HIGHWOODS PROPERTIES, INC., 10-K filed on 2/7/2017
Annual Report
v3.6.0.2
Document and Entity Information - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2016
Jan. 27, 2017
Jun. 30, 2016
Entity Information [Line Items]      
Entity Registrant Name HIGHWOODS PROPERTIES INC.    
Entity Central Index Key 0000921082    
Current Fiscal Year End Date --12-31    
Entity Filer Category Large Accelerated Filer    
Document Type 10-K    
Document Period End Date Dec. 31, 2016    
Document Fiscal Year Focus 2016    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Common Stock, Shares Outstanding   101,666,554  
Entity Public Float     $ 5.1
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 LTD PARTNERSHIP    
Entity Central Index Key 0000941713    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Document Type 10-K    
Document Period End Date Dec. 31, 2016    
Document Fiscal Year Focus 2016    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
v3.6.0.2
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Real estate assets, at cost:    
Land $ 474,375 $ 443,705
Buildings and tenant improvements 4,313,373 4,063,328
Development in-process 279,602 194,050
Land held for development 77,355 68,244
Total real estate assets 5,144,705 4,769,327
Less-accumulated depreciation (1,134,103) (1,007,104)
Net real estate assets 4,010,602 3,762,223
Real estate and other assets, net, held for sale 0 240,948
Cash and cash equivalents 49,490 5,036
Restricted cash 29,141 16,769
Accounts receivable, net of allowance of $624 and $928, respectively 17,372 29,077
Mortgages and notes receivable, net of allowance of $105 and $287, respectively 8,833 2,096
Accrued straight-line rents receivable, net of allowance of $692 and $257, respectively 172,829 150,392
Investments in and advances to unconsolidated affiliates 18,846 20,676
Deferred leasing costs, net of accumulated amortization of $140,081 and $115,172, respectively 213,500 231,765
Prepaid expenses and other assets, net of accumulated amortization of $19,904 and $17,830, respectively 40,437 26,649
Total Assets 4,561,050 4,485,631
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 1,948,047 2,491,813
Accounts payable, accrued expenses and other liabilities 313,885 233,988
Liabilities held for sale 0 14,119
Total Liabilities 2,261,932 2,739,920
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 144,802 126,429
Equity/Capital:    
Preferred Stock, $.01 par value, 50,000,000 authorized shares; 8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 28,920 and 29,050 shares issued and outstanding, respectively 28,920 29,050
Common Stock, $.01 par value, 200,000,000 authorized shares; 101,665,554 and 96,091,932 shares issued and outstanding, respectively 1,017 961
Additional paid-in capital 2,850,881 2,598,242
Distributions in excess of net income available for common stockholders (749,412) (1,023,135)
Accumulated other comprehensive income/(loss) 4,949 (3,811)
Total Stockholders’ Equity 2,136,355 1,601,307
Noncontrolling interests in consolidated affiliates 17,961 17,975
Total Equity/Capital: 2,154,316 1,619,282
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital 4,561,050 4,485,631
Highwoods Realty Limited Partnership [Member]    
Real estate assets, at cost:    
Land 474,375 443,705
Buildings and tenant improvements 4,313,373 4,063,328
Development in-process 279,602 194,050
Land held for development 77,355 68,244
Total real estate assets 5,144,705 4,769,327
Less-accumulated depreciation (1,134,103) (1,007,104)
Net real estate assets 4,010,602 3,762,223
Real estate and other assets, net, held for sale 0 240,948
Cash and cash equivalents 49,490 5,036
Restricted cash 29,141 16,769
Accounts receivable, net of allowance of $624 and $928, respectively 17,372 29,077
Mortgages and notes receivable, net of allowance of $105 and $287, respectively 8,833 2,096
Accrued straight-line rents receivable, net of allowance of $692 and $257, respectively 172,829 150,392
Investments in and advances to unconsolidated affiliates 18,846 20,676
Deferred leasing costs, net of accumulated amortization of $140,081 and $115,172, respectively 213,500 231,765
Prepaid expenses and other assets, net of accumulated amortization of $19,904 and $17,830, respectively 40,437 26,649
Total Assets 4,561,050 4,485,631
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 1,948,047 2,491,813
Accounts payable, accrued expenses and other liabilities 313,885 233,988
Liabilities held for sale 0 14,119
Total Liabilities 2,261,932 2,739,920
Commitments and contingencies
Redeemable Operating Partnership Units:    
Common Units, 2,838,704 and 2,899,752 outstanding, respectively 144,802 126,429
Series A Preferred Units (liquidation preference $1,000 per unit), 28,920 and 29,050 units issued and outstanding, respectively 28,920 29,050
Total Redeemable Operating Partnership Units 173,722 155,479
Equity/Capital:    
General partner Common Units, 1,040,954 and 985,829 outstanding, respectively 21,023 15,759
Limited partner Common Units, 100,215,791 and 94,697,294 outstanding, respectively 2,081,463 1,560,309
Accumulated other comprehensive income/(loss) 4,949 (3,811)
Noncontrolling interests in consolidated affiliates 17,961 17,975
Total Equity/Capital: 2,125,396 1,590,232
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital $ 4,561,050 $ 4,485,631
v3.6.0.2
Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2016
Dec. 31, 2015
Assets:    
Accounts receivable allowance $ 624 $ 928
Mortgages and notes receivable allowance 105 287
Accrued straight-line rents receivable allowance 692 257
Deferred leasing costs, accumulated amortization 140,081 115,172
Prepaid expenses and other assets, accumulated amortization $ 19,904 $ 17,830
Equity/Capital:    
Preferred Stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred Stock, authorized shares (in shares) 50,000,000 50,000,000
Preferred Stock, liquidation preference (in dollars per share) $ 1,000 $ 1,000
Preferred Stock, shares issued (in shares) 28,920 29,050
Preferred Stock, shares outstanding (in shares) 28,920 29,050
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) 101,665,554 96,091,932
Common Stock, shares outstanding (in shares) 101,665,554 96,091,932
Highwoods Realty Limited Partnership [Member]    
Assets:    
Accounts receivable allowance $ 624 $ 928
Mortgages and notes receivable allowance 105 287
Accrued straight-line rents receivable allowance 692 257
Deferred leasing costs, accumulated amortization 140,081 115,172
Prepaid expenses and other assets, accumulated amortization $ 19,904 $ 17,830
Redeemable Operating Partnership Units:    
Redeemable Common Units, outstanding (in shares) 2,838,704 2,899,752
Preferred Units liquidation preference (in dollars per share) $ 1,000 $ 1,000
Series A Preferred Units, issued (in shares) 28,920 29,050
Series A Preferred Units, outstanding (in shares) 28,920 29,050
Common Units:    
General partners' capital account, units outstanding (in shares) 1,040,954 985,829
Limited partners' capital account, units outstanding (in shares) 100,215,791 94,697,294
v3.6.0.2
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Rental and other revenues $ 665,634 $ 604,671 $ 555,871
Operating expenses:      
Rental property and other expenses 231,085 215,941 205,884
Depreciation and amortization 220,140 201,918 180,637
Impairments of real estate assets 0 0 588
General and administrative 38,153 37,642 35,258
Total operating expenses 489,378 455,501 422,367
Interest expense:      
Contractual 73,142 82,245 82,287
Amortization of debt issuance costs 3,506 3,645 3,082
Financing obligation 0 162 (242)
Total interest expense 76,648 86,052 85,127
Other income:      
Interest and other income 2,338 1,969 2,739
Losses on debt extinguishment 0 (243) (308)
Total other income 2,338 1,726 2,431
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 101,946 64,844 50,808
Gains on disposition of property 14,807 11,444 44,352
Gain on disposition of investment in unconsolidated affiliate 0 4,155 0
Equity in earnings of unconsolidated affiliates 5,793 5,078 1,827
Income from continuing operations 122,546 85,521 96,987
Discontinued operations:      
Income from discontinued operations 4,097 15,739 18,601
Net gains on disposition of discontinued operations 414,496 0 384
Total income from discontinued operations 418,593 [1] 15,739 18,985
Net income 541,139 101,260 115,972
Net (income) attributable to noncontrolling interests in the Operating Partnership (15,596) (2,918) (3,542)
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,253) (1,264) (1,466)
Dividends on Preferred Stock (2,501) (2,506) (2,507)
Net income available for common stockholders $ 521,789 $ 94,572 $ 108,457
Earnings per Common Share - basic:      
Income from continuing operations available for common stockholders (in dollars per share) $ 1.17 $ 0.84 $ 1.00
Income from discontinued operations available for common stockholders (in dollars per share) 4.13 0.16 0.20
Net income available for common stockholders (in dollars per share) $ 5.30 $ 1.00 $ 1.20
Weighted average Common Shares outstanding - basic (in shares) 98,439 94,404 90,743
Earnings per Common Share - diluted:      
Income from continuing operations available for common stockholders (in dollars per share) $ 1.17 $ 0.84 $ 0.99
Income from discontinued operations available for common stockholders (in dollars per share) 4.13 0.16 0.20
Net income available for common stockholders (in dollars per share) $ 5.30 $ 1.00 $ 1.19
Weighted average Common Shares outstanding - diluted (in shares) [2] 101,398 97,406 93,800
Net income available for common stockholders:      
Income from continuing operations available for common stockholders $ 115,461 $ 79,308 $ 90,069
Income from discontinued operations available for common stockholders 406,328 15,264 18,388
Net income available for common stockholders 521,789 94,572 108,457
Highwoods Realty Limited Partnership [Member]      
Rental and other revenues 665,634 604,671 555,871
Operating expenses:      
Rental property and other expenses 231,085 215,941 205,835
Depreciation and amortization 220,140 201,918 180,637
Impairments of real estate assets 0 0 588
General and administrative 38,153 37,642 35,307
Total operating expenses 489,378 455,501 422,367
Interest expense:      
Contractual 73,142 82,245 82,287
Amortization of debt issuance costs 3,506 3,645 3,082
Financing obligation 0 162 (242)
Total interest expense 76,648 86,052 85,127
Other income:      
Interest and other income 2,338 1,969 2,739
Losses on debt extinguishment 0 (243) (308)
Total other income 2,338 1,726 2,431
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 101,946 64,844 50,808
Gains on disposition of property 14,807 11,444 44,352
Gain on disposition of investment in unconsolidated affiliate 0 4,155 0
Equity in earnings of unconsolidated affiliates 5,793 5,078 1,827
Income from continuing operations 122,546 85,521 96,987
Discontinued operations:      
Income from discontinued operations 4,097 15,739 18,601
Net gains on disposition of discontinued operations 414,496 0 384
Total income from discontinued operations 418,593 [1] 15,739 18,985
Net income 541,139 101,260 115,972
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,253) (1,264) (1,466)
Distributions on Preferred Units (2,501) (2,506) (2,507)
Net income available for common unitholders $ 537,385 $ 97,490 $ 111,999
Earnings per Common Unit - basic:      
Income from continuing operations available for common unitholders (in dollars per share) $ 1.18 $ 0.84 $ 1.00
Income from discontinued operations available for common unitholders (in dollars per share) 4.15 0.17 0.20
Net income available for common unitholders (in dollars per share) $ 5.33 $ 1.01 $ 1.20
Weighted average Common Units outstanding - basic (in shares) 100,902 96,910 93,272
Earnings per Common Unit - diluted:      
Income from continuing operations available for common unitholders (in dollars per share) $ 1.18 $ 0.84 $ 1.00
Income from discontinued operations available for common unitholders (in dollars per share) 4.14 0.17 0.20
Net income available for common unitholders (in dollars per share) $ 5.32 $ 1.01 $ 1.20
Weighted average Common Units outstanding - diluted (in shares) [3] 100,989 96,997 93,391
Net income available for common unitholders:      
Income from continuing operations available for common unitholders $ 118,792 $ 81,751 $ 93,014
Total income from discontinued operations 418,593 [1] 15,739 18,985
Net income available for common unitholders $ 537,385 $ 97,490 $ 111,999
[1] See Note 2 for a discussion regarding the sales of the Plaza assets.
[2] Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
[3] Includes all unvested restricted stock where distributions on such restricted stock are non-forfeitable.
v3.6.0.2
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Comprehensive income:      
Net income $ 541,139 $ 101,260 $ 115,972
Other comprehensive income/(loss):      
Unrealized gains on tax increment financing bond 0 445 584
Unrealized gains/(losses) on cash flow hedges 5,703 (4,040) (5,662)
Amortization of cash flow hedges 3,057 3,696 3,777
Total other comprehensive income/(loss) 8,760 101 (1,301)
Total comprehensive income 549,899 101,361 114,671
Less-comprehensive (income) attributable to noncontrolling interests (16,849) (4,182) (5,008)
Comprehensive income attributable to common stockholders/unitholders 533,050 97,179 109,663
Highwoods Realty Limited Partnership [Member]      
Comprehensive income:      
Net income 541,139 101,260 115,972
Other comprehensive income/(loss):      
Unrealized gains on tax increment financing bond 0 445 584
Unrealized gains/(losses) on cash flow hedges 5,703 (4,040) (5,662)
Amortization of cash flow hedges 3,057 3,696 3,777
Total other comprehensive income/(loss) 8,760 101 (1,301)
Total comprehensive income 549,899 101,361 114,671
Less-comprehensive (income) attributable to noncontrolling interests (1,253) (1,264) (1,466)
Comprehensive income attributable to common stockholders/unitholders $ 548,646 $ 100,097 $ 113,205
v3.6.0.2
Consolidated Statements of Equity - USD ($)
$ in Thousands
Total
Highwoods Realty Limited Partnership [Member]
Special Dividend [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Common Stock [Member]
Special Dividend [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Special Dividend [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
General Partner Common Units [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Additional Paid-in Capital [Member]
Special Dividend [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Special Dividend [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Special Dividend [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Special Dividend [Member]
Balance (in shares) at Dec. 31, 2013         89,920,915                                      
Balance at Dec. 31, 2013 $ 1,507,467 $ 1,478,562     $ 899   $ 29,077   $ 14,596   $ 1,445,181   $ 2,370,368   $ (2,611) $ (2,611)     $ 21,396 $ 21,396     $ (911,662)  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   112,624             1,126   111,498         0       0        
Redemptions of Common Units   (93)             (1)   (92)         0       0        
Distributions on Common Units   (158,464)             (1,585)   (156,879)         0       0        
Distributions on Preferred Units   (2,507)             (25)   (2,482)         0       0        
Issuances of Common Stock - Shares         2,812,477                                      
Issuances of Common Stock, net of issuance costs and tax withholdings 112,624       $ 28   0           112,596   0       0       0  
Conversions of Common Units to Common Stock - Shares         4,417                                      
Conversions of Common Units to Common Stock 162       $ 0   0           162   0       0       0  
Dividends on Common Stock (154,165)       0   0           0   0       0       (154,165)  
Dividends on Preferred Stock (2,507)       0   0           0   0       0       (2,507)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value (25,275)       0   0           (25,275)   0       0       0  
Acquisition of noncontrolling interest in consolidated affiliate (4,126) (4,126)     0   0   (5)   (508)   (513)   0 0     (3,613) (3,613)     0  
Distributions to noncontrolling interests in consolidated affiliates (1,140) (1,140)     $ 0   0   0   0   0   0 0     (1,140) (1,140)     0  
Issuances of restricted stock - Shares         169,501                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (17)       $ 0   (17)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         0                                      
Share-based compensation expense, net of forfeitures 6,939 6,939     $ 2   0   69   6,870   6,937   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   (24,243)             (242)   (24,001)         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (3,542)       0   0           0   0       0       (3,542)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (15)   (1,451)   0   0 0     1,466 1,466     (1,466)  
Comprehensive income:                                                
Net income 115,972 115,972     0   0   1,160   114,812   0   0 0     0 0     115,972  
Other comprehensive income/(loss) (1,301) (1,301)     0   0   0   0   0   (1,301) (1,301)     0 0     0  
Total comprehensive income 114,671 114,671                                            
Balance at Dec. 31, 2014 1,551,091 1,522,223     $ 929   29,060   15,078   1,492,948   2,464,275   (3,912) (3,912)     18,109 18,109     (957,370)  
Balance (in shares) at Dec. 31, 2014         92,907,310                                      
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   125,537             1,255   124,282         0       0        
Distributions on Common Units   (164,601)             (1,646)   (162,955)         0       0        
Distributions on Preferred Units   (2,506)             (25)   (2,481)         0       0        
Issuances of Common Stock - Shares         3,023,710                                      
Issuances of Common Stock, net of issuance costs and tax withholdings 125,537       $ 30   0           125,507   0       0       0  
Conversions of Common Units to Common Stock - Shares         37,203                                      
Conversions of Common Units to Common Stock 1,645       $ 0   0           1,645   0       0       0  
Dividends on Common Stock (160,337)       0   0           0   0       0       (160,337)  
Dividends on Preferred Stock (2,506)       0   0           0   0       0       (2,506)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value (67)       0   0           (67)   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,398) (1,398)     $ 0   0   0   0   0   0 0     (1,398) (1,398)     0  
Issuances of restricted stock - Shares         128,951                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (10)       $ 0   (10)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         (5,242)                                      
Share-based compensation expense, net of forfeitures 6,884 6,884     $ 2   0   69   6,815   6,882   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   2,732             28   2,704         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (2,918)       0   0           0   0       0       (2,918)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (13)   (1,251)   0   0 0     1,264 1,264     (1,264)  
Comprehensive income:                                                
Net income 101,260 101,260     0   0   1,013   100,247   0   0 0     0 0     101,260  
Other comprehensive income/(loss) 101 101     0   0   0   0   0   101 101     0 0     0  
Total comprehensive income 101,361 101,361                                            
Balance at Dec. 31, 2015 $ 1,619,282 1,590,232     $ 961   29,050   15,759   1,560,309   2,598,242   (3,811) (3,811)     17,975 17,975     (1,023,135)  
Balance (in shares) at Dec. 31, 2015 96,091,932       96,091,932                                      
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   256,380             2,564   253,816         0       0        
Distributions on Common Units   (171,054)   $ (83,149)         (1,710) $ (832) (169,344) $ (82,317)       0   $ 0   0   $ 0    
Distributions on Preferred Units   (2,501)             (25)   (2,476)         0       0        
Issuances of Common Stock - Shares         5,390,710                                      
Issuances of Common Stock, net of issuance costs and tax withholdings $ 256,380       $ 54   0           256,326   0       0       0  
Conversions of Common Units to Common Stock - Shares         61,048                                      
Conversions of Common Units to Common Stock 3,057       $ 0   0           3,057   0       0       0  
Dividends on Common Stock (166,861)   $ (81,205)   0 $ 0 0 $ 0         0 $ 0 0   $ 0   0   $ 0   (166,861) $ (81,205)
Dividends on Preferred Stock (2,501)       0   0           0   0       0       (2,501)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value (12,993)       0   0           (12,993)   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,267) (1,267)     $ 0   0   0   0   0   0 0     (1,267) (1,267)     0  
Issuances of restricted stock - Shares         130,752                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (130)       $ 0   (130)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         (8,888)                                      
Share-based compensation expense, net of forfeitures 6,251 6,251     $ 2   0   63   6,188   6,249   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   (19,395)             (194)   (19,201)         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (15,596)       0   0           0   0       0       (15,596)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (13)   (1,240)   0   0 0     1,253 1,253     (1,253)  
Comprehensive income:                                                
Net income 541,139 541,139     0   0   5,411   535,728   0   0 0     0 0     541,139  
Other comprehensive income/(loss) 8,760 8,760     0   0   0   0   0   8,760 8,760     0 0     0  
Total comprehensive income 549,899 549,899                                            
Balance at Dec. 31, 2016 $ 2,154,316 $ 2,125,396     $ 1,017   $ 28,920   $ 21,023   $ 2,081,463   $ 2,850,881   $ 4,949 $ 4,949     $ 17,961 $ 17,961     $ (749,412)  
Balance (in shares) at Dec. 31, 2016 101,665,554       101,665,554                                      
v3.6.0.2
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Operating activities:      
Net income $ 541,139 $ 101,260 $ 115,972
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 220,140 215,957 196,023
Amortization of lease incentives and acquisition-related intangible assets and liabilities (1,996) 86 442
Share-based compensation expense 6,251 6,884 6,939
Allowance for losses on accounts and accrued straight-line rents receivable 2,001 2,103 2,182
Accrued interest on mortgages and notes receivable (502) (357) (477)
Amortization of debt issuance costs 3,506 3,645 3,082
Amortization of cash flow hedges 3,057 3,696 3,777
Amortization of mortgages and notes payable fair value adjustments (234) (58) (788)
Impairments of real estate assets 0 0 588
Losses on debt extinguishment 0 243 308
Net gains on disposition of property (429,303) (11,444) (44,736)
Gain on disposition of investment in unconsolidated affiliate 0 (4,155) 0
Equity in earnings of unconsolidated affiliates (5,793) (5,078) (1,827)
Changes in financing obligation 0 162 (241)
Distributions of earnings from unconsolidated affiliates 4,424 4,901 2,687
Changes in operating assets and liabilities:      
Accounts receivable 3,401 1,415 (3,114)
Prepaid expenses and other assets (4,423) 1,266 (615)
Accrued straight-line rents receivable (24,245) (22,756) (21,685)
Accounts payable, accrued expenses and other liabilities (11,618) (8,891) 8,394
Net cash provided by operating activities 305,805 288,879 266,911
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (110,249) (408,634) (163,641)
Investments in development in-process (177,875) (136,664) (183,873)
Investments in tenant improvements and deferred leasing costs (91,423) (115,503) (113,747)
Investments in building improvements (80,672) (55,881) (50,033)
Investment in acquired noncontrolling interest in consolidated affiliate 0 0 (4,126)
Net proceeds from disposition of real estate assets 684,371 26,748 172,442
Net proceeds from disposition of investment in unconsolidated affiliate 0 6,919 0
Distributions of capital from unconsolidated affiliates 2,766 10,401 3,806
Investments in mortgages and notes receivable (7,934) (1,772) (864)
Repayments of mortgages and notes receivable 1,699 9,381 17,239
Investments in and advances to unconsolidated affiliates (105) (659) (6,489)
Repayments from unconsolidated affiliates 448 20,800 0
Redemption of investment In unconsolidated affiliate 0 0 4,660
Changes in restricted cash and other investing activities (17,136) (9,293) (3,552)
Net cash provided by/(used in) investing activities 203,890 (654,157) (328,178)
Financing activities:      
Dividends on Common Stock (166,861) (160,337) (154,165)
Redemptions/repurchases of Preferred Stock (130) (10) (17)
Redemptions of Common Units 0 0 (93)
Dividends on Preferred Stock (2,501) (2,506) (2,507)
Distributions to noncontrolling interests in the Operating Partnership (4,888) (4,959) (4,994)
Distributions to noncontrolling interests in consolidated affiliates (1,267) (1,398) (1,140)
Proceeds from the issuance of Common Stock 264,769 131,341 117,716
Costs paid for the issuance of Common Stock (3,973) (2,040) (1,586)
Repurchase of shares related to tax withholdings (4,416) (3,764) (3,506)
Borrowings on revolving credit facility 287,600 476,300 506,900
Repayments of revolving credit facility (586,600) (386,300) (513,600)
Borrowings on mortgages and notes payable 150,000 475,000 296,949
Repayments of mortgages and notes payable (395,993) (156,120) (174,302)
Payments on financing obligation 0 (1,722) (2,904)
Payments of debt extinguishment costs 0 0 (369)
Changes in debt issuance costs and other financing activities (981) (2,003) (2,467)
Net cash provided by/(used in) financing activities (465,241) 361,482 59,915
Net increase/(decrease) in cash and cash equivalents 44,454 (3,796) (1,352)
Cash and cash equivalents at beginning of the period 5,036 8,832 10,184
Cash and cash equivalents at end of the period 49,490 5,036 8,832
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 72,847 82,242 83,086
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains/(losses) on cash flow hedges 5,703 (4,040) (5,662)
Conversions of Common Units to Common Stock 3,057 1,645 162
Changes in accrued capital expenditures 8,580 2,547 5,283
Write-off of fully depreciated real estate assets 39,262 48,698 42,633
Write-off of fully amortized debt issuance and leasing costs 26,533 38,264 25,286
Adjustment of noncontrolling interests in the Operating Partnership to fair value 12,993 67 25,275
Unrealized gains on tax increment financing bond 0 445 584
Assumption of mortgages and notes payable related to acquisition activities 0 19,277 0
Contingent consideration in connection with the acquisition of land 0 900 3,300
Special dividend on Common Stock declared (81,205) 0 0
Special distribution to noncontrolling interests in the Operating Partnership declared (2,271) 0 0
Highwoods Realty Limited Partnership [Member]      
Operating activities:      
Net income 541,139 101,260 115,972
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 220,140 215,957 196,023
Amortization of lease incentives and acquisition-related intangible assets and liabilities (1,996) 86 442
Share-based compensation expense 6,251 6,884 6,939
Allowance for losses on accounts and accrued straight-line rents receivable 2,001 2,103 2,182
Accrued interest on mortgages and notes receivable (502) (357) (477)
Amortization of debt issuance costs 3,506 3,645 3,082
Amortization of cash flow hedges 3,057 3,696 3,777
Amortization of mortgages and notes payable fair value adjustments (234) (58) (788)
Impairments of real estate assets 0 0 588
Losses on debt extinguishment 0 243 308
Net gains on disposition of property (429,303) (11,444) (44,736)
Gain on disposition of investment in unconsolidated affiliate 0 (4,155) 0
Equity in earnings of unconsolidated affiliates (5,793) (5,078) (1,827)
Changes in financing obligation 0 162 (241)
Distributions of earnings from unconsolidated affiliates 4,011 4,901 2,687
Changes in operating assets and liabilities:      
Accounts receivable 3,401 1,415 (3,114)
Prepaid expenses and other assets (4,423) 1,266 (615)
Accrued straight-line rents receivable (24,245) (22,756) (21,685)
Accounts payable, accrued expenses and other liabilities (11,618) (8,805) 8,383
Net cash provided by operating activities 305,392 288,965 266,900
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (110,249) (408,634) (163,641)
Investments in development in-process (177,875) (136,664) (183,873)
Investments in tenant improvements and deferred leasing costs (91,423) (115,503) (113,747)
Investments in building improvements (80,672) (55,881) (50,033)
Investment in acquired noncontrolling interest in consolidated affiliate 0 0 (4,126)
Net proceeds from disposition of real estate assets 684,371 26,748 172,442
Net proceeds from disposition of investment in unconsolidated affiliate 0 6,919 0
Distributions of capital from unconsolidated affiliates 3,179 10,401 3,806
Investments in mortgages and notes receivable (7,934) (1,772) (864)
Repayments of mortgages and notes receivable 1,699 9,381 17,239
Investments in and advances to unconsolidated affiliates (105) (659) (6,489)
Repayments from unconsolidated affiliates 448 20,800 0
Redemption of investment In unconsolidated affiliate 0 0 4,660
Changes in restricted cash and other investing activities (17,136) (9,293) (3,552)
Net cash provided by/(used in) investing activities 204,303 (654,157) (328,178)
Financing activities:      
Distributions on Common Units (171,054) (164,601) (158,464)
Redemptions/repurchases of Preferred Units (130) (10) (17)
Redemptions of Common Units 0 0 (93)
Distributions on Preferred Units (2,501) (2,506) (2,507)
Distributions to noncontrolling interests in consolidated affiliates (1,267) (1,398) (1,140)
Proceeds from the issuance of Common Units 264,769 131,341 117,716
Costs paid for the issuance of Common Units (3,973) (2,040) (1,586)
Repurchase of units related to tax withholdings (4,416) (3,764) (3,506)
Borrowings on revolving credit facility 287,600 476,300 506,900
Repayments of revolving credit facility (586,600) (386,300) (513,600)
Borrowings on mortgages and notes payable 150,000 475,000 296,949
Repayments of mortgages and notes payable (395,993) (156,120) (174,302)
Payments on financing obligation 0 (1,722) (2,904)
Payments of debt extinguishment costs 0 0 (369)
Changes in debt issuance costs and other financing activities (1,676) (2,890) (3,142)
Net cash provided by/(used in) financing activities (465,241) 361,290 59,935
Net increase/(decrease) in cash and cash equivalents 44,454 (3,902) (1,343)
Cash and cash equivalents at beginning of the period 5,036 8,938 10,281
Cash and cash equivalents at end of the period 49,490 5,036 8,938
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 72,847 82,242 83,086
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains/(losses) on cash flow hedges 5,703 (4,040) (5,662)
Changes in accrued capital expenditures 8,580 2,547 5,283
Write-off of fully depreciated real estate assets 39,262 48,698 42,633
Write-off of fully amortized debt issuance and leasing costs 26,533 38,264 25,286
Adjustment of Redeemable Common Units to fair value 18,373 (3,619) 23,568
Unrealized gains on tax increment financing bond 0 445 584
Assumption of mortgages and notes payable related to acquisition activities 0 19,277 0
Contingent consideration in connection with the acquisition of land 0 900 3,300
Special distribution on Common Units declared $ (83,149) $ 0 $ 0
v3.6.0.2
Description of Business and Significant Accounting Policies
12 Months Ended
Dec. 31, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc. (the “Company”) is a fully integrated real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At December 31, 2016, we owned or had an interest in 31.1 million rentable square feet of in-service properties, 1.1 million rentable square feet of office properties under development and approximately 400 acres of development land.

The Company is the sole general partner of the Operating Partnership. At December 31, 2016, the Company owned all of the Preferred Units and 101.3 million, or 97.3%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.8 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds of the issuance are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is obligated to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of Common Stock based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company, at its option, may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During 2016, the Company redeemed 61,048 Common Units for a like number of shares of Common Stock. These redemptions, in conjunction with the proceeds from issuances of Common Stock (see Note 12), increased the percentage of Common Units owned by the Company from 97.1% at December 31, 2015 to 97.3% at December 31, 2016.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Statements of Income for the year ended December 31, 2014 were retrospectively revised from previously reported amounts to reclassify the operations for those properties classified as discontinued operations.

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. We consolidate joint venture investments, such as interests in partnerships and limited liability companies, when we control the major operating and financial policies of the investment through majority ownership, in our capacity as a general partner or managing member or through some other contractual right. At December 31, 2016, three properties owned through a joint venture investment were consolidated.

In addition, we consolidate those entities deemed to be variable interest entities in which we are determined to be the primary beneficiary. During 2015, we acquired three buildings and a land parcel using special purpose entities owned by qualified intermediaries to facilitate a potential Section 1031 reverse exchange under the Internal Revenue Code. We determined that these entities were variable interest entities of which we were the primary beneficiary; therefore, we consolidated these entities as of December 31, 2015. At such time, these variable interest entities had total assets, liabilities and cash flows of $421.3 million, $16.3 million, and $7.1 million, respectively. During 2016, we subsequently acquired such special purpose entities and therefore own direct title to these buildings.

All intercompany transactions and accounts have been eliminated.

1.    Description of Business and Significant Accounting Policies – Continued

During 2015, as a result of our partner’s irrevocable exercise of a buy-sell provision in our SF-HIW Harborview Plaza, LP ("Harborview") joint venture agreement, our partner’s right to put its 80.0% equity interest back to us became no longer exercisable. As a result, we recorded the original contribution transaction as a partial sale. Our investment in this joint venture then qualified for the equity method of accounting, which resulted in the retrospective revision of our Consolidated Balance Sheets and Consolidated Statements of Equity and Capital for prior periods.

Use of Estimates

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

Real Estate and Related Assets

Real estate and related assets are recorded at cost and stated at cost less accumulated depreciation. Renovations, replacements and other expenditures that improve or extend the life of assets are capitalized and depreciated over their estimated useful lives. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful life of 40 years for buildings and depreciable land infrastructure costs, 15 years for building improvements and five to seven years for furniture, fixtures and equipment. Tenant improvements are amortized using the straight-line method over initial fixed terms of the respective leases, which generally are from three to 10 years. Depreciation expense for real estate assets was $173.1 million, $168.7 million and $154.4 million for the years ended December 31, 2016, 2015 and 2014, respectively.

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

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

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

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

1.    Description of Business and Significant Accounting Policies – Continued

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

In-place leases acquired are recorded at fair value in deferred leasing costs and are amortized to depreciation and amortization expense over the remaining term of the respective lease. The value of in-place leases is based on our evaluation of the specific characteristics of each customer's lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, current market conditions, the customer's credit quality and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, we consider tenant improvements, leasing commissions and legal and other related expenses.
 
Real estate and other assets are classified as long-lived assets held for use or as long-lived assets held for sale. Real estate is classified as held for sale when the sale of the asset is probable, has been duly approved by the Company, a legally enforceable contract has been executed and the buyer's due diligence period, if any, has expired.

Impairments of Real Estate Assets and Investments in Unconsolidated Affiliates

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

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

1.    Description of Business and Significant Accounting Policies – Continued

Sales of Real Estate
 
For sales transactions meeting the requirements for full profit recognition, the related assets and liabilities are removed from the balance sheet and the resultant gain or loss is recorded in the period the transaction closes. For sales transactions with continuing involvement after the sale, if the continuing involvement with the property is limited by the terms of the sales contract, profit is recognized at the time of sale and is reduced by the maximum exposure to loss related to the nature of the continuing involvement. Sales to entities in which we have or receive an interest are accounted for using partial sale accounting.

For transactions that do not meet the criteria for a sale, we evaluate the nature of the continuing involvement, including put and call provisions, if present, and account for the transaction as a financing arrangement, profit-sharing arrangement, leasing arrangement or other alternate method of accounting, rather than as a sale, based on the nature and extent of the continuing involvement. Some transactions may have numerous forms of continuing involvement. In those cases, we determine which method is most appropriate based on the substance of the transaction.

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

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

1.    Description of Business and Significant Accounting Policies – Continued

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

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

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

Cash Equivalents

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

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

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

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

1.    Description of Business and Significant Accounting Policies – Continued

Other than income taxes related to its taxable REIT subsidiary, the Operating Partnership does not reflect any federal income taxes in its financial statements, since as a partnership the taxable effects of its operations are attributed to its partners. The Operating Partnership does record state income tax for states that tax partnership income directly.
 
We conduct certain business activities through a taxable REIT subsidiary, as permitted under the Code. The taxable REIT subsidiary is subject to federal, state and local income taxes on its taxable income. We record provisions for income taxes based on its income recognized for financial statement purposes, including the effects of temporary differences between such income and the amount recognized for tax purposes.
 
Concentration of Credit Risk
 
At December 31, 2016, properties that we wholly own were leased to 1,741 customers. The geographic locations that comprise greater than 10.0% of our rental and other revenues are Raleigh, Atlanta, Tampa and Nashville. Our customers engage in a wide variety of businesses. No single customer generated more than 6% of our consolidated revenues during 2016.
 
We maintain our cash and cash equivalents and our restricted cash at financial or other intermediary institutions. The combined account balances at each institution may exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Additionally, from time to time in connection with tax-deferred 1031 transactions, our restricted cash balances may be commingled with other funds being held by any such intermediary institution, which would subject our balance to the credit risk of the institution.

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

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

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

1.    Description of Business and Significant Accounting Policies – Continued

Basic earnings per unit of the Operating Partnership is computed by dividing net income available for common unitholders by the weighted Common Units outstanding - basic. Diluted earnings per unit is computed by dividing net income available to common unitholders by the weighted Common Units outstanding - basic plus the dilutive effect of options and warrants, using the treasury stock method. Weighted Common Units outstanding - basic includes all of the Company's unvested restricted stock where distributions received on such restricted stock are non-forfeitable.
 
Recently Issued Accounting Standards
 
The Financial Accounting Standards Board (“FASB”) recently issued an accounting standards update (“ASU”) that amended consolidation requirements. The amendments significantly change the consolidation analysis required under GAAP and require companies to reevaluate all previous consolidation conclusions. We adopted the ASU as of January 1, 2016 and there was no impact to consolidated entities included in our Consolidated Financial Statements.
 
The FASB recently issued an ASU that requires debt issuance costs to be presented in the balance sheet as a direct deduction from the carrying amount of the debt liability to which they relate, consistent with debt discounts, as opposed to being presented as assets. For debt issuance costs related to revolving credit facilities, the FASB allows the presentation of debt issuance costs as an asset. We adopted the ASU as of January 1, 2016 with retrospective application to our December 31, 2015 Consolidated Balance Sheets. The effect of the adoption was to reclassify debt issuance costs from deferred financing and leasing costs, net of accumulated amortization, as follows: $7.8 million to a contra account as a deduction from the related mortgages and notes payable; and $2.1 million to prepaid expenses and other assets. There was no effect on our Consolidated Statements of Income or Consolidated Statements of Cash Flows.

The FASB recently issued an ASU that requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that we identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when we satisfy the performance obligations. We will also be required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The ASU is required to be adopted in 2018. Retrospective application is required either to all periods presented or with the cumulative effect of initial adoption recognized in the period of adoption. Our initial analysis of our non-lease related revenue contracts indicates that the adoption of this ASU will not have a material effect on our Consolidated Financial Statements; however, we are still in the process of evaluating this ASU.

The FASB recently issued an ASU that adds to and clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. The ASU is required to be adopted in 2018 with retrospective application required. We do not expect such adoption to have a material effect on our Consolidated Statements of Cash Flows.
 
The FASB recently issued an ASU which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The ASU requires lessors to account for leases using an approach that is substantially equivalent to the existing guidance and is effective for reporting periods beginning in 2019 with early adoption permitted. We are in the process of evaluating this ASU.

The FASB recently issued an ASU that requires, among other things, the use of a new current expected credit loss ("CECL") model in determining our allowances for doubtful accounts with respect to accounts receivable, accrued straight-line rents receivable and mortgages and notes receivable. The CECL model requires that we estimate our lifetime expected credit loss with respect to these receivables and record allowances that, when deducted from the balance of the receivables, represent the net amounts expected to be collected. We will also be required to disclose information about how we developed the allowances, including changes in the factors (e.g., portfolio mix, credit trends, unemployment, gross domestic product, etc.) that influenced our estimate of expected credit losses and the reasons for those changes. We will apply the ASU’s provisions as a cumulative-effect adjustment to retained earnings upon adoption in 2020. We are in the process of evaluating this ASU.

The FASB recently issued an ASU that requires management of all entities to evaluate whether there are conditions and events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the financial statements are issued. We adopted the ASU as of December 31, 2016. We added additional disclosures in Note 6 as a result of the adoption of this ASU.
v3.6.0.2
Real Estate Assets
12 Months Ended
Dec. 31, 2016
Real Estate [Abstract]  
Real Estate Assets
Real Estate Assets
 
Acquisitions

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

During 2016, we also acquired:

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

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

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

During 2015, we acquired:

a building in Tampa encompassing 528,000 rentable square feet for a net purchase price of $113.5 million and an adjacent land parcel for a purchase price of $2.2 million;

two buildings in Atlanta encompassing 896,000 rentable square feet for a net purchase price of $290.3 million;

land in Atlanta for a purchase price and related transaction costs of $5.2 million (including contingent consideration of $0.9 million); and

our Highwoods DLF 98/29, LLC joint venture partner’s 77.2% interest in a building in Orlando encompassing 168,000 rentable square feet in exchange for the assumption of secured debt recorded at fair value of $19.3 million (see Note 6).

We expensed $1.0 million of acquisition costs (included in general and administrative expenses) in 2015 related to these acquisitions. The assets acquired and liabilities assumed were recorded at fair value as determined by management, with the assistance of third party specialists, based on information available at the acquisition date and on current assumptions as to future operations.

The following table sets forth a summary of the fair value of the major assets acquired and liabilities assumed relating to the above-referenced acquisition of two buildings in Atlanta during 2015:

 
Total
Purchase Price Allocation
Real estate assets
$
275,639

Acquisition-related intangible assets (in deferred leasing costs)
23,722

Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(9,076
)
Total allocation
$
290,285


 

2.     Real Estate Assets - Continued

The following table sets forth the Company's revenues and net income, adjusted for interest expense, straight-line rental income, depreciation and amortization related to purchase price allocations and acquisition costs, assuming the above-referenced acquisition of two buildings in Atlanta during 2015 had been completed as of January 1, 2014:
 
 
Year Ended December 31,
 
2015
 
(unaudited)
Pro forma revenues
$
626,067

Pro forma net income
$
103,485

Pro forma net income available for common stockholders
$
96,797

Pro forma earnings per share - basic
$
1.03

Pro forma earnings per share - diluted
$
1.02



The above-referenced acquisition of two buildings in Atlanta during 2015 resulted in revenues of $7.3 million and net loss of $1.2 million recorded in the Consolidated Statements of Income for the year ended December 31, 2015.

During 2014, we acquired:

a building in Orlando encompassing 246,000 rentable square feet for a purchase price of $67.4 million;

our partner's 50.0% interest in a building owned by our consolidated Highwoods-Markel Associates, LLC joint venture in Richmond encompassing 66,000 rentable square feet for a purchase price of $4.2 million, which is recorded as acquisition of noncontrolling interest in consolidated affiliate;

land in Nashville for a purchase price and related transaction costs of $15.8 million (including contingent consideration of $3.3 million); and

a building in Raleigh encompassing 374,000 rentable square feet for a purchase price of $83.8 million.

We expensed $0.5 million of acquisition costs (included in general and administrative expenses) in 2014 related to these acquisitions. The assets acquired and liabilities assumed were recorded at fair value as determined by management, with the assistance of third party specialists, based on information available at the acquisition date and on current assumptions as to future operations.

Dispositions

During 2016, we sold:

substantially all of our wholly-owned Country Club Plaza assets in Kansas City (which we refer to as the “Plaza assets”) for a sale price of $660.0 million (before closing credits to buyer of $4.8 million). We recorded gains on disposition of discontinued operations of $414.5 million and a gain on disposition of property of $1.3 million related to the land; and
 
a 32,000 square foot building for a sale price of $4.7 million (before closing credits to buyer of $0.1 million) and recorded a gain on disposition of property of $1.1 million. The buyer, which leased 79% of the building, is a family business controlled by a director of the Company. The sale price exceeded the value set forth in an appraisal performed by a reputable independent commercial real estate services firm that has no relationship with the director or any of his affiliates.

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


2.     Real Estate Assets - Continued

During 2015, we sold a total of three buildings and various land parcels for an aggregate sale price of $27.8 million and recorded aggregate gains on disposition of property of $9.2 million, net of $0.5 million in taxes payable by our taxable REIT subsidiary.

During 2014, we sold a total of 33 buildings and various land parcels for an aggregate sale price of $187.3 million (before closing credits to buyer of $8.6 million for unfunded building and tenant improvements and $2.9 million for free rent) and recorded aggregate gains on disposition of property of $44.4 million.

Impairments

During 2014, we recorded an impairment of real estate assets of $0.6 million on a building in Greensboro. This impairment was due to a change in the assumed timing of future disposition and leasing assumptions, which reduced the future expected cash flows from the impaired property.
v3.6.0.2
Mortgages and Notes Receivable
12 Months Ended
Dec. 31, 2016
Receivables [Abstract]  
Mortgages and Notes Receivable
Mortgages and Notes Receivable

Mortgages and notes receivable were $8.8 million and $2.1 million at December 31, 2016 and 2015, respectively.

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

During 2012, we provided $8.6 million of secured acquisition financing to a third party. We also agreed to loan such third party $8.4 million on a secured basis to fund future infrastructure development. During 2015, $9.9 million of the secured acquisition financing was repaid, including accrued interest. Previously, we concluded this arrangement to be an interest in a variable interest entity. However, since we did not have the power to direct matters that most significantly impact the activities of the entity, we did not qualify as the primary beneficiary. Accordingly, the entity was not consolidated. Our risk of loss with respect to this arrangement was limited to the carrying value of the mortgage receivable.

We evaluate the ability to collect our mortgages and notes receivable by monitoring the leasing statistics and/or market fundamentals of these assets. As of December 31, 2016, our mortgages and notes receivable were not in default and there were no other indicators of impairment.
v3.6.0.2
Investments In and Advances To Affiliates
12 Months Ended
Dec. 31, 2016
Equity Method Investments and Joint Ventures [Abstract]  
Investments In and Advances To Affiliates
Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of the joint venture investment.

The following table sets forth our ownership in unconsolidated affiliates at December 31, 2016:

Joint Venture
 
Location
 
Ownership
Interest
Plaza Colonnade, Tenant-in-Common
 
Kansas City
 
50.0%
Highwoods DLF 97/26 DLF 99/32, LP
 
Orlando
 
42.9%
Kessinger/Hunter & Company, LC
 
Kansas City
 
26.5%
Highwoods DLF Forum, LLC
 
Raleigh
 
25.0%
Highwoods DLF 98/29, LLC
 
Orlando
 
22.8%


4.    Investments in and Advances to Affiliates – Continued

The following table sets forth the summarized balance sheets of our unconsolidated affiliates:

 
December 31,
 
2016
 
2015
Balance Sheets:
 
 
 
Assets:
 
 
 
Real estate assets, net
$
141,105

 
$
163,852

All other assets, net
58,467

 
53,511

Total Assets
$
199,572

 
$
217,363

Liabilities and Partners’ or Stockholders’ Equity:
 
 
 
Mortgages and notes payable, net
$
122,560

 
$
141,580

All other liabilities
9,512

 
6,547

Partners’ or stockholders’ equity
67,500

 
69,236

Total Liabilities and Partners’ or Stockholders’ Equity
$
199,572

 
$
217,363

Our share of historical partners’ or stockholders’ equity
$
20,032

 
$
21,022

Advances to unconsolidated affiliates

 
448

Difference between cost of investments and the net book value of underlying net assets
(1,186
)
 
(794
)
Carrying value of investments in and advances to unconsolidated affiliates
$
18,846

 
$
20,676



The following table sets forth the summarized income statements of our unconsolidated affiliates:
 
Year Ended December 31,
 
2016
 
2015
 
2014
Income Statements:
 
 
 
 
 
Rental and other revenues
$
42,344

 
$
48,118

 
$
50,514

Expenses:
 
 
 
 
 
Rental property and other expenses
17,808

 
22,721

 
25,159

Depreciation and amortization
10,348

 
12,257

 
13,310

Interest expense
5,191

 
7,196

 
8,847

Total expenses
33,347

 
42,174

 
47,316

Income before disposition of property
8,997

 
5,944

 
3,198

Gains on disposition of property
22,247

 
18,181

 
2,998

Net income
$
31,244

 
$
24,125

 
$
6,196



The following summarizes additional information related to certain of our unconsolidated affiliates:

- Concourse Center Associates, LLC ("Concourse")

During 2016, Concourse (a joint venture in which we owned a 50.0% interest) sold two buildings and land to an unrelated third party for an aggregate sale price of $11.0 million and recorded losses on disposition of property of $0.1 million. As our cost basis was different from the basis reflected at the joint venture level, we recorded $0.4 million of gains through equity in earnings of unconsolidated affiliates. Simultaneously with the sale, the joint venture repaid all $6.6 million of its debt.

4.    Investments in and Advances to Affiliates – Continued

- Highwoods DLF 97/26 DLF 99/32, LP (“DLF II”)
 
During 2015, DLF II sold a building to an unrelated third party for a sale price of $7.0 million and recorded a gain on disposition of property of $2.1 million. We recorded $1.1 million as our share of this gain through equity in earnings of unconsolidated affiliates.

- Kessinger/Hunter & Company, LC ("Kessinger/Hunter")
 
Kessinger/Hunter, which is managed by our joint venture partner, provides leasing services, among other things, to certain buildings that we currently own and/or previously owned in Kansas City in exchange for customary fees from us. Kessinger/Hunter received $0.4 million, $0.3 million and $0.6 million from us for these services in 2016, 2015 and 2014, respectively.
 
- Highwoods DLF 98/29, LLC (“DLF I”)

See Note 2 for a description of our acquisition of a building in Orlando from DLF I during 2015. The joint venture recorded a gain on disposition of property of $13.7 million. Our share of $3.1 million was recorded as a reduction to real estate assets.

During 2014, DLF I sold a building to an unrelated third party for a sale price of $13.7 million (before $0.4 million in closing credits to buyer for free rent) and recorded a gain on disposition of property of $1.0 million. We recorded $0.2 million as our share of this gain through equity in earnings of unconsolidated affiliates.

- 4600 Madison Associates, LP ("4600 Madison")

During 2016, 4600 Madison (a joint venture in which we owned a 12.5% interest) sold a building and land in separate transactions to unrelated third parties for an aggregate sale price of $36.1 million and recorded gains on disposition of property of $22.3 million. As our cost basis was different from the basis reflected at the joint venture level, we recorded $1.9 million of gains through equity in earnings of unconsolidated affiliates. Simultaneously with the sales, the joint venture repaid all $9.7 million of its debt.

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

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

- Highwoods KC Glenridge Office, LLC ("KC Glenridge Office") and Highwoods KC Glenridge Land, LLC ("KC Glenridge Land")

During 2015, KC Glenridge Office (a joint venture in which we owned a 40.0% interest) and KC Glenridge Land (a joint venture in which we owned a 39.9% interest) collectively sold two buildings and land to an unrelated third party for an aggregate sale price of $24.5 million (before closing credits to buyer of $0.3 million for unfunded tenant improvements) and recorded gains on disposition of property of $2.4 million. We recorded $0.9 million as our share of these gains through equity in earnings of unconsolidated affiliates.

During 2014, KC Glenridge Office paid at maturity the remaining $14.9 million balance on a secured mortgage loan with an effective interest rate of 4.84%.

4.    Investments in and Advances to Affiliates – Continued

- Other Activities
 
We receive development, management and leasing fees for services provided to certain of our joint ventures. These fees are recognized in income to the extent of our respective joint venture partner's interest. During the years ended December 31, 2016, 2015 and 2014, we recognized $0.8 million, $1.4 million and $1.2 million, respectively, of development/construction, management and leasing fees from our unconsolidated joint ventures. At both December 31, 2016 and 2015, we had receivables of $0.1 million related to these fees in accounts receivable.
 
Consolidated Affiliates
 
The following summarizes our consolidated affiliates:

- Highwoods-Markel Associates, LLC (“Markel”)

We have a 50.0% ownership interest in Markel. We are the manager and leasing agent for Markel's properties, which are located in Richmond in exchange for customary management and leasing fees. We consolidate Markel since we are the managing member and control the major operating and financial policies of the entity. As controlling member, we have an obligation to cause this property-owning entity to distribute proceeds of liquidation to the noncontrolling interest member in these partially owned properties only if the net proceeds received by the entity from the sale of any of Markel's assets warrant a distribution as determined by the agreement governing the joint venture. We estimate the value of such noncontrolling interest distributions would have been $24.8 million had the entity been liquidated at December 31, 2016. This estimated settlement value is based on the fair value of the underlying properties which is based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for customers, changes in market rental rates and costs to operate each property. If the entity's underlying assets are worth less than the underlying liabilities on the date of such liquidation, we would have no obligation to remit any consideration to the noncontrolling interest holder.

See Note 2 for a description of our acquisition of the noncontrolling member's 50.0% interest in a building owned by Markel during 2014.

- Harborview
 
We had a 20.0% interest in Harborview, which had been accounted for as a financing obligation since our partner had the right to put its 80.0% equity interest back to us any time prior to September 11, 2015. During 2012, we also provided a three-year $20.8 million interest-only secured loan to Harborview that was scheduled to mature in September 2015.

During the second quarter of 2015, as a result of our partner’s irrevocable exercise of a buy-sell provision in our Harborview joint venture agreement, our partner’s right to put its 80.0% equity interest back to us became no longer exercisable, which resulted in recording the original contribution transaction as a partial sale. As a result, we were required to begin accounting for Harborview using the equity method of accounting. See Note 1.

During the third quarter of 2015, we sold our 20.0% interest in Harborview to our partner for net proceeds of $6.9 million and recorded a $4.2 million gain on disposition of investment in unconsolidated affiliate. The $20.8 million interest-only secured loan previously provided by us to Harborview was paid in full upon consummation of the sale.
v3.6.0.2
Intangible Assets and Below Market Leaes Liabilities
12 Months Ended
Dec. 31, 2016
Goodwill and Intangible Assets Disclosure [Abstract]  
Intangible Assets and Below Market Lease Liabilities
Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

 
December 31,
 
2016
 
2015
Assets:
 
 
 
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
$
353,581

 
$
346,937

Less accumulated amortization
(140,081
)
 
(115,172
)
 
$
213,500

 
$
231,765

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
61,221

 
$
63,830

Less accumulated amortization
(23,074
)
 
(17,927
)
 
$
38,147

 
$
45,903


The following table sets forth amortization of intangible assets and below market lease liabilities:

 
Year Ended December 31,
 
2016
 
2015
 
2014
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
44,968

 
$
43,332

 
$
38,144

Amortization of lease incentives (in rental and other revenues)
$
1,779

 
$
1,493

 
$
1,419

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
3,851

 
$
5,062

 
$
4,549

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

 
$
557

 
$
557

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(8,183
)
 
$
(7,065
)
 
$
(6,129
)

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:

Years Ending December 31,
 
Amortization
of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)
 
Amortization
of Lease Incentives (in Rental and Other Revenues)
 
Amortization
of Acquisition-Related Intangible Assets (in Rental and Other Revenues)
 
Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses)
 
Amortization
of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
2017
 
$
42,508

 
$
1,478

 
$
2,626

 
$
553