HIGHWOODS PROPERTIES, INC., 10-K filed on 2/6/2018
Annual Report
v3.8.0.1
Document and Entity Information - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2017
Jan. 26, 2018
Jun. 30, 2017
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, 2017    
Document Fiscal Year Focus 2017    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Common Stock, Shares Outstanding   103,284,071  
Entity Public Float     $ 5.2
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, 2017    
Document Fiscal Year Focus 2017    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
v3.8.0.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Real estate assets, at cost:    
Land $ 485,956 $ 474,375
Buildings and tenant improvements 4,590,490 4,313,373
Development in-process 88,452 279,602
Land held for development 74,765 77,355
Total real estate assets 5,239,663 5,144,705
Less-accumulated depreciation (1,202,424) (1,134,103)
Net real estate assets 4,037,239 4,010,602
Real estate and other assets, net, held for sale 14,118 0
Cash and cash equivalents 3,272 49,490
Restricted cash 85,061 29,141
Accounts receivable, net of allowance of $753 and $624, respectively 24,397 17,372
Mortgages and notes receivable, net of allowance of $72 and $105, respectively 6,425 8,833
Accrued straight-line rents receivable, net of allowance of $819 and $692, respectively 200,131 172,829
Investments in and advances to unconsolidated affiliates 23,897 18,846
Deferred leasing costs, net of accumulated amortization of $143,512 and $140,081, respectively 200,679 213,500
Prepaid expenses and other assets, net of accumulated amortization of $19,092 and $19,904, respectively 28,572 40,437
Total Assets 4,623,791 4,561,050
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 2,014,333 1,948,047
Accounts payable, accrued expenses and other liabilities 228,215 313,885
Total Liabilities 2,242,548 2,261,932
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 144,009 144,802
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), 28,892 and 28,920 shares issued and outstanding, respectively 28,892 28,920
Common Stock, $.01 par value, 200,000,000 authorized shares; 103,266,875 and 101,665,554 shares issued and outstanding, respectively 1,033 1,017
Additional paid-in capital 2,929,399 2,850,881
Distributions in excess of net income available for common stockholders (747,344) (749,412)
Accumulated other comprehensive income 7,838 4,949
Total Stockholders’ Equity 2,219,818 2,136,355
Noncontrolling interests in consolidated affiliates 17,416 17,961
Total Equity/Capital: 2,237,234 2,154,316
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital 4,623,791 4,561,050
Highwoods Realty Limited Partnership [Member]    
Real estate assets, at cost:    
Land 485,956 474,375
Buildings and tenant improvements 4,590,490 4,313,373
Development in-process 88,452 279,602
Land held for development 74,765 77,355
Total real estate assets 5,239,663 5,144,705
Less-accumulated depreciation (1,202,424) (1,134,103)
Net real estate assets 4,037,239 4,010,602
Real estate and other assets, net, held for sale 14,118 0
Cash and cash equivalents 3,272 49,490
Restricted cash 85,061 29,141
Accounts receivable, net of allowance of $753 and $624, respectively 24,397 17,372
Mortgages and notes receivable, net of allowance of $72 and $105, respectively 6,425 8,833
Accrued straight-line rents receivable, net of allowance of $819 and $692, respectively 200,131 172,829
Investments in and advances to unconsolidated affiliates 23,897 18,846
Deferred leasing costs, net of accumulated amortization of $143,512 and $140,081, respectively 200,679 213,500
Prepaid expenses and other assets, net of accumulated amortization of $19,092 and $19,904, respectively 28,572 40,437
Total Assets 4,623,791 4,561,050
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 2,014,333 1,948,047
Accounts payable, accrued expenses and other liabilities 228,215 313,885
Total Liabilities 2,242,548 2,261,932
Commitments and contingencies
Redeemable Operating Partnership Units:    
Common Units, 2,828,704 and 2,838,704 outstanding, respectively 144,009 144,802
Series A Preferred Units (liquidation preference $1,000 per unit), 28,892 and 28,920 units issued and outstanding, respectively 28,892 28,920
Total Redeemable Operating Partnership Units 172,901 173,722
Equity/Capital:    
General partner Common Units, 1,056,868 and 1,040,954 outstanding, respectively 21,830 21,023
Limited partner Common Units, 101,801,198 and 100,215,791 outstanding, respectively 2,161,258 2,081,463
Accumulated other comprehensive income 7,838 4,949
Noncontrolling interests in consolidated affiliates 17,416 17,961
Total Equity/Capital: 2,208,342 2,125,396
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital $ 4,623,791 $ 4,561,050
v3.8.0.1
Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2017
Dec. 31, 2016
Assets:    
Accounts receivable allowance $ 753 $ 624
Mortgages and notes receivable allowance 72 105
Accrued straight-line rents receivable allowance 819 692
Deferred leasing costs, accumulated amortization 143,512 140,081
Prepaid expenses and other assets, accumulated amortization $ 19,092 $ 19,904
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) 28,892 28,920
Preferred Stock, shares outstanding (in shares) 28,892 28,920
Common Stock, par value (in dollars per share) $ 0.01 $ 0.01
Common Stock, authorized shares (in shares) 200,000,000 200,000,000
Common Stock, shares issued (in shares) 103,266,875 101,665,554
Common Stock, shares outstanding (in shares) 103,266,875 101,665,554
Highwoods Realty Limited Partnership [Member]    
Assets:    
Accounts receivable allowance $ 753 $ 624
Mortgages and notes receivable allowance 72 105
Accrued straight-line rents receivable allowance 819 692
Deferred leasing costs, accumulated amortization 143,512 140,081
Prepaid expenses and other assets, accumulated amortization $ 19,092 $ 19,904
Redeemable Operating Partnership Units:    
Redeemable Common Units, outstanding (in shares) 2,828,704 2,838,704
Preferred Units liquidation preference (in dollars per share) $ 1,000 $ 1,000
Series A Preferred Units, issued (in shares) 28,892 28,920
Series A Preferred Units, outstanding (in shares) 28,892 28,920
Common Units:    
General partners' capital account, units outstanding (in shares) 1,056,868 1,040,954
Limited partners' capital account, units outstanding (in shares) 101,801,198 100,215,791
v3.8.0.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Rental and other revenues $ 702,737 $ 665,634 $ 604,671
Operating expenses:      
Rental property and other expenses 236,888 231,085 215,941
Depreciation and amortization 227,832 220,140 201,918
Impairments of real estate assets 1,445 0 0
General and administrative 39,648 38,153 37,642
Total operating expenses 505,813 489,378 455,501
Interest expense:      
Contractual 65,939 73,142 82,245
Amortization of debt issuance costs 3,166 3,506 3,645
Financing obligation 0 0 162
Total interest expense 69,105 76,648 86,052
Other income:      
Interest and other income 2,309 2,338 1,969
Losses on debt extinguishment (26) 0 (243)
Total other income 2,283 2,338 1,726
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 130,102 101,946 64,844
Gains on disposition of property 54,157 14,807 11,444
Gain on disposition of investment in unconsolidated affiliate 0 0 4,155
Equity in earnings of unconsolidated affiliates 7,404 5,793 5,078
Income from continuing operations 191,663 122,546 85,521
Discontinued operations:      
Income from discontinued operations 0 4,097 15,739
Net gains on disposition of discontinued operations 0 414,496 0
Total income from discontinued operations 0 418,593 15,739
Net income 191,663 541,139 101,260
Net (income) attributable to noncontrolling interests in the Operating Partnership (5,059) (15,596) (2,918)
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,239) (1,253) (1,264)
Dividends on Preferred Stock (2,492) (2,501) (2,506)
Net income available for common stockholders $ 182,873 $ 521,789 $ 94,572
Earnings per Common Share - basic:      
Income from continuing operations available for common stockholders (in dollars per share) $ 1.78 $ 1.17 $ 0.84
Income from discontinued operations available for common stockholders (in dollars per share) 0.00 4.13 0.16
Net income available for common stockholders (in dollars per share) $ 1.78 $ 5.30 $ 1.00
Weighted average Common Shares outstanding - basic (in shares) 102,682 98,439 94,404
Earnings per Common Share - diluted:      
Income from continuing operations available for common stockholders (in dollars per share) $ 1.78 $ 1.17 $ 0.84
Income from discontinued operations available for common stockholders (in dollars per share) 0.00 4.13 0.16
Net income available for common stockholders (in dollars per share) $ 1.78 $ 5.30 $ 1.00
Weighted average Common Shares outstanding - diluted (in shares) 105,594 101,398 97,406
Net income available for common stockholders:      
Income from continuing operations available for common stockholders $ 182,873 $ 115,461 $ 79,308
Income from discontinued operations available for common stockholders 0 406,328 15,264
Net income available for common stockholders 182,873 521,789 94,572
Highwoods Realty Limited Partnership [Member]      
Rental and other revenues 702,737 665,634 604,671
Operating expenses:      
Rental property and other expenses 236,888 231,085 215,941
Depreciation and amortization 227,832 220,140 201,918
Impairments of real estate assets 1,445 0 0
General and administrative 39,648 38,153 37,642
Total operating expenses 505,813 489,378 455,501
Interest expense:      
Contractual 65,939 73,142 82,245
Amortization of debt issuance costs 3,166 3,506 3,645
Financing obligation 0 0 162
Total interest expense 69,105 76,648 86,052
Other income:      
Interest and other income 2,309 2,338 1,969
Losses on debt extinguishment (26) 0 (243)
Total other income 2,283 2,338 1,726
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 130,102 101,946 64,844
Gains on disposition of property 54,157 14,807 11,444
Gain on disposition of investment in unconsolidated affiliate 0 0 4,155
Equity in earnings of unconsolidated affiliates 7,404 5,793 5,078
Income from continuing operations 191,663 122,546 85,521
Discontinued operations:      
Income from discontinued operations 0 4,097 15,739
Net gains on disposition of discontinued operations 0 414,496 0
Total income from discontinued operations 0 418,593 15,739
Net income 191,663 541,139 101,260
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,239) (1,253) (1,264)
Distributions on Preferred Units (2,492) (2,501) (2,506)
Net income available for common unitholders $ 187,932 $ 537,385 $ 97,490
Earnings per Common Unit - basic:      
Income from continuing operations available for common unitholders (in dollars per share) $ 1.79 $ 1.18 $ 0.84
Income from discontinued operations available for common unitholders (in dollars per share) 0.00 4.15 0.17
Net income available for common unitholders (in dollars per share) $ 1.79 $ 5.33 $ 1.01
Weighted average Common Units outstanding - basic (in shares) 105,106 100,902 96,910
Earnings per Common Unit - diluted:      
Income from continuing operations available for common unitholders (in dollars per share) $ 1.79 $ 1.18 $ 0.84
Income from discontinued operations available for common unitholders (in dollars per share) 0.00 4.14 0.17
Net income available for common unitholders (in dollars per share) $ 1.79 $ 5.32 $ 1.01
Weighted average Common Units outstanding - diluted (in shares) 105,185 100,989 96,997
Net income available for common unitholders:      
Income from continuing operations available for common unitholders $ 187,932 $ 118,792 $ 81,751
Total income from discontinued operations 0 418,593 15,739
Net income available for common unitholders $ 187,932 $ 537,385 $ 97,490
v3.8.0.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Comprehensive income:      
Net income $ 191,663 $ 541,139 $ 101,260
Other comprehensive income/(loss):      
Unrealized gains on tax increment financing bond 0 0 445
Unrealized gains/(losses) on cash flow hedges 1,732 5,703 (4,040)
Amortization of cash flow hedges 1,157 3,057 3,696
Total other comprehensive income 2,889 8,760 101
Total comprehensive income 194,552 549,899 101,361
Less-comprehensive (income) attributable to noncontrolling interests (6,298) (16,849) (4,182)
Comprehensive income attributable to common stockholders/unitholders 188,254 533,050 97,179
Highwoods Realty Limited Partnership [Member]      
Comprehensive income:      
Net income 191,663 541,139 101,260
Other comprehensive income/(loss):      
Unrealized gains on tax increment financing bond 0 0 445
Unrealized gains/(losses) on cash flow hedges 1,732 5,703 (4,040)
Amortization of cash flow hedges 1,157 3,057 3,696
Total other comprehensive income 2,889 8,760 101
Total comprehensive income 194,552 549,899 101,361
Less-comprehensive (income) attributable to noncontrolling interests (1,239) (1,253) (1,264)
Comprehensive income attributable to common stockholders/unitholders $ 193,313 $ 548,646 $ 100,097
v3.8.0.1
Consolidated Statements of Equity - USD ($)
$ in Thousands
Total
Highwoods Realty Limited Partnership [Member]
Special Dividend [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Common Stock [Member]
Special Dividend [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Special Dividend [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
General Partner Common Units [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Additional Paid-in Capital [Member]
Special Dividend [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Special Dividend [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Special Dividend [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Special Dividend [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Special Dividend [Member]
Balance (in shares) at Dec. 31, 2014         92,907,310                                      
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)  
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 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                                      
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   256,380             2,564   253,816         0       0        
Distributions on Common Units   (171,054)   $ (83,149)         (1,710) $ (832) (169,344) $ (82,317)       0   $ 0   0   $ 0    
Distributions on Preferred Units   (2,501)             (25)   (2,476)         0       0        
Issuances of Common Stock - Shares         5,390,710                                      
Issuances of Common Stock, net of issuance costs and tax withholdings 256,380       $ 54   0           256,326   0       0       0  
Conversions of Common Units to Common Stock - Shares         61,048                                      
Conversions of Common Units to Common Stock 3,057       $ 0   0           3,057   0       0       0  
Dividends on Common Stock (166,861)   $ (81,205)   0 $ 0 0 $ 0         0 $ 0 0   $ 0   0   $ 0   (166,861) $ (81,205)
Dividends on Preferred Stock (2,501)       0   0           0   0       0       (2,501)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value (12,993)       0   0           (12,993)   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,267) (1,267)     $ 0   0   0   0   0   0 0     (1,267) (1,267)     0  
Issuances of restricted stock - Shares         130,752                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (130)       $ 0   (130)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         (8,888)                                      
Share-based compensation expense, net of forfeitures 6,251 6,251     $ 2   0   63   6,188   6,249   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   (19,395)             (194)   (19,201)         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (15,596)       0   0           0   0       0       (15,596)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (13)   (1,240)   0   0 0     1,253 1,253     (1,253)  
Comprehensive income:                                                
Net income 541,139 541,139     0   0   5,411   535,728   0   0 0     0 0     541,139  
Other comprehensive income 8,760 8,760     0   0   0   0   0   8,760 8,760     0 0     0  
Total comprehensive income 549,899 549,899                                            
Balance at Dec. 31, 2016 $ 2,154,316 2,125,396     $ 1,017   28,920   21,023   2,081,463   2,850,881   4,949 4,949     17,961 17,961     (749,412)  
Balance (in shares) at Dec. 31, 2016 101,665,554       101,665,554                                      
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                                
Issuances of Common Units, net of issuance costs and tax withholdings   70,977             710   70,267         0       0        
Distributions on Common Units   (185,072)             (1,851)   (183,221)         0       0        
Distributions on Preferred Units   (2,492)             (25)   (2,467)         0       0        
Issuances of Common Stock - Shares         1,480,573                                      
Issuances of Common Stock, net of issuance costs and tax withholdings $ 70,977       $ 15   0           70,962   0       0       0  
Conversions of Common Units to Common Stock - Shares         10,000                                      
Conversions of Common Units to Common Stock 511       $ 0   0           511   0       0       0  
Dividends on Common Stock (180,805)       0   0           0   0       0       (180,805)  
Dividends on Preferred Stock (2,492)       0   0           0   0       0       (2,492)  
Adjustment of noncontrolling interests in the Operating Partnership to fair value 354       0   0           354   0       0       0  
Distributions to noncontrolling interests in consolidated affiliates (1,784) (1,784)     $ 0   0   0   0   0   0 0     (1,784) (1,784)     0  
Issuances of restricted stock - Shares         110,748                                      
Issuances of restricted stock 0       $ 0   0           0   0       0       0  
Redemptions/repurchases of Preferred Stock (28)       $ 0   (28)           0   0       0       0  
Share-based compensation expense, net of forfeitures - Shares         0                                      
Share-based compensation expense, net of forfeitures 6,692 6,692     $ 1   0   67   6,625   6,691   0 0     0 0     0  
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   73             1   72         0       0        
Net (income) attributable to noncontrolling interests in the Operating Partnership (5,059)       0   0           0   0       0       (5,059)  
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     0   0   (12)   (1,227)   0   0 0     1,239 1,239     (1,239)  
Comprehensive income:                                                
Net income 191,663 191,663     0   0   1,917   189,746   0   0 0     0 0     191,663  
Other comprehensive income 2,889 2,889     0   0   0   0   0   2,889 2,889     0 0     0  
Total comprehensive income 194,552 194,552                                            
Balance at Dec. 31, 2017 $ 2,237,234 $ 2,208,342     $ 1,033   $ 28,892   $ 21,830   $ 2,161,258   $ 2,929,399   $ 7,838 $ 7,838     $ 17,416 $ 17,416     $ (747,344)  
Balance (in shares) at Dec. 31, 2017 103,266,875       103,266,875                                      
v3.8.0.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2017
Dec. 31, 2016
Dec. 31, 2015
Operating activities:      
Net income $ 191,663 $ 541,139 $ 101,260
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 227,832 220,140 215,957
Amortization of lease incentives and acquisition-related intangible assets and liabilities (1,172) (1,996) 86
Share-based compensation expense 6,692 6,251 6,884
Allowance for losses on accounts and accrued straight-line rents receivable 1,508 2,001 2,103
Accrued interest on mortgages and notes receivable (509) (502) (357)
Amortization of debt issuance costs 3,166 3,506 3,645
Amortization of cash flow hedges 1,157 3,057 3,696
Amortization of mortgages and notes payable fair value adjustments 705 (234) (58)
Impairments of real estate assets 1,445 0 0
Losses on debt extinguishment 26 0 243
Net gains on disposition of property (54,157) (429,303) (11,444)
Gain on disposition of investment in unconsolidated affiliate 0 0 (4,155)
Equity in earnings of unconsolidated affiliates (7,404) (5,793) (5,078)
Changes in financing obligation 0 0 162
Distributions of earnings from unconsolidated affiliates 5,078 4,424 4,901
Settlement of cash flow hedges 7,322 0 0
Changes in operating assets and liabilities:      
Accounts receivable (4,974) 3,401 1,415
Prepaid expenses and other assets 7,908 (4,423) 1,266
Accrued straight-line rents receivable (32,234) (24,245) (22,756)
Accounts payable, accrued expenses and other liabilities (1,520) (11,618) (8,891)
Net cash provided by operating activities 352,532 305,805 288,879
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (1,840) (110,249) (408,634)
Investments in development in-process (150,944) (177,875) (136,664)
Investments in tenant improvements and deferred leasing costs (109,742) (91,423) (115,503)
Investments in building improvements (63,780) (80,672) (55,881)
Net proceeds from disposition of real estate assets 129,503 684,371 26,748
Net proceeds from disposition of investment in unconsolidated affiliate 0 0 6,919
Distributions of capital from unconsolidated affiliates 11,670 2,766 10,401
Investments in mortgages and notes receivable 0 (7,934) (1,772)
Repayments of mortgages and notes receivable 2,917 1,699 9,381
Investments in and advances to unconsolidated affiliates (10,063) (105) (659)
Repayments from unconsolidated affiliates 0 448 20,800
Changes in restricted cash and other investing activities (63,943) (17,136) (9,293)
Net cash provided by/(used in) investing activities (256,222) 203,890 (654,157)
Financing activities:      
Dividends on Common Stock (180,805) (166,861) (160,337)
Special dividend on Common Stock (81,205) 0 0
Redemptions/repurchases of Preferred Stock (28) (130) (10)
Dividends on Preferred Stock (2,492) (2,501) (2,506)
Distributions to noncontrolling interests in the Operating Partnership (4,987) (4,888) (4,959)
Special distribution to noncontrolling interests in the Operating Partnership (2,271) 0 0
Distributions to noncontrolling interests in consolidated affiliates (1,784) (1,267) (1,398)
Proceeds from the issuance of Common Stock 76,268 264,769 131,341
Costs paid for the issuance of Common Stock (1,283) (3,973) (2,040)
Repurchase of shares related to tax withholdings (4,008) (4,416) (3,764)
Borrowings on revolving credit facility 780,300 287,600 476,300
Repayments of revolving credit facility (535,300) (586,600) (386,300)
Borrowings on mortgages and notes payable 656,001 150,000 475,000
Repayments of mortgages and notes payable (832,553) (395,993) (156,120)
Payments on financing obligation 0 0 (1,722)
Payments of debt extinguishment costs (57) 0 0
Changes in debt issuance costs and other financing activities (8,324) (981) (2,003)
Net cash provided by/(used in) financing activities (142,528) (465,241) 361,482
Net increase/(decrease) in cash and cash equivalents (46,218) 44,454 (3,796)
Cash and cash equivalents at beginning of the period 49,490 5,036 8,832
Cash and cash equivalents at end of the period 3,272 49,490 5,036
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 68,207 72,847 82,242
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains/(losses) on cash flow hedges 1,732 5,703 (4,040)
Conversions of Common Units to Common Stock 511 3,057 1,645
Changes in accrued capital expenditures (1,912) 8,580 2,547
Write-off of fully depreciated real estate assets 59,108 39,262 48,698
Write-off of fully amortized deferred leasing costs 40,517 25,569 37,176
Write-off of fully amortized debt issuance costs 11,724 964 1,088
Adjustment of noncontrolling interests in the Operating Partnership to fair value (354) 12,993 67
Unrealized gains on tax increment financing bond 0 0 445
Assumption of mortgages and notes payable related to acquisition activities 0 0 19,277
Contingent consideration in connection with the acquisition of land 750 0 900
Special dividend on Common Stock declared 0 (81,205) 0
Special distribution to noncontrolling interests in the Operating Partnership declared 0 (2,271) 0
Highwoods Realty Limited Partnership [Member]      
Operating activities:      
Net income 191,663 541,139 101,260
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 227,832 220,140 215,957
Amortization of lease incentives and acquisition-related intangible assets and liabilities (1,172) (1,996) 86
Share-based compensation expense 6,692 6,251 6,884
Allowance for losses on accounts and accrued straight-line rents receivable 1,508 2,001 2,103
Accrued interest on mortgages and notes receivable (509) (502) (357)
Amortization of debt issuance costs 3,166 3,506 3,645
Amortization of cash flow hedges 1,157 3,057 3,696
Amortization of mortgages and notes payable fair value adjustments 705 (234) (58)
Impairments of real estate assets 1,445 0 0
Losses on debt extinguishment 26 0 243
Net gains on disposition of property (54,157) (429,303) (11,444)
Gain on disposition of investment in unconsolidated affiliate 0 0 (4,155)
Equity in earnings of unconsolidated affiliates (7,404) (5,793) (5,078)
Changes in financing obligation 0 0 162
Distributions of earnings from unconsolidated affiliates 5,078 4,011 4,901
Settlement of cash flow hedges 7,322 0 0
Changes in operating assets and liabilities:      
Accounts receivable (4,974) 3,401 1,415
Prepaid expenses and other assets 7,908 (4,423) 1,266
Accrued straight-line rents receivable (32,234) (24,245) (22,756)
Accounts payable, accrued expenses and other liabilities (1,520) (11,618) (8,805)
Net cash provided by operating activities 352,532 305,392 288,965
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (1,840) (110,249) (408,634)
Investments in development in-process (150,944) (177,875) (136,664)
Investments in tenant improvements and deferred leasing costs (109,742) (91,423) (115,503)
Investments in building improvements (63,780) (80,672) (55,881)
Net proceeds from disposition of real estate assets 129,503 684,371 26,748
Net proceeds from disposition of investment in unconsolidated affiliate 0 0 6,919
Distributions of capital from unconsolidated affiliates 11,670 3,179 10,401
Investments in mortgages and notes receivable 0 (7,934) (1,772)
Repayments of mortgages and notes receivable 2,917 1,699 9,381
Investments in and advances to unconsolidated affiliates (10,063) (105) (659)
Repayments from unconsolidated affiliates 0 448 20,800
Changes in restricted cash and other investing activities (63,943) (17,136) (9,293)
Net cash provided by/(used in) investing activities (256,222) 204,303 (654,157)
Financing activities:      
Distributions on Common Units (185,072) (171,054) (164,601)
Special distribution on Common Units (83,149) 0 0
Redemptions/repurchases of Preferred Units (28) (130) (10)
Distributions on Preferred Units (2,492) (2,501) (2,506)
Distributions to noncontrolling interests in consolidated affiliates (1,784) (1,267) (1,398)
Proceeds from the issuance of Common Units 76,268 264,769 131,341
Costs paid for the issuance of Common Units (1,283) (3,973) (2,040)
Repurchase of units related to tax withholdings (4,008) (4,416) (3,764)
Borrowings on revolving credit facility 780,300 287,600 476,300
Repayments of revolving credit facility (535,300) (586,600) (386,300)
Borrowings on mortgages and notes payable 656,001 150,000 475,000
Repayments of mortgages and notes payable (832,553) (395,993) (156,120)
Payments on financing obligation 0 0 (1,722)
Payments of debt extinguishment costs (57) 0 0
Changes in debt issuance costs and other financing activities (9,371) (1,676) (2,890)
Net cash provided by/(used in) financing activities (142,528) (465,241) 361,290
Net increase/(decrease) in cash and cash equivalents (46,218) 44,454 (3,902)
Cash and cash equivalents at beginning of the period 49,490 5,036 8,938
Cash and cash equivalents at end of the period 3,272 49,490 5,036
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 68,207 72,847 82,242
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains/(losses) on cash flow hedges 1,732 5,703 (4,040)
Changes in accrued capital expenditures (1,912) 8,580 2,547
Write-off of fully depreciated real estate assets 59,108 39,262 48,698
Write-off of fully amortized deferred leasing costs 40,517 25,569 37,176
Write-off of fully amortized debt issuance costs 11,724 964 1,088
Adjustment of Redeemable Common Units to fair value (793) 18,373 (3,619)
Unrealized gains on tax increment financing bond 0 0 445
Assumption of mortgages and notes payable related to acquisition activities 0 0 19,277
Contingent consideration in connection with the acquisition of land 750 0 900
Special distribution on Common Units declared $ 0 $ (83,149) $ 0
v3.8.0.1
Description of Business and Significant Accounting Policies
12 Months Ended
Dec. 31, 2017
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, 2017, we owned or had an interest in 30.7 million rentable square feet of in-service properties, 1.5 million rentable square feet of properties under development and approximately 400 acres of development land.

The Company is the sole general partner of the Operating Partnership. At December 31, 2017, the Company owned all of the Preferred Units and 102.9 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 2017, the Company redeemed 10,000 Common Units for a like number of shares of Common Stock.

Basis of Presentation

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

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. We consolidate joint venture investments, such as interests in partnerships and limited liability companies, when we control the major operating and financial policies of the investment through majority ownership, in our capacity as a general partner or managing member or through some other contractual right. At December 31, 2017, three properties owned through a joint venture investment were consolidated.

All intercompany transactions and accounts have been eliminated.

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 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.

1.    Description of Business and Significant Accounting Policies – Continued

Real Estate and Related Assets

Real estate and related assets are recorded at cost and stated at cost less accumulated depreciation. Renovations, replacements and other expenditures that improve or extend the life of assets are capitalized and depreciated over their estimated useful lives. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful life of 40 years for buildings and depreciable land infrastructure costs, 15 years for building improvements and five to seven years for furniture, fixtures and equipment. Tenant improvements are amortized using the straight-line method over initial fixed terms of the respective leases, which generally are from three to 10 years. Depreciation expense for real estate assets was $184.4 million, $173.1 million and $168.7 million for the years ended December 31, 2017, 2016 and 2015, respectively.

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

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

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

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

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

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

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

Impairments of Real Estate Assets and Investments in Unconsolidated Affiliates

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

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

Sales of Real Estate
 
For sales 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.

1.    Description of Business and Significant Accounting Policies – Continued

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

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

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

1.    Description of Business and Significant Accounting Policies – Continued

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

Cash Equivalents

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

Restricted Cash
 
Restricted cash represents cash deposits that are legally restricted or held by third parties on our behalf, such as construction-related escrows, property disposition proceeds set aside and designated or intended to fund future tax-deferred exchanges of qualifying real estate investments, 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.

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.
 

1.    Description of Business and Significant Accounting Policies – Continued

Concentration of Credit Risk
 
At December 31, 2017, properties that we wholly own were leased to 1,792 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 2017.
 
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 (inclusive of noncontrolling interests in the Operating Partnership) by the weighted Common Shares outstanding - basic plus the dilutive effect of options, warrants and convertible securities outstanding, including Common Units, using the treasury stock method. Weighted Common Shares outstanding - basic includes all unvested restricted stock where dividends received on such restricted stock are non-forfeitable.

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

1.    Description of Business and Significant Accounting Policies – Continued
 
Recently Issued Accounting Standards
 
The Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that 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. Upon adoption of the ASU in 2018, we expect to utilize the modified retrospective approach which requires a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. We have analyzed the impact of the guidance on our Consolidated Financial Statements, including our internal control processes, and have an active project team continuing to refine our evaluation and finalize our implementation plan with particular emphasis on development of the new required disclosures. Our analysis of our non-lease related revenue contracts, which include primarily real estate sales, management, development and construction fee income and transient parking income, indicates that the adoption of this ASU will require additional financial statement disclosure related to these contracts but will have no material cumulative-effect adjustment or impact on the timing of revenue recognition. There could be additional impact of this ASU upon adoption of the ASU related to accounting for leases discussed below for certain lease revenue streams that may be required to be evaluated as non-lease components using the five-step revenue recognition model.
 
The FASB 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 issued an ASU that clarifies and narrows the definition of a business used in determining whether to account for a transaction as an asset acquisition or business combination. The guidance requires evaluation of the fair value of the assets acquired to determine if it is concentrated in a single identifiable asset or a group of similar identifiable assets. If so, the transferred assets would not be a business. The guidance also requires a business to include at least one substantive process and narrows the definition of outputs. The ASU is required to be adopted in 2018 and applied prospectively. Upon adoption of this ASU, we expect that the majority of our future acquisitions would not meet the definition of a business; therefore, the related acquisition costs would be capitalized as part of the purchase price.
 
The FASB issued an ASU that clarifies when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. The guidance requires modification accounting if the value, vesting conditions or classification of the award changes. The ASU is required to be adopted in 2018 and applied prospectively. We do not expect such adoption to have a material effect on our Consolidated Financial Statements.
 
The FASB issued an ASU which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. We are continuing to conduct our analysis of the impact of the guidance on our Consolidated Financial Statements and have an active project team working on the evaluation and implementation of the guidance. We continue to monitor FASB activity with respect to possible amendments to this ASU, particularly the Board’s recent vote to provide an optional practical expedient to lessors that would remove the requirement for lessors to separate lease and non-lease components when the pattern of recognition of those components are the same and, when combined as a single unit, those would be classified as operating leases. Should such amendment be finalized, we expect to elect the practical expedient. Regardless, we currently believe that the adoption of the ASU will not significantly change the accounting for operating leases on our Consolidated Balance Sheets where we are the lessor, and that such leases will be accounted for in a similar method to existing standards with the underlying leased asset being reported and recognized as a real estate asset. In addition, the guidance requires lessors to capitalize and amortize only incremental direct leasing costs. As a result, we expect that upon the adoption of the ASU, we will no longer be able to capitalize and amortize certain leasing related costs and instead will expense these costs as incurred. We are in the process of evaluating the impact to our results of operations of expensing such costs. The ASU is required to be adopted in 2019 using a modified retrospective approach which requires a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. Our initial analysis of our leases also indicates that upon adoption of the ASU, certain lease revenue streams that are currently accounted for using the lease accounting standard may be accounted for as non-lease components using the five-step revenue recognition model discussed above. Leases where we are the lessee include primarily our operating ground leases which are not material to our Consolidated Financial Statements. We will continue to refine our evaluation and finalize our implementation plan throughout 2018.

1.    Description of Business and Significant Accounting Policies – Continued

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

The FASB issued an ASU that requires, among other things, the use of a new current expected credit loss ("CECL") model in determining our allowances for doubtful accounts with respect to accounts receivable, accrued straight-line rents receivable and mortgages and notes receivable. The 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.
v3.8.0.1
Real Estate Assets
12 Months Ended
Dec. 31, 2017
Real Estate [Abstract]  
Real Estate Assets
Real Estate Assets
 
Acquisitions

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

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

During 2016, we also acquired:

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

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

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

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).


2.     Real Estate Assets - Continued

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


 
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.

Dispositions

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

During 2016, we sold:

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

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.


2.     Real Estate Assets - Continued

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.

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.

Impairments

During 2017, we recorded aggregate impairments of real estate assets of $1.4 million, which resulted from a change in market-based inputs and our assumptions about the use of the assets.
v3.8.0.1
Mortgages and Notes Receivable
12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Mortgages and Notes Receivable
Mortgages and Notes Receivable

Mortgages and notes receivable were $6.4 million and $8.8 million at December 31, 2017 and 2016, respectively. 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, 2017, our mortgages and notes receivable were not in default and there were no other indicators of impairment.
v3.8.0.1
Investments In and Advances To Affiliates
12 Months Ended
Dec. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]  
Investments In and Advances To Affiliates
Investments in and Advances to Affiliates
 
Unconsolidated Affiliates
 
We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of the joint venture investment. The difference between the cost of these investments and the net book value of the underlying net assets was $0.7 million and $(1.2) million at December 31, 2017 and 2016, respectively.
 
The following table sets forth our ownership in unconsolidated affiliates at December 31, 2017:
 
Joint Venture
 
Location
 
Ownership
Interest
Plaza Colonnade, Tenant-in-Common
 
Kansas City
 
50.0%
Kessinger/Hunter & Company, LC
 
Kansas City
 
26.5%
Highwoods DLF Forum, LLC
 
Raleigh
 
25.0%
Highwoods DLF 98/29, LLC
 
Orlando
 
22.8%

We receive development, management and leasing fees for services provided to certain of our joint ventures. These fees are recognized in income to the extent of our respective joint venture partner's interest. During the years ended December 31, 2017, 2016 and 2015, we recognized $1.4 million, $0.8 million and $1.4 million, respectively, of development/construction, management and leasing fees from our unconsolidated joint ventures. At both December 31, 2017 and 2016, we had receivables of $0.1 million related to these fees in accounts receivable.
 

4.    Investments in and Advances to Affiliates - Continued

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 $26.1 million had the entity been liquidated at December 31, 2017. 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.

- 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.
v3.8.0.1
Intangible Assets and Below Market Leaes Liabilities
12 Months Ended
Dec. 31, 2017
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,
 
2017
 
2016
Assets:
 
 
 
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
$
344,191

 
$
353,581

Less accumulated amortization
(143,512
)
 
(140,081
)
 
$
200,679

 
$
213,500

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
59,947

 
$
61,221

Less accumulated amortization
(28,214
)
 
(23,074
)
 
$
31,733

 
$
38,147


5.    Intangible Assets and Below Market Lease Liabilities - Continued

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

 
Year Ended December 31,
 
2017
 
2016
 
2015
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
41,187

 
$
44,968

 
$
43,332

Amortization of lease incentives (in rental and other revenues)
$
1,765

 
$
1,779

 
$
1,493

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
2,921

 
$
3,851

 
$
5,062

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

 
$
557

 
$
557

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(6,415
)
 
$
(8,183
)
 
$
(7,065
)

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)
2018
 
$
36,566

 
$
1,586

 
$
1,659

 
$
553

 
$
(5,911
)
2019
 
31,032

 
1,434

 
1,275

 
553

 
(5,454
)
2020
 
26,614

 
1,171

 
959

 
518

 
(5,193
)
2021
 
22,262

 
948

 
632

 

 
(4,383
)
2022
 
18,098

 
734

 
462

 

 
(3,269
)
Thereafter
 
48,182

 
4,033

 
1,408

 

 
(7,523
)
 
 
$
182,754

 
$
9,906

 
$
6,395

 
$
1,624

 
$
(31,733
)
Weighted average remaining amortization periods as of December 31, 2017 (in years)
 
7.6

 
9.9

 
6.5

 
3.0

 
6.6

v3.8.0.1
Mortgages and Notes Payable
12 Months Ended
Dec. 31, 2017
Debt Disclosure [Abstract]  
Mortgages and Notes Payable
Mortgages and Notes Payable
 
Our mortgages and notes payable consist of the following:
 
 
December 31,
 
2017
 
2016
Secured indebtedness: (1)
 
 
 
5.10% (4.22% effective rate) mortgage loan due 2017 (2)
$

 
$
109,138

6.11% (5.36% effective rate) mortgage loan due 2017 (2)

 
19,066

4.00% mortgage loan due 2029
98,981

 

 
98,981

 
128,204

Unsecured indebtedness:
 
 
 
5.85% (5.88% effective rate) notes due 2017 (2)

 
379,661

7.50% notes due 2018
200,000

 
200,000

3.20% (3.363% effective rate) notes due 2021 (3)
298,504

 
298,072

3.625% (3.752% effective rate) notes due 2023 (4)
248,675

 
248,412

3.875% (4.038% effective rate) notes due 2027 (5)
296,334

 

Variable rate term loan due 2018 (6)
10,000

 

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

 
350,000

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

 
150,000

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

 
200,000

Revolving credit facility due 2022 (10)
245,000

 

 
1,923,513

 
1,826,145

Less-unamortized debt issuance costs
(8,161
)
 
(6,302
)
Total mortgages and notes payable, net
$
2,014,333

 
$
1,948,047

__________
(1)
Our secured mortgage loans were collateralized by real estate assets with an aggregate undepreciated book value of $147.6 million at December 31, 2017. Our fixed rate mortgage loans generally are either locked out to prepayment for all or a portion of their term or are prepayable subject to certain conditions including prepayment penalties.
(2)
This debt was repaid in 2017.
(3)
Net of unamortized original issuance discount of $1.5 million and $1.9 million as of December 31, 2017 and 2016, respectively.
(4)
Net of unamortized original issuance discount of $1.3 million and $1.6 million as of December 31, 2017 and 2016, respectively.
(5)
Net of unamortized original issuance discount of $3.7 million as of December 31, 2017.
(6)
The interest rate was 2.46% at December 31, 2017.
(7)
As more fully described in Note 7, we entered into floating-to-fixed interest rate swaps that effectively fix LIBOR for $225.0 million of this loan. Accordingly, the equivalent fixed rate of this amount is 2.78%.
(8)
As more fully described in Note 7, we entered into floating-to-fixed interest rate swaps that effectively fix LIBOR for $50.0 million of this loan. Accordingly, the equivalent fixed rate of this amount is 2.79%. The interest rate on the remaining $150.0 million was 2.47% at December 31, 2017.
(9)
The interest rate was 2.60% at December 31, 2017.
(10)
The interest rate was 2.48% at December 31, 2017.

6.    Mortgages and Notes Payable - Continued

The following table sets forth scheduled future principal payments, including amortization, due on our mortgages and notes payable at December 31, 2017:

Years Ending December 31,
 
Principal Amount
2018
 
$
210,708

2019
 
781

2020
 
225,857

2021
 
301,170

2022
 
646,452

Thereafter
 
637,526

Less-unamortized debt issuance costs
 
(8,161
)
 
 
$
2,014,333


During 2017, we entered into a new $600.0 million unsecured revolving credit facility, which replaced our previously existing $475.0 million revolving credit facility, and includes an accordion feature that allows for an additional $400.0 million of borrowing capacity subject to additional lender commitments. Our new revolving credit facility is scheduled to mature in January 2022. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. The interest rate on the new facility at our current credit ratings is LIBOR plus 100 basis points and the annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor’s Ratings Services. The financial and other covenants under the new facility are similar to our previous credit facility. We incurred $3.5 million of debt issuance costs, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility. We recorded $0.1 million of loss on debt extinguishment. There was $245.0 million and $254.5 million outstanding under our new revolving credit facility at December 31, 2017 and January 26, 2018, respectively. At both December 31, 2017 and January 26, 2018, we had $0.5 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at December 31, 2017 and January 26, 2018 was $354.5 million and $345.0 million, respectively.

During 2017, we prepaid without penalty a secured mortgage loan with a fair market value of $108.2 million with an effective interest rate of 4.22%. We recorded $0.4 million of gain on debt extinguishment related to this prepayment. Real estate assets having a gross book value of approximately $242 million became unencumbered in connection with the payoff of this secured loan. We also paid down $1.6 million of secured loan balances through principal amortization during 2017.

During 2017, we modified our $200.0 million, five-year unsecured bank term loan, which was originally scheduled to mature in January 2019. The