HIGHWOODS PROPERTIES, INC., 10-Q filed on 7/28/2010
Quarterly Report
Consolidated Balance Sheets (USD $)
In Thousands
Jun. 30, 2010
Dec. 31, 2009
Assets:
 
 
Real estate assets, at cost:
 
 
Land
$ 337,656 
$ 350,537 
Buildings and tenant improvements
2,856,415 
2,880,632 
Land held for development
104,148 
104,148 
Total real estate assets, at cost
3,298,219 
3,335,317 
Less-accumulated depreciation
(798,814)
(781,073)
Net real estate assets
2,499,405 
2,554,244 
For-sale residential condominiums
10,126 
12,933 
Real estate and other assets, net, held for sale
1,229 
5,031 
Cash and cash equivalents
35,843 
23,699 
Restricted cash
6,241 
6,841 
Accounts receivable, net of allowance of $3,326 and $2,810, respectively
20,440 
21,069 
Mortgages and notes receivable, net of allowance of $771 and $698, respectively
20,144 
3,143 
Accrued straight-line rents receivable, net of allowance of $2,405 and $2,443, respectively
87,027 
82,600 
Investment in unconsolidated affiliates
62,633 
66,077 
Deferred financing and leasing costs, net of accumulated amortization of $53,539 and $52,129, respectively
72,350 
73,517 
Prepaid expenses and other assets
39,674 
37,947 
Total Assets
2,855,112 
2,887,101 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,463,727 
1,469,155 
Accounts payable, accrued expenses and other liabilities
105,318 
117,328 
Financing obligations
33,603 
37,706 
Total Liabilities
1,602,648 
1,624,189 
Commitments and contingencies
 
 
Noncontrolling interests in the Operating Partnership
105,409 
129,769 
Equity:
 
 
Common stock, $.01 par value, 200,000,000 authorized shares; 71,614,985 and 71,285,303 shares issued and outstanding, respectively
716 
713 
Additional paid-in capital
1,779,524 
1,751,398 
Distributions in excess of net income available for common stockholders
(716,790)
(701,932)
Accumulated other comprehensive loss
(3,275)
(3,811)
Total Stockholders' Equity
1,141,767 
1,127,960 
Noncontrolling interests in consolidated affiliates
5,288 
5,183 
Total Equity
1,147,055 
1,133,143 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
2,855,112 
2,887,101 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares
$ 52,500 
$ 52,500 
Parenthetical Data to The Consolidated Balance Sheets (USD $)
In Thousands, except Share and Per Share data
Jun. 30, 2010
Dec. 31, 2009
Assets:
 
 
Accounts receivable, allowance
$ 3,326 
$ 2,810 
Mortgages and notes receivable, allowance
771 
698 
Accrued straight-line rents receivable, allowance
2,405 
2,443 
Deferred financing and leasing costs, accumulated amortization
53,539 
52,129 
Equity:
 
 
Preferred Stock, par value
0.01 
0.01 
Preferred Stock, shares authorized
50,000,000 
50,000,000 
Common stock, par value
0.01 
0.01 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares issued
71,614,985 
71,285,303 
Common stock, shares outstanding
71,614,985 
71,285,303 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Preferred stock, liquidation preference
1,000 
1,000 
Preferred stock, shares outstanding
29,092 
29,092 
Preferred stock, shares issued
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Preferred stock, liquidation preference
25 
25 
Preferred stock, shares outstanding
2,100,000 
2,100,000 
Preferred stock, shares issued
2,100,000 
2,100,000 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data
3 Months Ended
Jun. 30, 2010
6 Months Ended
Jun. 30, 2010
3 Months Ended
Jun. 30, 2009
6 Months Ended
Jun. 30, 2009
Income Statement [Abstract]
 
 
 
 
Rental and other revenues
$ 114,339 
$ 229,393 
$ 111,914 
$ 224,275 
Operating expenses:
 
 
 
 
Rental property and other expenses
38,324 
80,039 
38,901 
79,179 
Depreciation and amortization
33,353 
66,082 
32,514 
65,223 
General and administrative
6,980 
15,487 
9,486 
17,801 
Total operating expenses
78,657 
161,608 
80,901 
162,203 
Interest expense:
 
 
 
 
Contractual
21,705 
43,507 
19,945 
40,524 
Amortization of deferred financing costs
835 
1,670 
689 
1,351 
Financing obligations
394 
870 
710 
1,445 
Total interest expense
22,934 
46,047 
21,344 
43,320 
Other income:
 
 
 
 
Interest and other income
966 
2,666 
2,284 
3,291 
Gain on debt extinguishment
0 
0 
630 
630 
Total other income
966 
2,666 
2,914 
3,921 
Income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
13,714 
24,404 
12,583 
22,673 
Gains on disposition of property
17 
36 
194 
213 
Gains on disposition of for-sale residential condominiums
163 
353 
289 
636 
Gains on disposition of investment in unconsolidated affiliates
25,330 
25,330 
0 
0 
Equity in earnings of unconsolidated affiliates
888 
1,683 
1,862 
3,162 
Income from continuing operations
40,112 
51,806 
14,928 
26,684 
Discontinued operations:
 
 
 
 
Income from discontinued operations
197 
411 
1,203 
2,574 
Net gains/(losses) on disposition of discontinued operations
(260)
(86)
20,943 
21,016 
Total discontinued operations
(63)
325 
22,146 
23,590 
Net income
40,049 
52,131 
37,074 
50,274 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,933)
(2,453)
(2,054)
(2,748)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(215)
(429)
(116)
(134)
Dividends on preferred stock
(1,677)
(3,354)
(1,677)
(3,354)
Net income available for common stockholders
36,224 
45,895 
33,227 
44,038 
Earnings per common share - basic:
 
 
 
 
Income from continuing operations available for common stockholders
0.51 
0.64 
0.19 
0.34 
Income from discontinued operations available for common stockholders
0.00 
0.00 
0.31 
0.34 
Net income available for common stockholders
0.51 
0.64 
0.50 
0.68 
Weighted average Common Shares outstanding - basic
71,601 
71,508 
66,122 
64,883 
Earnings per common share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders
0.50 
0.64 
0.19 
0.34 
Income from discontinued operations available for common stockholders
0.00 
0.00 
0.31 
0.34 
Net income available for common stockholders
0.50 
0.64 
0.50 
0.68 
Weighted average Common Shares outstanding - diluted
75,607 
75,504 
70,234 
68,978 
Dividends declared per Common Share
0.425 
0.85 
0.425 
0.85 
Net income available for common stockholders:
 
 
 
 
Income from continuing operations available for common stockholders
36,284 
45,587 
12,370 
21,824 
Income/(loss) from discontinued operations available for common stockholders
(60)
308 
20,857 
22,214 
Net income available for common stockholders
$ 36,224 
$ 45,895 
$ 33,227 
$ 44,038 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data
6 Months Ended
Jun. 30,
2010
2009
Balance - Shares
71,285,303 
 
Balance
1,133,143 
1,060,424 
Issuances of Common Stock
1,062 
144,264 
Conversion of Common Units to Common Stock
2,958 
189 
Dividends on Common Stock
(60,753)
(54,083)
Dividends on Preferred Stock
(3,354)
(3,354)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
20,612 
19,598 
Distributions to noncontrolling interests in consolidated affiliates
(324)
(245)
Share-based compensation expense
3,497 
3,573 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(2,453)
(2,748)
Comprehensive income:
 
 
Net income
52,131 
50,274 
Other comprehensive income
536 
465 
Total comprehensive income
52,667 
50,739 
Balance
1,147,055 
1,218,357 
Balance - Shares
71,614,985 
 
Common Stock
 
 
Balance - Shares
71,285,303 
63,571,705 
Balance
713 
636 
Issuances of Common Stock - Shares
71,568 
7,027,226 
Issuances of Common Stock
1 
70 
Conversion of Common Units to Common Stock - Shares
93,971 
8,291 
Conversion of Common Units to Common Stock
1 
 
Issuances of restricted stock, net - Shares
164,143 
240,740 
Share-based compensation expense
1 
2 
Balance
716 
708 
Balance - Shares
71,614,985 
70,847,962 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Balance
29,092 
29,092 
Balance
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Balance
52,500 
52,500 
Balance
52,500 
52,500 
Additional Paid-In Capital
 
 
Balance
1,751,398 
1,616,093 
Issuances of Common Stock
1,061 
144,194 
Conversion of Common Units to Common Stock
2,957 
189 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
20,612 
19,598 
Share-based compensation expense
3,496 
3,571 
Balance
1,779,524 
1,783,645 
Accumulated Other Comprehensive Loss
 
 
Balance
(3,811)
(4,792)
Comprehensive income:
 
 
Other comprehensive income
536 
465 
Balance
(3,275)
(4,327)
Non-Controlling Interests in Consolidated Affiliates
 
 
Balance
5,183 
6,176 
Distributions to noncontrolling interests in consolidated affiliates
(324)
(245)
Net (income) attributable to noncontrolling interests in consolidated affiliates
429 
134 
Balance
5,288 
6,065 
Distributions in Excess of Net Earnings
 
 
Balance
(701,932)
(639,281)
Dividends on Common Stock
(60,753)
(54,083)
Dividends on Preferred Stock
(3,354)
(3,354)
Net (income) attributable to noncontrolling interests in the Operating Partnership
(2,453)
(2,748)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(429)
(134)
Comprehensive income:
 
 
Net income
52,131 
50,274 
Balance
$ (716,790)
$ (649,326)
Consolidated Statements of Cash Flows (USD $)
In Thousands
6 Months Ended
Jun. 30,
2010
2009
Statement of Cash Flows [Abstract]
 
 
Operating activities:
 
 
Net income
$ 52,131 
$ 50,274 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
66,447 
66,510 
Amortization of lease incentives
537 
548 
Share-based compensation expense
3,497 
3,573 
Additions to allowance for doubtful accounts
2,636 
3,245 
Amortization of deferred financing costs
1,670 
1,351 
Amortization of past cash-flow hedges
287 
(141)
Gain on debt extinguishment
0 
(630)
Net (gains)/losses on disposition of property
50 
(21,229)
Gains on disposition of for-sale residential condominiums
(353)
(636)
Gains on disposition of investment in unconsolidated affiliates
(25,330)
0 
Equity in earnings of unconsolidated affiliates
(1,683)
(3,162)
Changes in financing obligations
81 
584 
Distributions of earnings from unconsolidated affiliates
1,717 
2,081 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(1,430)
1,853 
Prepaid expenses and other assets
1,734 
(1,296)
Accrued straight-line rents receivable
(5,296)
(3,637)
Accounts payable, accrued expenses and other liabilities
3,352 
5,351 
Net cash provided by operating activities
100,047 
104,639 
Investing activities:
 
 
Additions to real estate assets and deferred leasing costs
(38,292)
(68,851)
Net proceeds from disposition of real estate assets
6,801 
61,556 
Net proceeds from disposition of for-sale residential condominiums
3,186 
5,215 
Proceeds from disposition of investment in unconsolidated affiliates
15,000 
0 
Distributions of capital from unconsolidated affiliates
1,106 
2,879 
Repayments of mortgages and notes receivable
29 
272 
Contributions to unconsolidated affiliates
(303)
(500)
Changes in restricted cash and other investing activities
(3,178)
(12,020)
Net cash used in investing activities
(15,651)
(11,449)
Financing activities:
 
 
Dividends on Common Stock
(60,753)
(54,083)
Dividends on Preferred Stock
(3,354)
(3,354)
Distributions to noncontrolling interests in the Operating Partnership
(3,243)
(3,443)
Distributions to noncontrolling interests in consolidated affiliates
(324)
(245)
Net proceeds from the issuance of Common Stock
1,062 
144,264 
Borrowings on revolving credit facility
4,000 
122,000 
Repayments of revolving credit facility
(4,000)
(177,000)
Borrowings on mortgages and notes payable
0 
53,424 
Repayments of mortgages and notes payable
(5,452)
(173,846)
Additions to deferred financing costs
(188)
(1,292)
Net cash used in financing activities
(72,252)
(93,575)
Net increase/(decrease) in cash and cash equivalents
12,144 
(385)
Cash and cash equivalents at beginning of the period
23,699 
13,757 
Cash and cash equivalents at end of the period
35,843 
13,372 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
43,204 
43,386 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains on cash-flow hedges
0 
414 
Conversion of Common Units to Common Stock
2,958 
189 
Change in accrued capital expenditures
(2,294)
(4,915)
Write-off of fully depreciated real estate assets
24,273 
16,543 
Write-off of fully amortized deferred financing and leasing costs
7,963 
11,226 
Unrealized gains/(losses) on marketable securities of non-qualified deferred compensation plan
174 
(361)
Settlement of financing obligation
4,184 
0 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(20,612)
(19,598)
Unrealized gain on tax increment financing bond
146 
192 
Mortgages receivable from seller financing
$ 17,030 
$ 0 
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies
1.     Description of Business and Significant Accounting Policies

Description of Business

The Company is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that operates in the Southeastern and Midwestern United States. The Company conducts virtually all of its activities through the Operating Partnership. At June 30, 2010, the Company and/or the Operating Partnership wholly owned 295 in-service office, industrial and retail properties, comprising 26.8 million square feet; 96 rental residential units; 581 acres of undeveloped land suitable for future development, of which 490 acres are considered core holdings; one office property under development; one recently developed office property that is in service but not yet stabilized; and 32 for-sale residential condominiums (which are owned through a consolidated, majority-owned joint venture).

The Company is the sole general partner of the Operating Partnership. At June 30, 2010, the Company owned all of the Preferred Units and 71.2 million, or 95.0%, of the Common Units. Limited partners (including one officer and two directors of the Company) own the remaining 3.8 million 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, $.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption provided that the Company, at its option, may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months ended June 30, 2010, the Company redeemed 93,971 Common Units for a like number of shares of Common Stock, which increased the percentage of Common Units owned by the Company from 94.8% at December 31, 2009 to 95.0% at June 30, 2010.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). Our Consolidated Statements of Income for the three and six months ended June 30, 2009 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties sold or held for sale during 2009 and the first six months of 2010 which required discontinued operations presentation. Prior period amounts related to additions to allowance for doubtful accounts and amortization of lease commissions in our Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

Our Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which we have the controlling financial interest. All significant intercompany transactions and accounts have been eliminated. At June 30, 2010 and December 31, 2009, we were not involved with any entities that were deemed to be variable interest entities.

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2009 Annual Report on Form 10-K.
 
Use of Estimates

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

Real Estate Assets
Real Estate Assets
2.      Real Estate Assets

Dispositions

During the six months ended June 30, 2010, we sold seven office properties in our Piedmont Triad, NC segment for gross proceeds of $12.9 million. In connection with this disposition, we received cash of $4.5 million and provided seller financing of $8.4 million (recorded in mortgages and notes receivable) and committed to lend up to an additional $1.7 million for tenant improvements and lease commissions. The three-year, interest-only first mortgage carries a 6.0% average interest rate. Assuming no default exists, the note can be extended by the buyer for two additional one-year periods, subject to an increase in the interest rate to 7.0% in the fourth year and to 8.0% in the fifth year. We have accounted for this disposition using the installment method, whereby the $0.4 million gain on disposition of property has been deferred and will be recognized when the seller financing is repaid.

During the six months ended June 30, 2010, we also sold six industrial properties in our Piedmont Triad, NC segment for gross proceeds of $12.0 million. In connection with this disposition, we received cash of $3.4 million and provided seller financing of $8.6 million (recorded in mortgages and notes receivable) and a limited rent guarantee with maximum exposure to loss of $1.0 million. The three-year, interest-only first mortgage carries a 6.25% average interest rate. Assuming no default exists, the note can be extended by the buyer for two additional one-year periods, subject to an increase in the interest rate to 7.0% in the fourth year and to 7.75% in the fifth year. We currently do not believe a loss from the rent guarantee is probable. We have accounted for this disposition using the installment method, whereby the $0.3 million impairment was recognized in net gains/(losses) on disposition of discontinued operations in the second quarter of 2010.

Additionally, during the six months ended June 30, 2010, we recorded a completed sale in connection with the disposition of an office property in our Raleigh, NC segment in the fourth quarter of 2009 where the buyer’s right to compel us to repurchase the property expired. Accordingly, we recognized the $0.2 million gain on disposition of property in the first quarter of 2010.
Investments in Affiliates
Investments in Affiliates
3.      Investments in Affiliates

Unconsolidated Affiliates

We have equity interests ranging from 10.0% to 50.0% in various joint ventures with unrelated third parties. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures:

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Income Statements:
                         
Revenues                                                                      
 
$
31,714
 
$
37,347
 
$
67,302
 
$
76,216
 
Expenses:
                         
Rental property and other expenses
   
15,632
   
18,065
   
32,799
   
36,705
 
Depreciation and amortization
   
7,778
   
8,853
   
17,378
   
17,725
 
Interest expense
   
7,233
   
8,866
   
15,798
   
17,841
 
Total expenses
   
30,643
   
35,784
   
65,975
   
72,271
 
Income before disposition of property
   
1,071
   
1,563
   
1,327
   
3,945
 
Gains on disposition of property
   
—
   
3,426
   
—
   
3,426
 
Net income
 
$
1,071
 
$
4,989
 
$
1,327
 
$
7,371
 
Our share of:
                         
Net income (1)
 
$
888
 
$
1,862
 
$
1,683
 
$
3,162
 
Depreciation and amortization of real estate assets
 
$
2,737
 
$
3,223
 
$
6,078
 
$
6,473
 
Interest expense
 
$
2,755
 
$
3,542
 
$
6,178
 
$
7,120
 
Gain on disposition of property
 
$
—
 
$
781
 
$
—
 
$
781
 
__________
 
(1)
Our share of net income differs from our weighted average ownership percentage in the joint ventures’ net income due to our purchase accounting and other adjustments related primarily to management and leasing fees.

In the second quarter of 2010, we sold our equity interests in a series of unconsolidated joint ventures relating to properties in Des Moines, IA. The assets in the joint ventures included 2.5 million square feet of office (1.7 million square feet), industrial (788,000 square feet) and retail (45,000 square feet) properties, as well as 418 apartment units. In connection with the closing, we received $15.0 million in cash. We had a negative book basis in certain of the joint ventures, primarily as a result of prior cash distributions to the partners. Accordingly, we recorded gain on disposition of investment in unconsolidated affiliates of $25.3 million in the second quarter of 2010. As of the closing date, the joint ventures had approximately $170 million of secured debt, which was non-recourse to us except (1) in the case of customary exceptions pertaining to matters such as misuse of funds, borrower bankruptcy, unpermitted transfers, environmental conditions and material misrepresentations and (2) approximately $9.0 million of direct and indirect guarantees. We have been released by the applicable lenders from all such direct and indirect guarantees and we have no ongoing lender liability relating to such customary exceptions to non-recourse liability with respect to some, but not all, of the debt. The buyer has agreed to indemnify and hold us harmless from any and all future losses that we suffer as a result of our prior investment in the joint ventures (other than losses directly resulting from our acts or omissions). In the event we are exposed to any such future loss, our financial condition and results of operations would not be adversely affected unless the buyer defaults on its indemnification obligation.

Consolidated Affiliates

We own a majority interest in Plaza Residential, LLC (“Plaza Residential”), a joint venture which was formed to develop and sell 139 for-sale residential condominiums constructed above an office tower developed by us in Raleigh, NC. For-sale residential condominiums in our Consolidated Balance Sheets include 32 and 40 completed, but unsold, condominiums owned by Plaza Residential at June 30, 2010 and December 31, 2009, respectively. We initially record receipts of earnest money deposits in accounts payable, accrued expenses and other liabilities in accordance with the deposit method. We then record completed sales when units close and the remaining net cash is received. During the three months ended June 30, 2010 and 2009, we received $1.3 million and $2.2 million, respectively, in gross proceeds and recorded $1.1 million and $1.9 million, respectively, of cost of goods sold from condominium sales activity. During the six months ended June 30, 2010 and 2009, we received $3.5 million and $5.5 million, respectively, in gross proceeds and had $3.1 million and $4.9 million, respectively, of cost of goods sold from condominium sales activity.
Deferred Financing and Leasing Costs
Deferred Financing and Leasing Costs
4.      Deferred Financing and Leasing Costs

The following table sets forth total deferred financing and leasing costs, net of accumulated amortization:

   
June 30,
2010
 
December 31,
2009
 
Deferred financing costs
 
$
16,883
 
$
16,811
 
Less accumulated amortization
   
(6,120
)
 
(4,549
)
     
10,763
   
12,262
 
Deferred leasing costs
   
109,006
   
108,835
 
Less accumulated amortization
   
(47,419
)
 
(47,580
)
     
61,587
   
61,255
 
Deferred financing and leasing costs, net                                                                                              
 
$
72,350
 
$
73,517
 

Amortization of deferred financing and leasing costs were as follows:

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Amortization of deferred financing costs
 
$
835
 
$
689
 
$
1,670
 
$
1,351
 
Amortization of lease commissions (included in depreciation and amortization)
 
$
3,817
 
$
3,926
 
$
7,583
 
$
7,792
 
Amortization of lease incentives (included in rental and other revenues)
 
$
276
 
$
250
 
$
537
 
$
548
 

The following table sets forth scheduled future amortization for deferred financing and leasing costs:

   
Amortization of Deferred Financing Costs
 
Amortization of Lease Commissions
 
Amortization of Lease Incentives
 
June 30, 2010 through December 31, 2010
 
$
1,386
 
$
6,557
 
$
479
 
2011                                                                                    
   
2,517
   
12,098
   
916
 
2012                                                                                    
   
2,320
   
10,095
   
829
 
2013                                                                                    
   
1,198
   
8,268
   
682
 
2014                                                                                    
   
488
   
6,264
   
494
 
Thereafter                                                                                    
   
2,854
   
13,574
   
1,331
 
   
$
10,763
 
$
56,856
 
$
4,731
 

Mortgages and Notes Payable
Mortgages and Notes Payable
5.      Mortgages and Notes Payable

The following table sets forth our consolidated mortgages and notes payable:

   
June 30,
2010
 
December 31,
2009
 
Secured indebtedness                                                                                                      
 
$
715,240
 
$
720,727
 
Unsecured indebtedness                                                                                                      
   
748,487
   
748,428
 
Total mortgages and notes payable                                                                                                
 
$
1,463,727
 
$
1,469,155
 

At June 30, 2010, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1.2 billion.

Our $400.0 million unsecured revolving credit facility is scheduled to mature on February 21, 2013 and includes an accordion feature that allows for an additional $50.0 million of borrowing capacity subject to additional lender commitments. Assuming we continue to have three publicly announced ratings from the credit rating agencies, the interest rate and facility fee under our revolving credit facility are based on the lower of the two highest publicly announced ratings. Based on our current credit ratings, the interest rate is LIBOR plus 290 basis points and the annual facility fee is 60 basis points. There were no amounts outstanding under our revolving credit facility at June 30, 2010 and July 22, 2010. At June 30, 2010 and July 22, 2010, we had $1.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at June 30, 2010 and July 22, 2010 was $398.9 million.

Our $70.0 million secured construction facility, of which $41.7 million was outstanding at June 30, 2010, is initially scheduled to mature on December 20, 2010. Assuming no defaults have occurred, we have options to extend the maturity date for two successive one-year periods. The interest rate is LIBOR plus 85 basis points. Our secured construction facility had $28.3 million of availability at June 30, 2010 and July 22, 2010.

We are currently in compliance with all debt covenants and requirements.

Derivative Financial Instruments
Derivative Financial Instruments

6.      Derivative Financial Instruments

We had no outstanding interest rate hedge contracts at June 30, 2010 or December 31, 2009. The following table sets forth the effect of our past cash-flow hedges on accumulated other comprehensive loss (“AOCL”) and interest expense:

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Derivatives Designated as Cash-flow Hedges:
                         
Unrealized gain recognized in AOCL on derivatives (effective portion):
                         
Interest rate hedge contracts
 
$
—
 
$
217
 
$
—
 
$
414
 
                           
(Gain)/loss reclassified out of AOCL into interest expense (effective portion):
                         
Interest rate hedge contracts
 
$
48
 
$
(71
)
$
287
 
$
(141
)

Noncontrolling Interests
Noncontrolling Interests
7.      Noncontrolling Interests

Noncontrolling Interests in the Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. The following table sets forth noncontrolling interests in the Operating Partnership:

   
Six Months Ended
June 30,
 
   
2010
 
2009
 
Beginning noncontrolling interests in the Operating Partnership
 
$
129,769
 
$
111,278
 
Adjustments of noncontrolling interests in the Operating Partnership to fair value
   
(20,612
)
 
(19,598
)
Conversion of Common Units to Common Stock
   
(2,958
)
 
(189
)
Net income attributable to noncontrolling interests in the Operating Partnership
   
2,453
   
2,748
 
Distributions to noncontrolling interests in the Operating Partnership
   
(3,243
)
 
(3,443
)
Total noncontrolling interests in the Operating Partnership
 
$
105,409
 
$
90,796
 

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

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Net income available for common stockholders
 
$
36,224
 
$
33,227
 
$
45,895
 
$
44,038
 
Conversion of Common Units to Common Stock
   
33
   
—
   
2,958
   
189
 
Change in equity from net income available for common stockholders and conversion of Common Units to Common Stock
 
$
36,257
 
$
33,227
 
$
48,853
 
$
44,227
 

Noncontrolling Interests in Consolidated Affiliates

Noncontrolling interests in consolidated affiliates relates to our respective joint venture partners’ 50.0% interest in Highwoods-Markel Associates, LLC and estimated 12% economic interest in Plaza Residential. Each of our joint venture partners is an unrelated third party.
Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments
8.      Disclosure About Fair Value of Financial Instruments

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

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

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

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. We had no Level 2 assets or liabilities at June 30, 2010 and December 31, 2009.

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 are our tax increment financing bond, which is not routinely traded but whose fair value is determined using an estimate of projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds, and real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using independent appraisals.

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

       
Level 1
 
Level 3
 
   
June 30,
2010
 
Quoted Prices in Active Markets for Identical Assets or Liabilities
 
Significant
Unobservable
Inputs
 
Assets:
                   
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
$
3,283
 
$
3,283
 
$
—
 
Tax increment financing bond (in prepaid expenses and other assets)
   
17,017
   
—
   
17,017
 
Total Assets
 
$
20,300
 
$
3,283
 
$
17,017
 
                     
Noncontrolling Interests in the Operating Partnership
 
$
105,409
 
$
105,409
 
$
—
 
                     
Liability:
                   
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
$
3,799
 
$
3,799
 
$
—
 

       
Level 1
 
Level 3
 
   
December 31,
2009
 
Quoted Prices in Active Markets for Identical Assets or Liabilities
 
Significant
Unobservable
Inputs
 
Assets:
                   
Marketable securities of non-qualified deferred compensation plan
 
$
6,135
 
$
6,135
 
$
—
 
Tax increment financing bond
   
16,871
   
—
   
16,871
 
Impaired real estate assets
   
32,000
   
—
   
32,000
 
Total Assets
 
$
55,006
 
$
6,135
 
$
48,871
 
                     
Noncontrolling Interests in the Operating Partnership
 
$
129,769
 
$
129,769
 
$
—
 
                     
Liability:
                   
Non-qualified deferred compensation obligation
 
$
6,898
 
$
6,898
 
$
—
 
 
The following table sets forth our Level 3 asset:

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Asset:
                         
Tax Increment Financing Bond
                         
Beginning balance
 
$
17,090
 
$
17,434
 
$
16,871
 
$
17,468
 
Unrealized gain/(loss) (in AOCL)
   
(73
)
 
226
   
146
   
192
 
Ending balance
 
$
17,017
 
$
17,660
 
$
17,017
 
$
17,660
 

In the fourth quarter of 2007, we acquired the tax increment financing bond associated with a property developed by us. This bond amortizes to maturity in 2020. The estimated fair value at June 30, 2010 was $2.2 million below the outstanding principal due on the bond. We currently intend to hold this bond and do not believe that we will be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us and, therefore, we have recorded no credit losses related to the bond in the three and six months ended June 30, 2010 and 2009. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

The following table sets forth the carrying amounts and fair values of our financial instruments:

   
Carrying
Amount
 
Fair Value
 
June 30, 2010
             
Cash and cash equivalents
 
$
35,843
 
$
35,843
 
Restricted cash
 
$
6,241
 
$
6,241
 
Accounts, mortgages and notes receivable
 
$
40,584
 
$
40,584
 
Marketable securities of non-qualified deferred compensation plan
 
$
3,283
 
$
3,283
 
Tax increment financing bond
 
$
17,017
 
$
17,017
 
Mortgages and notes payable
 
$
1,463,727
 
$
1,502,526
 
Financing obligations
 
$
33,603
 
$
24,185
 
Non-qualified deferred compensation obligation
 
$
3,799
 
$
3,799
 
Noncontrolling interests in the Operating Partnership
 
$
105,409
 
$
105,409
 
               
December 31, 2009
             
Cash and cash equivalents
 
$
23,699
 
$
23,699
 
Restricted cash
 
$
6,841
 
$
6,841
 
Accounts, mortgages and notes receivable
 
$
24,212
 
$
24,212
 
Marketable securities of non-qualified deferred compensation plan
 
$
6,135
 
$
6,135
 
Tax increment financing bond
 
$
16,871
 
$
16,871
 
Mortgages and notes payable
 
$
1,469,155
 
$
1,440,317
 
Financing obligations
 
$
37,706
 
$
31,664
 
Non-qualified deferred compensation obligation
 
$
6,898
 
$
6,898
 
Noncontrolling interests in the Operating Partnership
 
$
129,769
 
$
129,769
 

The carrying values of our cash and cash equivalents, restricted cash, accounts receivable, mortgages and notes receivable, marketable securities of non-qualified deferred compensation plan, tax increment financing bond, non-qualified deferred compensation obligation and noncontrolling interests in the Operating Partnership are equal to or approximate fair value. The fair values of our mortgages and notes payable and financing obligations were estimated using the income or market approaches to approximate the price that would be paid in an orderly transaction between market participants on the respective measurement date.
Share-Based Payments
Share-Based Payments
9.     Share-Based Payments

During the six months ended June 30, 2010, we granted under our 2009 Long Term Equity Incentive Plan (the “Plan”) 190,826 stock options at an exercise price equal to the closing market price of a share of our Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted-average grant date fair value per share of $4.96. During the six months ended June 30, 2010, we also granted under the Plan 89,635 shares of time-based restricted stock and 78,151 shares of total return-based restricted stock with weighted-average grant date fair values per share of $29.05 and $29.40, respectively. We recorded stock-based compensation expense of $1.4 million and $1.8 million during the three months ended June 30, 2010 and 2009, respectively, and $3.5 million and $3.6 million during the six months ended June 30, 2010 and 2009, respectively. At June 30, 2010, there was $9.7 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 1.7 years.
Comprehensive Income and Accumulated Other Comprehensive Loss
Comprehensive Income and Accumulated Other Comprehensive Loss
10.    Comprehensive Income and Accumulated Other Comprehensive Loss

The following table sets forth the components of comprehensive income:

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Net income                                                                             
 
$
40,049
 
$
37,074
 
$
52,131
 
$
50,274
 
Other comprehensive income/(loss):
                         
Unrealized gain/(loss) on tax increment financing bond
   
(73
)
 
226
   
146
   
192
 
Unrealized gains on cash-flow hedges
   
—
   
217
   
—
   
414
 
Amortization of past cash-flow hedges
   
48
   
(71
)
 
287
   
(141
)
Settlement of past cash-flow hedge from disposition of investment in unconsolidated affiliate
   
103
   
—
   
103
   
—
 
Total other comprehensive income
   
78
   
372
   
536
   
465
 
Total comprehensive income
 
$
40,127
 
$
37,446
 
$
52,667
 
$
50,739
 

The following table sets forth the components of AOCL:

   
June 30,
2010
 
December 31,
2009
 
Tax increment financing bond                                                                                                      
 
$
2,220
 
$
2,366
 
Past cash-flow hedges                                                                                                      
   
1,055
   
1,445
 
Total accumulated other comprehensive loss                                                                                                
 
$
3,275
 
$
3,811
 

Discontinued Operations
Discontinued Operations
11.     Discontinued Operations

The following table sets forth our operations which required classification as discontinued operations. The assets associated with these discontinued operations comprised 1.7 million square feet of office, industrial and retail properties sold during 2009 and the six months ended June 30, 2010.

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Rental and other revenues                                                                                     
 
$
653
 
$
2,781
 
$
1,432
 
$
6,382
 
Operating expenses:
                         
Rental property and other expenses
   
274
   
1,005
   
656
   
2,522
 
Depreciation and amortization
   
182
   
572
   
365
   
1,287
 
Total operating expenses
   
456
   
1,577
   
1,021
   
3,809
 
Other income                                                                                     
   
—
   
(1
)
 
—
   
1
 
Income before net gains/(losses) on disposition of discontinued operations
   
197
   
1,203
   
411
   
2,574
 
Net gains/(losses) on disposition of discontinued operations
   
(260
)
 
20,943
   
(86
)
 
21,016
 
Total discontinued operations                                                                                     
 
$
(63
)
$
22,146
 
$
325
 
$
23,590
 

The following table sets forth the major classes of assets and liabilities of the properties classified as held for sale:

   
June 30,
2010
 
December 31,
2009
 
Assets:
             
Land
 
$
—
 
$
867
 
Buildings and tenant improvements                                                                                                 
   
—
   
3,876
 
Land held for development                                                                                                 
   
1,197
   
1,197
 
Total real estate assets                                                                                            
   
1,197
   
5,940
 
Less accumulated depreciation                                                                                                 
   
—
   
(1,484
)
Net real estate assets
   
1,197
   
4,456
 
Deferred leasing costs, net
   
—
   
209
 
Accrued straight line rents receivable
   
—
   
289
 
Prepaid expenses and other assets
   
32
   
77
 
Real estate and other assets, net, held for sale
 
$
1,229
 
$
5,031
 
Liabilities of real estate and other assets, net, held for sale (1)
 
$
12
 
$
12
 
__________
 
(1)
Included in accounts payable, accrued expenses and other liabilities.
 
Earnings Per Share
Earnings Per Share
12.           Earnings Per Share

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

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Earnings per Common Share - basic:
                         
Numerator:
                         
Income from continuing operations
 
$
40,112
 
$
14,928
 
$
51,806
 
$
26,684
 
Net (income) attributable to noncontrolling  interests in the Operating Partnership from continuing operations
   
(1,936
)
 
(765
)
 
(2,436
)
 
(1,372
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
   
(215
)
 
(116
)
 
(429
)
 
(134
)
Dividends on Preferred Stock
   
(1,677
)
 
(1,677
)
 
(3,354
)
 
(3,354
)
Income from continuing operations available for common stockholders
   
36,284
   
12,370
   
45,587
   
21,824
 
Income/(loss) from discontinued operations
   
(63
)
 
22,146
   
325
   
23,590
 
Net (income)/loss attributable to noncontrolling interests in the Operating Partnership from discontinued operations
   
3
   
(1,289
)
 
(17
)
 
(1,376
)
Income/(loss) from discontinued operations available for common stockholders
   
(60
)
 
20,857
   
308
   
22,214
 
Net income available for common stockholders
 
$
36,224
 
$
33,227
 
$
45,895
 
$
44,038
 
Denominator:
                         
Denominator for basic earnings per Common Share – weighted average shares
   
71,601
   
66,122
   
71,508
   
64,883
 
Earnings per Common Share – basic:
                         
Income from continuing operations available for common stockholders
 
$
0.51
 
$
0.19
 
$
0.64
 
$
0.34
 
Income from discontinued operations available for common stockholders
   
—
   
0.31
   
—
   
0.34
 
Net income available for common stockholders
 
$
0.51
 
$
0.50
 
$
0.64
 
$
0.68
 
Earnings per Common Share - diluted:
                         
Numerator:
                         
Income from continuing operations
 
$
40,112
 
$
14,928
 
$
51,806
 
$
26,684
 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
   
(215
)
 
(116
)
 
(429
)
 
(134
)
Dividends on Preferred Stock
   
(1,677
)
 
(1,677
)
 
(3,354
)
 
(3,354
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
   
38,220
   
13,135
   
48,023
   
23,196
 
Income/(loss) from discontinued operations available for common stockholders
   
(63
)
 
22,146
   
325
   
23,590
 
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
 
$
38,157
 
$
35,281
 
$
48,348
 
$
46,786
 
Denominator:
                         
Denominator for basic earnings per Common Share –weighted average shares
   
71,601
   
66,122
   
71,508
   
64,883
 
Add:
                         
Stock options using the treasury method
   
209
   
49
   
188
   
30
 
Noncontrolling interests partnership units
   
3,797
   
4,063
   
3,808
   
4,065
 
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
   
75,607
   
70,234
   
75,504
   
68,978
 
Earnings per Common Share – diluted:
                         
Income from continuing operations available for common stockholders
 
$
0.50
 
$
0.19
 
$
0.64
 
$
0.34
 
Income from discontinued operations available for common stockholders
   
—
   
0.31
   
—
   
0.34
 
Net income available for common stockholders
 
$
0.50
 
$
0.50
 
$
0.64
 
$
0.68
 
__________
 
(1)
Options and warrants aggregating approximately 0.6 million and 1.2 million shares were outstanding during the three months ended June 30, 2010 and 2009, respectively, and 0.6 million and 1.3 million shares were outstanding during the six months ended June 30, 2010 and 2009, respectively, but were not included in the computation of diluted earnings per Common Share because the impact of including such shares would be anti-dilutive.

Segment Information
Segment Information
13.           Segment Information

Our principal business is the operation, acquisition and development of rental real estate properties. We evaluate our business by product type and by geographic location. Each product type has different customers and economic characteristics as to rental rates and terms, cost per square foot of buildings, the purposes for which customers use the space, the degree of maintenance and customer support required and customer dependency on different economic drivers, among others. The operating results by geographic grouping are also regularly reviewed by our chief operating decision maker for assessing performance and other purposes. There are no material inter-segment transactions.

Our accounting policies of the segments are the same as those used in our Consolidated Financial Statements. All operations are within the United States and, at June 30, 2010, no single customer of the Wholly Owned Properties generated more than 9.5% of our consolidated revenues on an annualized basis.

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

   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Rental and Other Revenues: (1)
                         
Office:
                         
Atlanta, GA
 
$
12,067
 
$
12,106
 
$
24,198
 
$
23,604
 
Greenville, SC
   
3,451
   
3,600
   
7,127
   
7,237
 
Kansas City, MO
   
3,663
   
3,711
   
7,371
   
7,458
 
Memphis, TN
   
7,329
   
7,407
   
15,197
   
14,439
 
Nashville, TN
   
14,851
   
15,418
   
29,966
   
30,592
 
Orlando, FL
   
3,059
   
2,845
   
6,065
   
5,795
 
Piedmont Triad, NC
   
5,977
   
5,964
   
11,922
   
11,853
 
Raleigh, NC
   
18,497
   
18,092
   
37,257
   
36,302
 
Richmond, VA
   
11,483
   
11,238
   
23,277
   
22,947
 
Tampa, FL
   
18,038
   
16,589
   
35,980
   
33,127
 
Total Office Segment
   
98,415
   
96,970
   
198,360
   
193,354
 
Industrial:
                         
Atlanta, GA
   
3,842
   
3,931
   
7,817
   
7,871
 
Piedmont Triad, NC
   
3,041
   
2,961
   
6,062
   
7,006
 
Total Industrial Segment
   
6,883
   
6,892
   
13,879
   
14,877
 
Retail:
                         
Kansas City, MO
   
8,749
   
7,664
   
16,437
   
15,277
 
Piedmont Triad, NC
   
(40
)
 
57
   
(40
)
 
113
 
Raleigh, NC
   
29
   
30
   
75
   
60
 
Total Retail Segment
   
8,738
   
7,751
   
16,472
   
15,450
 
Residential:
                         
Kansas City, MO                                                         
   
303
   
301
   
682
   
594
 
Total Residential Segment
   
303
   
301
   
682
   
594
 
Total Rental and Other Revenues                                                                    
 
$
114,339
 
$
111,914
 
$
229,393
 
$
224,275
 


   
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
   
2010
 
2009
 
2010
 
2009
 
Net Operating Income: (1)
                         
Office:
                         
Atlanta, GA
 
$
7,835
 
$
8,039
 
$
15,470
 
$
15,016
 
Greenville, SC
   
2,168
   
2,339
   
4,450
   
4,624
 
Kansas City, MO
   
2,327
   
2,261
   
4,540
   
4,506
 
Memphis, TN
   
4,223
   
4,046
   
9,508
   
8,065
 
Nashville, TN
   
10,065
   
10,204
   
19,936
   
19,935
 
Orlando, FL
   
1,723
   
1,460
   
3,336
   
3,033
 
Piedmont Triad, NC
   
4,221
   
4,071
   
7,857
   
7,895
 
Raleigh, NC
   
13,132
   
12,675
   
25,835
   
24,788
 
Richmond, VA
   
8,406
   
8,063
   
16,356
   
16,061
 
Tampa, FL
   
10,992
   
9,518
   
21,813
   
19,399
 
Total Office Segment
   
65,092
   
62,676
   
129,101
   
123,322
 
Industrial:
                         
Atlanta, GA
   
2,793
   
2,944
   
5,563
   
6,003
 
Piedmont Triad, NC
   
2,325
   
2,207
   
4,372
   
5,532
 
Total Industrial Segment
   
5,118
   
5,151
   
9,935
   
11,535
 
Retail:
                         
Atlanta, GA (2)
   
(5
)
 
(6
)
 
(10
)
 
(11
)
Kansas City, MO
   
5,747
   
5,086
   
10,099
   
9,936
 
Piedmont Triad, NC
   
(40
)
 
45
   
(40
)
 
88
 
Raleigh, NC
   
3
   
8
   
19
   
11
 
Total Retail Segment
   
5,705
   
5,133
   
10,068
   
10,024
 
Residential:
                         
Kansas City, MO
   
188
   
183
   
426
   
354
 
Raleigh, NC (2)
   
(88
)
 
(130
)
 
(176
)
 
(139
)
Total Residential Segment
   
100
   
53
   
250
   
215
 
Total Net Operating Income                                                                    
   
76,015
   
73,013
   
149,354
   
145,096
 
Reconciliation to income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
                         
Depreciation and amortization
   
(33,353
)
 
(32,514
)
 
(66,082
)
 
(65,223
)
General and administrative expense
   
(6,980
)
 
(9,486
)
 
(15,487
)
 
(17,801
)
Interest expense
   
(22,934
)
 
(21,344
)
 
(46,047
)
 
(43,320
)
Interest and other income
   
966
   
2,914
   
2,666
   
3,921
 
Income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
 
$
13,714
 
$
12,583
 
$
24,404
 
$
22,673
 
__________
 
(1)
Net of discontinued operations.
 
(2)
Negative NOI with no corresponding revenues represents expensed real estate taxes and other carrying costs associated with land held for development that is currently zoned for the respective product type.

Subsequent Events
Subsequent Events
14.     Subsequent Events

Acquisitions

In July 2010, we acquired a 336,000 square foot office property in Memphis, TN for $10.0 million in cash and the assumption of secured debt expected to be recorded at fair value of approximately $40.3 million, with an implied interest rate of 6.4%. The debt matures in November 2015. We expect to incur or have incurred approximately $2.3 million of near-term building improvements and approximately $0.4 million of acquisition-related costs.
Document Information
6 Months Ended
Jun. 30, 2010
Document Information [Text Block]
 
Document Type
10-Q 
Amendment Flag
FALSE 
Document Period End Date
06/30/2010 
Entity Information (USD $)
6 Months Ended
Jun. 30, 2010
Jun. 30, 2009
Entity [Text Block]
HIGHWOODS PROPERTIES INC 
 
Entity Registrant Name
HIGHWOODS PROPERTIES INC 
 
Entity Central Index Key
0000921082 
 
Current Fiscal Year End Date
12/31 
 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Public Float
 
$ 1,564,176,615 
Entity Common Stock, Shares Outstanding
71,614,985 
 
Document Fiscal Year Focus
2010 
 
Document Fiscal Period Focus
Q2