HIGHWOODS PROPERTIES, INC., 10-Q filed on 5/1/2012
Quarterly Report
Document and Entity Information Document (USD $)
3 Months Ended
Mar. 31, 2012
Apr. 26, 2012
Jun. 30, 2011
Entity Information [Line Items]
 
 
 
Entity Registrant Name
HIGHWOODS PROPERTIES INC. 
 
 
Entity Central Index Key
0000921082 
 
 
Current Fiscal Year End Date
--12-31 
 
 
Entity Filer Category
Large Accelerated Filer 
 
 
Document Type
10-Q 
 
 
Document Period End Date
Mar. 31, 2012 
 
 
Document Fiscal Year Focus
2012 
 
 
Document Fiscal Period Focus
Q1 
 
 
Amendment Flag
false 
 
 
Entity Common Stock, Shares Outstanding
 
73,924,965 
 
Entity Well-known Seasoned Issuer
Yes 
 
 
Entity Voluntary Filers
No 
 
 
Entity Current Reporting Status
Yes 
 
 
Entity Public Float
 
 
$ 2,368,577,270 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Real estate assets, at cost:
 
 
Land
$ 368,122 
$ 367,870 
Buildings and tenant improvements
3,137,658 
3,127,984 
Land held for development
105,206 
105,206 
Total real estate assets
3,610,986 
3,601,060 
Less-accumulated depreciation
(911,512)
(895,777)
Net real estate assets
2,699,474 
2,705,283 
For-sale residential condominiums
3,808 
4,751 
Real estate and other assets, net, held for sale
7,556 
13,260 
Cash and cash equivalents
12,215 
11,188 
Restricted cash
20,753 
26,666 
Accounts receivable, net of allowance of $3,413 and $3,548, respectively
27,230 
30,093 
Mortgages and notes receivable, net of allowance of $122 and $61, respectively
17,119 
18,600 
Accrued straight-line rents receivable, net of allowance of $1,420 and $1,294, respectively
110,977 
105,611 
Investments in and advances to unconsolidated affiliates
99,062 
100,367 
Deferred financing and leasing costs, net of accumulated amortization of $67,662 and $63,059, respectively
129,204 
128,390 
Prepaid expenses and other assets
43,042 
36,783 
Total Assets
3,170,440 
3,180,992 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity:
 
 
Mortgages and notes payable
1,903,978 
1,903,213 
Accounts payable, accrued expenses and other liabilities
122,545 
148,821 
Financing obligations
31,110 
31,444 
Total Liabilities
2,057,633 
2,083,478 
Commitments and contingencies
   
   
Noncontrolling interests in the Operating Partnership
124,201 
110,655 
Equity:
 
 
8.625% Series A Cumulative Redeemable Preferred Shares, $.01 par value, 50,000,000 authorized shares, liquidation preference $1,000 per share; 29,077 shares issued and outstanding
29,077 
29,077 
Common Stock, $.01 par value, 200,000,000 authorized shares; 73,608,571 and 72,647,697 shares issued and outstanding, respectively
736 
726 
Additional paid-in capital
1,818,750 
1,803,997 
Distributions in excess of net income available for common stockholders
(860,120)
(845,853)
Accumulated other comprehensive loss
(4,376)
(5,734)
Total Stockholders' Equity
984,067 
982,213 
Noncontrolling interests in consolidated affiliates
4,539 
4,646 
Total Equity
988,606 
986,859 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
3,170,440 
3,180,992 
Highwoods Realty Limited Partnership [Member]
 
 
Real estate assets, at cost:
 
 
Land
368,122 
367,870 
Buildings and tenant improvements
3,137,658 
3,127,984 
Land held for development
105,206 
105,206 
Total real estate assets
3,610,986 
3,601,060 
Less-accumulated depreciation
(911,512)
(895,777)
Net real estate assets
2,699,474 
2,705,283 
For-sale residential condominiums
3,808 
4,751 
Real estate and other assets, net, held for sale
7,556 
13,260 
Cash and cash equivalents
9,052 
11,151 
Restricted cash
20,753 
26,666 
Accounts receivable, net of allowance of $3,413 and $3,548, respectively
30,481 
30,093 
Mortgages and notes receivable, net of allowance of $122 and $61, respectively
17,119 
18,600 
Accrued straight-line rents receivable, net of allowance of $1,420 and $1,294, respectively
110,977 
105,611 
Investments in and advances to unconsolidated affiliates
98,000 
99,296 
Deferred financing and leasing costs, net of accumulated amortization of $67,662 and $63,059, respectively
129,204 
128,390 
Prepaid expenses and other assets
42,994 
36,783 
Total Assets
3,169,418 
3,179,884 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity:
 
 
Mortgages and notes payable
1,903,978 
1,903,213 
Accounts payable, accrued expenses and other liabilities
122,545 
148,821 
Financing obligations
31,110 
31,444 
Total Liabilities
2,057,633 
2,083,478 
Commitments and contingencies
   
   
Redeemable Operating Partnership Units:
 
 
Common Units, 3,727,518 and 3,729,518 outstanding, respectively
124,201 
110,655 
Series A Preferred Units, liquidation preference $1,000 per unit; 29,077 units issued and outstanding
29,077 
29,077 
Total Redeemable Operating Partnership Units
153,278 
139,732 
Equity:
 
 
General partner Common Units, 769,273 and 759,684 outstanding, respectively
9,580 
9,575 
Limited partner Common Units, 72,430,489 and 71,479,204 outstanding, respectively
948,764 
948,187 
Accumulated other comprehensive loss
(4,376)
(5,734)
Noncontrolling interests in consolidated affiliates
4,539 
4,646 
Total Equity
958,507 
956,674 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
$ 3,169,418 
$ 3,179,884 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Assets [Abstract]
 
 
Accounts receivable allowance
$ 3,413 
$ 3,548 
Mortgages and notes receivable allowance
122 
61 
Accrued straight-line rents receivable allowance
1,420 
1,294 
Deferred financing and leasing costs, accumulated amortization
67,662 
63,059 
Stockholders' Equity Attributable to Parent [Abstract]
 
 
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, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Stock, shares issued (in shares)
29,077 
29,077 
Series A Preferred Stock, shares outstanding (in shares)
29,077 
29,077 
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)
73,608,571 
72,647,697 
Common Stock, shares outstanding (in shares)
73,608,571 
72,647,697 
Highwoods Realty Limited Partnership [Member]
 
 
Assets [Abstract]
 
 
Accounts receivable allowance
3,413 
3,548 
Mortgages and notes receivable allowance
122 
61 
Accrued straight-line rents receivable allowance
1,420 
1,294 
Deferred financing and leasing costs, accumulated amortization
$ 67,662 
$ 63,059 
Redeemable Operating Partnership Units: [Abstract]
 
 
Redeemable Common Units outstanding (in shares)
3,727,518 
3,729,518 
Series A Preferred Units liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Units issued (in shares)
29,077 
29,077 
Series A Preferred Units outstanding (in shares)
29,077 
29,077 
Common Units: [Abstract]
 
 
General Partners' Capital Account, Units Outstanding
769,273 
759,684 
Limited Partners' Capital Account, Units Outstanding
72,430,489 
71,479,204 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Rental and other revenues
$ 129,943 
$ 114,351 
Operating expenses:
 
 
Rental property and other expenses
46,124 
40,934 
Depreciation and amortization
38,362 
33,556 
General and administrative
9,673 
7,793 
Total operating expenses
94,159 
82,283 
Interest expense:
 
 
Contractual
23,948 
22,431 
Amortization of deferred financing costs
902 
821 
Financing obligations
(48)
291 
Total interest expense
24,802 
23,543 
Other income:
 
 
Interest and other income
2,230 
1,873 
Total other income
2,230 
1,873 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
13,212 
10,398 
Gains on for-sale residential condominiums
65 
38 
Equity in earnings/(losses) of unconsolidated affiliates
(162)
1,467 
Income from continuing operations
13,115 
11,903 
Discontinued operations:
 
 
Income from discontinued operations
83 
540 
Net gains on disposition of discontinued operations
5,134 
0 
Total discontinued operations
5,217 
540 
Net income
18,332 
12,443 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(827)
(507)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(184)
(123)
Dividends on Preferred Stock
(627)
(1,677)
Net income available for common stockholders
16,694 
10,136 
Earnings per Common Share - basic:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.16 
$ 0.13 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.07 
$ 0.01 
Net income available for common stockholders (in dollars per share)
$ 0.23 
$ 0.14 
Weighted average Common Shares outstanding - basic (in shares)
72,836 1 2
71,817 1 2
Earnings per Common Share - diluted:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.16 
$ 0.13 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.07 
$ 0.01 
Net income available for common stockholders (in dollars per share)
$ 0.23 
$ 0.14 
Weighted average Common Shares outstanding - diluted (in shares)
76,696 1
75,792 1
Dividends declared per Common Share (in dollars per share)
$ 0.425 
$ 0.425 
Net income available for common stockholders:
 
 
Income from continuing operations available for common stockholders
11,733 
9,623 
Income from discontinued operations available for common stockholders
4,961 
513 
Net income available for common stockholders
16,694 
10,136 
Highwoods Realty Limited Partnership [Member]
 
 
Rental and other revenues
129,943 
114,351 
Operating expenses:
 
 
Rental property and other expenses
46,062 
41,083 
Depreciation and amortization
38,362 
33,556 
General and administrative
9,735 
7,644 
Total operating expenses
94,159 
82,283 
Interest expense:
 
 
Contractual
23,948 
22,431 
Amortization of deferred financing costs
902 
821 
Financing obligations
(48)
291 
Total interest expense
24,802 
23,543 
Other income:
 
 
Interest and other income
2,230 
1,873 
Total other income
2,230 
1,873 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
13,212 
10,398 
Gains on for-sale residential condominiums
65 
38 
Equity in earnings/(losses) of unconsolidated affiliates
(160)
1,475 
Income from continuing operations
13,117 
11,911 
Discontinued operations:
 
 
Income from discontinued operations
83 
540 
Net gains on disposition of discontinued operations
5,134 
0 
Total discontinued operations
5,217 
540 
Net income
18,334 
12,451 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(184)
(123)
Distributions on Preferred Units
(627)
(1,677)
Net income available for common unitholders
17,523 
10,651 
Earnings per Common Unit - basic:
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.16 
$ 0.13 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.07 
$ 0.01 
Net income available for common unitholders (in dollars per share)
$ 0.23 
$ 0.14 
Weighted average Common Units outstanding - basic (in shares)
76,155 
75,198 
Earnings per Common Unit - diluted:
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.16 
$ 0.13 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.07 
$ 0.01 
Net income available for common unitholders (in dollars per share)
$ 0.23 
$ 0.14 
Weighted average Common Units outstanding - diluted (in shares)
76,287 
75,383 
Distributions declared per Common Unit (in dollars per unit)
$ 425 
$ 425 
Net income available for common unitholders:
 
 
Income from continuing operations available for common unitholders
12,306 
10,111 
Income from discontinued operations available for common unitholders
5,217 
540 
Net income available for common unitholders
$ 17,523 
$ 10,651 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Comprehensive income/(loss):
 
 
Net income
$ 18,332 
$ 12,443 
Other comprehensive income/(loss):
 
 
Unrealized gain/(loss) on tax increment financing bond
287 
(135)
Unrealized gains on cash flow hedges
1,104 
0 
Amortization of settled cash flow hedges
(33)
(29)
Total other comprehensive income/(loss)
1,358 
(164)
Total comprehensive income
19,690 
12,279 
Less-comprehensive (income) attributable to noncontrolling interests
(1,011)
(630)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership
18,679 
11,649 
Highwoods Realty Limited Partnership [Member]
 
 
Comprehensive income/(loss):
 
 
Net income
18,334 
12,451 
Other comprehensive income/(loss):
 
 
Unrealized gain/(loss) on tax increment financing bond
287 
(135)
Unrealized gains on cash flow hedges
1,104 
0 
Amortization of settled cash flow hedges
(33)
(29)
Total other comprehensive income/(loss)
1,358 
(164)
Total comprehensive income
19,692 
12,287 
Less-comprehensive (income) attributable to noncontrolling interests
(184)
(123)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership
$ 19,508 
$ 12,164 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Series B Cumulative Redeemable Preferred Shares [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance at Dec. 31, 2010
$ 1,088,222 
$ 1,005,466 
$ 717 
$ 29,092 
$ 52,500 
$ 10,044 
$ 994,610 
$ 1,766,886 
$ (3,648)
$ (3,648)
$ 4,460 
$ 4,460 
$ (761,785)
Balance (in shares) at Dec. 31, 2010
 
 
71,690,487 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
8,391 
 
 
 
84 
8,307 
 
 
0 
 
0 
 
Distributions paid on Common Units
 
(31,847)
 
 
 
(318)
(31,529)
 
 
0 
 
0 
 
Distributions paid on Preferred Units
 
(1,677)
 
 
 
(17)
(1,660)
 
 
0 
 
0 
 
Issuances of Common Stock - Shares
 
 
307,060 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
8,391 
 
3 
0 
0 
 
 
8,388 
0 
 
0 
 
0 
Conversion of Common Units to Common Stock - Shares
 
 
5,641 
 
 
 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
186 
 
0 
0 
0 
 
 
186 
0 
 
0 
 
0 
Dividends on Common Stock
(30,411)
 
0 
0 
0 
 
 
0 
0 
 
0 
 
(30,411)
Dividends on Preferred Stock
(1,677)
 
0 
0 
0 
 
 
0 
0 
 
0 
 
(1,677)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(13,081)
 
0 
0 
0 
 
 
(13,081)
0 
 
0 
 
0 
Distributions to noncontrolling interests in consolidated affiliates
(221)
(221)
0 
0 
0 
0 
0 
0 
0 
0 
(221)
(221)
0 
Issuances of restricted stock, net - Shares
 
 
127,026 
 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
 
0 
0 
0 
 
 
0 
0 
 
0 
 
0 
Share-based compensation expense
2,026 
2,026 
1 
0 
0 
20 
2,006 
2,025 
0 
0 
0 
0 
0 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(12,122)
 
 
 
(122)
(12,000)
 
 
0 
 
0 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(507)
 
0 
0 
0 
 
 
0 
0 
 
0 
 
(507)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
(1)
(122)
0 
0 
0 
123 
123 
(123)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
12,443 
12,451 
0 
0 
0 
125 
12,326 
0 
0 
0 
0 
0 
12,443 
Other comprehensive income/(loss)
(164)
(164)
0 
0 
0 
0 
0 
0 
(164)
(164)
0 
0 
0 
Total comprehensive income
12,279 
12,287 
 
 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2011
1,065,207 
982,303 
721 
29,092 
52,500 
9,815 
971,938 
1,764,404 
(3,812)
(3,812)
4,362 
4,362 
(782,060)
Balance (in shares) at Mar. 31, 2011
 
 
72,130,214 
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2011
986,859 
956,674 
726 
29,077 
 
9,575 
948,187 
1,803,997 
(5,734)
(5,734)
4,646 
4,646 
(845,853)
Balance (in shares) at Dec. 31, 2011
72,647,697 
 
72,647,697 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
26,644 
 
 
 
266 
26,378 
 
 
0 
 
0 
 
Distributions paid on Common Units
 
(32,371)
 
 
 
(323)
(32,048)
 
 
0 
 
0 
 
Distributions paid on Preferred Units
 
(627)
 
 
 
(6)
(621)
 
 
0 
 
0 
 
Issuances of Common Stock - Shares
 
 
807,483 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
26,644 
 
8 
0 
 
 
 
26,636 
0 
 
0 
 
0 
Conversion of Common Units to Common Stock - Shares
 
 
2,000 
 
 
 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
63 
 
0 
0 
 
 
 
63 
0 
 
0 
 
0 
Dividends on Common Stock
(30,961)
 
0 
0 
 
 
 
0 
0 
 
0 
 
(30,961)
Dividends on Preferred Stock
(627)
 
0 
0 
 
 
 
0 
0 
 
0 
 
(627)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(14,366)
 
0 
0 
 
 
 
(14,366)
0 
 
0 
 
0 
Distributions to noncontrolling interests in consolidated affiliates
(291)
(291)
0 
0 
 
0 
0 
0 
0 
0 
(291)
(291)
0 
Issuances of restricted stock, net - Shares
 
 
151,391 
 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
 
0 
0 
 
 
 
0 
0 
 
0 
 
0 
Share-based compensation expense
2,422 
2,422 
2 
0 
 
24 
2,398 
2,420 
0 
0 
0 
0 
0 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(13,636)
 
 
 
(137)
(13,499)
 
 
0 
 
0 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(827)
 
0 
0 
 
 
 
0 
0 
 
0 
 
(827)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
 
(2)
(182)
0 
0 
0 
184 
184 
(184)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
18,332 
18,334 
0 
0 
 
183 
18,151 
0 
0 
0 
0 
0 
18,332 
Other comprehensive income/(loss)
1,358 
1,358 
0 
0 
 
0 
0 
0 
1,358 
1,358 
0 
0 
0 
Total comprehensive income
19,690 
19,692 
 
 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2012
$ 988,606 
$ 958,507 
$ 736 
$ 29,077 
 
$ 9,580 
$ 948,764 
$ 1,818,750 
$ (4,376)
$ (4,376)
$ 4,539 
$ 4,539 
$ (860,120)
Balance (in shares) at Mar. 31, 2012
73,608,571 
 
73,608,571 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Operating activities:
 
 
Net income
$ 18,332 
$ 12,443 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
38,515 
33,812 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
69 
499 
Share-based compensation expense
2,422 
2,026 
Allowance for losses on accounts and accrued straight-line rents receivable
579 
298 
Amortization of deferred financing costs
902 
821 
Amortization of settled cash flow hedges
(33)
(29)
Net gains on disposition of property
(5,134)
0 
Gains on for-sale residential condominiums
(65)
(38)
Equity in (earnings)/losses of unconsolidated affiliates
162 
(1,467)
Changes in financing obligations
(334)
(74)
Distributions of earnings from unconsolidated affiliates
1,388 
1,137 
Changes in operating assets and liabilities:
 
 
Accounts receivable
2,470 
(993)
Prepaid expenses and other assets
(4,497)
(1,446)
Accrued straight-line rents receivable
(5,382)
(3,214)
Accounts payable, accrued expenses and other liabilities
(27,344)
(15,291)
Net cash provided by operating activities
22,050 
28,484 
Investing activities:
 
 
Investment in development in process
0 
(1,479)
Investment in tenant improvements and deferred leasing costs
(22,671)
(12,912)
Investment in building improvements
(8,483)
(2,444)
Net proceeds from disposition of real estate assets
10,941 
0 
Net proceeds from disposition of for-sale residential condominiums
1,008 
510 
Distributions of capital from unconsolidated affiliates
901 
408 
Repayments of mortgages and notes receivable
1,481 
133 
Investments in and advances to unconsolidated affiliates
(1,197)
(422)
Changes in restricted cash and other investing activities
5,124 
1,966 
Net cash used in investing activities
(12,896)
(14,240)
Financing activities:
 
 
Dividends on Common Stock
(30,961)
(30,411)
Dividends on Preferred Stock
(627)
(1,677)
Distributions to noncontrolling interests in the Operating Partnership
(1,584)
(1,610)
Distributions to noncontrolling interests in consolidated affiliates
(291)
(221)
Net proceeds from the issuance of Common Stock
28,392 
8,391 
Repurchase of shares related to tax withholdings
(1,748)
0 
Borrowings on revolving credit facility
61,000 
5,000 
Repayments of revolving credit facility
(282,000)
(35,000)
Borrowings on mortgages and notes payable
225,000 
200,000 
Repayments of mortgages and notes payable
(3,067)
(140,491)
Additions to deferred financing costs and other financing activities
(2,241)
(1,621)
Net cash provided by/(used in) financing activities
(8,127)
2,360 
Net increase/(decrease) in cash and cash equivalents
1,027 
16,604 
Cash and cash equivalents at beginning of the period
11,188 
14,206 
Cash and cash equivalents at end of the period
12,215 
30,810 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
25,970 
23,602 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains on cash flow hedges
1,104 
0 
Conversion of Common Units to Common Stock
63 
186 
Changes in accrued capital expenditures
975 
2,641 
Write-off of fully depreciated real estate assets
15,841 
9,912 
Write-off of fully amortized deferred financing and leasing costs
3,320 
4,023 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
334 
177 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
14,366 
13,081 
Unrealized gain/(loss) on tax increment financing bond
287 
(135)
Highwoods Realty Limited Partnership [Member]
 
 
Operating activities:
 
 
Net income
18,334 
12,451 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
38,515 
33,812 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
69 
499 
Share-based compensation expense
2,422 
2,026 
Allowance for losses on accounts and accrued straight-line rents receivable
579 
298 
Amortization of deferred financing costs
902 
821 
Amortization of settled cash flow hedges
(33)
(29)
Net gains on disposition of property
(5,134)
0 
Gains on for-sale residential condominiums
(65)
(38)
Equity in (earnings)/losses of unconsolidated affiliates
160 
(1,475)
Changes in financing obligations
(334)
(74)
Distributions of earnings from unconsolidated affiliates
1,381 
1,132 
Changes in operating assets and liabilities:
 
 
Accounts receivable
2,470 
(993)
Prepaid expenses and other assets
(4,449)
(1,295)
Accrued straight-line rents receivable
(5,382)
(3,214)
Accounts payable, accrued expenses and other liabilities
(27,344)
(15,291)
Net cash provided by operating activities
22,091 
28,630 
Investing activities:
 
 
Investment in development in process
0 
(1,479)
Investment in tenant improvements and deferred leasing costs
(22,671)
(12,912)
Investment in building improvements
(8,483)
(2,444)
Net proceeds from disposition of real estate assets
10,941 
0 
Net proceeds from disposition of for-sale residential condominiums
1,008 
510 
Distributions of capital from unconsolidated affiliates
901 
408 
Repayments of mortgages and notes receivable
1,481 
133 
Investments in and advances to unconsolidated affiliates
(1,197)
(422)
Changes in restricted cash and other investing activities
5,124 
1,966 
Net cash used in investing activities
(12,896)
(14,240)
Financing activities:
 
 
Distributions on Common Units
(32,371)
(31,847)
Distributions on Preferred Units
(627)
(1,677)
Distributions to noncontrolling interests in consolidated affiliates
(291)
(221)
Net proceeds from the issuance of Common Units
25,141 
8,391 
Repurchase of units related to tax withholdings
(1,748)
0 
Borrowings on revolving credit facility
61,000 
5,000 
Repayments of revolving credit facility
(282,000)
(35,000)
Borrowings on mortgages and notes payable
225,000 
200,000 
Repayments of mortgages and notes payable
(3,067)
(140,491)
Additions to deferred financing costs and other financing activities
(2,331)
(1,951)
Net cash provided by/(used in) financing activities
(11,294)
2,204 
Net increase/(decrease) in cash and cash equivalents
(2,099)
16,594 
Cash and cash equivalents at beginning of the period
11,151 
14,198 
Cash and cash equivalents at end of the period
9,052 
30,792 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
25,970 
23,602 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains on cash flow hedges
1,104 
0 
Changes in accrued capital expenditures
975 
2,641 
Write-off of fully depreciated real estate assets
15,841 
9,912 
Write-off of fully amortized deferred financing and leasing costs
3,320 
4,023 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
334 
177 
Adjustment of Redeemable Common Units to fair value
13,546 
11,792 
Unrealized gain/(loss) on tax increment financing bond
$ 287 
$ (135)
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies 
Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity 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 virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At March 31, 2012, the Company and/or the Operating Partnership wholly owned: 303 in-service office, industrial and retail properties, comprising 29.3 million square feet; 14 for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; one office property planned for development; and one office property that is considered completed but not yet stabilized.

The Company is the sole general partner of the Operating Partnership. At March 31, 2012, the Company owned all of the Preferred Units and 73.2 million, or 95.2%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 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 three months ended March 31, 2012, the Company redeemed 2,000 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.2% at March 31, 2012.

Common Stock Offerings
 
The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the first quarter of 2012, the Company issued 785,500 shares of Common Stock under these agreements at an average gross sales price of $32.82 per share raising net proceeds, after sales commissions and expenses, of $25.4 million.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Balance Sheet at December 31, 2011 was revised from previously reported amounts to reflect in real estate and other assets, net, held for sale those properties which qualified as held for sale during the three months ended March 31, 2012. Our Consolidated Statements of Income for the three months ended March 31, 2011 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations. Prior period amounts related to capital expenditures 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 March 31, 2012 and December 31, 2011, we had involvement with no entities that we concluded to be variable interest entities.

1.    Description of Business and Significant Accounting Policies – Continued

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 2011 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 the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recently Issued Accounting Standards
 
As a result of adopting certain new or amended accounting pronouncements in the first quarter of 2012, we have enhanced our disclosure of assets and liabilities measured at fair value and elected to continue use of credit valuation adjustments on a net basis by counterparty as part of the calculation to determine the fair value of our derivatives. Our disclosures now include: (1) significant transfers between Levels 1 and 2 of the fair value hierarchy, if any; (2) additional quantitative and qualitative information regarding fair value measurements categorized as Level 3 of the fair value hierarchy; and (3) the hierarchy classification for items whose fair value is not recorded on our Consolidated Balance Sheets but was disclosed previously in our Notes to Consolidated Financial Statements. Additionally, we have presented comprehensive income in a separate financial statement entitled Consolidated Statements of Comprehensive Income.
Description of Business and Significant Accounting Policies 
1.    Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity 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 virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At March 31, 2012, the Company and/or the Operating Partnership wholly owned: 303 in-service office, industrial and retail properties, comprising 29.3 million square feet; 14 for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; one office property planned for development; and one office property that is considered completed but not yet stabilized.

The Company is the sole general partner of the Operating Partnership. At March 31, 2012, the Company owned all of the Preferred Units and 73.2 million, or 95.2%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 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 three months ended March 31, 2012, the Company redeemed 2,000 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.2% at March 31, 2012.

Common Stock Offerings
 
The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the first quarter of 2012, the Company issued 785,500 shares of Common Stock under these agreements at an average gross sales price of $32.82 per share raising net proceeds, after sales commissions and expenses, of $25.4 million, of which $3.2 million was due to the Operating Partnership at March 31, 2012.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Balance Sheet at December 31, 2011 was revised from previously reported amounts to reflect in real estate and other assets, net, held for sale those properties which qualified as held for sale during the three months ended March 31, 2012. Our Consolidated Statements of Income for the three months ended March 31, 2011 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations. Prior period amounts related to capital expenditures in our Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

Our Consolidated Financial Statements include wholly owned subsidiaries and those entities in which we have the controlling financial interest. All significant intercompany transactions and accounts have been eliminated. At March 31, 2012 and December 31, 2011, we had involvement with no entities that we concluded to be variable interest entities.

1.    Description of Business and Significant Accounting Policies – Continued

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 2011 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 the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Recently Issued Accounting Standards
 
As a result of adopting certain new or amended accounting pronouncements in the first quarter of 2012, we have enhanced our disclosure of assets and liabilities measured at fair value and elected to continue use of credit valuation adjustments on a net basis by counterparty as part of the calculation to determine the fair value of our derivatives. Our disclosures now include: (1) significant transfers between Levels 1 and 2 of the fair value hierarchy, if any; (2) additional quantitative and qualitative information regarding fair value measurements categorized as Level 3 of the fair value hierarchy; and (3) the hierarchy classification for items whose fair value is not recorded on our Consolidated Balance Sheets but was disclosed previously in our Notes to Consolidated Financial Statements. Additionally, we have presented comprehensive income in a separate financial statement entitled Consolidated Statements of Comprehensive Income.
Real Estate Assets
Real Estate Assets 
Real Estate Assets

Dispositions

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.
Real Estate Assets 
Real Estate Assets

Dispositions

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.
Mortgages and Notes Receivable
Mortgages and Notes Receivable 
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
March 31,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,807

 
$
17,180

Less allowance
—

 
—

 
15,807

 
17,180

Promissory notes
1,434

 
1,481

Less allowance
(122
)
 
(61
)
 
1,312

 
1,420

Mortgages and notes receivable, net
$
17,119

 
$
18,600



Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010. This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectibility of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of March 31, 2012, the payments on both mortgages receivable were current and there were no other indications of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value.

3.    Mortgages and Notes Receivable - Continued

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

 
Three Months Ended March 31,
 
2012
 
2011
Beginning notes receivable allowance
$
61

 
$
868

Bad debt expense
—

 
22

Recoveries/write-offs/other
61

 
(393
)
Total notes receivable allowance
$
122

 
$
497


Mortgages and Notes Receivable 
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
March 31,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,807

 
$
17,180

Less allowance
—

 
—

 
15,807

 
17,180

Promissory notes
1,434

 
1,481

Less allowance
(122
)
 
(61
)
 
1,312

 
1,420

Mortgages and notes receivable, net
$
17,119

 
$
18,600


Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010. This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectibility of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of March 31, 2012, the payments on both mortgages receivable were current and there were no other indications of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value.

3.    Mortgages and Notes Receivable - Continued

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

 
Three Months Ended March 31,
 
2012
 
2011
Beginning notes receivable allowance
$
61

 
$
868

Bad debt expense
—

 
22

Recoveries/write-offs/other
61

 
(393
)
Total notes receivable allowance
$
122

 
$
497

Investments In and Advances To Affiliates
Investments In and Advances To Affiliates 
Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures:

 
Three Months Ended March 31,
 
2012
 
2011
Income Statements:
 
 
 
Rental and other revenues
$
24,820

 
$
25,217

Expenses:
 
 
 
Rental property and other expenses
11,416

 
11,997

Depreciation and amortization
6,565

 
6,616

Impairment of real estate assets
7,180

 
—

Interest expense
5,830

 
6,007

Total expenses
30,991

 
24,620

Net income/(loss)
$
(6,171
)
 
$
597

Our share of:
 
 
 
Depreciation and amortization of real estate assets
$
2,098

 
$
2,093

Impairment of real estate assets
$
1,002

 
$
—

Interest expense
$
1,980

 
$
2,161

Net income/(loss)
$
(795
)
 
$
921

 
 
 
 
Our share of net income/(loss)
$
(795
)
 
$
921

Purchase accounting and management, leasing and other fees adjustments
633

 
546

Equity in earnings/(losses) of unconsolidated affiliates
$
(162
)
 
$
1,467



In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. During the first quarter of 2012, the maturity date of the loan was extended to June 30, 2012. We recorded $0.4 million of interest income from this loan in interest and other income during the three months ended March 31, 2012. There was no interest income recorded for this loan during the three months ended March 31, 2011.

During the first quarter of 2012, we recorded $1.0 million as our share of impairment of real estate assets on two office properties in our DLF I joint venture, due to a decline in projected occupancy and a change in the assumed holding period of those assets, which reduced the expected future cash flows from the properties.
Investments In and Advances To Affiliates 
Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures:

 
Three Months Ended March 31,
 
2012
 
2011
Income Statements:
 
 
 
Rental and other revenues
$
23,797

 
$
24,202

Expenses:
 
 
 
Rental property and other expenses
10,801

 
11,371

Depreciation and amortization
6,254

 
6,246

Impairment of real estate assets
7,180

 
—

Interest expense
5,663

 
5,825

Total expenses
29,898

 
23,442

Net income/(loss)
$
(6,101
)
 
$
760

Our share of:
 
 
 
Depreciation and amortization of real estate assets
$
2,059

 
$
2,055

Impairment of real estate assets
$
1,002

 
$
—

Interest expense
$
1,959

 
$
2,137

Net income/(loss)
$
(786
)
 
$
935

 
 
 
 
Our share of net income/(loss)
$
(786
)
 
$
935

Purchase accounting and management, leasing and other fees adjustments
626

 
540

Equity in earnings/(losses) of unconsolidated affiliates
$
(160
)
 
$
1,475


In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. During the first quarter of 2012, the maturity date of the loan was extended to June 30, 2012. We recorded $0.4 million of interest income from this loan in interest and other income during the three months ended March 31, 2012. There was no interest income recorded for this loan during the three months ended March 31, 2011.

During the first quarter of 2012, we recorded $1.0 million as our share of impairment of real estate assets on two office properties in our DLF I joint venture, due to a decline in projected occupancy and a change in the assumed holding period of those assets, which reduced the expected future cash flows from the properties.
Intangible Assets and Below Market Liabilities
Intangible Assets and Below Market Liabilities 
Intangible Assets and Below Market Lease Liabilities

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

 
March 31,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,251

 
$
18,044

Less accumulated amortization
(6,675
)
 
(5,797
)
 
13,576

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
176,615

 
173,405

Less accumulated amortization
(60,987
)
 
(57,262
)
 
115,628

 
116,143

Deferred financing and leasing costs, net
$
129,204

 
$
128,390

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,390

 
$
16,441

Less accumulated amortization
(1,457
)
 
(971
)
 
$
14,933

 
$
15,470


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

 
Three Months Ended March 31,
 
2012
 
2011
Amortization of deferred financing costs
$
902

 
$
821

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,440

 
$
4,356

Amortization of lease incentives (in rental and other revenues)
$
343

 
$
338

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
270

 
$
186

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(544
)
 
$
(25
)

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

 
 
Amortization
of Deferred Financing
Costs
 
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, 2012 through December 31, 2012
 
$
2,835

 
$
19,281

 
$
981

 
$
788

 
$
(1,589
)
2013
 
3,306

 
21,690

 
1,154

 
820

 
(2,093
)
2014
 
3,004

 
17,497

 
992

 
526

 
(2,019
)
2015
 
2,391

 
13,476

 
771

 
341

 
(1,807
)
2016
 
1,020

 
10,175

 
600

 
281

 
(1,511
)
Thereafter
 
1,020

 
23,172

 
2,341

 
742

 
(5,914
)
 
 
$
13,576

 
$
105,291

 
$
6,839

 
$
3,498

 
$
(14,933
)


5.    Intangible Assets and Below Market Lease Liabilities - Continued

The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 4.0 years, 6.2 years, 8.0 years, 5.7 years and 8.4 years, respectively, as of March 31, 2012.

Intangible Assets and Below Market Liabilities 
Intangible Assets and Below Market Lease Liabilities

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

 
March 31,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,251

 
$
18,044

Less accumulated amortization
(6,675
)
 
(5,797
)
 
13,576

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
176,615

 
173,405

Less accumulated amortization
(60,987
)
 
(57,262
)
 
115,628

 
116,143

Deferred financing and leasing costs, net
$
129,204

 
$
128,390

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,390

 
$
16,441

Less accumulated amortization
(1,457
)
 
(971
)
 
$
14,933

 
$
15,470


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

 
Three Months Ended March 31,
 
2012
 
2011
Amortization of deferred financing costs
$
902

 
$
821

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,440

 
$
4,356

Amortization of lease incentives (in rental and other revenues)
$
343

 
$
338

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
270

 
$
186

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(544
)
 
$
(25
)

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

 
 
Amortization
of Deferred Financing
Costs
 
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, 2012 through December 31, 2012
 
$
2,835

 
$
19,281

 
$
981

 
$
788

 
$
(1,589
)
2013
 
3,306

 
21,690

 
1,154

 
820

 
(2,093
)
2014
 
3,004

 
17,497

 
992

 
526

 
(2,019
)
2015
 
2,391

 
13,476

 
771

 
341

 
(1,807
)
2016
 
1,020

 
10,175

 
600

 
281

 
(1,511
)
Thereafter
 
1,020

 
23,172

 
2,341

 
742

 
(5,914
)
 
 
$
13,576

 
$
105,291

 
$
6,839

 
$
3,498

 
$
(14,933
)

5.    Intangible Assets and Below Market Lease Liabilities - Continued

The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 4.0 years, 6.2 years, 8.0 years, 5.7 years and 8.4 years, respectively, as of March 31, 2012.
Mortgages and Notes Payable
Mortgages and Notes Payable 
Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

 
March 31,
2012
 
December 31,
2011
Secured indebtedness
$
746,784

 
$
750,049

Unsecured indebtedness
1,157,194

 
1,153,164

Total mortgages and notes payable
$
1,903,978

 
$
1,903,213



At March 31, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1.2 billion.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 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. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $141.0 million and $112.0 million outstanding under our revolving credit facility at March 31, 2012 and April 26, 2012, respectively. At both March 31, 2012 and April 26, 2012, we had $0.2 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, 2012 and April 26, 2012 was $333.8 million and $362.8 million, respectively.

In the first quarter of 2012, we obtained a $225.0 million, seven-year unsecured bank term loan bearing interest of LIBOR plus 190 basis points. The proceeds were used to pay off amounts then outstanding under our revolving credit facility.

We are currently in compliance with the debt covenants and other requirements with respect to our outst
Mortgages and Notes Payable 
Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

 
March 31,
2012
 
December 31,
2011
Secured indebtedness
$
746,784

 
$
750,049

Unsecured indebtedness
1,157,194

 
1,153,164

Total mortgages and notes payable
$
1,903,978

 
$
1,903,213


At March 31, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1.2 billion.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 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. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $141.0 million and $112.0 million outstanding under our revolving credit facility at March 31, 2012 and April 26, 2012, respectively. At both March 31, 2012 and April 26, 2012, we had $0.2 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, 2012 and April 26, 2012 was $333.8 million and $362.8 million, respectively.

In the first quarter of 2012, we obtained a $225.0 million, seven-year unsecured bank term loan bearing interest of LIBOR plus 190 basis points. The proceeds were used to pay off amounts then outstanding under our revolving credit facility.

We are currently in compliance with the debt covenants and other requirements with respect to our outstanding debt.
Derivative Financial Instruments
Derivative Financial Instruments 
Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the three months ended March 31, 2012.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from April 1, 2012 through March 31, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.


7.
Derivative Financial Instruments - Continued

The following table sets forth the fair value of our derivative instruments:

 
March 31,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
1,098

 
$
2,202



The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:

 
Three Months Ended March 31,
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gain recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
1,104

 
$
—

Amount of (gain) reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
(33
)
 
$
(29
)
Derivative Financial Instruments 
Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the three months ended March 31, 2012.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from April 1, 2012 through March 31, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.


7.
Derivative Financial Instruments - Continued

The following table sets forth the fair value of our derivative instruments:

 
March 31,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
1,098

 
$
2,202


The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:

 
Three Months Ended March 31,
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gain recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
1,104

 
$
—

Amount of (gain) reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
(33
)
 
$
(29
)
Noncontrolling Interests
Noncontrolling Interests 
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. Net income attributable to noncontrolling interests in the Operating Partnership is computed by applying the weighted average percentage of Common Units not owned by the Company during the period, as a percent of the total number of outstanding Common Units, to the Operating Partnership’s net income for the period after deducting distributions on Preferred Units. When a noncontrolling unitholder redeems a Common Unit for a share of Common Stock or cash, the noncontrolling interests in the Operating Partnership are reduced and the Company’s share in the Operating Partnership is increased by the fair value of each security at the time of redemption.

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

 
Three Months Ended March 31,
 
2012
 
2011
Beginning noncontrolling interests in the Operating Partnership
$
110,655

 
$
120,838

Adjustments of noncontrolling interests in the Operating Partnership to fair value
14,366

 
13,081

Conversion of Common Units to Common Stock
(63
)
 
(186
)
Net income attributable to noncontrolling interests in the Operating Partnership
827

 
507

Distributions to noncontrolling interests in the Operating Partnership
(1,584
)
 
(1,610
)
Total noncontrolling interests in the Operating Partnership
$
124,201

 
$
132,630



8.
Noncontrolling Interests - Continued

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

 
Three Months Ended March 31,
 
2012
 
2011
Net income available for common stockholders
$
16,694

 
$
10,136

Increase in additional paid in capital from conversion of Common Units to Common Stock
63

 
186

Change from net income available for common stockholders and transfers from noncontrolling interests
$
16,757

 
$
10,322


Noncontrolling Interests in Consolidated Affiliates

At March 31, 2012, noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties located in Richmond, VA. Our joint venture partner is an unrelated third party.

Noncontrolling Interests 
Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates

At March 31, 2012, noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties located in Richmond, VA. Our joint venture partner is an unrelated third party.
Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments 
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 that 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.

Our Level 2 asset is the fair value of our mortgages and notes receivable, which was 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.

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was 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 and (2) interest rate swaps whose fair value 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 our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated 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 our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analyses, which were valued using broker opinion of value and substantiated by internal cash flow projections.

9.
Disclosure About Fair Value of Financial Instruments - Continued

Our Level 3 liability is the fair value of our financing obligations, which was estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

The following tables set forth the assets, noncontrolling interests in the Operating Partnership and liabilities 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 2
 
Level 3
 
March 31, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,488

 
$
—

 
$
17,488

 
$
—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,219

 
3,219

 
—

 
—

Tax increment financing bond (in prepaid expenses and other assets)
15,075

 
—

 
—

 
15,075

Total Assets
$
35,782

 
$
3,219

 
$
17,488

 
$
15,075

Noncontrolling Interests in the Operating Partnership
$
124,201

 
$
124,201

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,000,039

 
$
—

 
$
2,000,039

 
$
—

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
1,098

 
—

 
1,098

 
—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,219

 
3,219

 
—

 
—

Financing obligations, at fair value (1)
20,076

 
—

 
—

 
20,076

Total Liabilities
$
2,024,432

 
$
3,219

 
$
2,001,137

 
$
20,076



9.
Disclosure About Fair Value of Financial Instruments - Continued

 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$
—

 
$
18,990

 
$
—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 
—

 
—

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 
—

 
—

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 
—

 
—

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Noncontrolling Interests in the Operating Partnership
$
110,655

 
$
110,655

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$
—

 
$
1,992,937

 
$
—

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 
—

 
2,202

 
—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 
—

 
—

Financing obligations, at fair value (1)
18,866

 
—

 
—

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866


__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at March 31, 2012 and December 31, 2011, respectively.

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended March 31,
 
2012
 
2011
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,788

 
$
15,699

Unrealized gain/(loss) (in AOCL)
287

 
(135
)
Ending balance
$
15,075

 
$
15,564



In 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at March 31, 2012 was $2.0 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.6 million lower or $0.6 million higher, respectively, as of March 31, 2012. Currently, we intend to hold this bond and have concluded that we will not 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 months ended March 31, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
March 31, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,075

 
Income approach
 
Discount rate
 
10.71
%
Disclosure About Fair Value of Financial Instruments 
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 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 that we use to pay benefits under our non-qualified deferred compensation plan. 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.

Our Level 2 asset is the fair value of our mortgages and notes receivable, which was 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.


9.
Disclosure About Fair Value of Financial Instruments - Continued

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was 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 and (2) interest rate swaps whose fair value 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 our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated 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 our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analyses, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

The following tables set forth the assets and liabilities 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 2
 
Level 3
 
March 31, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,488

 
$
—

 
$
17,488

 
$
—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,219

 
3,219

 
—

 
—

Tax increment financing bond (in prepaid expenses and other assets)
15,075

 
—

 
—

 
15,075

Total Assets
$
35,782

 
$
3,219

 
$
17,488

 
$
15,075

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,000,039

 
$
—

 
$
2,000,039

 
$
—

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
1,098

 
—

 
1,098

 
—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,219

 
3,219

 
—

 
—

Financing obligations, at fair value (1)
20,076

 
—

 
—

 
20,076

Total Liabilities
$
2,024,432

 
$
3,219

 
$
2,001,137

 
$
20,076




9.
Disclosure About Fair Value of Financial Instruments - Continued

 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$
—

 
$
18,990

 
$
—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 
—

 
—

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 
—

 
—

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 
—

 
—

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$
—

 
$
1,992,937

 
$
—

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 
—

 
2,202

 
—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 
—

 
—

Financing obligations, at fair value (1)
18,866

 
—

 
—

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866

__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at March 31, 2012 and December 31, 2011, respectively.

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended March 31,
 
2012
 
2011
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,788

 
$
15,699

Unrealized gain/(loss) (in AOCL)
287

 
(135
)
Ending balance
$
15,075

 
$
15,564


In 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at March 31, 2012 was $2.0 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.6 million lower or $0.6 million higher, respectively, as of March 31, 2012. Currently, we intend to hold this bond and have concluded that we will not 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 months ended March 31, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
March 31, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,075

 
Income approach
 
Discount rate
 
10.71
%
Share-Based Payments
Share-Based Payments 
Share-based Payments

During the three months ended March 31, 2012, we granted 190,886 stock options with 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 $5.47. During the three months ended March 31, 2012, we also granted 83,489 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.18 and $38.71, respectively. We recorded stock-based compensation expense of $2.4 million and $2.0 million during the three months ended March 31, 2012 and 2011, respectively. At March 31, 2012, there was $9.4 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.8 years.
Share-Based Payments 
Share-based Payments

During the three months ended March 31, 2012, the Company granted 190,886 stock options with an exercise price equal to the closing market price of a share of its 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 $5.47. During the three months ended March 31, 2012, the Company also granted 83,489 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.18 and $38.71, respectively. We recorded stock-based compensation expense of $2.4 million and $2.0 million during the three months ended March 31, 2012 and 2011, respectively. At March 31, 2012, there was $9.4 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.8 years.
Accumulated Other Comprehensive Loss
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,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gain/(loss) on tax increment financing bond
287

 
(135
)
Ending balance
(2,022
)
 
(2,678
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized gains on cash flow hedges
1,104

 
—

Amortization of settled cash flow hedges
(33
)
 
(29
)
Ending balance
(2,354
)
 
(1,134
)
Total accumulated other comprehensive loss
$
(4,376
)
 
$
(3,812
)



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,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gain/(loss) on tax increment financing bond
287

 
(135
)
Ending balance
(2,022
)
 
(2,678
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized gains on cash flow hedges
1,104

 
—

Amortization of settled cash flow hedges
(33
)
 
(29
)
Ending balance
(2,354
)
 
(1,134
)
Total accumulated other comprehensive loss
$
(4,376
)
 
$
(3,812
)
Discontinued Operations
Discontinued Operations 
Discontinued Operations

The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended March 31,
 
2012
 
2011
Rental and other revenues
$
429

 
$
1,241

Operating expenses:
 
 
 
Rental property and other expenses
193

 
445

Depreciation and amortization
153

 
256

Total operating expenses
346

 
701

Income from discontinued operations
83

 
540

Net gains on disposition of discontinued operations
5,134

 
—

Total discontinued operations
$
5,217

 
$
540


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

 
March 31,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
802

 
$
1,901

Buildings and tenant improvements
9,444

 
16,184

Accumulated depreciation
(3,292
)
 
(5,523
)
Net real estate assets
6,954

 
12,562

Accrued straight line rents receivable
393

 
399

Deferred leasing costs, net
205

 
195

Prepaid expenses and other assets
4

 
104

Real estate and other assets, net, held for sale
$
7,556

 
$
13,260

Tenant security deposits, deferred rents and accrued costs (1)
$
81

 
$
72

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.
Discontinued Operations 
Discontinued Operations

The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended March 31,
 
2012
 
2011
Rental and other revenues
$
429

 
$
1,241

Operating expenses:
 
 
 
Rental property and other expenses
193

 
445

Depreciation and amortization
153

 
256

Total operating expenses
346

 
701

Income from discontinued operations
83

 
540

Net gains on disposition of discontinued operations
5,134

 
—

Total discontinued operations
$
5,217

 
$
540


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

 
March 31,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
802

 
$
1,901

Buildings and tenant improvements
9,444

 
16,184

Accumulated depreciation
(3,292
)
 
(5,523
)
Net real estate assets
6,954

 
12,562

Accrued straight line rents receivable
393

 
399

Deferred leasing costs, net
205

 
195

Prepaid expenses and other assets
4

 
104

Real estate and other assets, net, held for sale
$
7,556

 
$
13,260

Tenant security deposits, deferred rents and accrued costs (1)
$
81

 
$
72

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.
Earnings Per Share
Earnings Per Share 
Earnings Per Share

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

 
Three Months Ended March 31,
 
2012
 
2011
Earnings per Common Share - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,115

 
$
11,903

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(571
)
 
(480
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184
)
 
(123
)
Dividends on Preferred Stock
(627
)
 
(1,677
)
Income from continuing operations available for common stockholders
11,733

 
9,623

Income from discontinued operations
5,217

 
540

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(256
)
 
(27
)
Income from discontinued operations available for common stockholders
4,961

 
513

Net income available for common stockholders
$
16,694

 
$
10,136

Denominator:
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
72,836

 
71,817

Earnings per Common Share - basic:
 
 
 
Income from continuing operations available for common stockholders
$
0.16

 
$
0.13

Income from discontinued operations available for common stockholders
0.07

 
0.01

Net income available for common stockholders
$
0.23

 
$
0.14

Earnings per Common Share - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,115

 
$
11,903

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184
)
 
(123
)
Dividends on Preferred Stock
(627
)
 
(1,677
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,304

 
10,103

Income from discontinued operations available for common stockholders
5,217

 
540

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
17,521

 
$
10,643

Denominator:
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
72,836

 
71,817

Add:
 
 
 
Stock options using the treasury method
132

 
185

Noncontrolling interests Common Units
3,728

 
3,790

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
76,696

 
75,792

Earnings per Common Share - diluted:
 
 
 
Income from continuing operations available for common stockholders
$
0.16

 
$
0.13

Income from discontinued operations available for common stockholders
0.07

 
0.01

Net income available for common stockholders
$
0.23

 
$
0.14

__________
(1)
There were 0.6 million and 0.3 million options outstanding during the three months ended March 31, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on such restricted stock are non-forfeitable.
Earnings Per Unit 
Earnings Per Unit

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

 
Three Months Ended March 31,
 
2012
 
2011
Earnings per Common Unit - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,117

 
$
11,911

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184
)
 
(123
)
Distributions on Preferred Units
(627
)
 
(1,677
)
Income from continuing operations available for common unitholders
12,306

 
10,111

Income from discontinued operations available for common unitholders
5,217

 
540

Net income available for common unitholders
$
17,523

 
$
10,651

Denominator:
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
76,155

 
75,198

Earnings per Common Unit - basic:
 
 
 
Income from continuing operations available for common unitholders
$
0.16

 
$
0.13

Income from discontinued operations available for common unitholders
0.07

 
0.01

Net income available for common unitholders
$
0.23

 
$
0.14

Earnings per Common Unit - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,117

 
$
11,911

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184
)
 
(123
)
Distributions on Preferred Units
(627
)
 
(1,677
)
Income from continuing operations available for common unitholders
12,306

 
10,111

Income from discontinued operations available for common unitholders
5,217

 
540

Net income available for common unitholders
$
17,523

 
$
10,651

Denominator:
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
76,155

 
75,198

Add:
 
 
 
Stock options using the treasury method
132

 
185

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
76,287

 
75,383

Earnings per Common Unit - diluted:
 
 
 
Income from continuing operations available for common unitholders
$
0.16

 
$
0.13

Income from discontinued operations available for common unitholders
0.07

 
0.01

Net income available for common unitholders
$
0.23

 
$
0.14

__________
(1)
There were 0.6 million and 0.3 million options outstanding during the three months ended March 31, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on such restricted stock are non-forfeitable.
Segment Information
Segment Information 
Segment Information

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 March 31,
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
15,785

 
$
11,902

Greenville, SC
3,504

 
3,505

Kansas City, MO
3,762

 
3,657

Memphis, TN
10,139

 
10,103

Nashville, TN
15,603

 
14,616

Orlando, FL
2,688

 
2,318

Piedmont Triad, NC
5,081

 
5,364

Pittsburgh, PA
9,087

 
—

Raleigh, NC
19,781

 
19,322

Richmond, VA
11,511

 
11,379

Tampa, FL
17,138

 
16,376

Total Office Segment
114,079

 
98,542

Industrial:
 
 
 
Atlanta, GA
3,774

 
3,934

Piedmont Triad, NC
3,165

 
2,977

Total Industrial Segment
6,939

 
6,911

Retail:
 
 
 
Kansas City, MO
8,925

 
8,898

Total Retail Segment
8,925

 
8,898

Total Rental and Other Revenues
$
129,943

 
$
114,351


14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2012
 
2011
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
10,396

 
$
7,493

Greenville, SC
2,133

 
2,075

Kansas City, MO
2,362

 
2,114

Memphis, TN
6,103

 
5,759

Nashville, TN
10,603

 
9,651

Orlando, FL
1,416

 
1,166

Piedmont Triad, NC
3,233

 
3,600

Pittsburgh, PA
4,282

 
—

Raleigh, NC
13,854

 
13,219

Richmond, VA
7,884

 
7,861

Tampa, FL
10,840

 
10,130

Total Office Segment
73,106

 
63,068

Industrial:
 
 
 
Atlanta, GA
2,889

 
2,839

Piedmont Triad, NC
2,288

 
2,223

Total Industrial Segment
5,177

 
5,062

Retail:
 
 
 
Kansas City, MO
5,536

 
5,287

Total Retail Segment
5,536

 
5,287

Total Net Operating Income
83,819

 
73,417

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(38,362
)
 
(33,556
)
General and administrative expense
(9,673
)
 
(7,793
)
Interest expense
(24,802
)
 
(23,543
)
Other income
2,230

 
1,873

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
$
13,212

 
$
10,398

__________
(1)
Net of discontinued operations.
Segment Information 
Segment Information

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 March 31,
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
15,785

 
$
11,902

Greenville, SC
3,504

 
3,505

Kansas City, MO
3,762

 
3,657

Memphis, TN
10,139

 
10,103

Nashville, TN
15,603

 
14,616

Orlando, FL
2,688

 
2,318

Piedmont Triad, NC
5,081

 
5,364

Pittsburgh, PA
9,087

 
—

Raleigh, NC
19,781

 
19,322

Richmond, VA
11,511

 
11,379

Tampa, FL
17,138

 
16,376

Total Office Segment
114,079

 
98,542

Industrial:
 
 
 
Atlanta, GA
3,774

 
3,934

Piedmont Triad, NC
3,165

 
2,977

Total Industrial Segment
6,939

 
6,911

Retail:
 
 
 
Kansas City, MO
8,925

 
8,898

Total Retail Segment
8,925

 
8,898

Total Rental and Other Revenues
$
129,943

 
$
114,351



14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2012
 
2011
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
10,404

 
$
7,479

Greenville, SC
2,135

 
2,071

Kansas City, MO
2,364

 
2,110

Memphis, TN
6,108

 
5,747

Nashville, TN
10,611

 
9,631

Orlando, FL
1,417

 
1,164

Piedmont Triad, NC
3,235

 
3,593

Pittsburgh, PA
4,285

 
—

Raleigh, NC
13,864

 
13,192

Richmond, VA
7,890

 
7,845

Tampa, FL
10,847

 
10,109

Total Office Segment
73,160

 
62,941

Industrial:
 
 
 
Atlanta, GA
2,891

 
2,833

Piedmont Triad, NC
2,290

 
2,218

Total Industrial Segment
5,181

 
5,051

Retail:
 
 
 
Kansas City, MO
5,540

 
5,276

Total Retail Segment
5,540

 
5,276

Total Net Operating Income
83,881

 
73,268

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(38,362
)
 
(33,556
)
General and administrative expense
(9,735
)
 
(7,644
)
Interest expense
(24,802
)
 
(23,543
)
Other income
2,230

 
1,873

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
$
13,212

 
$
10,398

__________
(1)
Net of discontinued operations.
Subsequent Events
Subsequent Events 
Subsequent Events

In early April 2012, the Company issued 307,900 shares of Common Stock from sales in the first quarter of 2012 under our equity sales agreements at an average gross sales price of $32.93 per share raising net proceeds, after sales commissions and expenses, of $10.0 million.

On April 25, 2012, we sold an office property located near Tampa, FL for gross proceeds of $9.5 million. We expect to record a gain on disposition of discontinued operations of $1.4 million related to this transaction.

On April 27, 2012, we acquired a 178,300 square foot office property in Cary, NC from our DLF I joint venture for $26.0 million. The joint venture's net proceeds of $25.3 million were all used to reduce the balance of the advance due to us from the joint venture.
Subsequent Events 
Subsequent Events

In early April 2012, the Company issued 307,900 shares of Common Stock from sales in the first quarter of 2012 under our equity sales agreements at an average gross sales price of $32.93 per share raising net proceeds, after sales commissions and expenses, of $10.0 million.

On April 25, 2012, we sold an office property located near Tampa, FL for gross proceeds of $9.5 million. We expect to record a gain on disposition of discontinued operations of $1.4 million related to this transaction.

On April 27, 2012, we acquired a 178,300 square foot office property in Cary, NC from our DLF I joint venture for $26.0 million. The joint venture's net proceeds of $25.3 million were all used to reduce the balance of the advance due to us from the joint venture.
Description of Business and Significant Accounting Policies Significant Accounting Policies (Policies)
Use of Estimates, Policy [Policy Text Block]
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 the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Mortgages and Notes Receivable (Tables)
Schedule of Mortgages and Notes Receivable [Table Text Block] 
The following table sets forth our mortgages and notes receivable:

 
March 31,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,807

 
$
17,180

Less allowance
—

 
—

 
15,807

 
17,180

Promissory notes
1,434

 
1,481

Less allowance
(122
)
 
(61
)
 
1,312

 
1,420

Mortgages and notes receivable, net
$
17,119

 
$
18,600

Schedule of Notes Receivable Allowance [Table Text Block] 
The following table sets forth our notes receivable allowance, which relates only to promissory notes:

 
Three Months Ended March 31,
 
2012
 
2011
Beginning notes receivable allowance
$
61

 
$
868

Bad debt expense
—

 
22

Recoveries/write-offs/other
61

 
(393
)
Total notes receivable allowance
$
122

 
$
497


Investments In and Advances To Affiliates (Tables)
Schedule of Equity Method Investments Summarized Income Statement Information [Table Text Block]

 
Three Months Ended March 31,
 
2012
 
2011
Income Statements:
 
 
 
Rental and other revenues
$
24,820

 
$
25,217

Expenses:
 
 
 
Rental property and other expenses
11,416

 
11,997

Depreciation and amortization
6,565

 
6,616

Impairment of real estate assets
7,180

 
—

Interest expense
5,830

 
6,007

Total expenses
30,991

 
24,620

Net income/(loss)
$
(6,171
)
 
$
597

Our share of:
 
 
 
Depreciation and amortization of real estate assets
$
2,098

 
$
2,093

Impairment of real estate assets
$
1,002

 
$
—

Interest expense
$
1,980

 
$
2,161

Net income/(loss)
$
(795
)
 
$
921

 
 
 
 
Our share of net income/(loss)
$
(795
)
 
$
921

Purchase accounting and management, leasing and other fees adjustments
633

 
546

Equity in earnings/(losses) of unconsolidated affiliates
$
(162
)
 
$
1,467

Intangible Assets and Below Market Liabilities (Tables)
Total Intangible Assets and Below Market Liabilities [Table Text Block] 
The following table sets forth total intangible assets and below market lease liabilities, net of accumulated amortization:

 
March 31,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
20,251

 
$
18,044

Less accumulated amortization
(6,675
)
 
(5,797
)
 
13,576

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
176,615

 
173,405

Less accumulated amortization
(60,987
)
 
(57,262
)
 
115,628

 
116,143

Deferred financing and leasing costs, net
$
129,204

 
$
128,390

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
16,390

 
$
16,441

Less accumulated amortization
(1,457
)
 
(971
)
 
$
14,933

 
$
15,470


Amortization of Intangible Assets and Below Market Liabilities [Table Text Block] 
The following table sets forth amortization of intangible assets and below market lease liabilities:

 
Three Months Ended March 31,
 
2012
 
2011
Amortization of deferred financing costs
$
902

 
$
821

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,440

 
$
4,356

Amortization of lease incentives (in rental and other revenues)
$
343

 
$
338

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
270

 
$
186

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(544
)
 
$
(25
)

Scheduled Future Amortization of Intangible Assets and Below Market Liabilities [Table Text Block] 
The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:

 
 
Amortization
of Deferred Financing
Costs
 
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, 2012 through December 31, 2012
 
$
2,835

 
$
19,281

 
$
981

 
$
788

 
$
(1,589
)
2013
 
3,306

 
21,690

 
1,154

 
820

 
(2,093
)
2014
 
3,004

 
17,497

 
992

 
526

 
(2,019
)
2015
 
2,391

 
13,476

 
771

 
341

 
(1,807
)
2016
 
1,020

 
10,175

 
600

 
281

 
(1,511
)
Thereafter
 
1,020

 
23,172

 
2,341

 
742

 
(5,914
)
 
 
$
13,576

 
$
105,291

 
$
6,839

 
$
3,498

 
$
(14,933
)
Mortgages and Notes Payable (Tables)
Schedule of Consolidated Mortgages and Notes Payable [Table Text Block]
The following table sets forth our mortgages and notes payable:

 
March 31,
2012
 
December 31,
2011
Secured indebtedness
$
746,784

 
$
750,049

Unsecured indebtedness
1,157,194

 
1,153,164

Total mortgages and notes payable
$
1,903,978

 
$
1,903,213

Derivative Financial Instruments (Tables)
Schedule of Derivative Instruments, Fair Value [Table Text Block] 

The following table sets forth the fair value of our derivative instruments:

 
March 31,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in other liabilities:
 
 
 
Interest rate swaps
$
1,098

 
$
2,202

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block] 

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:

 
Three Months Ended March 31,
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gain recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
1,104

 
$
—

Amount of (gain) reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
(33
)
 
$
(29
)
Noncontrolling Interests (Tables)
Noncontrolling Interests in the Operating Partnership [Table Text Block] 
The following table sets forth noncontrolling interests in the Operating Partnership:

 
Three Months Ended March 31,
 
2012
 
2011
Beginning noncontrolling interests in the Operating Partnership
$
110,655

 
$
120,838

Adjustments of noncontrolling interests in the Operating Partnership to fair value
14,366

 
13,081

Conversion of Common Units to Common Stock
(63
)
 
(186
)
Net income attributable to noncontrolling interests in the Operating Partnership
827

 
507

Distributions to noncontrolling interests in the Operating Partnership
(1,584
)
 
(1,610
)
Total noncontrolling interests in the Operating Partnership
$
124,201

 
$
132,630


Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Table Text Block] 
The following table sets forth net income available for common stockholders and transfers from noncontrolling interests in the Operating Partnership:

 
Three Months Ended March 31,
 
2012
 
2011
Net income available for common stockholders
$
16,694

 
$
10,136

Increase in additional paid in capital from conversion of Common Units to Common Stock
63

 
186

Change from net income available for common stockholders and transfers from noncontrolling interests
$
16,757

 
$
10,322


Disclosure About Fair Value of Financial Instruments (Tables)
Fair Value Measurements of Assets, Liabilities and Noncontrolling Interests [Table Text Block] 
The following tables set forth the assets, noncontrolling interests in the Operating Partnership and liabilities 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 2
 
Level 3
 
March 31, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,488

 
$
—

 
$
17,488

 
$
—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,219

 
3,219

 
—

 
—

Tax increment financing bond (in prepaid expenses and other assets)
15,075

 
—

 
—

 
15,075

Total Assets
$
35,782

 
$
3,219

 
$
17,488

 
$
15,075

Noncontrolling Interests in the Operating Partnership
$
124,201

 
$
124,201

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,000,039

 
$
—

 
$
2,000,039

 
$
—

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
1,098

 
—

 
1,098

 
—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,219

 
3,219

 
—

 
—

Financing obligations, at fair value (1)
20,076

 
—

 
—

 
20,076

Total Liabilities
$
2,024,432

 
$
3,219

 
$
2,001,137

 
$
20,076



9.
Disclosure About Fair Value of Financial Instruments - Continued

 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$
—

 
$
18,990

 
$
—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,149

 
3,149

 
—

 
—

Tax increment financing bond (in prepaid expenses and other assets)
14,788

 
—

 
—

 
14,788

Impaired real estate assets and for-sale residential condominiums
12,767

 
—

 
—

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Noncontrolling Interests in the Operating Partnership
$
110,655

 
$
110,655

 
$
—

 
$
—

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,992,937

 
$
—

 
$
1,992,937

 
$
—

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
2,202

 
—

 
2,202

 
—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,149

 
3,149

 
—

 
—

Financing obligations, at fair value (1)
18,866

 
—

 
—

 
18,866

Total Liabilities
$
2,017,154

 
$
3,149

 
$
1,995,139

 
$
18,866

Fair Value Measurements, Unobservable Inputs Reconciliation [Table Text Block] 
The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Three Months Ended March 31,
 
2012
 
2011
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,788

 
$
15,699

Unrealized gain/(loss) (in AOCL)
287

 
(135
)
Ending balance
$
15,075

 
$
15,564

Fair Value Measurements, Valuation Techniques [Table Text Block] 
The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

 
Fair Value at
March 31, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Discount
Rate
Tax increment financing bond
$
15,075

 
Income approach
 
Discount rate
 
10.71
%
Accumulated Other Comprehensive Loss (Tables)
Components of Accumulated Other Comprehensive Loss [Table Text Block]
The following table sets forth the components of accumulated other comprehensive loss:

 
Three Months Ended March 31,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gain/(loss) on tax increment financing bond
287

 
(135
)
Ending balance
(2,022
)
 
(2,678
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized gains on cash flow hedges
1,104

 
—

Amortization of settled cash flow hedges
(33
)
 
(29
)
Ending balance
(2,354
)
 
(1,134
)
Total accumulated other comprehensive loss
$
(4,376
)
 
$
(3,812
)
Discontinued Operations (Tables)
Operations Classified As Discontinued Operations [Table Text Block] 
The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended March 31,
 
2012
 
2011
Rental and other revenues
$
429

 
$
1,241

Operating expenses:
 
 
 
Rental property and other expenses
193

 
445

Depreciation and amortization
153

 
256

Total operating expenses
346

 
701

Income from discontinued operations
83

 
540

Net gains on disposition of discontinued operations
5,134

 
—

Total discontinued operations
$
5,217

 
$
540


Major Classes of Assets and Liabilities of the Properties Classified As Held For Sale [Table Text Block] 
The following table sets forth the major classes of assets and liabilities of the properties held for sale:

 
March 31,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$
802

 
$
1,901

Buildings and tenant improvements
9,444

 
16,184

Accumulated depreciation
(3,292
)
 
(5,523
)
Net real estate assets
6,954

 
12,562

Accrued straight line rents receivable
393

 
399

Deferred leasing costs, net
205

 
195

Prepaid expenses and other assets
4

 
104

Real estate and other assets, net, held for sale
$
7,556

 
$
13,260

Tenant security deposits, deferred rents and accrued costs (1)
$
81

 
$
72

__________
(1)
Included in accounts payable, accrued expenses and other liabilities.
Earnings Per Share (Tables)
Earnings Per Share [Table Text Block]
The following table sets forth the computation of basic and diluted earnings per share:

 
Three Months Ended March 31,
 
2012
 
2011
Earnings per Common Share - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,115

 
$
11,903

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(571
)
 
(480
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184
)
 
(123
)
Dividends on Preferred Stock
(627
)
 
(1,677
)
Income from continuing operations available for common stockholders
11,733

 
9,623

Income from discontinued operations
5,217

 
540

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(256
)
 
(27
)
Income from discontinued operations available for common stockholders
4,961

 
513

Net income available for common stockholders
$
16,694

 
$
10,136

Denominator:
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
72,836

 
71,817

Earnings per Common Share - basic:
 
 
 
Income from continuing operations available for common stockholders
$
0.16

 
$
0.13

Income from discontinued operations available for common stockholders
0.07

 
0.01

Net income available for common stockholders
$
0.23

 
$
0.14

Earnings per Common Share - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,115

 
$
11,903

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184
)
 
(123
)
Dividends on Preferred Stock
(627
)
 
(1,677
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,304

 
10,103

Income from discontinued operations available for common stockholders
5,217

 
540

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
17,521

 
$
10,643

Denominator:
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
72,836

 
71,817

Add:
 
 
 
Stock options using the treasury method
132

 
185

Noncontrolling interests Common Units
3,728

 
3,790

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
76,696

 
75,792

Earnings per Common Share - diluted:
 
 
 
Income from continuing operations available for common stockholders
$
0.16

 
$
0.13

Income from discontinued operations available for common stockholders
0.07

 
0.01

Net income available for common stockholders
$
0.23

 
$
0.14

__________
(1)
There were 0.6 million and 0.3 million options outstanding during the three months ended March 31, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on such restricted stock are non-forfeitable.
Segment Information (Tables)
Segment Information [Table Text Block]

 
Three Months Ended March 31,
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
15,785

 
$
11,902

Greenville, SC
3,504

 
3,505

Kansas City, MO
3,762

 
3,657

Memphis, TN
10,139

 
10,103

Nashville, TN
15,603

 
14,616

Orlando, FL
2,688

 
2,318

Piedmont Triad, NC
5,081

 
5,364

Pittsburgh, PA
9,087

 
—

Raleigh, NC
19,781

 
19,322

Richmond, VA
11,511

 
11,379

Tampa, FL
17,138

 
16,376

Total Office Segment
114,079

 
98,542

Industrial:
 
 
 
Atlanta, GA
3,774

 
3,934

Piedmont Triad, NC
3,165

 
2,977

Total Industrial Segment
6,939

 
6,911

Retail:
 
 
 
Kansas City, MO
8,925

 
8,898

Total Retail Segment
8,925

 
8,898

Total Rental and Other Revenues
$
129,943

 
$
114,351


14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2012
 
2011
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
10,396

 
$
7,493

Greenville, SC
2,133

 
2,075

Kansas City, MO
2,362

 
2,114

Memphis, TN
6,103

 
5,759

Nashville, TN
10,603

 
9,651

Orlando, FL
1,416

 
1,166

Piedmont Triad, NC
3,233

 
3,600

Pittsburgh, PA
4,282

 
—

Raleigh, NC
13,854

 
13,219

Richmond, VA
7,884

 
7,861

Tampa, FL
10,840

 
10,130

Total Office Segment
73,106

 
63,068

Industrial:
 
 
 
Atlanta, GA
2,889

 
2,839

Piedmont Triad, NC
2,288

 
2,223

Total Industrial Segment
5,177

 
5,062

Retail:
 
 
 
Kansas City, MO
5,536

 
5,287

Total Retail Segment
5,536

 
5,287

Total Net Operating Income
83,819

 
73,417

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(38,362
)
 
(33,556
)
General and administrative expense
(9,673
)
 
(7,793
)
Interest expense
(24,802
)
 
(23,543
)
Other income
2,230

 
1,873

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
$
13,212

 
$
10,398

__________
(1)
Net of discontinued operations.
Description of Business and Significant Accounting Policies (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
executives
D
property
sqft
acre
properties
Dec. 31, 2011
Organization, Consolidation and Presentation of Financial Statements [Abstract]
 
 
In-service office, industrial and retail properties (in units)
303 
 
Square footage of commercial property (in sq feet)
29,296,000 
 
Residential condominiums for sale (in units)
14 
 
Undeveloped land suitable for future development (in acres)
581 
 
Undeveloped land considered core holdings (in acres)
518 
 
Office properties planned for development (in units)
1 
 
Office properties completed but not yet stabilized (in units)
1 
 
Common Units of partnership owned (in shares)
73,200,000 
 
Percentage of ownership of Common Units
95.20% 
95.10% 
Number of officers of the Company who are also limited partners
1 
 
Number of directors of the Company who are also limited partners
2 
 
Common Units of partnership not owned by the Company (in shares)
3,700,000 
 
Number of common units required to convert to one share of common stock (in shares)
1 
 
Common Stock par value
$ 0.01 
$ 0.01 
Number of trading days preceeding Redemption Notice Date (in days)
10 
 
Common units redeemed for a like number of common shares of stock (in shares)
2,000 
 
Number of Common Stock sold at the market during period (in shares)
785,500 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 32.82 
 
Net proceeds of Common Stock sold at the market during period
$ 25.4 
 
Real Estate Assets (Details) (USD $)
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dispositions [Abstract]
 
 
Gains on disposition of discontinued operations
$ 5,134,000 
$ 0 
Kansas City, MO Rental Residential Disposition [Member]
 
 
Dispositions [Abstract]
 
 
Number of rental residential units sold (in units)
96 
 
Gross proceeds from the sale of real estate
11,000,000 
 
Gains on disposition of discontinued operations
$ 5,100,000 
 
Mortgages and Notes Receivable (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
transactions
Dec. 31, 2011
Schedule of mortgages and notes receivable
 
 
 
Seller financing (first mortgages)
$ 15,807 
 
$ 17,180 
Less allowance
0 
 
0 
Seller financing, net
15,807 
 
17,180 
Promissory notes
1,434 
 
1,481 
Less allowance
(122)
 
(61)
Promissory notes, net
1,312 
 
1,420 
Mortgages and notes receivable, net
17,119 
 
18,600 
Notes receivable allowance, promissory notes
 
 
 
Beginning notes receivable allowance
61 
868 
 
Bad debt expense
0 
22 
 
Recoveries/write-offs/other
61 
(393)
 
Total notes receivable allowance
$ 122 
$ 497 
 
Number of transactions with seller financing
 
2 
 
Investments In and Advances To Affiliates (Details) (USD $)
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Income Statements:
 
 
Rental and other revenues
$ 24,820,000 
$ 25,217,000 
Expenses:
 
 
Rental property and other expenses
11,416,000 
11,997,000 
Depreciation and amortization
6,565,000 
6,616,000 
Impairment of real estate assets
7,180,000 
0 
Interest expense
5,830,000 
6,007,000 
Total expenses
30,991,000 
24,620,000 
Net income/(loss)
(6,171,000)
597,000 
Our share of:
 
 
Depreciation and amortization of real estate assets
2,098,000 
2,093,000 
Impairment of real estate assets
1,002,000 
0 
Interest expense
1,980,000 
2,161,000 
Net income/(loss)
(795,000)
921,000 
Our share of net income/(loss)
(795,000)
921,000 
Purchase accounting and management, leasing and other fees adjustments
633,000 
546,000 
Equity in earnings/(losses) of unconsolidated affiliates
(162,000)
1,467,000 
Percentage of equity interest in joint ventures, maximum
50.00% 
 
Our share of impairment of real estate assets
1,002,000 
0 
Highwoods DLF 98/29, LLC Joint Venture [Member]
 
 
Our share of:
 
 
Impairment of real estate assets
1,000,000 
 
Advances to Affiliates loan amount
38,300,000 
 
Loan maturity date
Mar. 31, 2012 
 
Current interest rate
LIBOR plus 500 basis points 
 
Extended loan maturity date
Jun. 30, 2012 
 
Interest income from loan to affiliate
400,000 
 
Our share of impairment of real estate assets
$ 1,000,000 
 
Number of impaired office properties
2 
 
Intangible Assets and Below Market Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
years
Mar. 31, 2011
Dec. 31, 2011
Intangible assets and below market liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, accumulated amortization
$ (67,662)
 
$ (63,059)
Deferred financing and leasing costs, net
129,204 
 
128,390 
Deferred Financing Costs [Member]
 
 
 
Intangible assets and below market liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, gross
20,251 
 
18,044 
Deferred financing and leasing costs, accumulated amortization
(6,675)
 
(5,797)
Deferred financing and leasing costs, net
13,576 
 
12,247 
Amortization of intangible assets and below market liabilities [Abstract]
 
 
 
Amortization of intangible assets
902 
821 
 
Scheduled future amortization of intangible assets and below market liabilities [Abstract]
 
 
 
April 1, 2012 through December 31, 2012
2,835 
 
 
2013
3,306 
 
 
2014
3,004 
 
 
2015
2,391 
 
 
2016
1,020 
 
 
Thereafter
1,020 
 
 
Total future amortization of intangible assets and below market liabilities
13,576 
 
 
Weighted average remaining amortization periods for intangible assets and below market liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
4.0 
 
 
Deferred Leasing Costs [Member]
 
 
 
Intangible assets and below market liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, gross
176,615 
 
173,405 
Deferred financing and leasing costs, accumulated amortization
(60,987)
 
(57,262)
Deferred financing and leasing costs, net
115,628 
 
116,143 
Amortization of intangible assets and below market liabilities [Abstract]
 
 
 
Amortization of intangible assets
6,440 
4,356 
 
Scheduled future amortization of intangible assets and below market liabilities [Abstract]
 
 
 
April 1, 2012 through December 31, 2012
19,281 
 
 
2013
21,690 
 
 
2014
17,497 
 
 
2015
13,476 
 
 
2016
10,175 
 
 
Thereafter
23,172 
 
 
Total future amortization of intangible assets and below market liabilities
105,291 
 
 
Weighted average remaining amortization periods for intangible assets and below market liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
6.2 
 
 
Deferred Lease Incentives [Member]
 
 
 
Amortization of intangible assets and below market liabilities [Abstract]
 
 
 
Amortization of intangible assets
343 
338 
 
Scheduled future amortization of intangible assets and below market liabilities [Abstract]
 
 
 
April 1, 2012 through December 31, 2012
981 
 
 
2013
1,154 
 
 
2014
992 
 
 
2015
771 
 
 
2016
600 
 
 
Thereafter
2,341 
 
 
Total future amortization of intangible assets and below market liabilities
6,839 
 
 
Weighted average remaining amortization periods for intangible assets and below market liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
8.0 
 
 
Acquisition-Related Intangible Assets [Member]
 
 
 
Amortization of intangible assets and below market liabilities [Abstract]
 
 
 
Amortization of intangible assets
270 
186 
 
Scheduled future amortization of intangible assets and below market liabilities [Abstract]
 
 
 
April 1, 2012 through December 31, 2012
788 
 
 
2013
820 
 
 
2014
526 
 
 
2015
341 
 
 
2016
281 
 
 
Thereafter
742 
 
 
Total future amortization of intangible assets and below market liabilities
3,498 
 
 
Weighted average remaining amortization periods for intangible assets and below market liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
5.7 
 
 
Acquisition-Related Below Market Liabilities [Member]
 
 
 
Intangible assets and below market liabilities, net [Abstract]
 
 
 
Acquisition-related below market liabilities, gross
16,390 
 
16,441 
Acquisiton-related below market liabilities, accumulated amortization
(1,457)
 
(971)
Acquisition-related below market liabilities, net
14,933 
 
15,470 
Amortization of intangible assets and below market liabilities [Abstract]
 
 
 
Amortization of acquisition-related below market liabilities
(544)
(25)
 
Scheduled future amortization of intangible assets and below market liabilities [Abstract]
 
 
 
April 1, 2012 through December 31, 2012
(1,589)
 
 
2013
(2,093)
 
 
2014
(2,019)
 
 
2015
(1,807)
 
 
2016
(1,511)
 
 
Thereafter
(5,914)
 
 
Total future amortization of intangible assets and below market liabilities
$ (14,933)
 
 
Weighted average remaining amortization periods for intangible assets and below market liabilities [Abstract]
 
 
 
Finite-lived below market liabilities, average useful life (in years)
8.4 
 
 
Mortgages and Notes Payable (Details) (USD $)
3 Months Ended 3 Months Ended
Mar. 31, 2012
Dec. 31, 2011
Mar. 31, 2012
Revolving Credit Facility due 2015 [Member]
Apr. 26, 2012
Revolving Credit Facility due 2015 [Member]
Mar. 31, 2012
Variable Rate Term Loan due 2016 [Member]
Mar. 31, 2012
Secured indebtedness [Member]
Dec. 31, 2011
Secured indebtedness [Member]
Mar. 31, 2012
Unsecured indebtedness [Member]
Dec. 31, 2011
Unsecured indebtedness [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
Mortgages and notes payable
$ 1,903,978,000 
$ 1,903,213,000 
 
 
 
$ 746,784,000 
$ 750,049,000 
$ 1,157,194,000 
$ 1,153,164,000 
Aggregate undepreciated book value of secured real estate assets
 
 
 
 
 
1,200,000,000 
 
 
 
Maximum borrowing capacity on revolving credit facility
 
 
475,000,000 
 
 
 
 
 
 
Maturity date on revolving credit facility
 
 
Jul. 27, 2015 
 
 
 
 
 
 
Additional borrowing capacity on revolving credit facility
 
 
75,000,000 
 
 
 
 
 
 
Interest rate
 
 
LIBOR plus 150 basis points 
 
 
 
 
 
 
Annual facility fee (in hundredths)
 
 
0.35% 
 
 
 
 
 
 
Amount outstanding on revolving credit facility
 
 
141,000,000 
112,000,000 
 
 
 
 
 
Outstanding letters of credit on revolving credit facility
 
 
200,000 
200,000 
 
 
 
 
 
Unused borrowing capacity on revolving credit facility
 
 
333,800,000 
362,800,000 
 
 
 
 
 
Principal amount of debt
 
 
 
 
$ 225,000,000 
 
 
 
 
Term of debt instrument (in years)
 
 
 
 
7 
 
 
 
 
Interest rate basis
 
 
 
 
LIBOR plus 190 basis points 
 
 
 
 
Derivative Financial Instruments (Details) (USD $)
3 Months Ended
Mar. 31, 2012
swaps
Mar. 31, 2011
Dec. 31, 2011
Derivative [Line Items]
 
 
 
Number of derivative instruments obtained
6 
 
 
Term of derivative instruments (in years)
7 
 
 
Amount of borrowings outstanding
$ 225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
 
Expected increase to interest expense
3,100,000 
 
 
Derivatives designated as cash flow hedges in other liabilities [Abstract]
 
 
 
Interest rate swaps
1,098,000 
 
2,202,000 
Amount of unrealized gain recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
Interest rate swaps
1,104,000 
0 
 
Amount of (gain) reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
Interest rate swaps
$ (33,000)
$ (29,000)
 
Noncontrolling Interests (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Noncontrolling Interests in the Operating Partnership [Roll Forward]
 
 
Beginning noncontrolling interests in the Operating Partnership
$ 110,655 
$ 120,838 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
14,366 
13,081 
Conversion of Common Units to Common Stock
(63)
(186)
Net income attributable to noncontrolling interests in the Operating Partnership
827 
507 
Distributions to noncontrolling interests in the Operating Partnership
(1,584)
(1,610)
Total noncontrolling interests in the Operating Partnership
124,201 
132,630 
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
 
 
Net income available for common stockholders
16,694 
10,136 
Increase in additional paid in capital from conversion of Common Units to Common Stock
63 
186 
Change from net income available for common stockholders and transfers from noncontrolling interests
$ 16,757 
$ 10,322 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
Disclosure About Fair Value of Financial Instruments - Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2012
Dec. 31, 2011
Assets [Abstract]
 
 
Mortgages and notes receivable, at fair value
$ 17,488 1
$ 18,990 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,219 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
15,075 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
35,782 
49,694 
Noncontrolling Interests in the Operating Partnership
124,201 
110,655 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
2,000,039 1
1,992,937 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
1,098 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,219 
3,149 
Financing obligations, at fair value
20,076 1
18,866 1
Total Liabilities
2,024,432 
2,017,154 
Level 1 [Member]
 
 
Assets [Abstract]
 
 
Mortgages and notes receivable, at fair value
0 
0 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,219 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
0 
0 
Impaired real estate assets and for-sale residential condominiums
 
0 
Total Assets
3,219 
3,149 
Noncontrolling Interests in the Operating Partnership
124,201 
110,655 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
0 
0 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
0 
0 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,219 
3,149 
Financing obligations, at fair value
0 
0 
Total Liabilities
3,219 
3,149 
Level 2 [Member]
 
 
Assets [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,488 
18,990 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
0 
0 
Tax increment financing bond (in prepaid expenses and other assets)
0 
0 
Impaired real estate assets and for-sale residential condominiums
 
0 
Total Assets
17,488 
18,990 
Noncontrolling Interests in the Operating Partnership
 
0 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
2,000,039 
1,992,937 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
1,098 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
0 
0 
Financing obligations, at fair value
0 
0 
Total Liabilities
2,001,137 
1,995,139 
Level 3 [Member]
 
 
Assets [Abstract]
 
 
Mortgages and notes receivable, at fair value
0 
0 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
0 
0 
Tax increment financing bond (in prepaid expenses and other assets)
15,075 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
15,075 
27,555 
Noncontrolling Interests in the Operating Partnership
 
0 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
0 
0 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
0 
0 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
0 
0 
Financing obligations, at fair value
20,076 
18,866 
Total Liabilities
$ 20,076 
$ 18,866 
Disclosure About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (USD $)
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Unrealized gain/(loss) (in AOCL)
$ 287,000 
$ (135,000)
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Inputs [Abstract]
 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
2,022,000 
2,678,000 
2,309,000 
2,543,000 
Tax Increment Financing Bond [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
14,788,000 
15,699,000 
 
 
Unrealized gain/(loss) (in AOCL)
287,000 
(135,000)
 
 
Ending balance
15,075,000 
15,564,000 
 
 
Fair Value Assets And Liabilities Measured On Recurring Basis Unobservable Inputs [Abstract]
 
 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
2,000,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
600,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
600,000 
 
 
 
Fair value of Level 3 asset
$ 15,075,000 
$ 15,564,000 
 
 
Discount rate (in hundredths)
10.71% 
 
 
 
Share-Based Payments (Details) (USD $)
3 Months Ended
Mar. 31, 2012
years
Mar. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock-based compensation expense
$ 2,422,000 
$ 2,026,000 
Total unrecognized stock-based compensation costs
$ 9,400,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
2.8 
 
Stock Options [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock options granted
190,886 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
$ 5.47 
 
Time-Based Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock shares granted
83,489 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
$ 32.18 
 
Total Return-Based Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock shares granted
67,902 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
$ 38.71 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dec. 31, 2011
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
Tax increment financing bond, beginning balance
$ (2,309)
$ (2,543)
 
Unrealized gain/(loss) on tax increment financing bond
287 
(135)
 
Tax increment financing bond, ending balance
(2,022)
(2,678)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
Cash flow hedges, beginning balance
(3,425)
(1,105)
 
Unrealized gains on cash flow hedges
1,104 
0 
 
Amortization of settled cash flow hedges
(33)
(29)
 
Cash flow hedges, ending balance
(2,354)
(1,134)
 
Total accumulated other comprehensive loss
$ (4,376)
$ (3,812)
$ (5,734)
Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Dec. 31, 2011
Discontinued Operations and Disposal Groups [Abstract]
 
 
 
Rental and other revenues
$ 429 
$ 1,241 
 
Operating expenses:
 
 
 
Rental property and other expenses
193 
445 
 
Depreciation and amortization
153 
256 
 
Total operating expenses
346 
701 
 
Income from discontinued operations
83 
540 
 
Net gains on disposition of discontinued operations
5,134 
0 
 
Total discontinued operations
5,217 
540 
 
Assets:
 
 
 
Land
802 
 
1,901 
Buildings and tenant improvements
9,444 
 
16,184 
Less accumulated depreciation
(3,292)
 
(5,523)
Net real estate assets
6,954 
 
12,562 
Accrued straight line rents receivable
393 
 
399 
Deferred leasing costs, net
205 
 
195 
Prepaid expenses and other assets
4 
 
104 
Real estate and other assets, net, held for sale
7,556 
 
13,260 
Tenant security deposits, deferred rents and accrued costs
$ 81 1
 
$ 72 1
Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Numerator:
 
 
Income from continuing operations
$ 13,115 
$ 11,903 
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(571)
(480)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184)
(123)
Dividends on Preferred Stock
(627)
(1,677)
Income from continuing operations available for common stockholders
11,733 
9,623 
Income from discontinued operations
5,217 
540 
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(256)
(27)
Income from discontinued operations available for common stockholders
4,961 
513 
Net income available for common stockholders
16,694 
10,136 
Denominator:
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
72,836,000 1 2
71,817,000 1 2
Earnings per Common Share - basic:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.16 
$ 0.13 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.07 
$ 0.01 
Net income available for common stockholders (in dollars per share)
$ 0.23 
$ 0.14 
Numerator:
 
 
Income from continuing operations
13,115 
11,903 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(184)
(123)
Dividends on Preferred Stock
(627)
(1,677)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,304 
10,103 
Income from discontinued operations
5,217 
540 
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$ 17,521 
$ 10,643 
Denominator:
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
72,836,000 1 2
71,817,000 1 2
Stock options using the treasury method
132,000 
185,000 
Noncontrolling interests Common Units
3,728,000 
3,790,000 
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares) (1)
76,696,000 1
75,792,000 1
Earnings per Common Share - diluted:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.16 
$ 0.13 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.07 
$ 0.01 
Net income available for common stockholders (in dollars per share)
$ 0.23 
$ 0.14 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
600,000 
300,000 
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
$ 129,943 
$ 114,351 
Total Net Operating Income
83,819 
73,417 
Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
Depreciation and amortization
(38,362)
(33,556)
General and administrative expense
(9,673)
(7,793)
Interest expense
(24,802)
(23,543)
Interest and other income
2,230 
1,873 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
13,212 
10,398 
Total Office Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
114,079 1
98,542 1
Total Net Operating Income
73,106 1
63,068 1
Office Atlanta, GA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
15,785 
11,902 
Total Net Operating Income
10,396 
7,493 
Office Greenville, SC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,504 
3,505 
Total Net Operating Income
2,133 
2,075 
Office Kansas City, MO [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,762 
3,657 
Total Net Operating Income
2,362 
2,114 
Office Memphis, TN [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
10,139 
10,103 
Total Net Operating Income
6,103 
5,759 
Office Nashville, TN [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
15,603 
14,616 
Total Net Operating Income
10,603 
9,651 
Office Orlando, FL [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
2,688 
2,318 
Total Net Operating Income
1,416 
1,166 
Office Piedmont Triad, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
5,081 
5,364 
Total Net Operating Income
3,233 
3,600 
Office Pittsburgh, PA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,087 
0 
Total Net Operating Income
4,282 
0 
Office Raleigh, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
19,781 
19,322 
Total Net Operating Income
13,854 
13,219 
Office Richmond, VA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
11,511 
11,379 
Total Net Operating Income
7,884 
7,861 
Office Tampa, FL [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
17,138 
16,376 
Total Net Operating Income
10,840 
10,130 
Total Industrial Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
6,939 1
6,911 1
Total Net Operating Income
5,177 1
5,062 1
Industrial Atlanta, GA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,774 
3,934 
Total Net Operating Income
2,889 
2,839 
Industrial Piedmont Triad, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,165 
2,977 
Total Net Operating Income
2,288 
2,223 
Total Retail Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
8,925 1
8,898 1
Total Net Operating Income
5,536 1
5,287 1
Retail Kansas City, MO [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
8,925 
8,898 
Total Net Operating Income
$ 5,536 
$ 5,287 
Subsequent Events (Details) (USD $)
3 Months Ended 0 Months Ended 1 Months Ended
Mar. 31, 2012
Mar. 31, 2011
Apr. 4, 2012
ATM Equity Offering Sales [Member]
Apr. 25, 2012
Tampa, FL Office Property Disposition [Member]
Apr. 27, 2012
Cary, NC Office Property Acquisition [Member]
sqft
Subsequent Event [Line Items]
 
 
 
 
 
Number of Common Stock sold at the market during period (in shares)
785,500 
 
307,900 
 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 32.82 
 
$ 32.93 
 
 
Net proceeds of Common Stock sold at the market during period
$ 25,400,000 
 
$ 10,000,000 
 
 
Gross proceeds from the sale of real estate
 
 
 
9,500,000 
 
Gains on disposition of discontinued operations
5,134,000 
0 
 
1,400,000 
 
Rentable square feet of acquisition (in sq ft)
 
 
 
 
178,300 
Acquisition purchase price
 
 
 
 
26,000,000 
Joint venture's net proceeds received from disposition of property
 
 
 
 
$ 25,300,000