HIGHWOODS PROPERTIES, INC., 10-Q filed on 4/27/2021
Quarterly Report
v3.21.1
Cover Page - shares
3 Months Ended
Mar. 31, 2021
Apr. 20, 2021
Entity Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2021  
Document Transition Report false  
Entity Registrant Name HIGHWOODS PROPERTIES, INC.  
Entity Incorporation, State or Country Code MD  
Entity File Number 001-13100  
Entity Tax Identification Number 56-1871668  
Entity Address, Address Line One 3100 Smoketree Court  
Entity Address, Address Line Two Suite 600  
Entity Address, City or Town Raleigh  
Entity Address, State or Province NC  
Entity Address, Postal Zip Code 27604  
City Area Code 919  
Local Phone Number 872-4924  
Title of 12(b) Security Common Stock, $.01 par value, of Highwoods Properties, Inc.  
Trading Symbol HIW  
Security Exchange Name NYSE  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   104,055,736
Entity Central Index Key 0000921082  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Highwoods Realty Limited Partnership [Member]    
Entity Information [Line Items]    
Entity Registrant Name HIGHWOODS REALTY LIMITED PARTNERSHIP  
Entity Incorporation, State or Country Code NC  
Entity File Number 000-21731  
Entity Tax Identification Number 56-1869557  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Central Index Key 0000941713  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Amendment Flag false  
v3.21.1
Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Real estate assets, at cost:    
Land $ 474,141 $ 466,872
Buildings and tenant improvements 5,125,924 4,981,637
Development in-process 288,406 259,681
Land held for development 131,458 131,474
Total real estate assets 6,019,929 5,839,664
Less-accumulated depreciation (1,454,427) (1,418,379)
Net real estate assets 4,565,502 4,421,285
Real estate and other assets, net, held for sale 0 11,360
Cash and cash equivalents 49,279 109,322
Restricted cash 9,099 79,922
Accounts receivable 23,226 27,488
Mortgages and notes receivable 1,292 1,341
Accrued straight-line rents receivable 263,643 259,381
Investments in and advances to unconsolidated affiliates 638 27,104
Deferred leasing costs, net of accumulated amortization of $147,937 and $151,698, respectively 219,790 209,329
Prepaid expenses and other assets, net of accumulated depreciation of $18,895 and $21,154, respectively 72,845 62,885
Total Assets 5,205,314 5,209,417
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 2,470,472 2,470,021
Accounts payable, accrued expenses and other liabilities 258,026 268,727
Total Liabilities 2,728,498 2,738,748
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 121,895 112,499
Equity/Capital:    
Preferred Stock, $.01 par value, 50,000,000 authorized shares; 8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 28,826 shares issued and outstanding 28,826 28,826
Common Stock, $.01 par value, 200,000,000 authorized shares; 104,055,152 and 103,921,546 shares issued and outstanding, respectively 1,041 1,039
Additional paid-in capital 2,986,462 2,993,946
Distributions in excess of net income available for common stockholders (681,613) (686,225)
Accumulated other comprehensive loss (1,340) (1,462)
Total Stockholders’ Equity 2,333,376 2,336,124
Noncontrolling interests in consolidated affiliates 21,545 22,046
Total Equity/Capital 2,354,921 2,358,170
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital 5,205,314 5,209,417
Highwoods Realty Limited Partnership [Member]    
Real estate assets, at cost:    
Land 474,141 466,872
Buildings and tenant improvements 5,125,924 4,981,637
Development in-process 288,406 259,681
Land held for development 131,458 131,474
Total real estate assets 6,019,929 5,839,664
Less-accumulated depreciation (1,454,427) (1,418,379)
Net real estate assets 4,565,502 4,421,285
Real estate and other assets, net, held for sale 0 11,360
Cash and cash equivalents 49,279 109,322
Restricted cash 9,099 79,922
Accounts receivable 23,226 27,488
Mortgages and notes receivable 1,292 1,341
Accrued straight-line rents receivable 263,643 259,381
Investments in and advances to unconsolidated affiliates 638 27,104
Deferred leasing costs, net of accumulated amortization of $147,937 and $151,698, respectively 219,790 209,329
Prepaid expenses and other assets, net of accumulated depreciation of $18,895 and $21,154, respectively 72,845 62,885
Total Assets 5,205,314 5,209,417
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Capital:    
Mortgages and notes payable, net 2,470,472 2,470,021
Accounts payable, accrued expenses and other liabilities 258,026 268,727
Total Liabilities 2,728,498 2,738,748
Commitments and contingencies
Redeemable Operating Partnership Units:    
Common Units, 2,838,725 outstanding 121,895 112,499
Series A Preferred Units (liquidation preference $1,000 per unit), 28,826 units issued and outstanding 28,826 28,826
Total Redeemable Operating Partnership Units 150,721 141,325
Equity/Capital:    
General partner Common Units, 1,064,851 and 1,063,515 outstanding, respectively 23,059 23,087
Limited partner Common Units, 102,581,492 and 102,449,222 outstanding, respectively 2,282,831 2,285,673
Accumulated other comprehensive loss (1,340) (1,462)
Noncontrolling interests in consolidated affiliates 21,545 22,046
Total Equity/Capital 2,326,095 2,329,344
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Capital $ 5,205,314 $ 5,209,417
v3.21.1
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
3 Months Ended 12 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Assets:    
Deferred leasing costs, accumulated amortization $ 147,937 $ 151,698
Prepaid Expenses And Other Assets Accumulated Depreciation $ 18,895 $ 21,154
Equity/Capital:    
Series A Preferred Stock, par value (in dollars per share) $ 0.01 $ 0.01
Series A Preferred Stock, authorized shares (in shares) 50,000,000 50,000,000
Series A Preferred Stock, dividend rate percentage (in hundredths) 8.625% 8.625%
Series A Preferred Stock, liquidation preference (in dollars per share) $ 1,000 $ 1,000
Series A Preferred Stock, shares issued (in shares) 28,826 28,826
Series A Preferred Stock, shares outstanding (in shares) 28,826 28,826
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) 104,055,152 103,921,546
Common Stock, shares outstanding (in shares) 104,055,152 103,921,546
Highwoods Realty Limited Partnership [Member]    
Assets:    
Deferred leasing costs, accumulated amortization $ 147,937 $ 151,698
Prepaid Expenses And Other Assets Accumulated Depreciation $ 18,895 $ 21,154
Redeemable Operating Partnership Units: [Abstract]    
Redeemable Common Units outstanding (in shares) 2,838,725 2,838,725
Series A Preferred Units, liquidation preference (in dollars per share) $ 1,000 $ 1,000
Series A Preferred Units, issued (in shares) 28,826 28,826
Series A Preferred Units, outstanding (in shares) 28,826 28,826
Common Units: [Abstract]    
General partners' capital account, units outstanding (in shares) 1,064,851 1,063,515
Limited partners' capital account, units outstanding (in shares) 102,581,492 102,449,222
v3.21.1
Consolidated Statements of Income - USD ($)
shares in Thousands, $ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Rental and other revenues $ 183,805 $ 192,800
Operating expenses:    
Rental property and other expenses 56,189 62,202
Depreciation and amortization 60,927 61,150
General and administrative 9,952 10,930
Total operating expenses 127,068 134,282
Interest expense 19,768 21,277
Other income 312 69
Gains on disposition of property 18,937 153,067
Equity in earnings of unconsolidated affiliates 637 963
Net income 56,855 191,340
Net (income) attributable to noncontrolling interests in the Operating Partnership (1,493) (4,960)
Net (income) attributable to noncontrolling interests in consolidated affiliates (281) (285)
Dividends on Preferred Stock (622) (622)
Net income available for common stockholders $ 54,459 $ 185,473
Earnings per Common Share – basic:    
Net income available for common stockholders (in dollars per share) $ 0.52 $ 1.79
Weighted average Common Shares outstanding - basic (in shares) 103,963 103,813
Earnings per Common Share - diluted:    
Net income available for common stockholders (in dollars per share) $ 0.52 $ 1.79
Weighted average Common Shares outstanding - diluted (in shares) 106,810 106,633
Highwoods Realty Limited Partnership [Member]    
Rental and other revenues $ 183,805 $ 192,800
Operating expenses:    
Rental property and other expenses 56,189 62,202
Depreciation and amortization 60,927 61,150
General and administrative 9,952 10,930
Total operating expenses 127,068 134,282
Interest expense 19,768 21,277
Other income 312 69
Gains on disposition of property 18,937 153,067
Equity in earnings of unconsolidated affiliates 637 963
Net income 56,855 191,340
Net (income) attributable to noncontrolling interests in consolidated affiliates (281) (285)
Distributions on Preferred Units (622) (622)
Net income available for common unitholders $ 55,952 $ 190,433
Earnings per Common Unit - basic:    
Net income available for common unitholders (in dollars per share) $ 0.53 $ 1.79
Weighted average Common Units outstanding - basic (in shares) 106,393 106,199
Earnings per Common Unit - diluted:    
Net income available for common unitholders (in dollars per share) $ 0.53 $ 1.79
Weighted average Common Units outstanding - diluted (in shares) 106,401 106,224
v3.21.1
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Comprehensive income:    
Net income $ 56,855 $ 191,340
Other comprehensive income/(loss):    
Unrealized losses on cash flow hedges 0 (1,133)
Amortization of cash flow hedges 122 (72)
Total other comprehensive income/(loss) 122 (1,205)
Total comprehensive income 56,977 190,135
Less-comprehensive (income) attributable to noncontrolling interests (1,774) (5,245)
Comprehensive income attributable to common stockholders/Comprehensive income attributable to common unitholders 55,203 184,890
Highwoods Realty Limited Partnership [Member]    
Comprehensive income:    
Net income 56,855 191,340
Other comprehensive income/(loss):    
Unrealized losses on cash flow hedges 0 (1,133)
Amortization of cash flow hedges 122 (72)
Total other comprehensive income/(loss) 122 (1,205)
Total comprehensive income 56,977 190,135
Less-comprehensive (income) attributable to noncontrolling interests (281) (285)
Comprehensive income attributable to common stockholders/Comprehensive income attributable to common unitholders $ 56,696 $ 189,850
v3.21.1
Consolidated Statements of Equity/Capital - USD ($)
$ in Thousands
Total
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
General Partners' Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partners' 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, 2019     103,756,046                  
Balance at Dec. 31, 2019 $ 2,174,407 $ 2,145,548 $ 1,038 $ 28,859 $ 21,240 $ 2,102,769 $ 2,954,779 $ (471) $ (471) $ 22,010 $ 22,010 $ (831,808)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                        
Issuances of Common Units, net of issuance costs and tax withholdings   7,202     72 7,130            
Distributions on Common Units   (50,903)     (509) (50,394)            
Distributions on Preferred Units   (622)     (6) (616)            
Issuances of Common Stock, net of issuance costs and tax withholdings - Shares     (13,266)                  
Issuances of Common Stock, net of issuance costs and tax withholdings 1,039           1,039          
Dividends on Common Stock (49,735)                     (49,735)
Dividends on Preferred Stock (622)                     (622)
Adjustment of noncontrolling interests in the Operating Partnership to fair value 42,301           42,301          
Distributions to noncontrolling interests in consolidated affiliates (198) (198)               (198) (198)  
Issuances of restricted stock - shares     149,304                  
Issuances of restricted stock 0                      
Redemptions/repurchases of Preferred Stock (3)     (3)                
Share-based compensation expense, net of forfeitures - shares     (6,166)                  
Share-based compensation expense, net of forfeitures 2,496 2,496 $ 1   25 2,471 2,495          
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   32,346     323 32,023            
Net (income) attributable to noncontrolling interests in the Operating Partnership (4,960)                     (4,960)
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     (3) (282)       285 285 (285)
Comprehensive income:                        
Net income 191,340 191,340     1,913 189,427           191,340
Other comprehensive income/(loss) (1,205) (1,205)           (1,205) (1,205)      
Total comprehensive income 190,135 190,135                    
Balance (in shares) at Mar. 31, 2020     103,885,918                  
Balance at Mar. 31, 2020 $ 2,354,860 2,326,004 $ 1,039 28,856 23,055 2,282,528 3,000,614 (1,676) (1,676) 22,097 22,097 (696,070)
Balance (in shares) at Dec. 31, 2020 103,921,546   103,921,546                  
Balance at Dec. 31, 2020 $ 2,358,170 2,329,344 $ 1,039 28,826 23,087 2,285,673 2,993,946 (1,462) (1,462) 22,046 22,046 (686,225)
Increase (Decrease) in Stockholders' Equity [Roll Forward]                        
Issuances of Common Units, net of issuance costs and tax withholdings   (1,198)     (12) (1,186)            
Distributions on Common Units   (51,014)     (510) (50,504)            
Distributions on Preferred Units   (622)     (6) (616)            
Issuances of Common Stock, net of issuance costs and tax withholdings - Shares     (49,058)                  
Issuances of Common Stock, net of issuance costs and tax withholdings (1,198)           (1,198)          
Dividends on Common Stock (49,847)                     (49,847)
Dividends on Preferred Stock (622)                     (622)
Adjustment of noncontrolling interests in the Operating Partnership to fair value (9,266)           (9,266)          
Distributions to noncontrolling interests in consolidated affiliates (782) (782)               (782) (782)  
Issuances of restricted stock - shares     183,100                  
Issuances of restricted stock 0                      
Share-based compensation expense, net of forfeitures - shares     (436)                  
Share-based compensation expense, net of forfeitures 2,982 2,982 $ 2   30 2,952 2,980          
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner   (9,592)     (96) (9,496)            
Net (income) attributable to noncontrolling interests in the Operating Partnership (1,493)                     (1,493)
Net (income) attributable to noncontrolling interests in consolidated affiliates 0 0     (3) (278)       281 281 (281)
Comprehensive income:                        
Net income 56,855 56,855     569 56,286           56,855
Other comprehensive income/(loss) 122 122           122 122      
Total comprehensive income $ 56,977 56,977                    
Balance (in shares) at Mar. 31, 2021 104,055,152   104,055,152                  
Balance at Mar. 31, 2021 $ 2,354,921 $ 2,326,095 $ 1,041 $ 28,826 $ 23,059 $ 2,282,831 $ 2,986,462 $ (1,340) $ (1,340) $ 21,545 $ 21,545 $ (681,613)
v3.21.1
Consolidated Statements of Equity/Capital (Parentheticals) - $ / shares
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Highwoods Properties, Inc. [Member]    
Dividends on Common Stock (per share) $ 0.48 $ 0.48
Highwoods Properties, Inc. [Member] | Series A Cumulative Redeemable Preferred Shares [Member]    
Dividends on Preferred Stock (per share)/Distributions on Preferred Units (per unit) 21.5625 21.5625
Highwoods Realty Limited Partnership [Member]    
Distributions on Common Units (per unit) 0.48 0.48
Highwoods Realty Limited Partnership [Member] | Series A Cumulative Redeemable Preferred Shares [Member]    
Dividends on Preferred Stock (per share)/Distributions on Preferred Units (per unit) $ 21.5625 $ 21.5625
v3.21.1
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Operating activities:    
Net income $ 56,855 $ 191,340
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 60,927 61,150
Amortization of lease incentives and acquisition-related intangible assets and liabilities (704) (649)
Share-based compensation expense 2,982 2,496
Credit losses on operating lease receivables 237 1,249
Accrued interest on mortgages and notes receivable (27) (31)
Amortization of debt issuance costs 792 767
Amortization of cash flow hedges 122 (72)
Amortization of mortgages and notes payable fair value adjustments 411 426
Losses on debt extinguishment 76 0
Net gains on disposition of property (18,937) (153,067)
Equity in earnings of unconsolidated affiliates (637) (963)
Distributions of earnings from unconsolidated affiliates 395 341
Changes in operating assets and liabilities:    
Accounts receivable 6,658 824
Prepaid expenses and other assets (5,544) (8,745)
Accrued straight-line rents receivable (4,245) (10,888)
Accounts payable, accrued expenses and other liabilities (16,381) (20,564)
Net cash provided by operating activities 82,980 63,614
Investing activities:    
Investments in acquired real estate and related intangible assets, net of cash acquired 0 (55)
Investments in development in-process (19,789) (36,122)
Investments in tenant improvements and deferred leasing costs (22,939) (49,825)
Investments in building improvements (14,422) (15,254)
Investment in acquired controlling interest in unconsolidated affiliate (127,339) 0
Net proceeds from disposition of real estate assets 30,242 331,761
Distributions of capital from unconsolidated affiliates 0 72
Investments in mortgages and notes receivable 0 (32)
Repayments of mortgages and notes receivable 76 75
Changes in other investing activities (746) 477
Net cash provided by/(used in) investing activities (154,917) 231,097
Financing activities:    
Dividends on Common Stock (49,847) (49,735)
Redemptions/repurchases of Preferred Stock 0 (3)
Dividends on Preferred Stock (622) (622)
Distributions to noncontrolling interests in the Operating Partnership (1,363) (1,364)
Distributions to noncontrolling interests in consolidated affiliates (782) (198)
Proceeds from the issuance of Common Stock 493 2,343
Costs paid for the issuance of Common Stock (10) (180)
Repurchase of shares related to tax withholdings (1,681) (1,124)
Borrowings on revolving credit facility 0 110,000
Repayments of revolving credit facility 0 (244,000)
Repayments of mortgages and notes payable (501) (481)
Changes in debt issuance costs and other financing activities (4,616) 0
Net cash used in financing activities (58,929) (185,364)
Net increase/(decrease) in cash and cash equivalents and restricted cash (130,866) 109,347
Cash and cash equivalents and restricted cash at beginning of the period 189,244 14,742
Cash and cash equivalents and restricted cash at end of the period 58,378 124,089
Reconciliation of cash and cash equivalents and restricted cash:    
Cash and cash equivalents at end of the period 49,279 12,696
Restricted cash at end of the period 9,099 111,393
Supplemental disclosure of cash flow information:    
Cash paid for interest, net of amounts capitalized 27,646 25,321
Supplemental disclosure of non-cash investing and financing activities:    
Unrealized losses on cash flow hedges 0 (1,133)
Changes in accrued capital expenditures (1) [1] (454) (4,789)
Write-off of fully depreciated real estate assets 15,468 12,033
Write-off of fully amortized leasing costs 12,848 5,842
Write-off of fully amortized debt issuance costs 2,983 0
Adjustment of noncontrolling interests in the Operating Partnership to fair value 9,266 (42,301)
Issuances of Common Units to acquire real estate assets 0 6,163
Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities 65,500 63,200
Highwoods Realty Limited Partnership [Member]    
Operating activities:    
Net income 56,855 191,340
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 60,927 61,150
Amortization of lease incentives and acquisition-related intangible assets and liabilities (704) (649)
Share-based compensation expense 2,982 2,496
Credit losses on operating lease receivables 237 1,249
Accrued interest on mortgages and notes receivable (27) (31)
Amortization of debt issuance costs 792 767
Amortization of cash flow hedges 122 (72)
Amortization of mortgages and notes payable fair value adjustments 411 426
Losses on debt extinguishment 76 0
Net gains on disposition of property (18,937) (153,067)
Equity in earnings of unconsolidated affiliates (637) (963)
Distributions of earnings from unconsolidated affiliates 395 341
Changes in operating assets and liabilities:    
Accounts receivable 6,658 824
Prepaid expenses and other assets (5,544) (8,745)
Accrued straight-line rents receivable (4,245) (10,888)
Accounts payable, accrued expenses and other liabilities (16,381) (20,564)
Net cash provided by operating activities 82,980 63,614
Investing activities:    
Investments in acquired real estate and related intangible assets, net of cash acquired 0 (55)
Investments in development in-process (19,789) (36,122)
Investments in tenant improvements and deferred leasing costs (22,939) (49,825)
Investments in building improvements (14,422) (15,254)
Investment in acquired controlling interest in unconsolidated affiliate (127,339) 0
Net proceeds from disposition of real estate assets 30,242 331,761
Distributions of capital from unconsolidated affiliates 0 72
Investments in mortgages and notes receivable 0 (32)
Repayments of mortgages and notes receivable 76 75
Changes in other investing activities (746) 477
Net cash provided by/(used in) investing activities (154,917) 231,097
Financing activities:    
Distributions on Common Units (51,014) (50,903)
Redemptions/repurchases of Preferred Units 0 (3)
Distributions on Preferred Units (622) (622)
Distributions to noncontrolling interests in consolidated affiliates (782) (198)
Proceeds from the issuance of Common Units 493 2,343
Costs paid for the issuance of Common Units (10) (180)
Repurchase of units related to tax withholdings (1,681) (1,124)
Borrowings on revolving credit facility 0 110,000
Repayments of revolving credit facility 0 (244,000)
Repayments of mortgages and notes payable (501) (481)
Changes in debt issuance costs and other financing activities (4,812) (196)
Net cash used in financing activities (58,929) (185,364)
Net increase/(decrease) in cash and cash equivalents and restricted cash (130,866) 109,347
Cash and cash equivalents and restricted cash at beginning of the period 189,244 14,742
Cash and cash equivalents and restricted cash at end of the period 58,378 124,089
Reconciliation of cash and cash equivalents and restricted cash:    
Cash and cash equivalents at end of the period 49,279 12,696
Restricted cash at end of the period 9,099 111,393
Supplemental disclosure of cash flow information:    
Cash paid for interest, net of amounts capitalized 27,646 25,321
Supplemental disclosure of non-cash investing and financing activities:    
Unrealized losses on cash flow hedges 0 (1,133)
Changes in accrued capital expenditures (1) [1] (454) (4,789)
Write-off of fully depreciated real estate assets 15,468 12,033
Write-off of fully amortized leasing costs 12,848 5,842
Write-off of fully amortized debt issuance costs 2,983 0
Adjustment of Redeemable Common Units to fair value 9,396 (38,705)
Issuances of Common Units to acquire real estate assets 0 6,163
Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities $ 65,500 $ 63,200
[1] Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities at March 31, 2021 and 2020 were $65.5 million and $63.2 million, respectively.
v3.21.1
Description of Business and Significant Accounting Policies
3 Months Ended
Mar. 31, 2021
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 March 31, 2021, we owned or had an interest in 27.4 million rentable square feet of in-service properties, 0.8 million rentable square feet of office properties under development and approximately 230 acres of development land.

The Company is the sole general partner of the Operating Partnership. At March 31, 2021, the Company owned all of the Preferred Units and 103.6 million, or 97.3%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.8 million Common Units.

Basis of Presentation

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

The Company’s Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership’s Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. We consolidate joint venture investments, such as interests in partnerships and limited liability companies, when we control the major operating and financial policies of the investment through majority ownership, in our capacity as a general partner or managing member or through some other contractual right. We also consolidate those entities deemed to be variable interest entities in which we are determined to be the primary beneficiary. At March 31, 2021, we have involvement with, and are the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 3). All intercompany transactions and accounts have been eliminated.

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have condensed or omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2020 Annual Report on Form 10-K.

Use of Estimates

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

Insurance

We are primarily self-insured for health care claims for participating employees. We have stop-loss coverage to limit our exposure to significant claims on a per claim and annual aggregate basis. We determine our liabilities for claims, including incurred but not reported losses, based on all relevant information, including actuarial estimates of claim liabilities. At March 31, 2021, a reserve of $0.4 million was recorded to cover estimated reported and unreported claims.
Recently Issued Accounting Standards

The Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) that provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”). Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. The guidance in this ASU is optional and may be elected now through December 31, 2022 as reference rate reform activities occur. We will continue to evaluate the impact of this ASU; however, we currently expect to avail ourselves of such optional expedients and exceptions should our modified contracts meet the required criteria.

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, lessors may provide rent deferrals and other lease concessions to lessees. In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, we would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows us, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. We have elected the practical expedient and will not apply lease modification accounting on a lease by lease basis where applicable. As a result, $2.5 million of deferred rent is included in accounts receivable on our Consolidated Balance Sheets at March 31, 2021.
v3.21.1
Leases
3 Months Ended
Mar. 31, 2021
Leases [Abstract]  
Leases Leases We generally lease our office properties to lessees in exchange for fixed monthly payments that cover rent, property taxes, insurance and certain cost recoveries, primarily common area maintenance. Office properties owned by us that are under lease are primarily located in Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa and are leased to a wide variety of lessees across many industries. Our leases are operating leases and mostly range from three to 10 years. We recognized rental and other revenues related to operating lease payments of $179.9 million and $189.6 million during the three months ended March 31, 2021 and 2020, respectively. Included in these amounts are variable lease payments of $14.5 million and $16.5 million during the three months ended March 31, 2021 and 2020, respectively.
v3.21.1
Consolidated Variable Interest Entity
3 Months Ended
Mar. 31, 2021
Variable Interest Entities [Abstract]  
Consolidated Variable Interest Entity Consolidated Variable Interest EntityIn 2019, we and The Bromley Companies formed a joint venture (the “Midtown One joint venture”) to construct Midtown West, a 150,000 square foot, multi-customer office building located in the mixed-use Midtown Tampa project in Tampa’s Westshore submarket. Midtown West has an anticipated total investment of $71.3 million. Construction of Midtown West began in the third quarter of 2019 with a scheduled completion date in the second quarter of 2021. At closing, we agreed to contribute cash of $20.0 million, which has been fully funded, in exchange for an 80.0% interest in the Midtown One joint venture and The Bromley Companies contributed land valued at $5.0 million in exchange for the remaining 20.0% interest. We also committed to provide a $46.3 million interest-only secured construction loan to the Midtown One joint venture that is scheduled to mature on the second anniversary of completion. The loan bears interest at LIBOR plus 250 basis points. As of March 31, 2021, $21.1 million under the loan has been funded.
We determined that we have a variable interest in the Midtown One joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us as both a debt and an equity holder and The Bromley Companies as an equity holder. The Midtown One joint venture was further determined to be a variable interest entity as it requires additional subordinated financial support in the form of a loan because the initial equity investment provided by us and The Bromley Companies is not sufficient to finance its planned investments and operations. We, as majority owner and managing member and through our control rights as set forth in the joint venture’s governance documents, were determined to be the primary beneficiary as we have both the power to direct the activities that most significantly affect the entity (primarily lease rates, property operations and capital expenditures) and significant economic exposure through our equity investment and loan commitment. As such, the Midtown One joint venture is consolidated and all intercompany transactions and accounts are eliminated. The following table sets forth the assets and liabilities of the Midtown One joint venture included on our Consolidated Balance Sheets:
March 31,
2021
Development in-process$49,039 
Cash and cash equivalents$85 
Deferred leasing costs$196 
Prepaid expenses and other assets
$127 
Accounts payable, accrued expenses and other liabilities$2,127 

The assets of the Midtown One joint venture can be used only to settle obligations of the joint venture and its creditors have no recourse to our wholly owned assets.
v3.21.1
Real Estate Assets
3 Months Ended
Mar. 31, 2021
Real Estate [Abstract]  
Real Estate Assets Real Estate Assets
Acquisitions

During the first quarter of 2021, we acquired our joint venture partner’s 75.0% interest in our Highwoods DLF Forum, LLC joint venture (the “Forum”), which owned five buildings in Raleigh encompassing 636,000 rentable square feet, for a purchase price of $131.3 million. We previously accounted for our 25.0% interest in this joint venture using the equity method of accounting. The assets and liabilities of the joint venture are now wholly owned and we have determined the acquisition constitutes an asset purchase. As such, because the Forum is not a variable interest entity, we allocated our previously held equity interest at historical cost along with the consideration paid and acquisition costs to the assets acquired and liabilities assumed. The assets acquired and liabilities assumed were recorded at relative fair value as determined by management, with the assistance of third party specialists, based on information available at the acquisition date and on current assumptions as to future operations.

Dispositions
During the first quarter of 2021, we sold a building in Atlanta for a sale price of $30.7 million and recorded a gain on disposition of property of $18.9 million.
v3.21.1
Intangible Assets and Below Market Lease Liabilities
3 Months Ended
Mar. 31, 2021
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:

March 31,
2021
December 31,
2020
Assets:
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)$367,727 $361,027 
Less accumulated amortization(147,937)(151,698)
$219,790 $209,329 
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities$62,490 $63,748 
Less accumulated amortization(36,647)(37,838)
$25,843 $25,910 

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

Three Months Ended
March 31,
20212020
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)$8,571 $8,798 
Amortization of lease incentives (in rental and other revenues)$448 $490 
Amortization of acquisition-related intangible assets (in rental and other revenues)$277 $288 
Amortization of acquisition-related intangible assets (in rental property and other expenses)$— $139 
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)$(1,429)$(1,566)

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

Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)Amortization of Lease Incentives (in Rental and Other Revenues)Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2021$27,307 $1,169 $725 $(3,757)
202232,692 1,396 910 (4,214)
202329,031 1,322 754 (3,838)
202425,668 1,173 664 (3,171)
202520,705 1,095 546 (1,813)
Thereafter67,577 4,603 2,453 (9,050)
$202,980 $10,758 $6,052 $(25,843)
Weighted average remaining amortization periods as of March 31, 2021 (in years)8.29.49.08.4
The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2021 acquisition activity:

Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues)Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)
Amount recorded at acquisition$2,036 $13,168 $(1,361)
Weighted average remaining amortization periods as of March 31, 2021 (in years)7.45.95.9
v3.21.1
Mortgages and Notes Payable
3 Months Ended
Mar. 31, 2021
Debt Disclosure [Abstract]  
Mortgages and Notes Payable Mortgages and Notes Payable
The following table sets forth our mortgages and notes payable:

March 31,
2021
December 31,
2020
Secured indebtedness$92,850 $93,350 
Unsecured indebtedness2,391,063 2,390,652 
Less-unamortized debt issuance costs(13,441)(13,981)
Total mortgages and notes payable, net$2,470,472 $2,470,021 

At March 31, 2021, our secured mortgage loan was collateralized by real estate assets with an undepreciated book value of $147.9 million.

During the first quarter of 2021, we entered into a new $750.0 million unsecured revolving credit facility, which replaced our previously existing $600.0 million revolving credit facility and includes an accordion feature that allows for an additional $550.0 million of borrowing capacity subject to additional lender commitments. Our new revolving credit facility is scheduled to mature in March 2025. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. The current interest rate on the new facility at our existing credit ratings is LIBOR plus 90 basis points and the annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. The financial and other covenants under the new facility are substantially similar to our previous credit facility. We incurred $4.8 million of debt issuance costs, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility. We recorded $0.1 million of loss on debt extinguishment. There were no amounts outstanding under our new revolving credit facility at March 31, 2021. There was $160.0 million outstanding under our new revolving credit facility at April 20, 2021. At both March 31, 2021 and April 20, 2021, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at March 31, 2021 and April 20, 2021 was $749.9 million and $589.9 million, respectively.

We are currently in compliance with financial covenants with respect to our consolidated debt.

We have considered our short-term liquidity needs and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs. We intend to meet these short-term liquidity requirements through a combination of the following:

available cash and cash equivalents;

cash flows from operating activities;

issuance of debt securities by the Operating Partnership;

issuance of secured debt;

bank term loans;

borrowings under our revolving credit facility;
issuance of equity securities by the Company or the Operating Partnership; and

the disposition of non-core assets.
v3.21.1
Derivative Financial Instruments
3 Months Ended
Mar. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
The counterparties under our swaps are major financial institutions. The swap agreements contain a provision whereby if we default on certain of our indebtedness and which default results in repayment of such indebtedness being, or becoming capable of being, accelerated by the lender, then we could also be declared in default on our swaps.

Our interest rate swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income/(loss) each reporting period. We have no collateral requirements related to our interest rate swaps.

Amounts reported in accumulated other comprehensive income/(loss) related to derivatives will be reclassified to interest expense as interest payments are made on our debt. During the period from April 1, 2021 through March 31, 2022, we estimate that $0.4 million will be reclassified as a net increase to interest expense.

The following table sets forth the fair value of our derivatives:

March 31,
2021
December 31,
2020
Derivatives:
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
Interest rate swaps$650 $846 

The following table sets forth the effect of our cash flow hedges on accumulated other comprehensive loss and interest expense:

Three Months Ended
March 31,
20212020
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in accumulated other comprehensive loss on derivatives:
Interest rate swaps$— $(1,133)
Amount of (gains)/losses reclassified out of accumulated other comprehensive loss into interest expense:
Interest rate swaps$122 $(72)
v3.21.1
Noncontrolling Interests
3 Months Ended
Mar. 31, 2021
Noncontrolling Interest [Abstract]  
Noncontrolling Interests Noncontrolling Interests
Noncontrolling Interests in Consolidated Affiliates

At March 31, 2021, our noncontrolling interests in consolidated affiliates relate to our joint venture partners’ 50.0% interest in office properties in Richmond and 20.0% interest in an office development property in Tampa. Our joint venture partners are unrelated third parties.

Noncontrolling Interests in the Operating Partnership

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

Three Months Ended
March 31,
20212020
Beginning noncontrolling interests in the Operating Partnership$112,499 $133,216 
Adjustment of noncontrolling interests in the Operating Partnership to fair value9,266 (42,301)
Issuances of Common Units— 6,163 
Net income attributable to noncontrolling interests in the Operating Partnership1,493 4,960 
Distributions to noncontrolling interests in the Operating Partnership(1,363)(1,364)
Total noncontrolling interests in the Operating Partnership$121,895 $100,674 

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

Three Months Ended
March 31,
20212020
Net income available for common stockholders$54,459 $185,473 
Issuances of Common Units— (6,163)
Change from net income available for common stockholders and transfers from noncontrolling interests
$54,459 $179,310 
v3.21.1
Disclosure About Fair Value of Financial Instruments
3 Months Ended
Mar. 31, 2021
Fair Value Disclosures [Abstract]  
Disclosure About Fair Value of Financial Instruments Disclosure About Fair Value of Financial Instruments
The following summarizes the levels of inputs that we use to measure fair value.

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

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

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

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

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. In addition, credit valuation adjustments are considered in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our Level 3 assets include any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers’ opinions of value and/or the terms of definitive sales contracts. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.
The following table sets forth our assets and liabilities and the Company’s noncontrolling interests in the Operating Partnership that are measured or disclosed at fair value within the fair value hierarchy:

Level 1Level 2
TotalQuoted Prices
in Active
Markets for Identical Assets or Liabilities
Significant Observable Inputs
Fair Value at March 31, 2021:
Assets:
Mortgages and notes receivable, at fair value (1)
$1,292 $— $1,292 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
2,712 2,712 — 
Total Assets$4,004 $2,712 $1,292 
Noncontrolling Interests in the Operating Partnership$121,895 $121,895 $— 
Liabilities:
Mortgages and notes payable, net, at fair value (1)
$2,554,474 $— $2,554,474 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
650 — 650 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
2,712 2,712 — 
Total Liabilities
$2,557,836 $2,712 $2,555,124 
Fair Value at December 31, 2020:
Assets:
Mortgages and notes receivable, at fair value (1)
$1,341 $— $1,341 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
2,573 2,573 — 
Total Assets$3,914 $2,573 $1,341 
Noncontrolling Interests in the Operating Partnership$112,499 $112,499 $— 
Liabilities:
Mortgages and notes payable, net, at fair value (1)
$2,639,163 $— $2,639,163 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
846 — 846 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
2,573 2,573 — 
Total Liabilities
$2,642,582 $2,573 $2,640,009 
__________
(1)    Amounts are not recorded at fair value on our Consolidated Balance Sheets at March 31, 2021 and December 31, 2020.
v3.21.1
Share-Based Payments
3 Months Ended
Mar. 31, 2021
Share-based Payment Arrangement [Abstract]  
Share-Based Payments Share-Based PaymentsDuring the three months ended March 31, 2021, the Company granted 102,532 shares of time-based restricted stock and 80,568 shares of total return-based restricted stock with weighted average grant date fair values per share of $39.96 and $36.37, respectively. We recorded share-based compensation expense of $3.0 million and $2.5 million during the three months ended March 31, 2021 and 2020, respectively. At March 31, 2021, there was $9.2 million of total unrecognized share-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.3 years.
v3.21.1
Accumulated Other Comprehensive Loss
3 Months Ended
Mar. 31, 2021
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated Other Comprehensive Loss Accumulated Other Comprehensive Loss
The following table sets forth the components of accumulated other comprehensive loss:

Three Months Ended
March 31,
20212020
Cash flow hedges:
Beginning balance$(1,462)$(471)
Unrealized losses on cash flow hedges— (1,133)
Amortization of cash flow hedges (1)
122 (72)
Total accumulated other comprehensive loss$(1,340)$(1,676)
__________
(1)    Amounts reclassified out of accumulated other comprehensive loss into interest expense.
v3.21.1
Real Estate and Other Assets Held For Sale
3 Months Ended
Mar. 31, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Real Estate and Other Assets Held For Sale Real Estate and Other Assets Held For Sale
The following table sets forth the assets held for sale at March 31, 2021 and December 31, 2020, which are considered non-core:

March 31,
2021
December 31,
2020
Assets:
Land$— $2,612 
Buildings and tenant improvements— 12,238 
Less-accumulated depreciation— (3,577)
Net real estate assets— 11,273 
Deferred leasing costs, net— 87 
Real estate and other assets, net, held for sale$— $11,360 
v3.21.1
Earnings Per Share and Per Unit
3 Months Ended
Mar. 31, 2021
Earnings Per Share [Abstract]  
Earnings Per Share and Per Unit Earnings Per Share and Per Unit
The following table sets forth the computation of basic and diluted earnings per share of the Company:

Three Months Ended
March 31,
20212020
Earnings per Common Share - basic:
Numerator:
Net income$56,855 $191,340 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,493)(4,960)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(281)(285)
Dividends on Preferred Stock(622)(622)
Net income available for common stockholders$54,459 $185,473 
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1)
103,963 103,813 
Net income available for common stockholders$0.52 $1.79 
Earnings per Common Share - diluted:
Numerator:
Net income$56,855 $191,340 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(281)(285)
Dividends on Preferred Stock(622)(622)
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$55,952 $190,433 
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1)
103,963 103,813 
Add:
Stock options using the treasury method25 
Noncontrolling interests Common Units2,839 2,795 
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions
106,810 106,633 
Net income available for common stockholders$0.52 $1.79 
__________
(1)Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:

Three Months Ended
March 31,
20212020
Earnings per Common Unit - basic:
Numerator:
Net income$56,855 $191,340 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(281)(285)
Distributions on Preferred Units(622)(622)
Net income available for common unitholders$55,952 $190,433 
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1)
106,393 106,199 
Net income available for common unitholders$0.53 $1.79 
Earnings per Common Unit - diluted:
Numerator:
Net income$56,855 $191,340 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(281)(285)
Distributions on Preferred Units(622)(622)
Net income available for common unitholders$55,952 $190,433 
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1)
106,393 106,199 
Add:
Stock options using the treasury method25 
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions
106,401 106,224 
Net income available for common unitholders$0.53 $1.79 
__________
(1)Includes all unvested restricted stock where distributions on such restricted stock are non-forfeitable.
v3.21.1
Segment Information
3 Months Ended
Mar. 31, 2021
Segment Reporting [Abstract]  
Segment Information Segment Information
The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker and which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments. Our segment information for the three months ended March 31, 2020 has been retrospectively revised from previously reported amounts to reflect a change in our reportable segments as a result of recent dispositions.

Three Months Ended
March 31,
20212020
Rental and Other Revenues:
Office:
Atlanta$35,975 $37,959 
Charlotte9,134 8,933 
Nashville35,159 34,497 
Orlando12,559 13,022 
Pittsburgh14,618 14,948 
Raleigh37,042 32,553 
Richmond11,462 12,260 
Tampa24,424 25,244 
Total Office Segment180,373 179,416 
Other3,432 13,384 
Total Rental and Other Revenues$183,805 $192,800 
Net Operating Income:
Office:
Atlanta$24,000 $25,183 
Charlotte7,252 7,202 
Nashville24,993 24,753 
Orlando7,712 8,005 
Pittsburgh8,889 8,670 
Raleigh28,136 23,636 
Richmond8,053 8,691 
Tampa16,640 16,533 
Total Office Segment125,675 122,673 
Other1,941 7,925 
Total Net Operating Income127,616 130,598 
Reconciliation to net income:
Depreciation and amortization(60,927)(61,150)
General and administrative expenses(9,952)(10,930)
Interest expense(19,768)(21,277)
Other income312 69 
Gains on disposition of property18,937 153,067 
Equity in earnings of unconsolidated affiliates637 963 
Net income$56,855 $191,340 
v3.21.1
Contingencies
3 Months Ended
Mar. 31, 2021
Loss Contingency [Abstract]  
Contingencies ContingenciesSince early March 2020, efforts to slow the spread of the COVID-19 virus have had a significant impact on the U.S. economy. We continue to follow the policies described in Notes 1 and 2 to our Consolidated Financial Statements contained in our 2020 Annual Report on Form 10-K, including those related to impairments of real estate assets and investments in unconsolidated affiliates, leases and estimates of credit losses on operating lease receivables. While the results of our current analyses did not result in any material adjustments to amounts as of and during the three months ended March 31, 2021, circumstances related to the COVID-19 pandemic may result in recording impairments, lease modifications and credit losses in future periods.
v3.21.1
Subsequent Events
3 Months Ended
Mar. 31, 2021
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
On April 15, 2021, we prepaid without penalty the remaining $150.0 million principal amount of 3.20% unsecured notes that was scheduled to mature in June 2021. We expect to record $0.1 million of loss on debt extinguishment related to this prepayment.

On April 15, 2021, the Company declared a cash dividend of $0.48 per share of Common Stock, which is payable on June 8, 2021 to stockholders of record as of May 17, 2021.

On April 16, 2021, we agreed to acquire a portfolio of office assets from Preferred Apartment Communities, Inc. (NYSE:APTS) (“PAC”). The core portfolio to be acquired consists of the following four Class A office assets in Charlotte and Raleigh, which encompass 1,630,000 square feet in total, and one mixed-use redevelopment site in Atlanta: 150 Fayetteville, Raleigh (CBD); CAPTRUST Tower, Raleigh (North Hills); Capitol Towers, Charlotte (SouthPark); Morrocroft Centre, Charlotte (SouthPark); and Galleria 75, Atlanta (Cumberland/Galleria). We have also agreed to acquire two non-core assets: a mezzanine loan related to a recently constructed office building in Atlanta; and Armour Yards, a multi-building creative office project in Atlanta. Our total investment, including the estimated value of the non-core assets, is expected to be $769 million, which includes $28 million of near-term building improvements and $5 million of transaction costs. The transaction is expected to include, among other things, the assumption of four secured loans collateralized by the core office buildings estimated to be recorded at fair value of $403 million in the aggregate, with a weighted average effective interest rate of 3.7% and a weighted average maturity of 10.8 years. The value of the non-core assets represents less than 12% of the anticipated total investment. The acquisition, which is subject to customary closing conditions, is scheduled to close during the third quarter of 2021. We have posted $50 million of earnest money deposits that are non-refundable except in limited circumstances. As part of the transaction, PAC will separately market Armour Yards for sale to a third party. If PAC chooses not to sell Armour Yards to a third party, we will close on the acquisition of the creative office project no later than the first quarter of 2022.

See also Note 15 for information regarding the potential impact of the COVID-19 pandemic in future periods. The severity and duration of the COVID-19 pandemic and the resulting economic recession and the future demand for office space over the long-term are difficult to predict and could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.
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Description of Business and Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation