HIGHWOODS PROPERTIES, INC., 10-K filed on 2/9/2016
Annual Report
v3.3.1.900
Document and Entity Information - USD ($)
$ in Billions
12 Months Ended
Dec. 31, 2015
Jan. 29, 2016
Jun. 30, 2015
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, 2015    
Document Fiscal Year Focus 2015    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Common Stock, Shares Outstanding   96,103,555  
Entity Public Float     $ 3.7
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Highwoods Realty Limited Partnership [Member]      
Entity Information [Line Items]      
Entity Registrant Name HIGHWOODS REALTY LIMITED PARTNERSHIP    
Entity Central Index Key 0000941713    
Current Fiscal Year End Date --12-31    
Entity Filer Category Non-accelerated Filer    
Document Type 10-K    
Document Period End Date Dec. 31, 2015    
Document Fiscal Year Focus 2015    
Document Fiscal Period Focus FY    
Amendment Flag false    
Entity Well-known Seasoned Issuer Yes    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
v3.3.1.900
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2015
Dec. 31, 2014
Real estate assets, at cost:    
Land $ 443,705 $ 367,895
Buildings and tenant improvements 4,063,328 3,493,992
Development in-process 194,050 201,409
Land held for development 68,244 78,266
Total real estate assets 4,769,327 4,141,562
Less-accumulated depreciation (1,007,104) (893,517)
Net real estate assets 3,762,223 3,248,045
Real estate and other assets, net, held for sale 240,948 236,815
Cash and cash equivalents 5,036 8,832
Restricted cash 16,769 14,595
Accounts receivable, net of allowance of $928 and $1,314, respectively 29,077 48,557
Mortgages and notes receivable, net of allowance of $287 and $275, respectively 2,096 13,116
Accrued straight-line rents receivable, net of allowance of $257 and $316, respectively 150,392 130,394
Investments in and advances to unconsolidated affiliates 20,676 50,685
Deferred financing and leasing costs, net of accumulated amortization of $123,723 and $108,122, respectively 241,663 222,448
Prepaid expenses and other assets, net of accumulated amortization of $15,648 and $13,887, respectively 24,552 25,636
Total Assets 4,493,432 3,999,123
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable 2,499,614 2,071,389
Accounts payable, accrued expenses and other liabilities 233,988 231,482
Liabilities held for sale 14,119 15,113
Total Liabilities $ 2,747,721 $ 2,317,984
Commitments and contingencies
Noncontrolling interests in the Operating Partnership $ 126,429 $ 130,048
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), 29,050 and 29,060 shares issued and outstanding, respectively 29,050 29,060
Common Stock, $.01 par value, 200,000,000 authorized shares; 96,091,932 and 92,907,310 shares issued and outstanding, respectively 961 929
Additional paid-in capital 2,598,242 2,464,275
Distributions in excess of net income available for common stockholders (1,023,135) (957,370)
Accumulated other comprehensive loss (3,811) (3,912)
Total Stockholders’ Equity 1,601,307 1,532,982
Noncontrolling interests in consolidated affiliates 17,975 18,109
Total Equity/Capital: 1,619,282 1,551,091
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital 4,493,432 3,999,123
Highwoods Realty Limited Partnership [Member]    
Real estate assets, at cost:    
Land 443,705 367,895
Buildings and tenant improvements 4,063,328 3,493,992
Development in-process 194,050 201,409
Land held for development 68,244 78,266
Total real estate assets 4,769,327 4,141,562
Less-accumulated depreciation (1,007,104) (893,517)
Net real estate assets 3,762,223 3,248,045
Real estate and other assets, net, held for sale 240,948 236,815
Cash and cash equivalents 5,036 8,938
Restricted cash 16,769 14,595
Accounts receivable, net of allowance of $928 and $1,314, respectively 29,077 48,557
Mortgages and notes receivable, net of allowance of $287 and $275, respectively 2,096 13,116
Accrued straight-line rents receivable, net of allowance of $257 and $316, respectively 150,392 130,394
Investments in and advances to unconsolidated affiliates 20,676 50,685
Deferred financing and leasing costs, net of accumulated amortization of $123,723 and $108,122, respectively 241,663 222,448
Prepaid expenses and other assets, net of accumulated amortization of $15,648 and $13,887, respectively 24,552 25,636
Total Assets 4,493,432 3,999,229
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable 2,499,614 2,071,389
Accounts payable, accrued expenses and other liabilities 233,988 231,396
Liabilities held for sale 14,119 15,113
Total Liabilities $ 2,747,721 $ 2,317,898
Commitments and contingencies
Redeemable Operating Partnership Units:    
Common Units, 2,899,752 and 2,936,955 outstanding, respectively $ 126,429 $ 130,048
Series A Preferred Units (liquidation preference $1,000 per unit), 29,050 and 29,060 units issued and outstanding, respectively 29,050 29,060
Total Redeemable Operating Partnership Units 155,479 159,108
Equity/Capital:    
General partner Common Units, 985,829 and 954,355 outstanding, respectively 15,759 15,078
Limited partner Common Units, 94,697,294 and 91,544,146 outstanding, respectively 1,560,309 1,492,948
Accumulated other comprehensive loss (3,811) (3,912)
Noncontrolling interests in consolidated affiliates 17,975 18,109
Total Equity/Capital: 1,590,232 1,522,223
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital $ 4,493,432 $ 3,999,229
v3.3.1.900
Consolidated Balance Sheets (Parentheticals) - USD ($)
$ in Thousands
Dec. 31, 2015
Dec. 31, 2014
Assets:    
Accounts receivable allowance $ 928 $ 1,314
Mortgages and notes receivable allowance 287 275
Accrued straight-line rents receivable allowance 257 316
Deferred financing and leasing costs, accumulated amortization 123,723 108,122
Prepaid expenses and other assets, accumulated amortization $ 15,648 $ 13,887
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) 29,050 29,060
Preferred Stock, shares outstanding (in shares) 29,050 29,060
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) 96,091,932 92,907,310
Common Stock, shares outstanding (in shares) 96,091,932 92,907,310
Highwoods Realty Limited Partnership [Member]    
Assets:    
Accounts receivable allowance $ 928 $ 1,314
Mortgages and notes receivable allowance 287 275
Accrued straight-line rents receivable allowance 257 316
Deferred financing and leasing costs, accumulated amortization 123,723 108,122
Prepaid expenses and other assets, accumulated amortization $ 15,648 $ 13,887
Redeemable Operating Partnership Units:    
Redeemable Common Units, outstanding (in shares) 2,899,752 2,936,955
Preferred Units liquidation preference (in dollars per share) $ 1,000 $ 1,000
Series A Preferred Units, issued (in shares) 29,050 29,060
Series A Preferred Units, outstanding (in shares) 29,050 29,060
Common Units:    
General partners' capital account, units outstanding (in shares) 985,829 954,355
Limited partners' capital account, units outstanding (in shares) 94,697,294 91,544,146
v3.3.1.900
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Rental and other revenues $ 604,671 $ 555,871 $ 505,008
Operating expenses:      
Rental property and other expenses 215,941 205,884 184,187
Depreciation and amortization 201,918 180,637 162,937
Impairments of real estate assets 0 588 0
General and administrative 37,642 35,258 36,381
Total operating expenses 455,501 422,367 383,505
Interest expense:      
Contractual 82,245 82,287 88,838
Amortization of deferred financing costs 3,645 3,082 3,802
Financing obligation 162 (242) (754)
Total interest expense 86,052 85,127 91,886
Other income:      
Interest and other income 1,969 2,739 3,511
Losses on debt extinguishment (243) (308) (199)
Total other income 1,726 2,431 3,312
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 64,844 50,808 32,929
Gains/(losses) on disposition of property 11,444 44,352 (3)
Gain on disposition of investment in unconsolidated affiliate 4,155 0 0
Gain on acquisition of controlling interest in unconsolidated affiliate 0 0 7,451
Equity in earnings of unconsolidated affiliates 5,078 1,827 2,264
Income from continuing operations 85,521 96,987 42,641
Discontinued operations:      
Income from discontinued operations 15,739 18,601 26,858
Impairments of real estate assets 0 0 (2,194)
Net gains on disposition of discontinued operations 0 384 63,792
Total income from discontinued operations 15,739 18,985 88,456
Net income 101,260 115,972 131,097
Net (income) attributable to noncontrolling interests in the Operating Partnership (2,918) (3,542) (4,691)
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,264) (1,466) (949)
Dividends on Preferred Stock (2,506) (2,507) (2,508)
Net income available for common stockholders $ 94,572 $ 108,457 $ 122,949
Earnings per Common Share - basic:      
Income from continuing operations available for common stockholders (in dollars per share) $ 0.84 $ 1.00 $ 0.44
Income from discontinued operations available for common stockholders (in dollars per share) 0.16 0.20 1.00
Net income available for common stockholders (in dollars per share) $ 1.00 $ 1.20 $ 1.44
Weighted average Common Shares outstanding - basic (in shares) 94,404 90,743 85,335
Earnings per Common Share - diluted:      
Income from continuing operations available for common stockholders (in dollars per share) $ 0.84 $ 0.99 $ 0.44
Income from discontinued operations available for common stockholders (in dollars per share) 0.16 0.20 1.00
Net income available for common stockholders (in dollars per share) $ 1.00 $ 1.19 $ 1.44
Weighted average Common Shares outstanding - diluted (in shares) [1],[2] 97,406 93,800 88,836
Net income available for common stockholders:      
Income from continuing operations available for common stockholders $ 79,308 $ 90,069 $ 37,890
Income from discontinued operations available for common stockholders 15,264 18,388 85,059
Net income available for common stockholders 94,572 108,457 122,949
Highwoods Realty Limited Partnership [Member]      
Rental and other revenues 604,671 555,871 505,008
Operating expenses:      
Rental property and other expenses 215,941 205,835 184,146
Depreciation and amortization 201,918 180,637 162,937
Impairments of real estate assets 0 588 0
General and administrative 37,642 35,307 36,422
Total operating expenses 455,501 422,367 383,505
Interest expense:      
Contractual 82,245 82,287 88,838
Amortization of deferred financing costs 3,645 3,082 3,802
Financing obligation 162 (242) (754)
Total interest expense 86,052 85,127 91,886
Other income:      
Interest and other income 1,969 2,739 3,511
Losses on debt extinguishment (243) (308) (199)
Total other income 1,726 2,431 3,312
Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 64,844 50,808 32,929
Gains/(losses) on disposition of property 11,444 44,352 (3)
Gain on disposition of investment in unconsolidated affiliate 4,155 0 0
Gain on acquisition of controlling interest in unconsolidated affiliate 0 0 7,451
Equity in earnings of unconsolidated affiliates 5,078 1,827 2,213
Income from continuing operations 85,521 96,987 42,590
Discontinued operations:      
Income from discontinued operations 15,739 18,601 26,858
Impairments of real estate assets 0 0 (2,194)
Net gains on disposition of discontinued operations 0 384 63,792
Total income from discontinued operations 15,739 18,985 88,456
Net income 101,260 115,972 131,046
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,264) (1,466) (949)
Distributions on Preferred Units (2,506) (2,507) (2,508)
Net income available for common unitholders $ 97,490 $ 111,999 $ 127,589
Earnings per Common Unit - basic:      
Income from continuing operations available for common unitholders (in dollars per share) $ 0.84 $ 1.00 $ 0.44
Income from discontinued operations available for common unitholders (in dollars per share) 0.17 0.20 1.00
Net income available for common unitholders (in dollars per share) $ 1.01 $ 1.20 $ 1.44
Weighted average Common Units outstanding - basic (in shares) 96,910 93,272 88,313
Earnings per Common Unit - diluted:      
Income from continuing operations available for common unitholders (in dollars per share) $ 0.84 $ 1.00 $ 0.44
Income from discontinued operations available for common unitholders (in dollars per share) 0.17 0.20 1.00
Net income available for common unitholders (in dollars per share) $ 1.01 $ 1.20 $ 1.44
Weighted average Common Units outstanding - diluted (in shares) [1],[2] 96,997 93,391 88,427
Net income available for common unitholders:      
Income from continuing operations available for common unitholders $ 81,751 $ 93,014 $ 39,133
Total income from discontinued operations 15,739 18,985 88,456
Net income available for common unitholders $ 97,490 $ 111,999 $ 127,589
[1] Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
[2] There were 0.2 million and 0.3 million options outstanding during the years ended December 31, 2015 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive. There were no such options outstanding during the year ended December 31, 2014.
v3.3.1.900
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Comprehensive income/(loss):      
Net income $ 101,260 $ 115,972 $ 131,097
Other comprehensive income/(loss):      
Unrealized gains on tax increment financing bond 445 584 869
Unrealized gains/(losses) on cash flow hedges (4,040) (5,662) 5,778
Amortization of cash flow hedges 3,696 3,777 3,370
Total other comprehensive income/(loss) 101 (1,301) 10,017
Total comprehensive income 101,361 114,671 141,114
Less-comprehensive (income) attributable to noncontrolling interests (4,182) (5,008) (5,640)
Comprehensive income attributable to common stockholders/unitholders 97,179 109,663 135,474
Highwoods Realty Limited Partnership [Member]      
Comprehensive income/(loss):      
Net income 101,260 115,972 131,046
Other comprehensive income/(loss):      
Unrealized gains on tax increment financing bond 445 584 869
Unrealized gains/(losses) on cash flow hedges (4,040) (5,662) 5,778
Amortization of cash flow hedges 3,696 3,777 3,370
Total other comprehensive income/(loss) 101 (1,301) 10,017
Total comprehensive income 101,361 114,671 141,063
Less-comprehensive (income) attributable to noncontrolling interests (1,264) (1,466) (949)
Comprehensive income attributable to common stockholders/unitholders $ 100,097 $ 113,205 $ 140,114
v3.3.1.900
Consolidated Statements of Equity - USD ($)
$ in Thousands
Total
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance (in shares) at Dec. 31, 2012     80,311,437                  
Balance at Dec. 31, 2012 $ 1,173,664 $ 1,143,804 $ 803 $ 29,077 $ 11,515 $ 1,140,164 $ 2,040,306 $ (12,628) $ (12,628) $ 4,753 $ 4,753 $ (888,647)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                        
Issuances of Common Units, net of issuance costs and tax withholdings   305,846     3,058 302,788     0   0  
Distributions paid on Common Units   (150,936)     (1,509) (149,427)     0   0  
Distributions paid on Preferred Units   (2,508)     (25) (2,483)     0   0  
Issuances of Common Stock - Shares     8,670,517                  
Issuances of Common Stock, net of issuance costs and tax withholdings 305,846   $ 87 0     305,759 0   0   0
Conversions of Common Units to Common Stock - Shares     789,144                  
Conversions of Common Units to Common Stock 28,788   $ 0 0     28,788 0   0   0
Dividends on Common Stock (145,964)   0 0     0 0   0   (145,964)
Dividends on Preferred Stock (2,508)   0 0     0 0   0   (2,508)
Adjustment of noncontrolling interests in the Operating Partnership to fair value (11,375)   0 0     (11,375) 0   0   0
Distributions to noncontrolling interests in consolidated affiliates (546) (546) 0 0 0 0 0 0 0 (546) (546) 0
Contributions from noncontrolling interests in consolidated affiliates 16,240 16,240 $ 0 0 0 0 0 0 0 16,240 16,240 0
Issuances of restricted stock - Shares     151,630                  
Issuances of restricted stock 0   $ 0 0     0 0   0   0
Share-based compensation expense, net of forfeitures - Shares     (1,813)                  
Share-based compensation expense, net of forfeitures 6,899 6,899 $ 9 0 69 6,830 6,890 0 0 0 0 0
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   18,700     187 18,513     0   0  
Net (income) attributable to noncontrolling interests in the Operating Partnership (4,691)   0 0     0 0   0   (4,691)
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0 0 0 (9) (940) 0 0 0 949 949 (949)
Comprehensive income:                        
Net income 131,097 131,046 0 0 1,310 129,736 0 0 0 0 0 131,097
Other comprehensive income/(loss) 10,017 10,017 0 0 0 0 0 10,017 10,017 0 0 0
Total comprehensive income 141,114 141,063                    
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)
Balance (in shares) at Dec. 31, 2013     89,920,915                  
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 paid on Common Units   (158,464)     (1,585) (156,879)     0   0  
Distributions paid 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 6,939 6,939 2 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   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 paid on Common Units   (164,601)     (1,646) (162,955)     0   0  
Distributions paid 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 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                  
v3.3.1.900
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
12 Months Ended
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
Operating activities:      
Net income $ 101,260 $ 115,972 $ 131,097
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 215,957 196,023 182,710
Amortization of lease incentives and acquisition-related intangible assets and liabilities 86 442 345
Share-based compensation expense 6,884 6,939 6,899
Allowance for losses on accounts and accrued straight-line rents receivable 2,103 2,182 1,516
Accrued interest on mortgages and notes receivable (357) (477) (485)
Amortization of deferred financing costs 3,645 3,082 3,802
Amortization of cash flow hedges 3,696 3,777 3,370
Amortization of mortgages and notes payable fair value adjustments (58) (788) (1,825)
Impairments of real estate assets 0 588 2,194
Losses on debt extinguishment 243 308 199
Net gains on disposition of property (11,444) (44,736) (63,789)
Gain on disposition of investment in unconsolidated affiliate (4,155) 0 0
Gain on acquisition of controlling interest in unconsolidated affiliate 0 0 (7,451)
Equity in earnings of unconsolidated affiliates (5,078) (1,827) (2,264)
Changes in financing obligation 162 (241) (753)
Distributions of earnings from unconsolidated affiliates 4,901 2,687 3,985
Changes in operating assets and liabilities:      
Accounts receivable 1,415 (3,114) (920)
Prepaid expenses and other assets 1,266 (615) 684
Accrued straight-line rents receivable (22,756) (21,685) (18,253)
Accounts payable, accrued expenses and other liabilities (8,891) 8,394 15,376
Net cash provided by operating activities 288,879 266,911 256,437
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (408,634) (163,641) (418,796)
Investments in development in-process (136,664) (183,873) (34,474)
Investments in tenant improvements and deferred leasing costs (115,503) (113,747) (103,243)
Investments in building improvements (55,881) (50,033) (53,189)
Investment in acquired noncontrolling interest in consolidated affiliate 0 (4,126) 0
Investment in acquired controlling interest in unconsolidated affiliate 0 0 (32,818)
Net proceeds from disposition of real estate assets 26,748 172,442 254,022
Net proceeds from disposition of investment in unconsolidated affiliate 6,919 0 0
Distributions of capital from unconsolidated affiliates 10,401 3,806 27,486
Investments in mortgages and notes receivable (1,772) (864) (902)
Repayments of mortgages and notes receivable 9,381 17,239 405
Investments in and advances to unconsolidated affiliates (659) (6,489) (429)
Repayments from unconsolidated affiliates 20,800 0 0
Redemption of investment In unconsolidated affiliate 0 4,660 0
Changes in restricted cash and other investing activities (9,293) (3,552) 5,335
Net cash used in investing activities (654,157) (328,178) (356,603)
Financing activities:      
Dividends on Common Stock (160,337) (154,165) (145,964)
Redemptions/repurchases of Preferred Stock (10) (17) 0
Redemptions of Common Units 0 (93) 0
Dividends on Preferred Stock (2,506) (2,507) (2,508)
Distributions to noncontrolling interests in the Operating Partnership (4,959) (4,994) (5,667)
Distributions to noncontrolling interests in consolidated affiliates (1,398) (1,140) (546)
Proceeds from the issuance of Common Stock 131,341 117,716 316,081
Costs paid for the issuance of Common Stock (2,040) (1,586) (7,678)
Repurchase of shares related to tax withholdings (3,764) (3,506) (2,557)
Borrowings on revolving credit facility 476,300 506,900 837,000
Repayments of revolving credit facility (386,300) (513,600) (644,300)
Borrowings on mortgages and notes payable 475,000 296,949 0
Repayments of mortgages and notes payable (156,120) (174,302) (259,202)
Payments on financing obligation (1,722) (2,904) (1,941)
Payments of debt extinguishment costs 0 (369) 0
Contributions from noncontrolling interests in consolidated affiliates 0 0 16,240
Changes in deferred financing costs and other financing activities (2,003) (2,467) (2,391)
Net cash provided by financing activities 361,482 59,915 96,567
Net decrease in cash and cash equivalents (3,796) (1,352) (3,599)
Cash and cash equivalents at beginning of the period 8,832 10,184 13,783
Cash and cash equivalents at end of the period 5,036 8,832 10,184
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 82,242 83,086 85,919
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains/(losses) on cash flow hedges (4,040) (5,662) 5,778
Conversions of Common Units to Common Stock 1,645 162 28,788
Changes in accrued capital expenditures 2,547 5,283 18,384
Write-off of fully depreciated real estate assets 48,698 42,633 31,008
Write-off of fully amortized deferred financing and leasing costs 38,264 25,286 27,347
Adjustment of noncontrolling interests in the Operating Partnership to fair value 67 25,275 11,375
Unrealized gains on tax increment financing bond 445 584 869
Assumption of mortgages and notes payable related to acquisition activities 19,277 0 165,515
Contingent consideration in connection with the acquisition of land 900 3,300 0
Option deposit applied upon acquisition of real estate assets 0 0 5,000
Highwoods Realty Limited Partnership [Member]      
Operating activities:      
Net income 101,260 115,972 131,046
Adjustments to reconcile net income to net cash provided by operating activities:      
Depreciation and amortization 215,957 196,023 182,710
Amortization of lease incentives and acquisition-related intangible assets and liabilities 86 442 345
Share-based compensation expense 6,884 6,939 6,899
Allowance for losses on accounts and accrued straight-line rents receivable 2,103 2,182 1,516
Accrued interest on mortgages and notes receivable (357) (477) (485)
Amortization of deferred financing costs 3,645 3,082 3,802
Amortization of cash flow hedges 3,696 3,777 3,370
Amortization of mortgages and notes payable fair value adjustments (58) (788) (1,825)
Impairments of real estate assets 0 588 2,194
Losses on debt extinguishment 243 308 199
Net gains on disposition of property (11,444) (44,736) (63,789)
Gain on disposition of investment in unconsolidated affiliate (4,155) 0 0
Gain on acquisition of controlling interest in unconsolidated affiliate 0 0 (7,451)
Equity in earnings of unconsolidated affiliates (5,078) (1,827) (2,213)
Changes in financing obligation 162 (241) (753)
Distributions of earnings from unconsolidated affiliates 4,901 2,687 3,965
Changes in operating assets and liabilities:      
Accounts receivable 1,415 (3,114) (920)
Prepaid expenses and other assets 1,266 (615) 684
Accrued straight-line rents receivable (22,756) (21,685) (18,253)
Accounts payable, accrued expenses and other liabilities (8,805) 8,383 15,421
Net cash provided by operating activities 288,965 266,900 256,462
Investing activities:      
Investments in acquired real estate and related intangible assets, net of cash acquired (408,634) (163,641) (418,796)
Investments in development in-process (136,664) (183,873) (34,474)
Investments in tenant improvements and deferred leasing costs (115,503) (113,747) (103,243)
Investments in building improvements (55,881) (50,033) (53,189)
Investment in acquired noncontrolling interest in consolidated affiliate 0 (4,126) 0
Investment in acquired controlling interest in unconsolidated affiliate 0 0 (32,818)
Net proceeds from disposition of real estate assets 26,748 172,442 254,022
Net proceeds from disposition of investment in unconsolidated affiliate 6,919 0 0
Distributions of capital from unconsolidated affiliates 10,401 3,806 27,486
Investments in mortgages and notes receivable (1,772) (864) (902)
Repayments of mortgages and notes receivable 9,381 17,239 405
Investments in and advances to unconsolidated affiliates (659) (6,489) (429)
Repayments from unconsolidated affiliates 20,800 0 0
Redemption of investment In unconsolidated affiliate 0 4,660 0
Changes in restricted cash and other investing activities (9,293) (3,552) 5,335
Net cash used in investing activities (654,157) (328,178) (356,603)
Financing activities:      
Distributions on Common Units (164,601) (158,464) (150,936)
Redemptions/repurchases of Preferred Units (10) (17) 0
Redemptions of Common Units 0 (93) 0
Distributions on Preferred Units (2,506) (2,507) (2,508)
Distributions to noncontrolling interests in consolidated affiliates (1,398) (1,140) (546)
Proceeds from the issuance of Common Units 131,341 117,716 316,081
Costs paid for the issuance of Common Units (2,040) (1,586) (7,678)
Repurchase of units related to tax withholdings (3,764) (3,506) (2,557)
Borrowings on revolving credit facility 476,300 506,900 837,000
Repayments of revolving credit facility (386,300) (513,600) (644,300)
Borrowings on mortgages and notes payable 475,000 296,949 0
Repayments of mortgages and notes payable (156,120) (174,302) (259,202)
Payments on financing obligation (1,722) (2,904) (1,941)
Payments of debt extinguishment costs 0 (369) 0
Contributions from noncontrolling interests in consolidated affiliates 0 0 16,240
Changes in deferred financing costs and other financing activities (2,890) (3,142) (3,098)
Net cash provided by financing activities 361,290 59,935 96,555
Net decrease in cash and cash equivalents (3,902) (1,343) (3,586)
Cash and cash equivalents at beginning of the period 8,938 10,281 13,867
Cash and cash equivalents at end of the period 5,036 8,938 10,281
Supplemental disclosure of cash flow information:      
Cash paid for interest, net of amounts capitalized 82,242 83,086 85,919
Supplemental disclosure of non-cash investing and financing activities:      
Unrealized gains/(losses) on cash flow hedges (4,040) (5,662) 5,778
Changes in accrued capital expenditures 2,547 5,283 18,384
Write-off of fully depreciated real estate assets 48,698 42,633 31,008
Write-off of fully amortized deferred financing and leasing costs 38,264 25,286 27,347
Adjustment of Redeemable Common Units to fair value (3,619) 23,568 (18,389)
Unrealized gains on tax increment financing bond 445 584 869
Assumption of mortgages and notes payable related to acquisition activities 19,277 0 165,515
Contingent consideration in connection with the acquisition of land 900 3,300 0
Option deposit applied upon acquisition of real estate assets $ 0 $ 0 $ 5,000
v3.3.1.900
Description of Business and Significant Accounting Policies
12 Months Ended
Dec. 31, 2015
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, 2015, we owned or had an interest in 32.5 million rentable square feet of in-service properties, 1.5 million rentable square feet of properties under development and approximately 500 acres of development land.

The Company is the sole general partner of the Operating Partnership. At December 31, 2015, the Company owned all of the Preferred Units and 95.7 million, or 97.1%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.9 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 2015, the Company redeemed 37,203 Common Units for a like number of shares of Common Stock. As a result of this activity, in conjunction with the proceeds from issuances of Common Stock (see Note 12), the percentage of Common Units owned by the Company increased from 96.9% at December 31, 2014 to 97.1% at December 31, 2015.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Balance Sheets at December 31, 2014 were retrospectively revised from previously reported amounts to reclassify those properties classified as held for sale as of December 31, 2015. Our Consolidated Statements of Income for the years ended December 31, 2014 and 2013 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 partnerships, joint ventures and limited liability companies when we control the major operating and financial policies of the entity through majority ownership or in our capacity as general partner or managing member. At December 31, 2015, three of the 50.0% or less owned in-service office properties in a joint venture 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. To realize the tax deferral available under the Section 1031 exchange, we must complete the Section 1031 exchange, and take title to the to-be-exchanged buildings within 180 days of the acquisition date. We have determined that these entities are variable interest entities of which we are the primary beneficiary; and therefore, we consolidate these entities. As of December 31, 2015, these variable interest entities had total assets, liabilities and cash flows of $421.3 million, $16.3 million, and $7.1 million, respectively. At December 31, 2014, we had involvement with, but were not the primary beneficiary in, an entity that we concluded to be a variable interest entity. All intercompany transactions and accounts have been eliminated.

1.    Description of Business and Significant Accounting Policies – Continued

During the second quarter of 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 and recognized $2.2 million of gain. 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 all prior periods presented. Such retrospective revision is denoted using "as revised" in our Consolidated Financial Statements and accompanying notes. The effects of the retrospective application of the equity method of accounting to our Consolidated Statements of Income, Comprehensive Income and Cash Flows were not material. The effects of the retrospective application of the equity method of accounting to the Company's December 31, 2014 Balance Sheet were as follows:
 
 
December 31,
2014
 
Increase/(Decrease)
Net real estate assets
$
(29,400
)
Investments in and advances to unconsolidated affiliates
$
23,614

Total Assets
$
(5,786
)
Financing obligation
$
(14,557
)
Distributions in excess of net income available for common stockholders
$
8,771

Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
$
(5,786
)

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 $168.7 million, $154.4 million and $138.2 million for the years ended December 31, 2015, 2014 and 2013, 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.

1.    Description of Business and Significant Accounting Policies – Continued

Expenditures directly related to the leasing of properties are included in deferred financing and 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 financing and 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 financing and 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.
 

1.    Description of Business and Significant Accounting Policies – Continued

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 unconsolidated affiliate, 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.

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.

1.    Description of Business and Significant Accounting Policies – Continued

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
 
Subsequent to the early adoption of the Financial Accounting Standards Board ("FASB") accounting standards update on the presentation of discontinued operations beginning in April 2014, 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. If the property is sold to a joint venture in which we retain an interest, the property will not be accounted for as a discontinued operation due to our significant ongoing interest in the operations through our joint venture interest. If we are retained to provide property management, leasing and/or other services for the property owner after the sale, the property generally will be accounted for as a discontinued operation because the expected cash flows related to our management and leasing activities generally will not be significant in comparison to the cash flows from the property prior to 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 financing and 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 investments in less than majority owned joint ventures, partnerships and limited liability companies 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 entity. These investments are initially recorded at cost in 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.

1.    Description of Business and Significant Accounting Policies – Continued

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.
 
Concentration of Credit Risk
 
At December 31, 2015, properties that we wholly own were leased to 1,910 customers. The geographic locations that comprise greater than 10.0% of our rental and other revenues are Raleigh, NC, Atlanta, GA, Tampa, FL and Nashville, TN. Our customers engage in a wide variety of businesses. No single customer of the properties that we wholly own generated more than 6.0% of our consolidated revenues during 2015.
 
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.


1.    Description of Business and Significant Accounting Policies – Continued
 
Derivative Financial Instruments
 
We borrow funds at a combination of fixed and variable rates. Borrowings under our revolving credit facility, bridge 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 to 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 loss ("AOCL") 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.
 
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 dividends received on such restricted stock are non-forfeitable.
 
Recently Issued Accounting Standards
 
The FASB recently issued an accounting standards update that requires the use of a new five-step model to recognize revenue from customer contracts. The five-step model requires that we identify the contract with the customer, identify the performance obligations in the contract, determine the transaction price, allocate the transaction price to the performance obligations in the contract and recognize revenue when we satisfy the performance obligations. We will also be required to disclose information regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The accounting standards update 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. We are in the process of evaluating this accounting standards update.
 
The FASB recently issued an accounting standards update that amends consolidation requirements. The amendments significantly change the consolidation analysis required under GAAP and will require companies to reevaluate all previous consolidation conclusions. The accounting standards update is required to be adopted in 2016. We are in the process of evaluating this accounting standards update.
 
The FASB recently issued an accounting standards update that requires debt issuance costs related to a recognized debt liability to be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The accounting standards update is required to be adopted in 2016. Retrospective application is required. We do not expect such adoption to have a material effect on the balance sheet.
v3.3.1.900
Real Estate Assets
12 Months Ended
Dec. 31, 2015
Real Estate [Abstract]  
Real Estate Assets
Real Estate Assets

Acquisitions

During 2015, we acquired:

a building in Tampa, FL 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, GA encompassing 896,000 rentable square feet for a net purchase price of $290.3 million;

land in Atlanta, GA 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, FL 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 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, GA during 2015:

 
Total
Purchase Price Allocation
Real estate assets
$
275,639

Acquisition-related intangible assets (in deferred financing and 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, GA during 2015 had been completed as of January 1, 2014:
 
 
Year Ended December 31,
 
2015
 
2014
 
(unaudited)
Pro forma revenues
$
626,067

 
$
584,650

Pro forma net income
$
103,485

 
$
113,284

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

 
$
105,769

Pro forma earnings per share - basic
$
1.03

 
$
1.17

Pro forma earnings per share - diluted
$
1.02

 
$
1.17



The above-referenced acquisition of two buildings in Atlanta, GA 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.

2.     Real Estate Assets - Continued
 
During 2014, we acquired:

a building in Orlando, FL 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, VA 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, TN for a purchase price and related transaction costs of $15.8 million (including contingent consideration of $3.3 million); and

a building in Raleigh, NC 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 based on information available at the acquisition date and on current assumptions as to future operations.  

During 2013, we acquired:

our joint venture partner's 60.0% interest in our HIW-KC Orlando, LLC joint venture, which owned five buildings in Orlando, FL encompassing 1.3 million rentable square feet, for a net purchase price of $112.8 million. We previously accounted for our 40.0% interest in this joint venture using the equity method of accounting. The assets and liabilities of the joint venture are now wholly owned and are recorded in our Consolidated Financial Statements, including assets recorded at fair value of $188.0 million and secured debt recorded at fair value of $127.9 million, with an effective interest rate of 3.11%. This debt has since been repaid. As a result of acquiring a controlling interest in this joint venture, our previously held equity interest was remeasured at a fair value of $75.2 million resulting in a gain of $7.5 million, which represents the difference between the fair market value of our previously held equity interest and the carrying value of our investment on the date of acquisition. The fair market value of our previously held equity interest was determined by management based on information available at the acquisition date and on current assumptions as to future operations;

a building in Nashville, TN encompassing 520,000 rentable square feet for a net purchase price of $150.1 million;

our Highwoods DLF 97/26 DLF 99/32, LP joint venture partner's 57.0% interest in two buildings in Atlanta, GA encompassing 505,000 rentable square feet for a net purchase price of $44.5 million, including the assumption of secured debt recorded at fair value of $37.6 million, with an effective interest rate of 3.34%. This debt has since been repaid;

a building in Atlanta, GA encompassing 553,000 rentable square feet for a purchase price of $140.1 million;

two buildings in Tampa, FL encompassing 372,000 rentable square feet for a purchase price of $52.5 million;

two buildings in Greensboro, NC encompassing 195,000 rentable square feet for a purchase price of $30.8 million; and

land in Memphis, TN for a purchase price of $4.8 million.
 
We expensed $1.8 million of acquisition costs (included in general and administrative expenses) in 2013 related to these acquisitions. The assets acquired and liabilities assumed were recorded at fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.  
 

2.     Real Estate Assets - Continued
 
The following table sets forth a summary of the fair value of the major assets acquired and liabilities assumed relating to the above-referenced acquisitions of a building in Orlando, FL and Nashville, TN and the 553,000 rentable square foot building in Atlanta, GA during 2013:
 
 
Total
Purchase Price Allocation
Real estate assets
$
445,396

Acquisition-related intangible assets (in deferred financing and leasing costs)
50,595

Mortgages and notes payable
(127,891
)
Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(17,818
)
Total allocation
$
350,282



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, acquisition costs and equity in earnings of unconsolidated affiliates previously recognized as income assuming the above-referenced acquisitions of buildings in Orlando, FL, Nashville, TN and Atlanta, GA during 2013 had been completed as of January 1, 2012:
 
 
Year Ended December 31,
 
2013
 
(unaudited)
Pro forma revenues
$
538,890

Pro forma net income
$
121,754

Pro forma net income available for common stockholders
$
113,606

Pro forma earnings per share - basic
$
1.33

Pro forma earnings per share - diluted
$
1.33


 
The above-referenced acquisitions of buildings in Orlando, FL, Nashville, TN and Atlanta, GA during 2013 resulted in revenues of $25.0 million and net losses of $0.2 million recorded in the Consolidated Statements of Income for the year ended December 31, 2013.

Dispositions

During 2015, we sold a total of three buildings and land 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 land 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.

During 2013, we sold a total of 47 buildings and land for an aggregate sale price of $260.5 million (before closing credits to buyer of $3.6 million for unfunded tenant improvements and after $2.0 million in closing credits to buyer for free rent) and recorded aggregate gains on disposition of discontinued operations of $62.3 million. Additionally, in connection with the disposition of a building in 2012, we had the right to receive additional cash consideration of up to $1.5 million upon the satisfaction of a certain post-closing requirement. The post-closing requirement was satisfied and the cash consideration was received during 2013. Accordingly, we recognized $1.5 million in additional gain on disposition of discontinued operations in 2013.

2.     Real Estate Assets - Continued

Impairments

During 2014, we recorded an impairment of real estate assets of $0.6 million on a building in Greensboro, NC. During 2013, we recorded impairments of real estate assets of $1.1 million on four buildings in a single office park in Winston-Salem, NC and $1.1 million on seven buildings in Atlanta, GA. These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the impaired properties.
v3.3.1.900
Mortgages and Notes Receivable
12 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Mortgages and Notes Receivable
Mortgages and Notes Receivable

Mortgages and notes receivable were $2.1 million and $13.1 million at December 31, 2015 and 2014, 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, 2015, our mortgages and notes receivable were not in default and there were no other indicators of impairment.
v3.3.1.900
Investments In and Advances To Affiliates
12 Months Ended
Dec. 31, 2015
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 their operating and financial policies.

The following table sets forth our ownership in unconsolidated affiliates at December 31, 2015:

Joint Venture
 
Location of Properties
 
Ownership
Interest
Concourse Center Associates, LLC
 
Greensboro, NC
 
50.0%
Plaza Colonnade, LLC
 
Kansas City, MO
 
50.0%
Highwoods DLF 97/26 DLF 99/32, LP
 
Orlando, FL
 
42.9%
Kessinger/Hunter & Company, LC
 
Kansas City, MO
 
26.5%
Highwoods DLF Forum, LLC
 
Raleigh, NC
 
25.0%
Highwoods DLF 98/29, LLC
 
Orlando, FL
 
22.8%
4600 Madison Associates, LP
 
Kansas City, MO
 
12.5%


4.    Investments in and Advances to Affiliates – Continued

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

 
December 31,
 
2015
 
2014
 
 
 
(as revised)
Balance Sheets:
 
 
 
Assets:
 
 
 
Real estate assets, net
$
163,852

 
$
239,142

All other assets, net
53,511

 
61,290

Total Assets
$
217,363

 
$
300,432

Liabilities and Partners’ or Shareholders’ Equity:
 
 
 
Mortgages and notes payable (1)
$
141,580

 
$
191,587

All other liabilities
6,547

 
11,967

Partners’ or shareholders’ equity
69,236

 
96,878

Total Liabilities and Partners’ or Shareholders’ Equity
$
217,363

 
$
300,432

Our share of historical partners’ or shareholders’ equity
$
21,022

 
$
30,784

Advances to unconsolidated affiliates
448

 
20,864

Difference between cost of investments and the net book value of underlying net assets
(794
)
 
(963
)
Carrying value of investments in and advances to unconsolidated affiliates
$
20,676

 
$
50,685

Our share of unconsolidated non-recourse mortgage debt (1)
$
49,242

 
$
60,972

__________
(1)
Our share of scheduled future principal payments, including amortization, due on mortgages and notes payable at December 31, 2015 is as follows:
2016
$
4,407

2017
20,817

2018
19,580

2019
563

2020
562

Thereafter
3,313

 
$
49,242


 
All of this joint venture debt is non-recourse to us except in the case of customary exceptions pertaining to such matters as misuse of funds, environmental conditions, material misrepresentations and voluntary or uncontested involuntary bankruptcy events.

4.    Investments in and Advances to Affiliates – Continued

The following table sets forth the summarized income statements of our unconsolidated affiliates:
 
Year Ended December 31,
 
2015
 
2014
 
2013
Income Statements:
 
 
 
 
 
Rental and other revenues
$
48,118

 
$
50,514

 
$
82,168

Expenses:
 
 
 
 
 
Rental property and other expenses
22,721

 
25,159

 
41,284

Depreciation and amortization
12,257

 
13,310

 
20,928

Impairments of real estate assets

 

 
20,077

Interest expense
7,196

 
8,847

 
14,994

Total expenses
42,174

 
47,316

 
97,283

Income/(loss) before disposition of property
5,944

 
3,198

 
(15,115
)
Gains on disposition of property
18,181

 
2,998

 
20,501

Net income
$
24,125

 
$
6,196

 
$
5,386



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

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

During 2014, Board of Trade 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 49.0% 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 and KC Glenridge Land 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%.

- HIW-KC Orlando, LLC

See Note 2 for a description of our acquisition of our partner's 60.0% equity interest in this joint venture during 2013.

4.    Investments in and Advances to Affiliates – Continued

- Lofts at Weston, LLC ("Weston Lofts")

During 2011, we and Ravin Partners, LLC (“Ravin”) formed Weston Lofts, in which we had a 50.0% ownership interest. We contributed 15.0 acres of land at an agreed upon value of $2.4 million to this joint venture, and Ravin contributed $1.2 million in cash and agreed to guarantee the joint venture's development loan. The joint venture then distributed $1.2 million to us and we recorded a gain of $0.3 million on this transaction. Ravin was the developer, manager and leasing agent and received customary fees from the joint venture, which constructed 215 residential units at a total cost of $25.9 million. During 2013, Weston Lofts sold the 215 residential units to an unrelated third party for gross proceeds of $38.3 million and recorded a gain of $12.2 million. As a result, we received aggregate net distributions of $9.4 million and recorded our share of the gain of $3.2 million, which is net of $1.7 million in taxes incurred by our taxable REIT subsidiary, in equity in earnings of unconsolidated affiliates. Our share of the gain was less than 50.0% due to Ravin's preferred return as the developer.

- 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.

See Note 2 for a description of our acquisition of two buildings in Atlanta, GA from DLF II during 2013.
 
During 2013, DLF II sold a building to an unrelated third party for a sale price of $10.1 million (after $0.3 million in closing credits to buyer for free rent) and recorded a gain on disposition of property of less than $0.1 million. As our cost basis was different from the basis reflected at the joint venture level, we recorded $0.4 million of 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 wholly own in Kansas City, MO in exchange for customary fees from us. Kessinger/Hunter received $0.3 million, $0.6 million and $0.2 million from us for these services in 2015, 2014 and 2013, respectively.
 
- Highwoods DLF Forum, LLC (“Forum”)
 
During 2013, Forum obtained a $71.7 million, five-year secured mortgage loan from a third party lender, bearing a floating interest rate of LIBOR plus 190 basis points, which was used by the joint venture to repay a secured loan at maturity to a third party lender. This loan is scheduled to mature in November 2018.

- Highwoods DLF 98/29, LLC (“DLF I”)

See Note 2 for a description of our acquisition of a building in Orlando, FL 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.

During 2013, DLF I sold a building to an unrelated third party for a sale price of $5.9 million (after $0.1 million in closing credits to buyer for free rent) and recorded a gain on disposition of discontinued operations of less than $0.1 million. We recorded less than $0.1 million as our share of this gain through equity in earnings of unconsolidated affiliates.

4.    Investments in and Advances to Affiliates – Continued

During 2013, DLF I recorded impairments of real estate assets of $20.1 million on buildings in Orlando, FL, Atlanta, GA and Charlotte, NC. We recorded $4.5 million as our share of these impairment charges through equity in earnings of unconsolidated affiliates. These impairments were due to a change in the assumed timing of future dispositions and/or leasing assumptions, which reduced the future expected cash flows from the impaired properties.

- 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, 2015, 2014 and 2013, we recognized $1.4 million, $1.2 million and $2.9 million, respectively, of development/construction, management and leasing fees from our unconsolidated joint ventures. At December 31, 2015 and 2014, we had receivables of $0.1 million and $0.5 million, respectively, 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, VA 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 Markel's assets warrant a distribution as determined by the governing agreement. We estimate the value of noncontrolling interest distributions would have been $19.4 million had the entity been liquidated at December 31, 2015. 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.
v3.3.1.900
Intangible Assets and Below Market Leaes Liabilities
12 Months Ended
Dec. 31, 2015
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,
 
2015
 
2014
Assets:
 
 
 
Deferred financing costs
$
18,449

 
$
19,478

Less accumulated amortization
(8,551
)
 
(7,953
)
 
9,898

 
11,525

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
346,937

 
311,092

Less accumulated amortization
(115,172
)
 
(100,169
)
 
231,765

 
210,923

Deferred financing and leasing costs, net
$
241,663

 
$
222,448

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
63,830

 
$
55,783

Less accumulated amortization
(17,927
)
 
(13,548
)
 
$
45,903

 
$
42,235


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

 
Year Ended December 31,
 
2015
 
2014
 
2013
Amortization of deferred financing costs
$
3,645

 
$
3,082

 
$
3,802

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
43,332

 
$
38,144

 
$
35,941

Amortization of lease incentives (in rental and other revenues)
$
1,493

 
$
1,419

 
$
1,361

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
5,062