772 
$ 579 
 
 
 
 
 
$ 2,234 
 
$ 14,242 
$ 772 
$ 579 
 
 
 
2013
 
 
3,262 
 
21,834 
1,167 
765 
 
 
 
 
 
3,262 
 
21,834 
1,167 
765 
 
 
 
2014
 
 
2,987 
 
17,877 
1,013 
504 
 
 
 
 
 
2,987 
 
17,877 
1,013 
504 
 
 
 
2015
 
 
2,264 
 
13,879 
779 
328 
 
 
 
 
 
2,264 
 
13,879 
779 
328 
 
 
 
2016
 
 
957 
 
10,880 
608 
280 
 
 
 
 
 
957 
 
10,880 
608 
280 
 
 
 
Thereafter
 
 
920 
 
25,453 
2,379 
717 
 
 
 
 
 
920 
 
25,453 
2,379 
717 
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
126,680 
127,774 
12,624 
12,247 
104,165 
6,718 
3,173 
 
 
 
126,680 
127,774 
12,624 
12,247 
104,165 
6,718 
3,173 
 
 
 
Scheduled future amortization of below market lease liabilities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
July 1, 2012 through December 31, 2012
 
 
 
 
 
 
 
(1,229)
 
 
 
 
 
 
 
 
 
(1,229)
 
 
2013
 
 
 
 
 
 
 
(2,081)
 
 
 
 
 
 
 
 
 
(2,081)
 
 
2014
 
 
 
 
 
 
 
(2,005)
 
 
 
 
 
 
 
 
 
(2,005)
 
 
2015
 
 
 
 
 
 
 
(1,768)
 
 
 
 
 
 
 
 
 
(1,768)
 
 
2016
 
 
 
 
 
 
 
(1,498)
 
 
 
 
 
 
 
 
 
(1,498)
 
 
Thereafter
 
 
 
 
 
 
 
(5,799)
 
 
 
 
 
 
 
 
 
(5,799)
 
 
Total scheduled future amortization of acquisition-related below market lease liabilities
 
 
 
 
 
 
 
$ (14,380)
$ (15,470)
 
 
 
 
 
 
 
 
$ (14,380)
$ (15,470)
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Finite-lived intangible assets, average useful life (in years)
 
 
3 years 9 months 
 
6 years 3 months 
7 years 10 months 
5 years 8 months 
 
 
 
 
 
3 years 9 months 
 
6 years 3 months 
7 years 10 months 
5 years 8 months 
 
 
 
Finite-lived below market lease liabilities, average useful life (in years)
 
 
 
 
 
 
 
8 years 11 months 
 
 
 
 
 
 
 
 
 
8 years 11 months 
 
 
Acquired finite-lived intangible assets, average useful life (in years)
 
 
 
 
 
 
 
 
 
6 years 3 months 
 
 
 
 
 
 
 
 
 
6 years 3 months 
Mortgages and Notes Payable (Details) (USD $)
3 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 3 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Jun. 30, 2012
Revolving Credit Facility due 2015 [Member]
Jul. 19, 2012
Revolving Credit Facility due 2015 [Member]
Jun. 30, 2012
5.85% (5.88% effective rate) Notes due 2017 [Member]
Mar. 31, 2012
Variable Rate Term Loan due 2016 [Member]
Jun. 30, 2012
Secured indebtedness [Member]
Dec. 31, 2011
Secured indebtedness [Member]
Jun. 30, 2012
Unsecured indebtedness [Member]
Dec. 31, 2011
Unsecured indebtedness [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Revolving Credit Facility due 2015 [Member]
Jul. 19, 2012
Highwoods Realty Limited Partnership [Member]
Revolving Credit Facility due 2015 [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
5.85% (5.88% effective rate) Notes due 2017 [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Variable Rate Term Loan due 2016 [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Variable Rate Term Loan due 2016 [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Secured indebtedness [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Secured indebtedness [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Unsecured indebtedness [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Unsecured indebtedness [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgages and notes payable
$ 1,823,128,000 
 
$ 1,823,128,000 
 
$ 1,903,213,000 
 
 
 
 
$ 743,492,000 
$ 750,049,000 
$ 1,079,636,000 
$ 1,153,164,000 
$ 1,823,128,000 
 
$ 1,823,128,000 
 
$ 1,903,213,000 
 
 
 
 
 
$ 743,492,000 
$ 750,049,000 
$ 1,079,636,000 
$ 1,153,164,000 
Aggregate undepreciated book value of secured real estate assets
 
 
 
 
 
 
 
 
 
1,237,700,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,237,700,000 
 
 
 
Maximum borrowing capacity on revolving credit facility
 
 
 
 
 
475,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
475,000,000 
 
 
 
 
 
 
 
 
Maturity date on revolving credit facility
 
 
 
 
 
Jul. 27, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
Jul. 27, 2015 
 
 
 
 
 
 
 
 
Additional borrowing capacity on revolving credit facility
 
 
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
Credit facility, interest rate basis
 
 
 
 
 
LIBOR plus 150 basis points 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus 150 basis points 
 
 
 
 
 
 
 
 
Credit facility, current interest rate (in hundredths)
 
 
 
 
 
1.50% 
 
 
 
 
 
 
 
 
 
 
 
 
1.50% 
 
 
 
 
 
 
 
 
Annual facility fee (in hundredths)
 
 
 
 
 
0.35% 
 
 
 
 
 
 
 
 
 
 
 
 
0.35% 
 
 
 
 
 
 
 
 
Amount outstanding on revolving credit facility
 
 
 
 
 
75,500,000 
28,100,000 
 
 
 
 
 
 
 
 
 
 
 
75,500,000 
28,100,000 
 
 
 
 
 
 
 
Outstanding letters of credit on revolving credit facility
 
 
 
 
 
100,000 
100,000 
 
 
 
 
 
 
 
 
 
 
 
100,000 
100,000 
 
 
 
 
 
 
 
Unused borrowing capacity on revolving credit facility
 
 
 
 
 
399,400,000 
446,800,000 
 
 
 
 
 
 
 
 
 
 
 
399,400,000 
446,800,000 
 
 
 
 
 
 
 
Principal amount of repurchased debt
 
 
 
 
 
 
 
12,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
12,100,000 
 
 
 
 
 
 
Debt instrument maturity date
 
 
 
 
 
 
 
Mar. 15, 2017 
 
 
 
 
 
 
 
 
 
 
 
 
Mar. 15, 2017 
 
 
 
 
 
 
Debt instrument, interest rate basis
 
 
 
 
 
 
 
 
LIBOR plus 190 basis points 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus 190 basis points 
 
 
 
 
 
Debt instrument, interest rate basis spread (in hundredths)
 
 
 
 
 
 
 
 
1.90% 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.90% 
 
 
 
 
Debt instrument, current interest rate (in hundredths)
 
 
 
 
 
 
 
5.85% 
 
 
 
 
 
 
 
 
 
 
 
 
5.85% 
 
 
 
 
 
 
Purchase price of debt, percentage of par value (in hundredths)
 
 
 
 
 
 
 
107.50% 
 
 
 
 
 
 
 
 
 
 
 
 
107.50% 
 
 
 
 
 
 
Loss on extinguishment of debt
(973,000)
(24,000)
(973,000)
(24,000)
 
 
 
1,000,000 
 
 
 
 
 
(973,000)
(24,000)
(973,000)
(24,000)
 
 
 
1,000,000 
 
 
 
 
 
 
Principal amount of debt
 
 
 
 
 
 
 
 
$ 225,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
$ 225,000,000 
 
 
 
 
 
Term of debt instrument (in years)
 
 
 
 
 
 
 
 
7 years 
 
 
 
 
 
 
 
 
 
 
 
 
7 years 
 
 
 
 
 
Derivative Financial Instruments (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
swaps
Jun. 30, 2011
Jun. 30, 2012
swaps
Jun. 30, 2011
Dec. 31, 2011
Derivative [Line Items]
 
 
 
 
 
Number of derivative instruments obtained
 
 
 
Term of derivative instruments (in years)
 
 
7 years 
 
 
Amount of borrowings outstanding
$ 225,000,000 
 
$ 225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
1.678% 
 
 
Cross-default minimum threshold
 
 
10,000,000 
 
 
Expected increase to interest expense
3,100,000 
 
3,100,000 
 
 
Derivatives designated as cash flow hedges in other liabilities [Abstract]
 
 
 
 
 
Interest rate swaps
7,763,000 
 
7,763,000 
 
2,202,000 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
(7,481,000)
(7,087,000)
 
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
782,000 
(29,000)
1,459,000 
(58,000)
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Number of derivative instruments obtained
 
 
 
Term of derivative instruments (in years)
 
 
7 years 
 
 
Amount of borrowings outstanding
225,000,000 
 
225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
1.678% 
 
 
Cross-default minimum threshold
 
 
10,000,000 
 
 
Expected increase to interest expense
3,100,000 
 
3,100,000 
 
 
Derivatives designated as cash flow hedges in other liabilities [Abstract]
 
 
 
 
 
Interest rate swaps
7,763,000 
 
7,763,000 
 
2,202,000 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
(7,481,000)
(7,087,000)
 
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
$ 782,000 
$ (29,000)
$ 1,459,000 
$ (58,000)
 
Noncontrolling Interests (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Noncontrolling Interests in the Operating Partnership [Roll Forward]
 
 
 
 
Beginning noncontrolling interests in the Operating Partnership
 
 
$ 110,655 
$ 120,838 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
 
 
16,501 
6,957 
Conversion of Common Units to Common Stock
 
 
(631)
(635)
Net income attributable to noncontrolling interests in the Operating Partnership
686 
623 
1,513 
1,130 
Distributions to noncontrolling interests in the Operating Partnership
 
 
(3,158)
(3,215)
Total noncontrolling interests in the Operating Partnership
124,880 
125,075 
124,880 
125,075 
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
 
 
 
 
Net income available for common stockholders
12,962 
10,112 
29,656 
20,248 
Increase in additional paid in capital from conversion of Common Units to Common Stock
568 
449 
631 
635 
Change from net income available for common stockholders and transfers from noncontrolling interests
$ 13,530 
$ 10,561 
$ 30,287 
$ 20,883 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
50.00% 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
50.00% 
 
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, 2012
Dec. 31, 2011
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
$ 17,330 1
$ 18,990 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
15,371 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
35,800 
49,694 
Noncontrolling Interests in the Operating Partnership
124,880 
110,655 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,918,241 1
1,992,937 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,099 
3,149 
Financing obligations, at fair value
21,141 1
18,866 1
Total Liabilities
1,950,244 
2,017,154 
Level 1 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets and for-sale residential condominiums
 
Total Assets
3,099 
3,149 
Noncontrolling Interests in the Operating Partnership
124,880 
110,655 
Liabilities[Abstract]
 
 
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)
3,099 
3,149 
Financing obligations, at fair value
Total Liabilities
3,099 
3,149 
Level 2 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,330 
18,990 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets and for-sale residential condominiums
 
Total Assets
17,330 
18,990 
Noncontrolling Interests in the Operating Partnership
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,918,241 
1,992,937 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
1,926,004 
1,995,139 
Level 3 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
15,371 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
15,371 
27,555 
Noncontrolling Interests in the Operating Partnership
Liabilities[Abstract]
 
 
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
21,141 
18,866 
Total Liabilities
21,141 
18,866 
Highwoods Realty Limited Partnership [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,330 1
18,990 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
15,371 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
35,800 
49,694 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,918,241 1
1,992,937 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,099 
3,149 
Financing obligations, at fair value
21,141 1
18,866 1
Total Liabilities
1,950,244 
2,017,154 
Highwoods Realty Limited Partnership [Member] |
Level 1 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,099 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets and for-sale residential condominiums
 
Total Assets
3,099 
3,149 
Liabilities[Abstract]
 
 
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)
3,099 
3,149 
Financing obligations, at fair value
Total Liabilities
3,099 
3,149 
Highwoods Realty Limited Partnership [Member] |
Level 2 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,330 
18,990 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets and for-sale residential condominiums
 
Total Assets
17,330 
18,990 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,918,241 
1,992,937 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
7,763 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
1,926,004 
1,995,139 
Highwoods Realty Limited Partnership [Member] |
Level 3 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
15,371 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
15,371 
27,555 
Liabilities[Abstract]
 
 
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
21,141 
18,866 
Total Liabilities
$ 21,141 
$ 18,866 
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, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Unrealized gains/(losses) (in AOCL)
$ 296,000 
$ (336,000)
$ 583,000 
$ (471,000)
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,726,000 
3,014,000 
1,726,000 
3,014,000 
2,309,000 
2,543,000 
Tax Increment Financing Bond [Member]
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Beginning balance
15,075,000 
15,564,000 
14,788,000 
15,699,000 
 
 
Unrealized gains/(losses) (in AOCL)
296,000 
(336,000)
583,000 
(471,000)
 
 
Ending balance
15,371,000 
15,228,000 
15,371,000 
15,228,000 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,700,000 
 
1,700,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
600,000 
 
600,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
600,000 
 
600,000 
 
 
 
Fair value of Level 3 asset
15,371,000 
15,228,000 
15,371,000 
15,228,000 
 
 
Discount rate (in hundredths)
 
 
9.85% 
 
 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Unrealized gains/(losses) (in AOCL)
296,000 
(336,000)
583,000 
(471,000)
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,726,000 
3,014,000 
1,726,000 
3,014,000 
2,309,000 
2,543,000 
Highwoods Realty Limited Partnership [Member] |
Tax Increment Financing Bond [Member]
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Beginning balance
15,075,000 
15,564,000 
14,788,000 
15,699,000 
 
 
Unrealized gains/(losses) (in AOCL)
296,000 
(336,000)
583,000 
(471,000)
 
 
Ending balance
15,371,000 
15,228,000 
15,371,000 
15,228,000 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,700,000 
 
1,700,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
600,000 
 
600,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
600,000 
 
600,000 
 
 
 
Fair value of Level 3 asset
$ 15,371,000 
$ 15,228,000 
$ 15,371,000 
$ 15,228,000 
 
 
Discount rate (in hundredths)
 
 
9.85% 
 
 
 
Share-Based Payments (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 2,000,000 
$ 1,400,000 
$ 4,459,000 
$ 3,453,000 
Total unrecognized stock-based compensation costs
7,600,000 
 
7,600,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
 
 
2 years 7 months 12 days 
 
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock options granted
 
 
190,886 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
 
 
$ 5.47 
 
Time-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
90,983 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 32.27 
 
Total Return-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
67,902 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 38.71 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
2,000,000 
1,400,000 
4,459,000 
3,453,000 
Total unrecognized stock-based compensation costs
$ 7,600,000 
 
$ 7,600,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
 
 
2 years 7 months 12 days 
 
Highwoods Realty Limited Partnership [Member] |
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock options granted
 
 
190,886 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
 
 
$ 5.47 
 
Highwoods Realty Limited Partnership [Member] |
Time-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
90,983 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 32.27 
 
Highwoods Realty Limited Partnership [Member] |
Total Return-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
67,902 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 38.71 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
 
 
Tax increment financing bond, beginning balance
 
 
$ (2,309)
$ (2,543)
 
Unrealized gains/(losses) on tax increment financing bond
296 
(336)
583 
(471)
 
Tax increment financing bond, ending balance
(1,726)
(3,014)
(1,726)
(3,014)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
 
 
Cash flow hedges, beginning balance
 
 
(3,425)
(1,105)
 
Unrealized losses on cash flow hedges
(7,481)
(7,087)
 
Amortization of cash flow hedges
782 
(29)
1,459 
(58)
 
Cash flow hedges, ending balance
(9,053)
(1,163)
(9,053)
(1,163)
 
Total accumulated other comprehensive loss
(10,779)
(4,177)
(10,779)
(4,177)
(5,734)
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
 
 
Tax increment financing bond, beginning balance
 
 
(2,309)
(2,543)
 
Unrealized gains/(losses) on tax increment financing bond
296 
(336)
583 
(471)
 
Tax increment financing bond, ending balance
(1,726)
(3,014)
(1,726)
(3,014)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
 
 
Cash flow hedges, beginning balance
 
 
(3,425)
(1,105)
 
Unrealized losses on cash flow hedges
(7,481)
(7,087)
 
Amortization of cash flow hedges
782 
(29)
1,459 
(58)
 
Cash flow hedges, ending balance
(9,053)
(1,163)
(9,053)
(1,163)
 
Total accumulated other comprehensive loss
$ (10,779)
$ (4,177)
$ (10,779)
$ (4,177)
$ (5,734)
Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Rental and other revenues
$ 2,044 
$ 2,907 
$ 4,383 
$ 6,169 
 
Operating expenses:
 
 
 
 
 
Rental property and other expenses
966 
1,390 
2,084 
2,862 
 
Depreciation and amortization
322 
778 
1,008 
1,653 
 
Total operating expenses
1,288 
2,168 
3,092 
4,515 
 
Income from discontinued operations
756 
739 
1,291 
1,654 
 
Net gains on disposition of discontinued operations
1,385 
6,519 
 
Total discontinued operations
2,141 
739 
7,810 
1,654 
 
Assets:
 
 
 
 
 
Land
3,849 
 
3,849 
 
5,749 
Buildings and tenant improvements
49,460 
 
49,460 
 
65,860 
Less accumulated depreciation
(18,743)
 
(18,743)
 
(23,917)
Net real estate assets
34,566 
 
34,566 
 
47,692 
Accrued straight line rents receivable
1,490 
 
1,490 
 
1,726 
Deferred leasing costs, net
678 
 
678 
 
811 
Prepaid expenses and other assets
17 
 
17 
 
106 
Real estate and other assets, net, held for sale
36,751 
 
36,751 
 
50,335 
Tenant security deposits, deferred rents and accrued costs
595 1
 
595 1
 
238 1
Pinellas County, FL Office Property Disposition [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Kansas City, MO Rental Residential Disposition [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of residential properties included in real estate and other assets held for sale, net
 
 
 
 
96 
Nashville, TN Office Properties Disposition [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
Kansas City, MO Office Property Held For Sale [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
 
 
 
 
 
Rental and other revenues
2,044 
2,907 
4,383 
6,169 
 
Operating expenses:
 
 
 
 
 
Rental property and other expenses
966 
1,390 
2,084 
2,862 
 
Depreciation and amortization
322 
778 
1,008 
1,653 
 
Total operating expenses
1,288 
2,168 
3,092 
4,515 
 
Income from discontinued operations
756 
739 
1,291 
1,654 
 
Net gains on disposition of discontinued operations
1,385 
6,519 
 
Total discontinued operations
2,141 
739 
7,810 
1,654 
 
Assets:
 
 
 
 
 
Land
3,849 
 
3,849 
 
5,749 
Buildings and tenant improvements
49,460 
 
49,460 
 
65,860 
Less accumulated depreciation
(18,743)
 
(18,743)
 
(23,917)
Net real estate assets
34,566 
 
34,566 
 
47,692 
Accrued straight line rents receivable
1,490 
 
1,490 
 
1,726 
Deferred leasing costs, net
678 
 
678 
 
811 
Prepaid expenses and other assets
17 
 
17 
 
106 
Real estate and other assets, net, held for sale
36,751 
 
36,751 
 
50,335 
Tenant security deposits, deferred rents and accrued costs
$ 595 1
 
$ 595 1
 
$ 238 1
Highwoods Realty Limited Partnership [Member] |
Pinellas County, FL Office Property Disposition [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Kansas City, MO Rental Residential Disposition [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of residential properties included in real estate and other assets held for sale, net
 
 
 
 
96 
Highwoods Realty Limited Partnership [Member] |
Nashville, TN Office Properties Disposition [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Kansas City, MO Office Property Held For Sale [Member]
 
 
 
 
 
Assets:
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Numerator:
 
 
 
 
Income from continuing operations
$ 12,357 
$ 13,695 
$ 25,020 
$ 25,223 
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(584)
(586)
(1,133)
(1,047)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223)
(182)
(407)
(305)
Dividends on Preferred Stock
(627)
(1,622)
(1,254)
(3,299)
Excess of Preferred Stock redemption/repurchase cost over carrying value
(1,895)
(1,895)
Income from continuing operations available for common stockholders
10,923 
9,410 
22,226 
18,677 
Income from discontinued operations
2,141 
739 
7,810 
1,654 
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(102)
(37)
(380)
(83)
Income from discontinued operations available for common stockholders
2,039 
702 
7,430 
1,571 
Net income available for common stockholders
12,962 
10,112 
29,656 
20,248 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
74,662,000 1 2
72,211,000 1 2
73,749,000 1 2
72,015,000 1 2
Earnings per Common Share - basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.13 
$ 0.30 
$ 0.26 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.02 
$ 0.01 
$ 0.10 
$ 0.02 
Net income available for common stockholders (in dollars per share)
$ 0.17 
$ 0.14 
$ 0.40 
$ 0.28 
Numerator:
 
 
 
 
Income from continuing operations
12,357 
13,695 
25,020 
25,223 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223)
(182)
(407)
(305)
Dividends on Preferred Stock
(627)
(1,622)
(1,254)
(3,299)
Excess of Preferred Stock redemption/repurchase cost over carrying value
(1,895)
(1,895)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
11,507 
9,996 
23,359 
19,724 
Income from discontinued operations available for common stockholders
2,141 
739 
7,810 
1,654 
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
13,648 
10,735 
31,169 
21,378 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
74,662,000 1 2
72,211,000 1 2
73,749,000 1 2
72,015,000 1 2
Stock options using the treasury method
141,000 
202,000 
129,000 
185,000 
Noncontrolling interests Common Units
3,718,000 
3,784,000 
3,723,000 
3,787,000 
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares) (1)
78,521,000 1
76,197,000 1
77,601,000 1
75,987,000 1
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.13 
$ 0.30 
$ 0.26 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.02 
$ 0.01 
$ 0.10 
$ 0.02 
Net income available for common stockholders (in dollars per share)
$ 0.17 
$ 0.14 
$ 0.40 
$ 0.28 
Earnings per Common Unit - diluted:
 
 
 
 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
500,000 
300,000 
500,000 
600,000 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Numerator:
 
 
 
 
Income from continuing operations
12,360 
13,699 
25,025 
25,235 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223)
(182)
(407)
(305)
Distributions on Preferred Units
(627)
(1,622)
(1,254)
(3,299)
Excess of Preferred Unit redemption/repurchase cost over carrying value
(1,895)
(1,895)
Income from continuing operations available for common unitholders
11,510 
10,000 
23,364 
19,736 
Income from discontinued operations available for common unitholders
2,141 
739 
7,810 
1,654 
Net income available for common unitholders
13,651 
10,739 
31,174 
21,390 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
77,971,000 1 2
75,586,000 1 2
77,063,000 1 2
75,393,000 1 2
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.15 
$ 0.13 
$ 0.30 
$ 0.26 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.03 
$ 0.01 
$ 0.10 
$ 0.02 
Net income available for common unitholders (in dollars per share)
$ 0.18 
$ 0.14 
$ 0.40 
$ 0.28 
Numerator:
 
 
 
 
Income from continuing operations
12,360 
13,699 
25,025 
25,235 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(223)
(182)
(407)
(305)
Distributions on Preferred Units
(627)
(1,622)
(1,254)
(3,299)
Excess of Preferred Unit redemption/repurchase cost over carrying value
(1,895)
(1,895)
Income from continuing operations available for common unitholders
11,510 
10,000 
23,364 
19,736 
Income from discontinued operations available for common unitholders
2,141 
739 
7,810 
1,654 
Net income available for common unitholders
$ 13,651 
$ 10,739 
$ 31,174 
$ 21,390 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
77,971,000 1 2
75,586,000 1 2
77,063,000 1 2
75,393,000 1 2
Stock options using the treasury method
141,000 
202,000 
129,000 
185,000 
Denominator for diluted earnings per Common Unit - adjusted weighted average units and assumed conversions (in shares)
78,112,000 1
75,788,000 1
77,192,000 1
75,578,000 1
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.15 
0.13 
0.30 
0.26 
Income from discontinued operations available for common unitholders (in dollars per share)
0.02 
0.01 
0.10 
0.02 
Net income available for common unitholders (in dollars per share)
0.17 
0.14 
0.40 
0.28 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
500,000 
300,000 
500,000 
600,000 
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
$ 130,735 
$ 114,651 
$ 258,768 
$ 226,981 
Total Net Operating Income
83,646 
74,720 
166,480 
147,143 
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
 
 
 
 
Depreciation and amortization
(40,276)
(32,684)
(78,105)
(65,621)
General and administrative expense
(8,900)
(7,978)
(18,573)
(15,771)
Interest expense
(24,495)
(23,907)
(49,297)
(47,450)
Interest and other income
764 
1,875 
2,994 
3,748 
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
10,739 
12,026 
23,499 
22,049 
Total Office Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
114,724 1
99,595 1
226,896 1
196,114 1
Total Net Operating Income
73,254 1
64,780 1
145,378 1
126,851 1
Office Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
16,209 
12,341 
31,993 
24,242 
Total Net Operating Income
10,426 
7,973 
20,821 
15,464 
Office Greenville, SC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,489 
3,437 
6,993 
6,942 
Total Net Operating Income
2,051 
2,067 
4,183 
4,142 
Office Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,560 
3,441 
7,163 
6,960 
Total Net Operating Income
2,186 
2,112 
4,518 
4,256 
Office Memphis, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
10,130 
10,077 
20,268 
20,179 
Total Net Operating Income
5,841 
5,462 
11,942 
11,222 
Office Nashville, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,321 
13,572 
28,186 
26,315 
Total Net Operating Income
9,835 
9,369 
19,490 
18,001 
Office Orlando, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
2,756 
2,619 
5,443 
4,936 
Total Net Operating Income
1,431 
1,284 
2,847 
2,450 
Office Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
5,072 
5,273 
10,152 
10,637 
Total Net Operating Income
3,219 
3,452 
6,452 
7,053 
Office Pittsburgh, PA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,113 
18,199 
Total Net Operating Income
4,627 
8,910 
Office Raleigh, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
20,400 
20,103 
40,179 
39,421 
Total Net Operating Income
14,291 
14,273 
28,146 
27,489 
Office Richmond, VA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
12,095 
11,668 
23,605 
23,046 
Total Net Operating Income
8,536 
8,231 
16,419 
16,090 
Office Tampa, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
17,579 
17,064 
34,715 
33,436 
Total Net Operating Income
10,811 
10,557 
21,650 
20,684 
Total Industrial Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
6,936 1
6,853 1
13,874 1
13,764 1
Total Net Operating Income
5,069 1
5,108 1
10,245 1
10,171 1
Industrial Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,849 
4,028 
7,623 
7,962 
Total Net Operating Income
2,761 
3,001 
5,649 
5,840 
Industrial Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,087 
2,825 
6,251 
5,802 
Total Net Operating Income
2,308 
2,107 
4,596 
4,331 
Total Retail Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,075 1
8,203 1
17,998 1
17,103 1
Total Net Operating Income
5,323 1
4,832 1
10,857 1
10,121 1
Retail Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,075 
8,203 
17,998 
17,103 
Total Net Operating Income
5,323 
4,832 
10,857 
10,121 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
130,735 
114,651 
258,768 
226,981 
Total Net Operating Income
83,705 
74,783 
166,601 
147,057 
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
 
 
 
 
Depreciation and amortization
(40,276)
(32,684)
(78,105)
(65,621)
General and administrative expense
(8,959)
(8,041)
(18,694)
(15,685)
Interest expense
(24,495)
(23,907)
(49,297)
(47,450)
Interest and other income
764 
1,875 
2,994 
3,748 
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates
10,739 
12,026 
23,499 
22,049 
Highwoods Realty Limited Partnership [Member] |
Total Office Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
114,724 1
99,595 1
226,896 1
196,114 1
Total Net Operating Income
73,305 1
64,834 1
145,484 1
126,777 1
Highwoods Realty Limited Partnership [Member] |
Office Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
16,209 
12,341 
31,993 
24,242 
Total Net Operating Income
10,435 
7,980 
20,837 
15,456 
Highwoods Realty Limited Partnership [Member] |
Office Greenville, SC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,489 
3,437 
6,993 
6,942 
Total Net Operating Income
2,052 
2,069 
4,186 
4,140 
Highwoods Realty Limited Partnership [Member] |
Office Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,560 
3,441 
7,163 
6,960 
Total Net Operating Income
2,188 
2,114 
4,521 
4,254 
Highwoods Realty Limited Partnership [Member] |
Office Memphis, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
10,130 
10,077 
20,268 
20,179 
Total Net Operating Income
5,845 
5,467 
11,951 
11,215 
Highwoods Realty Limited Partnership [Member] |
Office Nashville, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,321 
13,572 
28,186 
26,315 
Total Net Operating Income
9,842 
9,376 
19,504 
17,989 
Highwoods Realty Limited Partnership [Member] |
Office Orlando, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
2,756 
2,619 
5,443 
4,936 
Total Net Operating Income
1,432 
1,285 
2,849 
2,449 
Highwoods Realty Limited Partnership [Member] |
Office Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
5,072 
5,273 
10,152 
10,637 
Total Net Operating Income
3,221 
3,455 
6,457 
7,049 
Highwoods Realty Limited Partnership [Member] |
Office Pittsburgh, PA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,113 
18,199 
Total Net Operating Income
4,630 
8,911 
Highwoods Realty Limited Partnership [Member] |
Office Raleigh, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
20,400 
20,103 
40,179 
39,421 
Total Net Operating Income
14,301 
14,285 
28,169 
27,473 
Highwoods Realty Limited Partnership [Member] |
Office Richmond, VA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
12,095 
11,668 
23,605 
23,046 
Total Net Operating Income
8,541 
8,238 
16,431 
16,080 
Highwoods Realty Limited Partnership [Member] |
Office Tampa, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
17,579 
17,064 
34,715 
33,436 
Total Net Operating Income
10,818 
10,565 
21,668 
20,672 
Highwoods Realty Limited Partnership [Member] |
Total Industrial Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
6,936 1
6,853 1
13,874 1
13,764 1
Total Net Operating Income
5,073 1
5,113 1
10,252 1
10,165 1
Highwoods Realty Limited Partnership [Member] |
Industrial Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,849 
4,028 
7,623 
7,962 
Total Net Operating Income
2,763 
3,004 
5,653 
5,837 
Highwoods Realty Limited Partnership [Member] |
Industrial Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,087 
2,825 
6,251 
5,802 
Total Net Operating Income
2,310 
2,109 
4,599 
4,328 
Highwoods Realty Limited Partnership [Member] |
Total Retail Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,075 1
8,203 1
17,998 1
17,103 1
Total Net Operating Income
5,327 1
4,836 1
10,865 1
10,115 1
Highwoods Realty Limited Partnership [Member] |
Retail Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,075 
8,203 
17,998 
17,103 
Total Net Operating Income
$ 5,327 
$ 4,836 
$ 10,865 
$ 10,115 
Subsequent Events (Details) (USD $)
3 Months Ended 6 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 6 Months Ended 0 Months Ended 1 Months Ended
Jun. 30, 2012
Jun. 30, 2011
Jun. 30, 2012
Jun. 30, 2011
Jul. 5, 2012
ATM Equity Offering Sales [Member]
Jul. 13, 2012
Greensboro, NC Medical Office Properties Acquisition [Member]
property
Jul. 13, 2012
Nashville, TN Office Properties Disposition [Member]
property
Jul. 25, 2012
General Services Administration Buildings Disposition [Member]
property
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Jul. 5, 2012
Highwoods Realty Limited Partnership [Member]
ATM Equity Offering Sales [Member]
Jul. 13, 2012
Highwoods Realty Limited Partnership [Member]
Greensboro, NC Medical Office Properties Acquisition [Member]
property
Jul. 13, 2012
Highwoods Realty Limited Partnership [Member]
Nashville, TN Office Properties Disposition [Member]
property
Jul. 25, 2012
Highwoods Realty Limited Partnership [Member]
General Services Administration Buildings Disposition [Member]
property
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of Common Stock sold at the market during period (in shares)
1,836,976 
 
2,622,476 
 
451,300 
 
 
 
1,836,976 
 
2,622,476 
 
451,300 
 
 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 33.72 
 
$ 33.45 
 
$ 33.52 
 
 
 
$ 33.72 
 
$ 33.45 
 
$ 33.52 
 
 
 
Net proceeds of Common Stock sold at the market during period
$ 61,000,000 
 
$ 86,400,000 
 
$ 14,900,000 
 
 
 
$ 61,000,000 
 
$ 86,400,000 
 
$ 14,900,000 
 
 
 
Number of office properties acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition purchase price
 
 
 
 
 
16,400,000 
 
 
 
 
 
 
 
16,400,000 
 
 
Common Units Of Partnership Issued
 
 
 
 
 
77,000 
 
 
 
 
 
 
 
77,000 
 
 
Acquisition-related costs
 
 
 
 
 
100,000 
 
 
 
 
 
 
 
100,000 
 
 
Number of office properties sold
 
 
 
 
 
 
 
 
 
 
 
 
Gross proceeds from the sale of real estate
 
 
 
 
 
 
41,000,000 
86,500,000 
 
 
 
 
 
 
41,000,000 
86,500,000 
Gains on disposition of discontinued operations
$ 1,385,000 
$ 0 
$ 6,519,000 
$ 0 
 
 
$ 6,800,000 
$ 14,000,000 
$ 1,385,000 
$ 0 
$ 6,519,000 
$ 0 
 
 
$ 6,800,000 
$ 14,000,000