HIGHWOODS PROPERTIES, INC., 10-Q filed on 4/30/2013
Quarterly Report
Document and Entity Information Document
3 Months Ended
Mar. 31, 2013
Apr. 19, 2013
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, 2013 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q1 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
82,142,340 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Real estate assets, at cost:
 
 
Land
$ 380,932 
$ 371,730 
Buildings and tenant improvements
3,365,154 
3,281,362 
Development in process
29,209 
21,198 
Land held for development
122,825 
117,784 
Total real estate assets
3,898,120 
3,792,074 
Less-accumulated depreciation
(966,448)
(939,550)
Net real estate assets
2,931,672 
2,852,524 
Real estate and other assets, net, held for sale
4,394 
18,938 
Cash and cash equivalents
12,170 
13,783 
Restricted cash
14,790 
19,702 
Accounts receivable, net of allowance of $1,923 and $2,848, respectively
25,067 
23,073 
Mortgages and notes receivable, net of allowance of $437 and $182, respectively
25,472 
25,472 
Accrued straight-line rents receivable, net of allowance of $1,034 and $880, respectively
122,098 
116,584 
Investments in and advances to unconsolidated affiliates
66,142 
66,800 
Deferred financing and leasing costs, net of accumulated amortization of $82,472 and $77,219, respectively
176,816 
169,094 
Prepaid expenses and other assets, net of accumulated amortization of $12,587 and $12,318, respectively
41,972 
44,458 
Total Assets
3,420,593 
3,350,428 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,896,300 
1,859,162 
Accounts payable, accrued expenses and other liabilities
167,553 
172,146 
Financing obligations
29,251 
29,358 
Total Liabilities
2,093,104 
2,060,666 
Commitments and contingencies
   
   
Noncontrolling interests in the Operating Partnership
147,317 
124,869 
Equity:
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares; 8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share; 29,077 shares issued and outstanding)
29,077 
29,077 
Common Stock, $.01 par value, 200,000,000 authorized shares; 82,130,593 and 80,311,437 shares issued and outstanding, respectively
821 
803 
Additional paid-in capital
2,076,081 
2,040,306 
Distributions in excess of net income available for common stockholders
(919,328)
(897,418)
Accumulated other comprehensive loss
(11,170)
(12,628)
Total Stockholders’ Equity
1,175,481 
1,160,140 
Noncontrolling interests in consolidated affiliates
4,691 
4,753 
Total Equity
1,180,172 
1,164,893 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
3,420,593 
3,350,428 
Highwoods Realty Limited Partnership [Member]
 
 
Real estate assets, at cost:
 
 
Land
380,932 
371,730 
Buildings and tenant improvements
3,365,154 
3,281,362 
Development in process
29,209 
21,198 
Land held for development
122,825 
117,784 
Total real estate assets
3,898,120 
3,792,074 
Less-accumulated depreciation
(966,448)
(939,550)
Net real estate assets
2,931,672 
2,852,524 
Real estate and other assets, net, held for sale
4,394 
18,938 
Cash and cash equivalents
12,254 
13,867 
Restricted cash
14,790 
19,702 
Accounts receivable, net of allowance of $1,923 and $2,848, respectively
25,067 
23,073 
Mortgages and notes receivable, net of allowance of $437 and $182, respectively
25,472 
25,472 
Accrued straight-line rents receivable, net of allowance of $1,034 and $880, respectively
122,098 
116,584 
Investments in and advances to unconsolidated affiliates
65,109 
65,813 
Deferred financing and leasing costs, net of accumulated amortization of $82,472 and $77,219, respectively
176,816 
169,094 
Prepaid expenses and other assets, net of accumulated amortization of $12,587 and $12,318, respectively
41,830 
44,458 
Total Assets
3,419,502 
3,349,525 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,896,300 
1,859,162 
Accounts payable, accrued expenses and other liabilities
167,530 
172,026 
Financing obligations
29,251 
29,358 
Total Liabilities
2,093,081 
2,060,546 
Commitments and contingencies
   
   
Redeemable Operating Partnership Units:
 
 
Common Units, 3,722,945 and 3,733,016 outstanding, respectively
147,317 
124,869 
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
176,394 
153,946 
Equity:
 
 
General partner Common Units, 854,447 and 836,356 outstanding, respectively
11,563 
11,427 
Limited partner Common Units, 80,867,336 and 79,066,272 outstanding, respectively
1,144,943 
1,131,481 
Accumulated other comprehensive loss
(11,170)
(12,628)
Noncontrolling interests in consolidated affiliates
4,691 
4,753 
Total Equity
1,150,027 
1,135,033 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
$ 3,419,502 
$ 3,349,525 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2013
Dec. 31, 2012
Assets:
 
 
Accounts receivable allowance
$ 1,923 
$ 2,848 
Mortgages and notes receivable allowance
437 
182 
Accrued straight-line rents receivable allowance
1,034 
880 
Deferred financing and leasing costs, accumulated amortization
82,472 
77,219 
Prepaid expenses and other assets, accumulated amortization
12,587 
12,318 
Equity:
 
 
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)
82,130,593 
80,311,437 
Common Stock, shares outstanding (in shares)
82,130,593 
80,311,437 
Highwoods Realty Limited Partnership [Member]
 
 
Assets:
 
 
Accounts receivable allowance
1,923 
2,848 
Mortgages and notes receivable allowance
437 
182 
Accrued straight-line rents receivable allowance
1,034 
880 
Deferred financing and leasing costs, accumulated amortization
82,472 
77,219 
Prepaid expenses and other assets, accumulated amortization
$ 12,587 
$ 12,318 
Equity:
 
 
Common Stock, par value (in dollars per share)
$ 0.01 
 
Redeemable Operating Partnership Units: [Abstract]
 
 
Redeemable Common Units outstanding (in shares)
3,722,945 
3,733,016 
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 (in shares)
854,447 
836,356 
Limited partners' capital account, units outstanding (in shares)
80,867,336 
79,066,272 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Rental and other revenues
$ 137,030 
$ 124,894 
Operating expenses:
 
 
Rental property and other expenses
48,941 
44,378 
Depreciation and amortization
42,144 
36,983 
Impairments of real estate assets
415 
General and administrative
10,582 
9,673 
Total operating expenses
102,082 
91,034 
Interest expense:
 
 
Contractual
22,798 
23,851 
Amortization of deferred financing costs
949 
902 
Financing obligations
121 
(76)
Total interest expense
23,868 
24,677 
Other income:
 
 
Interest and other income
1,783 
2,230 
Losses on debt extinguishment
(164)
Total other income
1,619 
2,230 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
12,699 
11,413 
Gains on for-sale residential condominiums
65 
Equity in earnings/(losses) of unconsolidated affiliates
436 
(162)
Income from continuing operations
13,135 
11,316 
Discontinued operations:
 
 
Income from discontinued operations
94 
1,882 
Impairments of real estate assets held for sale
(713)
Net gains on disposition of discontinued operations
1,244 
5,134 
Total discontinued operations
625 
7,016 
Net income
13,760 
18,332 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(581)
(827)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(203)
(184)
Dividends on Preferred Stock
(627)
(627)
Net income available for common stockholders
12,349 
16,694 
Earnings per Common Share – basic:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.14 
$ 0.14 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.01 
$ 0.09 
Net income available for common stockholders (in dollars per share)
$ 0.15 
$ 0.23 
Weighted average Common Shares outstanding - basic (in shares)
81,029 1 2
72,836 1 2
Earnings per Common Share - diluted:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.14 
$ 0.14 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.01 
$ 0.09 
Net income available for common stockholders (in dollars per share)
$ 0.15 
$ 0.23 
Weighted average Common Shares outstanding - diluted (in shares)
84,862 2
76,696 2
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
11,752 
10,022 
Income from discontinued operations available for common stockholders
597 
6,672 
Net income available for common stockholders
12,349 
16,694 
Highwoods Realty Limited Partnership [Member]
 
 
Rental and other revenues
137,030 
124,894 
Operating expenses:
 
 
Rental property and other expenses
48,967 
44,316 
Depreciation and amortization
42,144 
36,983 
Impairments of real estate assets
415 
General and administrative
10,556 
9,735 
Total operating expenses
102,082 
91,034 
Interest expense:
 
 
Contractual
22,798 
23,851 
Amortization of deferred financing costs
949 
902 
Financing obligations
121 
(76)
Total interest expense
23,868 
24,677 
Other income:
 
 
Interest and other income
1,783 
2,230 
Losses on debt extinguishment
(164)
Total other income
1,619 
2,230 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
12,699 
11,413 
Gains on for-sale residential condominiums
65 
Equity in earnings/(losses) of unconsolidated affiliates
383 
(160)
Income from continuing operations
13,082 
11,318 
Discontinued operations:
 
 
Income from discontinued operations
94 
1,882 
Impairments of real estate assets held for sale
(713)
Net gains on disposition of discontinued operations
1,244 
5,134 
Total discontinued operations
625 
7,016 
Net income
13,707 
18,334 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(203)
(184)
Distributions on Preferred Units
(627)
(627)
Net income available for common unitholders
12,877 
17,523 
Earnings per Common Unit - basic:
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.14 
$ 0.14 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.01 
$ 0.09 
Net income available for common unitholders (in dollars per share)
$ 0.15 
$ 0.23 
Weighted average Common Units outstanding - basic (in shares)
84,345 1 2
76,155 1 2
Earnings per Common Unit - diluted:
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.14 
0.14 
Income from discontinued operations available for common unitholders (in dollars per share)
0.01 
0.09 
Net income available for common unitholders (in dollars per share)
0.15 
0.23 
Weighted average Common Units outstanding - diluted (in shares)
84,453 2
76,287 2
Distributions declared per Common Unit (in dollars per unit)
$ 0.425 
$ 0.425 
Net income available for common unitholders:
 
 
Income from continuing operations available for common unitholders
12,252 
10,507 
Total discontinued operations
625 
7,016 
Net income available for common unitholders
$ 12,877 
$ 17,523 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Comprehensive income:
 
 
Net income
$ 13,760 
$ 18,332 
Other comprehensive income:
 
 
Unrealized gains on tax increment financing bond
390 
287 
Unrealized gains on cash flow hedges
280 
1,104 
Amortization of cash flow hedges
788 1
(33)1
Total other comprehensive income
1,458 
1,358 
Total comprehensive income
15,218 
19,690 
Less-comprehensive (income) attributable to noncontrolling interests
(784)
(1,011)
Comprehensive income attributable to common stockholders
14,434 
18,679 
Highwoods Realty Limited Partnership [Member]
 
 
Comprehensive income:
 
 
Net income
13,707 
18,334 
Other comprehensive income:
 
 
Unrealized gains on tax increment financing bond
390 
287 
Unrealized gains on cash flow hedges
280 
1,104 
Amortization of cash flow hedges
788 1
(33)1
Total other comprehensive income
1,458 
1,358 
Total comprehensive income
15,165 
19,692 
Less-comprehensive (income) attributable to noncontrolling interests
(203)
(184)
Comprehensive income attributable to common stockholders
$ 14,962 
$ 19,508 
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]
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, 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 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
26,644 
 
 
266 
26,378 
 
 
 
 
Distributions paid on Common Units
 
(32,371)
 
 
(323)
(32,048)
 
 
 
 
Distributions paid on Preferred Units
 
(627)
 
 
(6)
(621)
 
 
 
 
Issuances of Common Stock - Shares
 
 
807,483 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
26,644 
 
 
 
26,636 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
2,000 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
63 
 
 
 
63 
 
 
Dividends on Common Stock
(30,961)
 
 
 
 
 
(30,961)
Dividends on Preferred Stock
(627)
 
 
 
 
 
(627)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(14,366)
 
 
 
(14,366)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(291)
(291)
(291)
(291)
Issuances of restricted stock - Shares
 
 
151,391 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Share-based compensation expense
2,422 
2,422 
24 
2,398 
2,420 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(13,636)
 
 
(137)
(13,499)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(827)
 
 
 
 
 
(827)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(2)
(182)
184 
184 
(184)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
18,332 
18,334 
183 
18,151 
18,332 
Other comprehensive income
1,358 
1,358 
1,358 
1,358 
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 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2012
1,164,893 
1,135,033 
803 
29,077 
11,427 
1,131,481 
2,040,306 
(12,628)
(12,628)
4,753 
4,753 
(897,418)
Balance (in shares) at Dec. 31, 2012
80,311,437 
 
80,311,437 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
55,804 
 
 
558 
55,246 
 
 
 
 
Distributions paid on Common Units
 
(35,669)
 
 
(356)
(35,313)
 
 
 
 
Distributions paid on Preferred Units
 
(627)
 
 
(6)
(621)
 
 
 
 
Issuances of Common Stock - Shares
 
 
1,664,519 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
55,804 
 
17 
 
 
55,787 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
10,071 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
351 
 
 
 
351 
 
 
Dividends on Common Stock
(34,259)
 
 
 
 
 
(34,259)
Dividends on Preferred Stock
(627)
 
 
 
 
 
(627)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(23,802)
 
 
 
(23,802)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(265)
(265)
(265)
(265)
Issuances of restricted stock - Shares
 
 
144,566 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Share-based compensation expense
3,440 
3,440 
34 
3,406 
3,439 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(22,854)
 
 
(229)
(22,625)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(581)
 
 
 
 
 
(581)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(2)
(201)
203 
203 
(203)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
Net income
13,760 
13,707 
137 
13,570 
13,760 
Other comprehensive income
1,458 
1,458 
1,458 
1,458 
Total comprehensive income
15,218 
15,165 
 
 
 
 
 
 
 
 
 
 
Balance at Mar. 31, 2013
$ 1,180,172 
$ 1,150,027 
$ 821 
$ 29,077 
$ 11,563 
$ 1,144,943 
$ 2,076,081 
$ (11,170)
$ (11,170)
$ 4,691 
$ 4,691 
$ (919,328)
Balance (in shares) at Mar. 31, 2013
82,130,593 
 
82,130,593 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Operating activities:
 
 
Net income
$ 13,760 
$ 18,332 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
42,292 
38,515 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
(136)
69 
Share-based compensation expense
3,440 
2,422 
Allowance for losses on accounts and accrued straight-line rents receivable
426 
579 
Amortization of deferred financing costs
949 
902 
Amortization of cash flow hedges
788 
(33)
Impairments of real estate assets
415 
Impairments of real estate assets held for sale
713 
Losses on debt extinguishment
164 
Net gains on disposition of property
(1,244)
(5,134)
Gains on for-sale residential condominiums
(65)
Equity in (earnings)/losses of unconsolidated affiliates
(436)
162 
Changes in financing obligations
(105)
(334)
Distributions of earnings from unconsolidated affiliates
1,145 
1,388 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(1,479)
2,470 
Prepaid expenses and other assets
(2,533)
(4,497)
Accrued straight-line rents receivable
(5,788)
(5,382)
Accounts payable, accrued expenses and other liabilities
(10,252)
(27,344)
Net cash provided by operating activities
42,119 
22,050 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(88,332)
Investments in development in process
(4,978)
Investments in tenant improvements and deferred leasing costs
(18,004)
(22,671)
Investments in building improvements
(13,107)
(8,483)
Net proceeds from disposition of real estate assets
14,971 
10,941 
Net proceeds from disposition of for-sale residential condominiums
1,008 
Distributions of capital from unconsolidated affiliates
363 
901 
Repayments of mortgages and notes receivable
1,481 
Investments in and advances/repayments to/from unconsolidated affiliates
(429)
(1,197)
Changes in restricted cash and other investing activities
10,262 
5,124 
Net cash used in investing activities
(99,254)
(12,896)
Financing activities:
 
 
Dividends on Common Stock
(34,259)
(30,961)
Dividends on Preferred Stock
(627)
(627)
Distributions to noncontrolling interests in the Operating Partnership
(1,584)
(1,584)
Distributions to noncontrolling interests in consolidated affiliates
(265)
(291)
Proceeds from the issuance of Common Stock
59,019 
28,392 
Costs paid for the issuance of Common Stock
(701)
Repurchase of shares related to tax withholdings
(2,514)
(1,748)
Borrowings on revolving credit facility
135,900 
61,000 
Repayments of revolving credit facility
(61,400)
(282,000)
Borrowings on mortgages and notes payable
225,000 
Repayments of mortgages and notes payable
(37,214)
(3,067)
Additions to deferred financing costs and other financing activities
(833)
(2,241)
Net cash provided by/(used in) financing activities
55,522 
(8,127)
Net increase/(decrease) in cash and cash equivalents
(1,613)
1,027 
Cash and cash equivalents at beginning of the period
13,783 
11,188 
Cash and cash equivalents at end of the period
12,170 
12,215 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
21,887 
25,970 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains on cash flow hedges
280 
1,104 
Conversions of Common Units to Common Stock
351 
63 
Changes in accrued capital expenditures
5,158 
975 
Write-off of fully depreciated real estate assets
6,467 
15,841 
Write-off of fully amortized deferred financing and leasing costs
4,872 
3,320 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
283 
334 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
23,802 
14,366 
Unrealized gains on tax increment financing bond
390 
287 
Highwoods Realty Limited Partnership [Member]
 
 
Operating activities:
 
 
Net income
13,707 
18,334 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
42,292 
38,515 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
(136)
69 
Share-based compensation expense
3,440 
2,422 
Allowance for losses on accounts and accrued straight-line rents receivable
426 
579 
Amortization of deferred financing costs
949 
902 
Amortization of cash flow hedges
788 
(33)
Impairments of real estate assets
415 
Impairments of real estate assets held for sale
713 
Losses on debt extinguishment
164 
Net gains on disposition of property
(1,244)
(5,134)
Gains on for-sale residential condominiums
(65)
Equity in (earnings)/losses of unconsolidated affiliates
(383)
160 
Changes in financing obligations
(105)
(334)
Distributions of earnings from unconsolidated affiliates
1,139 
1,381 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(1,479)
2,470 
Prepaid expenses and other assets
(2,391)
(4,449)
Accrued straight-line rents receivable
(5,788)
(5,382)
Accounts payable, accrued expenses and other liabilities
(10,155)
(27,344)
Net cash provided by operating activities
42,352 
22,091 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(88,332)
Investments in development in process
(4,978)
Investments in tenant improvements and deferred leasing costs
(18,004)
(22,671)
Investments in building improvements
(13,107)
(8,483)
Net proceeds from disposition of real estate assets
14,971 
10,941 
Net proceeds from disposition of for-sale residential condominiums
1,008 
Distributions of capital from unconsolidated affiliates
363 
901 
Repayments of mortgages and notes receivable
1,481 
Investments in and advances/repayments to/from unconsolidated affiliates
(429)
(1,197)
Changes in restricted cash and other investing activities
10,262 
5,124 
Net cash used in investing activities
(99,254)
(12,896)
Financing activities:
 
 
Distributions on Common Units
(35,669)
(32,371)
Distributions on Preferred Units
(627)
(627)
Distributions to noncontrolling interests in consolidated affiliates
(265)
(291)
Proceeds from the issuance of Common Units
59,019 
25,141 
Costs paid for the issuance of Common Units
(701)
Repurchase of units related to tax withholdings
(2,514)
(1,748)
Borrowings on revolving credit facility
135,900 
61,000 
Repayments of revolving credit facility
(61,400)
(282,000)
Borrowings on mortgages and notes payable
225,000 
Repayments of mortgages and notes payable
(37,214)
(3,067)
Additions to deferred financing costs and other financing activities
(1,240)
(2,331)
Net cash provided by/(used in) financing activities
55,289 
(11,294)
Net increase/(decrease) in cash and cash equivalents
(1,613)
(2,099)
Cash and cash equivalents at beginning of the period
13,867 
11,151 
Cash and cash equivalents at end of the period
12,254 
9,052 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
21,887 
25,970 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains on cash flow hedges
280 
1,104 
Changes in accrued capital expenditures
5,158 
975 
Write-off of fully depreciated real estate assets
6,467 
15,841 
Write-off of fully amortized deferred financing and leasing costs
4,872 
3,320 
Unrealized gains on marketable securities of non-qualified deferred compensation plan
283 
334 
Adjustment of Redeemable Common Units to fair value
22,448 
13,546 
Unrealized gains on tax increment financing bond
$ 390 
$ 287 
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, 2013, the Company and/or the Operating Partnership wholly owned: 303 in-service office, industrial and retail properties, comprising 30.1 million square feet; 649 acres of undeveloped land suitable for future development, of which 566 acres are considered core assets; and two office development properties. In addition, we owned interests (50.0% or less) in 31 in-service office properties, a rental residential development property and 11 acres of undeveloped land suitable for future development, which includes a 12.5% interest in a 261,000 square foot office property directly owned by the Company (not included in the Operating Partnership’s Consolidated Financial Statements).

The Company is the sole general partner of the Operating Partnership. At March 31, 2013, the Company owned all of the Preferred Units and 81.7 million, or 95.7%, of the Common Units in the Operating Partnership. Limited partners, including 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 of the issuance 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, 2013, the Company redeemed 10,071 Common Units for a like number of shares of Common Stock. As a result of this activity, the percentage of Common Units owned by the Company increased from 95.6% at December 31, 2012 to 95.7% at March 31, 2013.

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 three months ended March 31, 2013, the Company issued 1,299,791 shares of Common Stock under these agreements at an average gross sales price of $35.95 per share and received net proceeds, after sales commissions, of $46.0 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, 2012 was retrospectively 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, 2013. Our Consolidated Statements of Income for the three months ended March 31, 2012 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations.

Our Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which we have the controlling financial interest. All intercompany transactions and accounts have been eliminated. At March 31, 2013 and December 31, 2012, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 3).

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 as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2012 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.
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, 2013, the Company and/or the Operating Partnership wholly owned: 303 in-service office, industrial and retail properties, comprising 30.1 million square feet; 649 acres of undeveloped land suitable for future development, of which 566 acres are considered core assets; and two office development properties. In addition, we owned interests (50.0% or less) in 31 in-service office properties, a rental residential development property and 11 acres of undeveloped land suitable for future development, which includes a 12.5% interest in a 261,000 square foot office property directly owned by the Company (not included in the Operating Partnership’s Consolidated Financial Statements).

The Company is the sole general partner of the Operating Partnership. At March 31, 2013, the Company owned all of the Preferred Units and 81.7 million, or 95.7%, of the Common Units in the Operating Partnership. Limited partners, including 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 of the issuance 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, 2013, the Company redeemed 10,071 Common Units for a like number of shares of Common Stock. As a result of this activity, the percentage of Common Units owned by the Company increased from 95.6% at December 31, 2012 to 95.7% at March 31, 2013.

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 three months ended March 31, 2013, the Company issued 1,299,791 shares of Common Stock under these agreements at an average gross sales price of $35.95 per share and received net proceeds, after sales commissions, of $46.0 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, 2012 was retrospectively 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, 2013. Our Consolidated Statements of Income for the three months ended March 31, 2012 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations.

Our Consolidated Financial Statements include wholly owned subsidiaries and those entities in which we have the controlling financial interest. All intercompany transactions and accounts have been eliminated. At March 31, 2013 and December 31, 2012, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 3).

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 as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2012 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.
Real Estate Assets
Real Estate Assets
 
Acquisitions
 
During the first quarter of 2013, we acquired:

two office properties in Tampa, FL encompassing 372,000 square feet for a purchase price of $52.5 million,

two office properties in Greensboro, NC encompassing 195,000 square feet for a purchase price of $30.8 million, and

five acres of development land in Memphis, TN for a purchase price of $4.8 million.

We expensed $0.5 million of acquisition costs (included in general and administrative expenses) related to these acquisitions. The assets acquired and liabilities assumed were recorded at fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.

Dispositions

During the first quarter of 2013, we sold two office properties in Orlando, FL for a sale price of $14.6 million (before $0.8 million in closing credits to buyer for unfunded tenant improvements) and recorded a loss on disposition of discontinued operations of $0.3 million.

In connection with the disposition of an office property in Jackson, MS in the third quarter of 2012, we had the right to receive additional cash consideration of up to $1.5 million upon the satisfaction of a certain post-closing requirement. The post-closing requirement was satisfied and the cash consideration was received during the first quarter of 2013. Accordingly, we recognized $1.5 million in additional gain on disposition of discontinued operations in the first quarter of 2013.

Impairments

During the first quarter of 2013, we recorded impairments of real estate assets of $0.4 million on two industrial properties located in Atlanta, GA and recorded impairments of real estate assets held for sale of $0.7 million on five industrial properties in Atlanta, GA. These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.
Real Estate Assets
 
Acquisitions
 
During the first quarter of 2013, we acquired:

two office properties in Tampa, FL encompassing 372,000 square feet for a purchase price of $52.5 million,

two office properties in Greensboro, NC encompassing 195,000 square feet for a purchase price of $30.8 million, and

five acres of development land in Memphis, TN for a purchase price of $4.8 million.

We expensed $0.5 million of acquisition costs (included in general and administrative expenses) related to these acquisitions. The assets acquired and liabilities assumed were recorded at fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.

Dispositions

During the first quarter of 2013, we sold two office properties in Orlando, FL for a sale price of $14.6 million (before $0.8 million in closing credits to buyer for unfunded tenant improvements) and recorded a loss on disposition of discontinued operations of $0.3 million.

In connection with the disposition of an office property in Jackson, MS in the third quarter of 2012, we had the right to receive additional cash consideration of up to $1.5 million upon the satisfaction of a certain post-closing requirement. The post-closing requirement was satisfied and the cash consideration was received during the first quarter of 2013. Accordingly, we recognized $1.5 million in additional gain on disposition of discontinued operations in the first quarter of 2013.

Impairments

During the first quarter of 2013, we recorded impairments of real estate assets of $0.4 million on two industrial properties located in Atlanta, GA and recorded impairments of real estate assets held for sale of $0.7 million on five industrial properties in Atlanta, GA. These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.
Mortgages and Notes Receivable
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
March 31,
2013
 
December 31,
2012
Seller financing (first mortgages)
$
15,853

 
$
15,853

Less allowance

 

 
15,853

 
15,853

Mortgage receivable
8,648

 
8,648

Less allowance

 

 
8,648

 
8,648

Promissory notes
1,408

 
1,153

Less allowance
(437
)
 
(182
)
 
971

 
971

Mortgages and notes receivable, net
$
25,472

 
$
25,472



Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010 and acquisition financing provided to a third party buyer of adjacent development land in Nashville, TN.

The seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectability of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of March 31, 2013, the payments on both mortgages receivable were current and there were no other indicators 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.

During 2012, we provided an $8.6 million loan to a third party, which was used by such third party to fund a portion of the purchase price to acquire 77 acres of mixed-use development land adjacent to our 68-acre office development parcel in Nashville, TN. Initially, the loan is scheduled to mature in December 2015 and bears interest at 5.0% per year. The loan can be extended by the third party for up to three additional years, subject to applicable increases in the interest rate. We also agreed to loan such third party approximately $8.4 million to fund future infrastructure development on its 77-acre development parcel. Both loans are or will be secured by the 77-acre development parcel. As of March 31, 2013, less than $0.1 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated and the arrangement is accounted for in mortgages and notes receivable in our Consolidated Balance Sheet at March 31, 2013. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

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

 
Three Months Ended March 31,
 
2013
 
2012
Beginning notes receivable allowance
$
182

 
$
61

Recoveries/write-offs/other
255

 
61

Total notes receivable allowance
$
437

 
$
122

Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
March 31,
2013
 
December 31,
2012
Seller financing (first mortgages)
$
15,853

 
$
15,853

Less allowance

 

 
15,853

 
15,853

Mortgage receivable
8,648

 
8,648

Less allowance

 

 
8,648

 
8,648

Promissory notes
1,408

 
1,153

Less allowance
(437
)
 
(182
)
 
971

 
971

Mortgages and notes receivable, net
$
25,472

 
$
25,472



Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010 and acquisition financing provided to a third party buyer of adjacent development land in Nashville, TN.

The seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectability of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of March 31, 2013, the payments on both mortgages receivable were current and there were no other indicators 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.

During 2012, we provided an $8.6 million loan to a third party, which was used by such third party to fund a portion of the purchase price to acquire 77 acres of mixed-use development land adjacent to our 68-acre office development parcel in Nashville, TN. Initially, the loan is scheduled to mature in December 2015 and bears interest at 5.0% per year. The loan can be extended by the third party for up to three additional years, subject to applicable increases in the interest rate. We also agreed to loan such third party approximately $8.4 million to fund future infrastructure development on its 77-acre development parcel. Both loans are or will be secured by the 77-acre development parcel. As of March 31, 2013, less than $0.1 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated and the arrangement is accounted for in mortgages and notes receivable in our Consolidated Balance Sheet at March 31, 2013. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

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

 
Three Months Ended March 31,
 
2013
 
2012
Beginning notes receivable allowance
$
182

 
$
61

Recoveries/write-offs/other
255

 
61

Total notes receivable allowance
$
437

 
$
122

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

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financing policies. The following table sets forth combined summarized financial information for our unconsolidated affiliates:

 
Three Months Ended March 31,
 
2013
 
2012
Income Statements:
 
 
 
Rental and other revenues
$
23,516

 
$
24,820

Expenses:
 
 
 
Rental property and other expenses
11,209

 
11,416

Depreciation and amortization
6,146

 
6,565

Impairments of real estate assets
4,790

 
7,180

Interest expense
4,739

 
5,830

Total expenses
26,884

 
30,991

Loss before disposition of properties
(3,368
)
 
(6,171
)
Gains on disposition of properties
24

 

Net loss
$
(3,344
)
 
$
(6,171
)
Our share of:
 
 
 
Depreciation and amortization
$
2,015

 
$
2,098

Impairments of real estate assets
$
1,020

 
$
1,002

Interest expense
$
1,752

 
$
1,980

Gains on disposition of depreciable properties
$
421

 
$

Net income/(loss)
$
4

 
$
(795
)
 
 
 
 
Our share of net income/(loss)
$
4

 
$
(795
)
Adjustments for management and other fees
432

 
633

Equity in earnings/(losses) of unconsolidated affiliates
$
436

 
$
(162
)


During the first quarter of 2013, our DLF II joint venture sold an office property to unrelated third parties for a sale price of $10.1 million (after $0.3 million in closing credits to buyer for free rent) and recorded a gain on disposition of property of less than $0.1 million. As our cost basis is different from the basis reflected at the joint venture level, we recorded $0.4 million of gain through equity in earnings of unconsolidated affiliates.

During the first quarter of 2013, our DLF I joint venture recorded impairments of real estate assets of $4.8 million on an office property located in Atlanta, GA and an office property located in Charlotte, NC. We recorded $1.0 million as our share of this impairment charge through equity in earnings of unconsolidated affiliates.  These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.
Investments in and Advances to Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financing policies. The following table sets forth combined summarized financial information for our unconsolidated affiliates:

 
Three Months Ended March 31,
 
2013
 
2012
Income Statements:
 
 
 
Rental and other revenues
$
22,479

 
$
23,797

Expenses:
 
 
 
Rental property and other expenses
10,608

 
10,801

Depreciation and amortization
5,835

 
6,254

Impairments of real estate assets
4,790

 
7,180

Interest expense
4,578

 
5,663

Total expenses
25,811

 
29,898

Loss before disposition of properties
(3,332
)
 
(6,101
)
Gains on disposition of properties
24

 

Net loss
$
(3,308
)
 
$
(6,101
)
Our share of:
 
 
 
Depreciation and amortization
$
1,976

 
$
2,059

Impairments of real estate assets
$
1,020

 
$
1,002

Interest expense
$
1,732

 
$
1,959

Gains on disposition of depreciable properties
$
421

 
$

Net income/(loss)
$
8

 
$
(786
)
 
 
 
 
Our share of net income/(loss)
$
8

 
$
(786
)
Adjustments for management and other fees
375

 
626

Equity in earnings/(losses) of unconsolidated affiliates
$
383

 
$
(160
)


During the first quarter of 2013, our DLF II joint venture sold an office property to unrelated third parties for a sale price of $10.1 million (after $0.3 million in closing credits to buyer for free rent) and recorded a gain on disposition of property of less than $0.1 million. As our cost basis is different from the basis reflected at the joint venture level, we recorded $0.4 million of gain through equity in earnings of unconsolidated affiliates.

During the first quarter of 2013, our DLF I joint venture recorded impairments of real estate assets of $4.8 million on an office property located in Atlanta, GA and an office property located in Charlotte, NC.  We recorded $1.0 million as our share of this impairment charge through equity in earnings of unconsolidated affiliates.  These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions, which reduced the future expected cash flows from the properties.
Intangible Assets and Below Market Lease Liabilities
Intangible Assets and Below Market Lease Liabilities
 
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Deferred financing costs
$
21,426

 
$
21,759

Less accumulated amortization
(8,648
)
 
(7,862
)
 
12,778

 
13,897

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
237,862

 
224,554

Less accumulated amortization
(73,824
)
 
(69,357
)
 
164,038

 
155,197

Deferred financing and leasing costs, net
$
176,816

 
$
169,094

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
37,538

 
$
37,019

Less accumulated amortization
(4,319
)
 
(3,383
)
 
$
33,219

 
$
33,636

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended March 31,
 
2013
 
2012
Amortization of deferred financing costs
$
949

 
$
902

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
8,359

 
$
6,440

Amortization of lease incentives (in rental and other revenues)
$
383

 
$
343

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
466

 
$
270

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
137

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,122
)
 
$
(544
)


5.    Intangible Assets and Below Market Lease Liabilities - Continued

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 Intangible Assets (in Rental Property and Other Expenses)
 
Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2013
 
$
2,768

 
$
24,305

 
$
965

 
$
1,372

 
$
416

 
$
(3,087
)
2014
 
3,249

 
28,125

 
1,154

 
1,537

 
553

 
(4,009
)
2015
 
2,614

 
22,845

 
926

 
1,252

 
553

 
(3,746
)
2016
 
1,515

 
18,485

 
734

 
1,023

 
553

 
(3,443
)
2017
 
1,226

 
15,591

 
660

 
908

 
553

 
(3,208
)
Thereafter
 
1,406

 
36,617

 
2,105

 
1,164

 
1,642

 
(15,726
)
 
 
$
12,778

 
$
145,968

 
$
6,544

 
$
7,256

 
$
4,270

 
$
(33,219
)
Weighted average remaining amortization periods as of March 31, 2013 (in years)
 
5.0

 
6.6

 
7.6

 
5.4

 
7.7

 
9.8



The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2013 acquisition activity:

 
 
Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues)
 
Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)
 
Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)
Amount recorded from acquisition activity
 
$
2,777

 
$
11,561

 
$
(1,329
)
Weighted average remaining amortization periods (in years)
 
4.9

 
4.8

 
9.3



Intangible Assets and Below Market Lease Liabilities
 
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Deferred financing costs
$
21,426

 
$
21,759

Less accumulated amortization
(8,648
)
 
(7,862
)
 
12,778

 
13,897

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
237,862

 
224,554

Less accumulated amortization
(73,824
)
 
(69,357
)
 
164,038

 
155,197

Deferred financing and leasing costs, net
$
176,816

 
$
169,094

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
37,538

 
$
37,019

Less accumulated amortization
(4,319
)
 
(3,383
)
 
$
33,219

 
$
33,636


 
The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended March 31,
 
2013
 
2012
Amortization of deferred financing costs
$
949

 
$
902

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
8,359

 
$
6,440

Amortization of lease incentives (in rental and other revenues)
$
383

 
$
343

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
466

 
$
270

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
137

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,122
)
 
$
(544
)

 

5.    Intangible Assets and Below Market Lease Liabilities - Continued

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 Intangible Assets (in Rental Property and Other Expenses)
 
Amortization
of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2013
 
$
2,768

 
$
24,305

 
$
965

 
$
1,372

 
$
416

 
$
(3,087
)
2014
 
3,249

 
28,125

 
1,154

 
1,537

 
553

 
(4,009
)
2015
 
2,614

 
22,845

 
926

 
1,252

 
553

 
(3,746
)
2016
 
1,515

 
18,485

 
734

 
1,023

 
553

 
(3,443
)
2017
 
1,226

 
15,591

 
660

 
908

 
553

 
(3,208
)
Thereafter
 
1,406

 
36,617

 
2,105

 
1,164

 
1,642

 
(15,726
)
 
 
$
12,778

 
$
145,968

 
$
6,544

 
$
7,256

 
$
4,270

 
$
(33,219
)
Weighted average remaining amortization periods as of March 31, 2013 (in years)
 
5.0

 
6.6

 
7.6

 
5.4

 
7.7

 
9.8



The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2013 acquisition activity:

 
 
Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues)
 
Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)
 
Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)
Amount recorded from acquisition activity
 
$
2,777

 
$
11,561

 
$
(1,329
)
Weighted average remaining amortization periods (in years)
 
4.9

 
4.8

 
9.3

Mortgages and Notes Payable
Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

 
March 31,
2013
 
December 31,
2012
Secured indebtedness
$
547,150

 
$
549,607

Unsecured indebtedness
1,349,150

 
1,309,555

Total mortgages and notes payable
$
1,896,300

 
$
1,859,162



At March 31, 2013, our secured mortgage loans were collateralized by real estate assets with an aggregate undepreciated book value of $967.3 million.


6.    Mortgages and Notes Payable - Continued

Our $475.0 million unsecured revolving credit facility is scheduled to mature in July 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. The continued ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $97.5 million and $94.5 million outstanding under our revolving credit facility at March 31, 2013 and April 19, 2013, respectively. At both March 31, 2013 and April 19, 2013, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at March 31, 2013 and April 19, 2013 was $377.4 million and $380.4 million, respectively.

During the first quarter of 2013, we prepaid the remaining $35.0 million balance on a $200.0 million bank term loan that was originally scheduled to mature in February 2016. We recorded $0.2 million of loss on debt extinguishment related to this repayment.

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

The following table sets forth our mortgages and notes payable:

 
March 31,
2013
 
December 31,
2012
Secured indebtedness
$
547,150

 
$
549,607

Unsecured indebtedness
1,349,150

 
1,309,555

Total mortgages and notes payable
$
1,896,300

 
$
1,859,162



At March 31, 2013, our secured mortgage loans were collateralized by real estate assets with an aggregate undepreciated book value of $967.3 million.


6.    Mortgages and Notes Payable - Continued

Our $475.0 million unsecured revolving credit facility is scheduled to mature in July 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. The continued ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $97.5 million and $94.5 million outstanding under our revolving credit facility at March 31, 2013 and April 19, 2013, respectively. At both March 31, 2013 and April 19, 2013, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at March 31, 2013 and April 19, 2013 was $377.4 million and $380.4 million, respectively.

During the first quarter of 2013, we prepaid the remaining $35.0 million balance on a $200.0 million bank term loan that was originally scheduled to mature in February 2016. We recorded $0.2 million of loss on debt extinguishment related to this repayment.

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

We have six floating-to-fixed interest rate swaps through January 2019 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, 2013. We have no collateral requirements related to our interest rate swaps.

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, 2013 through March 31, 2014, we estimate that $3.3 million will be reclassified to interest expense.

For the periods ending March 31, 2013 and December 31, 2012, all of our derivatives were in a liability position. The following table sets forth the fair value of our liability derivatives:

 
March 31,
2013
 
December 31,
2012
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
8,261

 
$
9,369




7.
Derivative Financial Instruments - Continued
The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended March 31,
 
2013
 
2012
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gains recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
280

 
$
1,104

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
788

 
$
(33
)
Derivative Financial Instruments
 
We have six floating-to-fixed interest rate swaps through January 2019 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, 2013. We have no collateral requirements related to our interest rate swaps.

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, 2013 through March 31, 2014, we estimate that $3.3 million will be reclassified to interest expense.
 
For the periods ending March 31, 2013 and December 31, 2012, all of our derivatives were in a liability position. The following table sets forth the fair value of our liability derivatives:

 
March 31,
2013
 
December 31,
2012
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
8,261

 
$
9,369




7.
Derivative Financial Instruments - Continued

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended March 31,
 
2013
 
2012
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gains recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
280

 
$
1,104

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
788

 
$
(33
)
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,
 
2013
 
2012
Beginning noncontrolling interests in the Operating Partnership
$
124,869

 
$
110,655

Adjustment of noncontrolling interests in the Operating Partnership to fair value
23,802

 
14,366

Conversions of Common Units to Common Stock
(351
)
 
(63
)
Net income attributable to noncontrolling interests in the Operating Partnership
581

 
827

Distributions to noncontrolling interests in the Operating Partnership
(1,584
)
 
(1,584
)
Total noncontrolling interests in the Operating Partnership
$
147,317

 
$
124,201

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,
 
2013
 
2012
Net income available for common stockholders
$
12,349

 
$
16,694

Increase in additional paid in capital from conversions of Common Units to Common Stock
351

 
63

Change from net income available for common stockholders and transfers from noncontrolling interests
$
12,700

 
$
16,757


8.
Noncontrolling Interests - Continued

Noncontrolling Interests in Consolidated Affiliates
 
At March 31, 2013, 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 in Consolidated Affiliates
 
At March 31, 2013, 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

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 certain 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 (1) certain of our mortgages and notes receivable, which were estimated by the income approach utilizing internal cash flow projections and market interest rates to estimate the price that would be paid in an orderly transaction between market participants, (2) 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 (3) any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using the terms of definitive sales contracts or the sales comparison approach and substantiated with internal cash flow projections.
 
Our Level 3 liabilities include the fair value of our contingent consideration to acquire real estate assets and financing obligations, which were 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.
 

9.
Disclosure About Fair Value of Financial Instruments - Continued
 
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, 2013
 
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)
$
25,638

 
$

 
$
16,990

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529

 
3,529

 

 

Impaired real estate assets
9,002

 

 

 
9,002

Tax increment financing bond (in prepaid expenses and other assets)
14,324

 

 

 
14,324

Total Assets
$
52,493

 
$
3,529

 
$
16,990

 
$
31,974

Noncontrolling Interests in the Operating Partnership
$
147,317

 
$
147,317

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,024,509

 
$

 
$
2,024,509

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261

 

 
8,261

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529

 
3,529

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375

 

 

 
375

Financing obligations, at fair value (1)
23,986

 

 

 
23,986

Total Liabilities
$
2,060,660

 
$
3,529

 
$
2,032,770

 
$
24,361

 
 
 
 
Level 1
 
Level 2
 
Level 3
 
December 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)
$
24,725

 
$

 
$
16,077

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,354

 
3,354

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,496

 

 

 
14,496

Total Assets
$
42,575

 
$
3,354

 
$
16,077

 
$
23,144

Noncontrolling Interests in the Operating Partnership
$
124,869

 
$
124,869

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,987,364

 
$

 
$
1,987,364

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
9,369

 

 
9,369

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,354

 
3,354

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
563

 

 

 
563

Financing obligations, at fair value (1)
23,252

 

 

 
23,252

Total Liabilities
$
2,023,902

 
$
3,354

 
$
1,996,733

 
$
23,815


__________
 
9.
Disclosure About Fair Value of Financial Instruments - Continued

(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2013 and December 31, 2012.

The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

 
Three Months Ended March 31,
 
2013
 
2012
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,496

 
$
14,788

Principal repayment
(562
)
 

Unrealized gains (in AOCL)
390

 
287

Ending balance
$
14,324

 
$
15,075

Liability:
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
Beginning balance
$
563

 
$

Unrealized gains (in general and administrative expenses)
(188
)
 

Ending balance
$
375

 
$



During 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, 2013 was $1.5 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 $0.5 million lower or $0.5 million higher, respectively, as of March 31, 2013. 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. We have recorded no credit losses related to the bond during the three months ended March 31, 2013 and 2012. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

The impaired real estate assets that were measured in the first quarter of 2013 at fair value and deemed to be Level 3 assets were valued based primarily on market-based inputs and our assumptions about the use of the assets, as observable inputs were not available. In the absence of observable inputs, we estimate the fair value of real estate using unobservable data such as estimated discount and capitalization rates. We also utilize local and national industry market data such as comparable sales, sales contracts and appraisals to assist us in our estimation of fair value. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.

 
9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth quantitative information about the unobservable inputs of our Level 3 assets and liability, which are recorded at fair value on our Consolidated Balance Sheets:

 
Fair Value at
March 31, 2013
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Assets:
 
 
 
 
 
 
 
Tax increment financing bond
$
14,324

 
Income approach
 
Discount rate
 
10.4%
Impaired real estate assets
$
9,002

 
Income approach
 
Capitalization rate
 
8.5%-9.5%
 
 
 
 
 
Discount rate
 
9.0%-10.0%
Liability:
 
 
 
 
 
 
 
Contingent consideration to acquire real estate assets
$
375

 
Income approach
 
Payout percentage
 
50.0%
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 certain 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.


9.
Disclosure About Fair Value of Financial Instruments - Continued

Our Level 3 assets include (1) certain of our mortgages and notes receivable, which were estimated by the income approach utilizing internal cash flow projections and market interest rates to estimate the price that would be paid in an orderly transaction between market participants, (2) 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 (3) any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using the terms of definitive sales contracts or the sales comparison approach and substantiated with internal cash flow projections.

Our Level 3 liabilities include the fair value of our contingent consideration to acquire real estate assets and financing obligations, which were 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, 2013
 
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)
$
25,638

 
$

 
$
16,990

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529

 
3,529

 

 

Impaired real estate assets
9,002

 

 

 
9,002

Tax increment financing bond (in prepaid expenses and other assets)
14,324

 

 

 
14,324

Total Assets
$
52,493

 
$
3,529

 
$
16,990

 
$
31,974

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,024,509

 
$

 
$
2,024,509

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261

 

 
8,261

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529

 
3,529

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375

 

 

 
375

Financing obligations, at fair value (1)
23,986

 

 

 
23,986

Total Liabilities
$
2,060,660

 
$
3,529

 
$
2,032,770

 
$
24,361



9.
Disclosure About Fair Value of Financial Instruments - Continued
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
December 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)
$
24,725

 
$

 
$
16,077

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,354

 
3,354

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,496

 

 

 
14,496

Total Assets
$
42,575

 
$
3,354

 
$
16,077

 
$
23,144

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,987,364

 
$

 
$
1,987,364

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
9,369

 

 
9,369

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,354

 
3,354

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
563

 

 

 
563

Financing obligations, at fair value (1)
23,252

 

 

 
23,252

Total Liabilities
$
2,023,902

 
$
3,354

 
$
1,996,733

 
$
23,815

__________
(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2013 and December 31, 2012.
 
The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:
 
 
Three Months Ended March 31,
 
2013
 
2012
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,496

 
$
14,788

Principal repayment
(562
)
 

Unrealized gains (in AOCL)
390

 
287

Ending balance
$
14,324

 
$
15,075

Liability:
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
Beginning balance
$
563

 
$

Unrealized gains (in general and administrative expenses)
(188
)
 

Ending balance
$
375

 
$


 

9.
Disclosure About Fair Value of Financial Instruments - Continued

During 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, 2013 was $1.5 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 $0.5 million lower or $0.5 million higher, respectively, as of March 31, 2013. 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. We have recorded no credit losses related to the bond during the three months ended March 31, 2013 and 2012. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

The impaired real estate assets that were measured in the first quarter of 2013 at fair value and deemed to be Level 3 assets were valued based primarily on market-based inputs and our assumptions about the use of the assets, as observable inputs were not available. In the absence of observable inputs, we estimate the fair value of real estate using unobservable data such as estimated discount and capitalization rates. We also utilize local and national industry market data such as comparable sales, sales contracts and appraisals to assist us in our estimation of fair value. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.

The following table sets forth quantitative information about the unobservable inputs of our Level 3 assets and liability, which are recorded at fair value on our Consolidated Balance Sheets:
 
 
Fair Value at
March 31, 2013
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Assets:
 
 
 
 
 
 
 
Tax increment financing bond
$
14,324

 
Income approach
 
Discount rate
 
10.4%
Impaired real estate assets
$
9,002

 
Income approach
 
Capitalization rate
 
8.5%-9.5%
 
 
 
 
 
Discount rate
 
9.0%-10.0%
Liability:
 
 
 
 
 
 
 
Contingent consideration to acquire real estate assets
$
375

 
Income approach
 
Payout percentage
 
50.0%
Share-Based Payments
Share-based Payments

During the three months ended March 31, 2013, we granted 168,700 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 $6.50. During the three months ended March 31, 2013, we also granted 79,080 shares of time-based restricted stock and 65,486 shares of total return-based restricted stock with weighted average grant date fair values per share of $36.35 and $31.73, respectively. We recorded stock-based compensation expense of $3.4 million and $2.4 million during the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013, there was $7.2 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.7 years.
Share-based Payments

During the three months ended March 31, 2013, the Company granted 168,700 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 $6.50. During the three months ended March 31, 2013, the Company also granted 79,080 shares of time-based restricted stock and 65,486 shares of total return-based restricted stock with weighted average grant date fair values per share of $36.35 and $31.73, respectively. We recorded stock-based compensation expense of $3.4 million and $2.4 million during the three months ended March 31, 2013 and 2012, respectively. At March 31, 2013, there was $7.2 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.7 years.
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss

The following table sets forth the components of AOCL:

 
Three Months Ended March 31,
 
2013
 
2012
Tax increment financing bond:
 
 
 
Beginning balance
$
(1,898
)
 
$
(2,309
)
Unrealized gains on tax increment financing bond
390

 
287

Ending balance
(1,508
)
 
(2,022
)
Cash flow hedges:
 
 
 
Beginning balance
(10,730
)
 
(3,425
)
Unrealized gains on cash flow hedges
280

 
1,104

Amortization of cash flow hedges (1)
788

 
(33
)
Ending balance
(9,662
)
 
(2,354
)
Total accumulated other comprehensive loss
$
(11,170
)
 
$
(4,376
)
__________
(1)    Amounts reclassified out of AOCL into contractual interest expense.
Accumulated Other Comprehensive Loss

The following table sets forth the components of AOCL:

 
Three Months Ended March 31,
 
2013
 
2012
Tax increment financing bond:
 
 
 
Beginning balance
$
(1,898
)
 
$
(2,309
)
Unrealized gains on tax increment financing bond
390

 
287

Ending balance
(1,508
)
 
(2,022
)
Cash flow hedges:
 
 
 
Beginning balance
(10,730
)
 
(3,425
)
Unrealized gains on cash flow hedges
280

 
1,104

Amortization of cash flow hedges (1)
788

 
(33
)
Ending balance
(9,662
)
 
(2,354
)
Total accumulated other comprehensive loss
$
(11,170
)
 
$
(4,376
)
__________
(1)    Amounts reclassified out of AOCL into contractual interest expense.
Discontinued Operations
Discontinued Operations

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

 
Three Months Ended March 31,
 
2013
 
2012
Rental and other revenues
$
345

 
$
5,478

Operating expenses:
 
 
 
Rental property and other expenses
103

 
1,939

Depreciation and amortization
148

 
1,532

Total operating expenses
251

 
3,471

Interest expense

 
125

Income from discontinued operations
94

 
1,882

Impairments of real estate assets held for sale
(713
)
 

Net gains on disposition of discontinued operations
1,244

 
5,134

Total discontinued operations
$
625

 
$
7,016


The following table sets forth the major classes of assets of our real estate and other assets, net, held for sale:

 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Land
$
658

 
$
2,482

Buildings and tenant improvements
6,690

 
23,106

Less-accumulated depreciation
(2,991
)
 
(8,017
)
Net real estate assets
4,357

 
17,571

Accrued straight-line rents receivable, net
26

 
408

Deferred leasing costs, net
11

 
929

Prepaid expenses and other assets

 
30

Real estate and other assets, net, held for sale
$
4,394

 
$
18,938



As of March 31, 2013, real estate and other assets, net, held for sale included five industrial properties in Atlanta, GA. As of December 31, 2012, real estate and other assets, net, held for sale included two office properties in Orlando, FL and five industrial properties in Atlanta, GA. All of these properties qualified for discontinued operations in the first quarter of 2013.
Discontinued Operations

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

 
Three Months Ended March 31,
 
2013
 
2012
Rental and other revenues
$
345

 
$
5,478

Operating expenses:

 

Rental property and other expenses
103

 
1,939

Depreciation and amortization
148

 
1,532

Total operating expenses
251

 
3,471

Interest expense

 
125

Income from discontinued operations
94

 
1,882

Impairments of real estate assets held for sale
(713
)
 

Net gains on disposition of discontinued operations
1,244

 
5,134

Total discontinued operations
$
625

 
$
7,016



The following table sets forth the major classes of assets of our real estate and other assets, net, held for sale:

 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Land
$
658

 
$
2,482

Buildings and tenant improvements
6,690

 
23,106

Less-accumulated depreciation
(2,991
)
 
(8,017
)
Net real estate assets
4,357

 
17,571

Accrued straight-line rents receivable, net
26

 
408

Deferred leasing costs, net
11

 
929

Prepaid expenses and other assets

 
30

Real estate and other assets, net, held for sale
$
4,394

 
$
18,938



As of March 31, 2013, real estate and other assets, net, held for sale included five industrial properties in Atlanta, GA. As of December 31, 2012, real estate and other assets, net, held for sale included two office properties in Orlando, FL and five industrial properties in Atlanta, GA. All of these properties qualified for discontinued operations in the first quarter of 2013.
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,
 
2013
 
2012
Earnings per Common Share - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,135

 
$
11,316

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(553
)
 
(483
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Dividends on Preferred Stock
(627
)
 
(627
)
Income from continuing operations available for common stockholders
11,752

 
10,022

Income from discontinued operations
625

 
7,016

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(28
)
 
(344
)
Income from discontinued operations available for common stockholders
597

 
6,672

Net income available for common stockholders
$
12,349

 
$
16,694

Denominator:
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
81,029

 
72,836

Earnings per Common Share - basic:
 
 
 
Income from continuing operations available for common stockholders
$
0.14

 
$
0.14

Income from discontinued operations available for common stockholders
0.01

 
0.09

Net income available for common stockholders
$
0.15

 
$
0.23

Earnings per Common Share - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,135

 
$
11,316

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Dividends on Preferred Stock
(627
)
 
(627
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,305

 
10,505

Income from discontinued operations available for common stockholders
625

 
7,016

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
12,930

 
$
17,521

Denominator:
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
81,029

 
72,836

Add:
 
 
 
Stock options using the treasury method
108

 
132

Noncontrolling interests Common Units
3,725

 
3,728

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
84,862

 
76,696

Earnings per Common Share - diluted:
 
 
 
Income from continuing operations available for common stockholders
$
0.14

 
$
0.14

Income from discontinued operations available for common stockholders
0.01

 
0.09

Net income available for common stockholders
$
0.15

 
$
0.23

__________
(1)
There were 0.5 million and 0.6 million options outstanding during the three months ended March 31, 2013 and 2012, 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 where dividends on such restricted stock are non-forfeitable.
Earnings Per Unit

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

 
Three Months Ended March 31,
 
2013
 
2012
Earnings per Common Unit - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,082

 
$
11,318

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Distributions on Preferred Units
(627
)
 
(627
)
Income from continuing operations available for common unitholders
12,252

 
10,507

Income from discontinued operations available for common unitholders
625

 
7,016

Net income available for common unitholders
$
12,877

 
$
17,523

Denominator:
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
84,345

 
76,155

Earnings per Common Unit - basic:
 
 
 
Income from continuing operations available for common unitholders
$
0.14

 
$
0.14

Income from discontinued operations available for common unitholders
0.01

 
0.09

Net income available for common unitholders
$
0.15

 
$
0.23

Earnings per Common Unit - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,082

 
$
11,318

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Distributions on Preferred Units
(627
)
 
(627
)
Income from continuing operations available for common unitholders
12,252

 
10,507

Income from discontinued operations available for common unitholders
625

 
7,016

Net income available for common unitholders
$
12,877

 
$
17,523

Denominator:
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
84,345

 
76,155

Add:
 
 
 
Stock options using the treasury method
108

 
132

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
84,453

 
76,287

Earnings per Common Unit - diluted:
 
 
 
Income from continuing operations available for common unitholders
$
0.14

 
$
0.14

Income from discontinued operations available for common unitholders
0.01

 
0.09

Net income available for common unitholders
$
0.15

 
$
0.23

__________
(1)
There were 0.5 million and 0.6 million options outstanding during the three months ended March 31, 2013 and 2012, 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 where dividends on such restricted stock are non-forfeitable.
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,
 
2013
 
2012
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
17,535

 
$
14,908

Greenville, SC
3,229

 
3,503

Kansas City, MO
3,970

 
3,602

Memphis, TN
9,383

 
9,256

Nashville, TN
14,076

 
13,862

Orlando, FL
2,222

 
2,158

Piedmont Triad, NC
6,891

 
5,079

Pittsburgh, PA
13,693

 
9,084

Raleigh, NC
20,668

 
19,775

Richmond, VA
11,777

 
11,507

Tampa, FL
18,029

 
17,133

Total Office Segment
121,473

 
109,867

Industrial:
 
 
 
Atlanta, GA
2,968

 
2,941

Piedmont Triad, NC
3,123

 
3,164

Total Industrial Segment
6,091

 
6,105

Retail:
 
 
 
Kansas City, MO
9,466

 
8,922

Total Retail Segment
9,466

 
8,922

Total Rental and Other Revenues
$
137,030

 
$
124,894


14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2013
 
2012
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
11,170

 
$
9,728

Greenville, SC
1,889

 
2,132

Kansas City, MO
2,564

 
2,332

Memphis, TN
5,632

 
5,555

Nashville, TN
9,690

 
9,652

Orlando, FL
1,079

 
1,064

Piedmont Triad, NC
4,356

 
3,232

Pittsburgh, PA
7,423

 
4,280

Raleigh, NC
14,631

 
13,959

Richmond, VA
8,116

 
7,880

Tampa, FL
11,503

 
10,835

Total Office Segment
78,053

 
70,649

Industrial:
 
 
 
Atlanta, GA
2,186

 
2,156

Piedmont Triad, NC
2,246

 
2,287

Total Industrial Segment
4,432

 
4,443

Retail:
 
 
 
Kansas City, MO
5,623

 
5,533

Total Retail Segment
5,623

 
5,533

Residential:
 
 
 
Raleigh, NC

 
(87
)
Total Residential Segment

 
(87
)
Corporate and other (2)
(19
)
 
(22
)
Total Net Operating Income
88,089

 
80,516

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(42,144
)
 
(36,983
)
Impairments of real estate assets
(415
)
 

General and administrative expenses
(10,582
)
 
(9,673
)
Interest expense
(23,868
)
 
(24,677
)
Other income
1,619

 
2,230

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of
unconsolidated affiliates
$
12,699

 
$
11,413

__________
(1)
Net of discontinued operations.
(2)
Negative NOI with no corresponding revenues represents expensed real estate taxes and other carrying costs associated with land held for development that is currently zoned for the respective product type.
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,
 
2013
 
2012
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
17,535

 
$
14,908

Greenville, SC
3,229

 
3,503

Kansas City, MO
3,970

 
3,602

Memphis, TN
9,383

 
9,256

Nashville, TN
14,076

 
13,862

Orlando, FL
2,222

 
2,158

Piedmont Triad, NC
6,891

 
5,079

Pittsburgh, PA
13,693

 
9,084

Raleigh, NC
20,668

 
19,775

Richmond, VA
11,777

 
11,507

Tampa, FL
18,029

 
17,133

Total Office Segment
121,473

 
109,867

Industrial:
 
 
 
Atlanta, GA
2,968

 
2,941

Piedmont Triad, NC
3,123

 
3,164

Total Industrial Segment
6,091

 
6,105

Retail:
 
 
 
Kansas City, MO
9,466

 
8,922

Total Retail Segment
9,466

 
8,922

Total Rental and Other Revenues
$
137,030

 
$
124,894



14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2013
 
2012
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
11,167

 
$
9,735

Greenville, SC
1,888

 
2,134

Kansas City, MO
2,563

 
2,334

Memphis, TN
5,630

 
5,559

Nashville, TN
9,687

 
9,659

Orlando, FL
1,079

 
1,065

Piedmont Triad, NC
4,355

 
3,234

Pittsburgh, PA
7,421

 
4,284

Raleigh, NC
14,627

 
13,970

Richmond, VA
8,114

 
7,886

Tampa, FL
11,500

 
10,843

Total Office Segment
78,031

 
70,703

Industrial:
 
 
 
Atlanta, GA
2,185

 
2,158

Piedmont Triad, NC
2,245

 
2,289

Total Industrial Segment
4,430

 
4,447

Retail:
 
 
 
Kansas City, MO
5,621

 
5,537

Total Retail Segment
5,621

 
5,537

Residential:
 
 
 
Raleigh, NC

 
(87
)
Total Residential Segment

 
(87
)
Corporate and other (2)
(19
)
 
(22
)
Total Net Operating Income
88,063

 
80,578

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(42,144
)
 
(36,983
)
Impairments of real estate assets
(415
)
 

General and administrative expenses
(10,556
)
 
(9,735
)
Interest expense
(23,868
)
 
(24,677
)
Other income
1,619

 
2,230

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of
unconsolidated affiliates
$
12,699

 
$
11,413

__________
(1)
Net of discontinued operations.
(2)
Negative NOI with no corresponding revenues represents expensed real estate taxes and other carrying costs associated with land held for development that is currently zoned for the respective product type.
Subsequent Events
Subsequent Events

On April 15, 2013, we sold five industrial properties in Atlanta, GA for a sale price of $4.5 million (after $0.1 million in closing credits to buyer for free rent) and expect to record a gain on disposition of discontinued operations of less than $0.1 million.

On April 17, 2013, our DLF I joint venture sold an office property to an unrelated third party for a sale price of $6.0 million and expects to record a gain on disposition of discontinued operations of less than $0.1 million. We expect to record less than $0.1 million as our share of this gain through equity in earnings of unconsolidated affiliates.

On April 24, 2013, we sold six industrial properties and a land parcel in a single transaction in Atlanta, GA for a sale price of $38.7 million (before $1.8 million in closing credits to buyer for unfunded tenant improvements and after $1.3 million in closing credits to buyer for free rent) and expect to record a gain on disposition of discontinued operations of $13.2 million.
Subsequent Events

On April 15, 2013, we sold five industrial properties in Atlanta, GA for a sale price of $4.5 million (after $0.1 million in closing credits to buyer for free rent) and expect to record a gain on disposition of discontinued operations of less than $0.1 million.

On April 17, 2013, our DLF I joint venture sold an office property to an unrelated third party for a sale price of $6.0 million and expects to record a gain on disposition of discontinued operations of less than $0.1 million. We expect to record less than $0.1 million as our share of this gain through equity in earnings of unconsolidated affiliates.

On April 24, 2013, we sold six industrial properties and a land parcel in a single transaction in Atlanta, GA for a sale price of $38.7 million (before $1.8 million in closing credits to buyer for unfunded tenant improvements and after $1.3 million in closing credits to buyer for free rent) and expect to record a gain on disposition of discontinued operations of $13.2 million.
Description of Business and Significant Accounting Policies Significant Accounting Policies (Policies)
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.
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)
The following table sets forth our mortgages and notes receivable:

 
March 31,
2013
 
December 31,
2012
Seller financing (first mortgages)
$
15,853

 
$
15,853

Less allowance

 

 
15,853

 
15,853

Mortgage receivable
8,648

 
8,648

Less allowance

 

 
8,648

 
8,648

Promissory notes
1,408

 
1,153

Less allowance
(437
)
 
(182
)
 
971

 
971

Mortgages and notes receivable, net
$
25,472

 
$
25,472

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

 
Three Months Ended March 31,
 
2013
 
2012
Beginning notes receivable allowance
$
182

 
$
61

Recoveries/write-offs/other
255

 
61

Total notes receivable allowance
$
437

 
$
122

The following table sets forth our mortgages and notes receivable:

 
March 31,
2013
 
December 31,
2012
Seller financing (first mortgages)
$
15,853

 
$
15,853

Less allowance

 

 
15,853

 
15,853

Mortgage receivable
8,648

 
8,648

Less allowance

 

 
8,648

 
8,648

Promissory notes
1,408

 
1,153

Less allowance
(437
)
 
(182
)
 
971

 
971

Mortgages and notes receivable, net
$
25,472

 
$
25,472

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

 
Three Months Ended March 31,
 
2013
 
2012
Beginning notes receivable allowance
$
182

 
$
61

Recoveries/write-offs/other
255

 
61

Total notes receivable allowance
$
437

 
$
122

Investments In and Advances To Affiliates (Tables)
We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financing policies. The following table sets forth combined summarized financial information for our unconsolidated affiliates:

 
Three Months Ended March 31,
 
2013
 
2012
Income Statements:
 
 
 
Rental and other revenues
$
23,516

 
$
24,820

Expenses:
 
 
 
Rental property and other expenses
11,209

 
11,416

Depreciation and amortization
6,146

 
6,565

Impairments of real estate assets
4,790

 
7,180

Interest expense
4,739

 
5,830

Total expenses
26,884

 
30,991

Loss before disposition of properties
(3,368
)
 
(6,171
)
Gains on disposition of properties
24

 

Net loss
$
(3,344
)
 
$
(6,171
)
Our share of:
 
 
 
Depreciation and amortization
$
2,015

 
$
2,098

Impairments of real estate assets
$
1,020

 
$
1,002

Interest expense
$
1,752

 
$
1,980

Gains on disposition of depreciable properties
$
421

 
$

Net income/(loss)
$
4

 
$
(795
)
 
 
 
 
Our share of net income/(loss)
$
4

 
$
(795
)
Adjustments for management and other fees
432

 
633

Equity in earnings/(losses) of unconsolidated affiliates
$
436

 
$
(162
)
We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financing policies. The following table sets forth combined summarized financial information for our unconsolidated affiliates:

 
Three Months Ended March 31,
 
2013
 
2012
Income Statements:
 
 
 
Rental and other revenues
$
22,479

 
$
23,797

Expenses:
 
 
 
Rental property and other expenses
10,608

 
10,801

Depreciation and amortization
5,835

 
6,254

Impairments of real estate assets
4,790

 
7,180

Interest expense
4,578

 
5,663

Total expenses
25,811

 
29,898

Loss before disposition of properties
(3,332
)
 
(6,101
)
Gains on disposition of properties
24

 

Net loss
$
(3,308
)
 
$
(6,101
)
Our share of:
 
 
 
Depreciation and amortization
$
1,976

 
$
2,059

Impairments of real estate assets
$
1,020

 
$
1,002

Interest expense
$
1,732

 
$
1,959

Gains on disposition of depreciable properties
$
421

 
$

Net income/(loss)
$
8

 
$
(786
)
 
 
 
 
Our share of net income/(loss)
$
8

 
$
(786
)
Adjustments for management and other fees
375

 
626

Equity in earnings/(losses) of unconsolidated affiliates
$
383

 
$
(160
)
Intangible Assets and Below Market Lease Liabilities (Tables)
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Deferred financing costs
$
21,426

 
$
21,759

Less accumulated amortization
(8,648
)
 
(7,862
)
 
12,778

 
13,897

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
237,862

 
224,554

Less accumulated amortization
(73,824
)
 
(69,357
)
 
164,038

 
155,197

Deferred financing and leasing costs, net
$
176,816

 
$
169,094

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
37,538

 
$
37,019

Less accumulated amortization
(4,319
)
 
(3,383
)
 
$
33,219

 
$
33,636

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended March 31,
 
2013
 
2012
Amortization of deferred financing costs
$
949

 
$
902

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
8,359

 
$
6,440

Amortization of lease incentives (in rental and other revenues)
$
383

 
$
343

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
466

 
$
270

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
137

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,122
)
 
$
(544
)

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 Intangible Assets (in Rental Property and Other Expenses)
 
Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2013
 
$
2,768

 
$
24,305

 
$
965

 
$
1,372

 
$
416

 
$
(3,087
)
2014
 
3,249

 
28,125

 
1,154

 
1,537

 
553

 
(4,009
)
2015
 
2,614

 
22,845

 
926

 
1,252

 
553

 
(3,746
)
2016
 
1,515

 
18,485

 
734

 
1,023

 
553

 
(3,443
)
2017
 
1,226

 
15,591

 
660

 
908

 
553

 
(3,208
)
Thereafter
 
1,406

 
36,617

 
2,105

 
1,164

 
1,642

 
(15,726
)
 
 
$
12,778

 
$
145,968

 
$
6,544

 
$
7,256

 
$
4,270

 
$
(33,219
)
Weighted average remaining amortization periods as of March 31, 2013 (in years)
 
5.0

 
6.6

 
7.6

 
5.4

 
7.7

 
9.8

The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2013 acquisition activity:

 
 
Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues)
 
Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)
 
Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)
Amount recorded from acquisition activity
 
$
2,777

 
$
11,561

 
$
(1,329
)
Weighted average remaining amortization periods (in years)
 
4.9

 
4.8

 
9.3

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Deferred financing costs
$
21,426

 
$
21,759

Less accumulated amortization
(8,648
)
 
(7,862
)
 
12,778

 
13,897

Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)
237,862

 
224,554

Less accumulated amortization
(73,824
)
 
(69,357
)
 
164,038

 
155,197

Deferred financing and leasing costs, net
$
176,816

 
$
169,094

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
37,538

 
$
37,019

Less accumulated amortization
(4,319
)
 
(3,383
)
 
$
33,219

 
$
33,636

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended March 31,
 
2013
 
2012
Amortization of deferred financing costs
$
949

 
$
902

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
8,359

 
$
6,440

Amortization of lease incentives (in rental and other revenues)
$
383

 
$
343

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
466

 
$
270

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
137

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(1,122
)
 
$
(544
)
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 Intangible Assets (in Rental Property and Other Expenses)
 
Amortization
of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2013
 
$
2,768

 
$
24,305

 
$
965

 
$
1,372

 
$
416

 
$
(3,087
)
2014
 
3,249

 
28,125

 
1,154

 
1,537

 
553

 
(4,009
)
2015
 
2,614

 
22,845

 
926

 
1,252

 
553

 
(3,746
)
2016
 
1,515

 
18,485

 
734

 
1,023

 
553

 
(3,443
)
2017
 
1,226

 
15,591

 
660

 
908

 
553

 
(3,208
)
Thereafter
 
1,406

 
36,617

 
2,105

 
1,164

 
1,642

 
(15,726
)
 
 
$
12,778

 
$
145,968

 
$
6,544

 
$
7,256

 
$
4,270

 
$
(33,219
)
Weighted average remaining amortization periods as of March 31, 2013 (in years)
 
5.0

 
6.6

 
7.6

 
5.4

 
7.7

 
9.8

The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2013 acquisition activity:

 
 
Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues)
 
Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)
 
Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)
Amount recorded from acquisition activity
 
$
2,777

 
$
11,561

 
$
(1,329
)
Weighted average remaining amortization periods (in years)
 
4.9

 
4.8

 
9.3

Mortgages and Notes Payable (Tables)
The following table sets forth our mortgages and notes payable:

 
March 31,
2013
 
December 31,
2012
Secured indebtedness
$
547,150

 
$
549,607

Unsecured indebtedness
1,349,150

 
1,309,555

Total mortgages and notes payable
$
1,896,300

 
$
1,859,162

The following table sets forth our mortgages and notes payable:

 
March 31,
2013
 
December 31,
2012
Secured indebtedness
$
547,150

 
$
549,607

Unsecured indebtedness
1,349,150

 
1,309,555

Total mortgages and notes payable
$
1,896,300

 
$
1,859,162

Derivative Financial Instruments (Tables)
The following table sets forth the fair value of our liability derivatives:

 
March 31,
2013
 
December 31,
2012
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
8,261

 
$
9,369

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended March 31,
 
2013
 
2012
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gains recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
280

 
$
1,104

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
788

 
$
(33
)
The following table sets forth the fair value of our liability derivatives:

 
March 31,
2013
 
December 31,
2012
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
8,261

 
$
9,369

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended March 31,
 
2013
 
2012
Derivatives Designated as Cash Flow Hedges:
 
 
 
Amount of unrealized gains recognized in AOCL on derivatives (effective portion):
 
 
 
Interest rate swaps
$
280

 
$
1,104

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
Interest rate swaps
$
788

 
$
(33
)
Noncontrolling Interests (Tables)
The following table sets forth noncontrolling interests in the Operating Partnership:
 
 
Three Months Ended March 31,
 
2013
 
2012
Beginning noncontrolling interests in the Operating Partnership
$
124,869

 
$
110,655

Adjustment of noncontrolling interests in the Operating Partnership to fair value
23,802

 
14,366

Conversions of Common Units to Common Stock
(351
)
 
(63
)
Net income attributable to noncontrolling interests in the Operating Partnership
581

 
827

Distributions to noncontrolling interests in the Operating Partnership
(1,584
)
 
(1,584
)
Total noncontrolling interests in the Operating Partnership
$
147,317

 
$
124,201

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,
 
2013
 
2012
Net income available for common stockholders
$
12,349

 
$
16,694

Increase in additional paid in capital from conversions of Common Units to Common Stock
351

 
63

Change from net income available for common stockholders and transfers from noncontrolling interests
$
12,700

 
$
16,757

Disclosure About Fair Value of Financial Instruments (Tables)
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, 2013
 
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)
$
25,638

 
$

 
$
16,990

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529

 
3,529

 

 

Impaired real estate assets
9,002

 

 

 
9,002

Tax increment financing bond (in prepaid expenses and other assets)
14,324

 

 

 
14,324

Total Assets
$
52,493

 
$
3,529

 
$
16,990

 
$
31,974

Noncontrolling Interests in the Operating Partnership
$
147,317

 
$
147,317

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,024,509

 
$

 
$
2,024,509

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261

 

 
8,261

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529

 
3,529

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375

 

 

 
375

Financing obligations, at fair value (1)
23,986

 

 

 
23,986

Total Liabilities
$
2,060,660

 
$
3,529

 
$
2,032,770

 
$
24,361

 
 
 
 
Level 1
 
Level 2
 
Level 3
 
December 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)
$
24,725

 
$

 
$
16,077

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,354

 
3,354

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,496

 

 

 
14,496

Total Assets
$
42,575

 
$
3,354

 
$
16,077

 
$
23,144

Noncontrolling Interests in the Operating Partnership
$
124,869

 
$
124,869

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,987,364

 
$

 
$
1,987,364

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
9,369

 

 
9,369

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,354

 
3,354

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
563

 

 

 
563

Financing obligations, at fair value (1)
23,252

 

 

 
23,252

Total Liabilities
$
2,023,902

 
$
3,354

 
$
1,996,733

 
$
23,815


__________
 
9.
Disclosure About Fair Value of Financial Instruments - Continued

(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2013 and December 31, 2012.

The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

 
Three Months Ended March 31,
 
2013
 
2012
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,496

 
$
14,788

Principal repayment
(562
)
 

Unrealized gains (in AOCL)
390

 
287

Ending balance
$
14,324

 
$
15,075

Liability:
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
Beginning balance
$
563

 
$

Unrealized gains (in general and administrative expenses)
(188
)
 

Ending balance
$
375

 
$

The following table sets forth quantitative information about the unobservable inputs of our Level 3 assets and liability, which are recorded at fair value on our Consolidated Balance Sheets:

 
Fair Value at
March 31, 2013
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Assets:
 
 
 
 
 
 
 
Tax increment financing bond
$
14,324

 
Income approach
 
Discount rate
 
10.4%
Impaired real estate assets
$
9,002

 
Income approach
 
Capitalization rate
 
8.5%-9.5%
 
 
 
 
 
Discount rate
 
9.0%-10.0%
Liability:
 
 
 
 
 
 
 
Contingent consideration to acquire real estate assets
$
375

 
Income approach
 
Payout percentage
 
50.0%
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, 2013
 
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)
$
25,638

 
$

 
$
16,990

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529

 
3,529

 

 

Impaired real estate assets
9,002

 

 

 
9,002

Tax increment financing bond (in prepaid expenses and other assets)
14,324

 

 

 
14,324

Total Assets
$
52,493

 
$
3,529

 
$
16,990

 
$
31,974

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
2,024,509

 
$

 
$
2,024,509

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261

 

 
8,261

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529

 
3,529

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375

 

 

 
375

Financing obligations, at fair value (1)
23,986

 

 

 
23,986

Total Liabilities
$
2,060,660

 
$
3,529

 
$
2,032,770

 
$
24,361



9.
Disclosure About Fair Value of Financial Instruments - Continued
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
December 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)
$
24,725

 
$

 
$
16,077

 
$
8,648

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,354

 
3,354

 

 

Tax increment financing bond (in prepaid expenses and other assets)
14,496

 

 

 
14,496

Total Assets
$
42,575

 
$
3,354

 
$
16,077

 
$
23,144

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,987,364

 
$

 
$
1,987,364

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
9,369

 

 
9,369

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,354

 
3,354

 

 

Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
563

 

 

 
563

Financing obligations, at fair value (1)
23,252

 

 

 
23,252

Total Liabilities
$
2,023,902

 
$
3,354

 
$
1,996,733

 
$
23,815

__________
(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2013 and December 31, 2012.
The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:
 
 
Three Months Ended March 31,
 
2013
 
2012
Asset:
 
 
 
Tax Increment Financing Bond:
 
 
 
Beginning balance
$
14,496

 
$
14,788

Principal repayment
(562
)
 

Unrealized gains (in AOCL)
390

 
287

Ending balance
$
14,324

 
$
15,075

Liability:
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
Beginning balance
$
563

 
$

Unrealized gains (in general and administrative expenses)
(188
)
 

Ending balance
$
375

 
$

The following table sets forth quantitative information about the unobservable inputs of our Level 3 assets and liability, which are recorded at fair value on our Consolidated Balance Sheets:
 
 
Fair Value at
March 31, 2013
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Assets:
 
 
 
 
 
 
 
Tax increment financing bond
$
14,324

 
Income approach
 
Discount rate
 
10.4%
Impaired real estate assets
$
9,002

 
Income approach
 
Capitalization rate
 
8.5%-9.5%
 
 
 
 
 
Discount rate
 
9.0%-10.0%
Liability:
 
 
 
 
 
 
 
Contingent consideration to acquire real estate assets
$
375

 
Income approach
 
Payout percentage
 
50.0%
Accumulated Other Comprehensive Loss (Tables)
The following table sets forth the components of AOCL:

 
Three Months Ended March 31,
 
2013
 
2012
Tax increment financing bond:
 
 
 
Beginning balance
$
(1,898
)
 
$
(2,309
)
Unrealized gains on tax increment financing bond
390

 
287

Ending balance
(1,508
)
 
(2,022
)
Cash flow hedges:
 
 
 
Beginning balance
(10,730
)
 
(3,425
)
Unrealized gains on cash flow hedges
280

 
1,104

Amortization of cash flow hedges (1)
788

 
(33
)
Ending balance
(9,662
)
 
(2,354
)
Total accumulated other comprehensive loss
$
(11,170
)
 
$
(4,376
)
__________
(1)    Amounts reclassified out of AOCL into contractual interest expense.
The following table sets forth the components of AOCL:

 
Three Months Ended March 31,
 
2013
 
2012
Tax increment financing bond:
 
 
 
Beginning balance
$
(1,898
)
 
$
(2,309
)
Unrealized gains on tax increment financing bond
390

 
287

Ending balance
(1,508
)
 
(2,022
)
Cash flow hedges:
 
 
 
Beginning balance
(10,730
)
 
(3,425
)
Unrealized gains on cash flow hedges
280

 
1,104

Amortization of cash flow hedges (1)
788

 
(33
)
Ending balance
(9,662
)
 
(2,354
)
Total accumulated other comprehensive loss
$
(11,170
)
 
$
(4,376
)
__________
(1)    Amounts reclassified out of AOCL into contractual interest expense.
Discontinued Operations (Tables)
The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended March 31,
 
2013
 
2012
Rental and other revenues
$
345

 
$
5,478

Operating expenses:
 
 
 
Rental property and other expenses
103

 
1,939

Depreciation and amortization
148

 
1,532

Total operating expenses
251

 
3,471

Interest expense

 
125

Income from discontinued operations
94

 
1,882

Impairments of real estate assets held for sale
(713
)
 

Net gains on disposition of discontinued operations
1,244

 
5,134

Total discontinued operations
$
625

 
$
7,016


The following table sets forth the major classes of assets of our real estate and other assets, net, held for sale:

 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Land
$
658

 
$
2,482

Buildings and tenant improvements
6,690

 
23,106

Less-accumulated depreciation
(2,991
)
 
(8,017
)
Net real estate assets
4,357

 
17,571

Accrued straight-line rents receivable, net
26

 
408

Deferred leasing costs, net
11

 
929

Prepaid expenses and other assets

 
30

Real estate and other assets, net, held for sale
$
4,394

 
$
18,938

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

 
Three Months Ended March 31,
 
2013
 
2012
Rental and other revenues
$
345

 
$
5,478

Operating expenses:

 

Rental property and other expenses
103

 
1,939

Depreciation and amortization
148

 
1,532

Total operating expenses
251

 
3,471

Interest expense

 
125

Income from discontinued operations
94

 
1,882

Impairments of real estate assets held for sale
(713
)
 

Net gains on disposition of discontinued operations
1,244

 
5,134

Total discontinued operations
$
625

 
$
7,016

The following table sets forth the major classes of assets of our real estate and other assets, net, held for sale:

 
March 31,
2013
 
December 31,
2012
Assets:
 
 
 
Land
$
658

 
$
2,482

Buildings and tenant improvements
6,690

 
23,106

Less-accumulated depreciation
(2,991
)
 
(8,017
)
Net real estate assets
4,357

 
17,571

Accrued straight-line rents receivable, net
26

 
408

Deferred leasing costs, net
11

 
929

Prepaid expenses and other assets

 
30

Real estate and other assets, net, held for sale
$
4,394

 
$
18,938

Earnings Per Share (Tables)
The following table sets forth the computation of basic and diluted earnings per share:

 
Three Months Ended March 31,
 
2013
 
2012
Earnings per Common Share - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,135

 
$
11,316

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(553
)
 
(483
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Dividends on Preferred Stock
(627
)
 
(627
)
Income from continuing operations available for common stockholders
11,752

 
10,022

Income from discontinued operations
625

 
7,016

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(28
)
 
(344
)
Income from discontinued operations available for common stockholders
597

 
6,672

Net income available for common stockholders
$
12,349

 
$
16,694

Denominator:
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
81,029

 
72,836

Earnings per Common Share - basic:
 
 
 
Income from continuing operations available for common stockholders
$
0.14

 
$
0.14

Income from discontinued operations available for common stockholders
0.01

 
0.09

Net income available for common stockholders
$
0.15

 
$
0.23

Earnings per Common Share - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,135

 
$
11,316

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Dividends on Preferred Stock
(627
)
 
(627
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,305

 
10,505

Income from discontinued operations available for common stockholders
625

 
7,016

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
12,930

 
$
17,521

Denominator:
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
81,029

 
72,836

Add:
 
 
 
Stock options using the treasury method
108

 
132

Noncontrolling interests Common Units
3,725

 
3,728

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
84,862

 
76,696

Earnings per Common Share - diluted:
 
 
 
Income from continuing operations available for common stockholders
$
0.14

 
$
0.14

Income from discontinued operations available for common stockholders
0.01

 
0.09

Net income available for common stockholders
$
0.15

 
$
0.23

__________
(1)
There were 0.5 million and 0.6 million options outstanding during the three months ended March 31, 2013 and 2012, 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 where dividends on such restricted stock are non-forfeitable.
The following table sets forth the computation of basic and diluted earnings per unit:

 
Three Months Ended March 31,
 
2013
 
2012
Earnings per Common Unit - basic:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,082

 
$
11,318

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Distributions on Preferred Units
(627
)
 
(627
)
Income from continuing operations available for common unitholders
12,252

 
10,507

Income from discontinued operations available for common unitholders
625

 
7,016

Net income available for common unitholders
$
12,877

 
$
17,523

Denominator:
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
84,345

 
76,155

Earnings per Common Unit - basic:
 
 
 
Income from continuing operations available for common unitholders
$
0.14

 
$
0.14

Income from discontinued operations available for common unitholders
0.01

 
0.09

Net income available for common unitholders
$
0.15

 
$
0.23

Earnings per Common Unit - diluted:
 
 
 
Numerator:
 
 
 
Income from continuing operations
$
13,082

 
$
11,318

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203
)
 
(184
)
Distributions on Preferred Units
(627
)
 
(627
)
Income from continuing operations available for common unitholders
12,252

 
10,507

Income from discontinued operations available for common unitholders
625

 
7,016

Net income available for common unitholders
$
12,877

 
$
17,523

Denominator:
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
84,345

 
76,155

Add:
 
 
 
Stock options using the treasury method
108

 
132

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
84,453

 
76,287

Earnings per Common Unit - diluted:
 
 
 
Income from continuing operations available for common unitholders
$
0.14

 
$
0.14

Income from discontinued operations available for common unitholders
0.01

 
0.09

Net income available for common unitholders
$
0.15

 
$
0.23

__________
(1)
There were 0.5 million and 0.6 million options outstanding during the three months ended March 31, 2013 and 2012, 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 where dividends on such restricted stock are non-forfeitable.
Segment Information (Tables)
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,
 
2013
 
2012
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
17,535

 
$
14,908

Greenville, SC
3,229

 
3,503

Kansas City, MO
3,970

 
3,602

Memphis, TN
9,383

 
9,256

Nashville, TN
14,076

 
13,862

Orlando, FL
2,222

 
2,158

Piedmont Triad, NC
6,891

 
5,079

Pittsburgh, PA
13,693

 
9,084

Raleigh, NC
20,668

 
19,775

Richmond, VA
11,777

 
11,507

Tampa, FL
18,029

 
17,133

Total Office Segment
121,473

 
109,867

Industrial:
 
 
 
Atlanta, GA
2,968

 
2,941

Piedmont Triad, NC
3,123

 
3,164

Total Industrial Segment
6,091

 
6,105

Retail:
 
 
 
Kansas City, MO
9,466

 
8,922

Total Retail Segment
9,466

 
8,922

Total Rental and Other Revenues
$
137,030

 
$
124,894


14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2013
 
2012
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
11,170

 
$
9,728

Greenville, SC
1,889

 
2,132

Kansas City, MO
2,564

 
2,332

Memphis, TN
5,632

 
5,555

Nashville, TN
9,690

 
9,652

Orlando, FL
1,079

 
1,064

Piedmont Triad, NC
4,356

 
3,232

Pittsburgh, PA
7,423

 
4,280

Raleigh, NC
14,631

 
13,959

Richmond, VA
8,116

 
7,880

Tampa, FL
11,503

 
10,835

Total Office Segment
78,053

 
70,649

Industrial:
 
 
 
Atlanta, GA
2,186

 
2,156

Piedmont Triad, NC
2,246

 
2,287

Total Industrial Segment
4,432

 
4,443

Retail:
 
 
 
Kansas City, MO
5,623

 
5,533

Total Retail Segment
5,623

 
5,533

Residential:
 
 
 
Raleigh, NC

 
(87
)
Total Residential Segment

 
(87
)
Corporate and other (2)
(19
)
 
(22
)
Total Net Operating Income
88,089

 
80,516

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(42,144
)
 
(36,983
)
Impairments of real estate assets
(415
)
 

General and administrative expenses
(10,582
)
 
(9,673
)
Interest expense
(23,868
)
 
(24,677
)
Other income
1,619

 
2,230

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of
unconsolidated affiliates
$
12,699

 
$
11,413

__________
(1)
Net of discontinued operations.
(2)
Negative NOI with no corresponding revenues represents expensed real estate taxes and other carrying costs associated with land held for development that is currently zoned for the respective product type.
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,
 
2013
 
2012
Rental and Other Revenues: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
17,535

 
$
14,908

Greenville, SC
3,229

 
3,503

Kansas City, MO
3,970

 
3,602

Memphis, TN
9,383

 
9,256

Nashville, TN
14,076

 
13,862

Orlando, FL
2,222

 
2,158

Piedmont Triad, NC
6,891

 
5,079

Pittsburgh, PA
13,693

 
9,084

Raleigh, NC
20,668

 
19,775

Richmond, VA
11,777

 
11,507

Tampa, FL
18,029

 
17,133

Total Office Segment
121,473

 
109,867

Industrial:
 
 
 
Atlanta, GA
2,968

 
2,941

Piedmont Triad, NC
3,123

 
3,164

Total Industrial Segment
6,091

 
6,105

Retail:
 
 
 
Kansas City, MO
9,466

 
8,922

Total Retail Segment
9,466

 
8,922

Total Rental and Other Revenues
$
137,030

 
$
124,894



14.
Segment Information - Continued

 
Three Months Ended March 31,
 
2013
 
2012
Net Operating Income: (1)
 
 
 
Office:
 
 
 
Atlanta, GA
$
11,167

 
$
9,735

Greenville, SC
1,888

 
2,134

Kansas City, MO
2,563

 
2,334

Memphis, TN
5,630

 
5,559

Nashville, TN
9,687

 
9,659

Orlando, FL
1,079

 
1,065

Piedmont Triad, NC
4,355

 
3,234

Pittsburgh, PA
7,421

 
4,284

Raleigh, NC
14,627

 
13,970

Richmond, VA
8,114

 
7,886

Tampa, FL
11,500

 
10,843

Total Office Segment
78,031

 
70,703

Industrial:
 
 
 
Atlanta, GA
2,185

 
2,158

Piedmont Triad, NC
2,245

 
2,289

Total Industrial Segment
4,430

 
4,447

Retail:
 
 
 
Kansas City, MO
5,621

 
5,537

Total Retail Segment
5,621

 
5,537

Residential:
 
 
 
Raleigh, NC

 
(87
)
Total Residential Segment

 
(87
)
Corporate and other (2)
(19
)
 
(22
)
Total Net Operating Income
88,063

 
80,578

Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
 
Depreciation and amortization
(42,144
)
 
(36,983
)
Impairments of real estate assets
(415
)
 

General and administrative expenses
(10,556
)
 
(9,735
)
Interest expense
(23,868
)
 
(24,677
)
Other income
1,619

 
2,230

Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of
unconsolidated affiliates
$
12,699

 
$
11,413

__________
(1)
Net of discontinued operations.
(2)
Negative NOI with no corresponding revenues represents expensed real estate taxes and other carrying costs associated with land held for development that is currently zoned for the respective product type.
Description of Business and Significant Accounting Policies (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
executives
acre
property
sqft
Dec. 31, 2012
Description of Business and Significant Accounting Policies [Line Items]
 
 
In-service office, industrial and retail properties (in units)
303 
 
Square footage of commercial property (in sq feet)
30,100,000 
 
Undeveloped land suitable for future development (in acres)
649 
 
Undeveloped land considered core holdings (in acres)
566 
 
Office properties under/planned for development (in units)
 
Percentage of equity interest in joint ventures, maximum (in hundredths)
50.00% 
 
Number of real estate properties not wholly owned (in units)
31 
 
Area of undeveloped land not wholly owned (in acres)
11 
 
Percentage of equity interest in joint venture not owned by Operating Partership
12.50% 
 
Square footage of real estate property not owned by Operating Partnership (in sq feet)
261,000 
 
Common Units of partnership owned (in shares)
81,700,000 
 
Percentage of ownership of Common Units
95.70% 
95.60% 
Number of directors of the Company who are also limited partners
 
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)
 
Common Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Number of trading days preceding Redemption Notice Date (in days)
10 days 
 
Common Units redeemed for a like number of common shares of stock (in shares)
10,071 
 
Number of Common Stock sold at the market during period (in shares)
1,299,791 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 35.95 
 
Net proceeds of Common Stock sold at the market during period
$ 46.0 
 
Highwoods Realty Limited Partnership [Member]
 
 
Description of Business and Significant Accounting Policies [Line Items]
 
 
In-service office, industrial and retail properties (in units)
303 
 
Square footage of commercial property (in sq feet)
30,100,000 
 
Undeveloped land suitable for future development (in acres)
649 
 
Undeveloped land considered core holdings (in acres)
566 
 
Office properties under/planned for development (in units)
 
Percentage of equity interest in joint ventures, maximum (in hundredths)
50.00% 
 
Number of real estate properties not wholly owned (in units)
31 
 
Area of undeveloped land not wholly owned (in acres)
11 
 
Percentage of equity interest in joint venture not owned by Operating Partership
12.50% 
 
Square footage of real estate property not owned by Operating Partnership (in sq feet)
261,000 
 
Common Units of partnership owned (in shares)
81,700,000 
 
Percentage of ownership of Common Units
95.70% 
95.60% 
Number of directors of the Company who are also limited partners
 
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)
 
Common Stock, par value (in dollars per share)
$ 0.01 
 
Number of trading days preceding Redemption Notice Date (in days)
10 days 
 
Common Units redeemed for a like number of common shares of stock (in shares)
10,071 
 
Number of Common Stock sold at the market during period (in shares)
1,299,791 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 35.95 
 
Net proceeds of Common Stock sold at the market during period
$ 46.0 
 
Real Estate Assets (Details) (USD $)
3 Months Ended
Mar. 31, 2013
acre
Mar. 31, 2012
Acquisitions [Abstract]
 
 
Acquisition development land (in acres)
649 
 
Acquisition-related costs
$ 500,000 
 
Dispositions [Abstract]
 
 
Gain/(loss) on disposition of discontinued operations
1,244,000 
5,134,000 
Impairments [Abstract]
 
 
Impairments of real estate assets
415,000 
Impairments of real estate assets held for sale
713,000 
Tampa, FL Office Properties Acquisition (3/2013) [Member]
 
 
Acquisitions [Abstract]
 
 
Number of office properties acquired
 
Rentable square feet of acquisition (in sq. ft)
372,000 
 
Acquisition purchase price
52,500,000 
 
Greensboro, NC Office Properties Acquisition (3/2013) [Member]
 
 
Acquisitions [Abstract]
 
 
Number of office properties acquired
 
Rentable square feet of acquisition (in sq. ft)
195,000 
 
Acquisition purchase price
30,800,000 
 
Memphis, TN Development Land Acquisition (3/2013) [Member]
 
 
Acquisitions [Abstract]
 
 
Acquisition development land (in acres)
 
Acquisition purchase price
4,800,000 
 
Orlando, FL Office Properties Disposition (3/2013) [Member]
 
 
Dispositions [Abstract]
 
 
Number of office properties sold
 
Proceeds received from sale of real estate
14,600,000 
 
Closing credits for unfunded tenant improvements
800,000 
 
Gain/(loss) on disposition of discontinued operations
(300,000)
 
Jackson, MS Office Property Disposition (9/2012) [Member]
 
 
Dispositions [Abstract]
 
 
Gain/(loss) on disposition of discontinued operations
1,500,000 
 
Atlanta, GA Industrial Properties (3/2013) [Member]
 
 
Impairments [Abstract]
 
 
Number of impaired properties
 
Impairments of real estate assets
400,000 
 
Atlanta, GA Industrial Properties Held For Sale (3/2013) [Member]
 
 
Impairments [Abstract]
 
 
Number of impaired properties
 
Impairments of real estate assets held for sale
700,000 
 
Highwoods Realty Limited Partnership [Member]
 
 
Acquisitions [Abstract]
 
 
Acquisition development land (in acres)
649 
 
Acquisition-related costs
500,000 
 
Dispositions [Abstract]
 
 
Gain/(loss) on disposition of discontinued operations
1,244,000 
5,134,000 
Impairments [Abstract]
 
 
Impairments of real estate assets
415,000 
Impairments of real estate assets held for sale
713,000 
Highwoods Realty Limited Partnership [Member] |
Tampa, FL Office Properties Acquisition (3/2013) [Member]
 
 
Acquisitions [Abstract]
 
 
Number of office properties acquired
 
Rentable square feet of acquisition (in sq. ft)
372,000 
 
Acquisition purchase price
52,500,000 
 
Highwoods Realty Limited Partnership [Member] |
Greensboro, NC Office Properties Acquisition (3/2013) [Member]
 
 
Acquisitions [Abstract]
 
 
Number of office properties acquired
 
Rentable square feet of acquisition (in sq. ft)
195,000 
 
Acquisition purchase price
30,800,000 
 
Highwoods Realty Limited Partnership [Member] |
Memphis, TN Development Land Acquisition (3/2013) [Member]
 
 
Acquisitions [Abstract]
 
 
Acquisition development land (in acres)
 
Acquisition purchase price
4,800,000 
 
Highwoods Realty Limited Partnership [Member] |
Orlando, FL Office Properties Disposition (3/2013) [Member]
 
 
Dispositions [Abstract]
 
 
Number of office properties sold
 
Proceeds received from sale of real estate
14,600,000 
 
Closing credits for unfunded tenant improvements
800,000 
 
Gain/(loss) on disposition of discontinued operations
(300,000)
 
Highwoods Realty Limited Partnership [Member] |
Jackson, MS Office Property Disposition (9/2012) [Member]
 
 
Dispositions [Abstract]
 
 
Gain/(loss) on disposition of discontinued operations
1,500,000 
 
Highwoods Realty Limited Partnership [Member] |
Atlanta, GA Industrial Properties (3/2013) [Member]
 
 
Impairments [Abstract]
 
 
Number of impaired properties
 
Impairments of real estate assets
400,000 
 
Highwoods Realty Limited Partnership [Member] |
Atlanta, GA Industrial Properties Held For Sale (3/2013) [Member]
 
 
Impairments [Abstract]
 
 
Number of impaired properties
 
Impairments of real estate assets held for sale
$ 700,000 
 
Mortgages and Notes Receivable (Details) (USD $)
3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended
Mar. 31, 2013
acre
Dec. 31, 2012
Mar. 31, 2013
Seller Financing [Member]
transactions
Dec. 31, 2012
Seller Financing [Member]
Mar. 31, 2013
Mortgage Receivable [Member]
Dec. 31, 2012
Mortgage Receivable [Member]
acre
Mar. 31, 2013
Promissory Notes [Member]
Mar. 31, 2012
Promissory Notes [Member]
Dec. 31, 2012
Promissory Notes [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
acre
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Seller Financing [Member]
transactions
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Seller Financing [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Mortgage Receivable [Member]
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Mortgage Receivable [Member]
acre
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Promissory Notes [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Promissory Notes [Member]
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Promissory Notes [Member]
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Financing receivable, gross
 
 
$ 15,853,000 
$ 15,853,000 
$ 8,648,000 
$ 8,648,000 
$ 1,408,000 
 
$ 1,153,000 
 
 
$ 15,853,000 
$ 15,853,000 
$ 8,648,000 
$ 8,648,000 
$ 1,408,000 
 
$ 1,153,000 
Mortgages and notes receivable, allowance
(437,000)
(182,000)
 
(437,000)
(122,000)
 
(437,000)
(182,000)
 
(437,000)
(122,000)
 
Mortgages and notes receivable, net
25,472,000 
25,472,000 
15,853,000 
15,853,000 
8,648,000 
8,648,000 
971,000 
 
971,000 
25,472,000 
25,472,000 
15,853,000 
15,853,000 
8,648,000 
8,648,000 
971,000 
 
971,000 
Financing receivable, gross
 
 
15,853,000 
15,853,000 
8,648,000 
8,648,000 
1,408,000 
 
1,153,000 
 
 
15,853,000 
15,853,000 
8,648,000 
8,648,000 
1,408,000 
 
1,153,000 
Number of transactions with seller financing
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Acquisition of development land (in acres)
 
 
 
 
 
77 
 
 
 
 
 
 
 
 
77 
 
 
 
Acquisition development land (in acres)
649 
 
 
 
 
68 
 
 
 
649 
 
 
 
 
68 
 
 
 
Mortgage receivable maturity date
 
 
 
 
 
Dec. 01, 2015 
 
 
 
 
 
 
 
 
Dec. 01, 2015 
 
 
 
Mortgage receivable current interest rate (in hundredths)
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
5.00% 
 
 
 
Term of optional extension
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
3 years 
 
 
 
Additional loan commitment to third party
 
 
 
 
 
8,400,000 
 
 
 
 
 
 
 
 
8,400,000 
 
 
 
Cumulative funds for future infrastructure disbursed to third party
 
 
 
 
100,000 
 
 
 
 
 
 
 
 
100,000 
 
 
 
 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning notes receivable allowance
(437,000)
(182,000)
 
 
(182,000)
(61,000)
 
(437,000)
(182,000)
 
 
(182,000)
(61,000)
 
Recoveries/write-offs/other
 
 
 
 
 
 
255,000 
61,000 
 
 
 
 
 
 
 
255,000 
61,000 
 
Total notes receivable allowance
$ (437,000)
$ (182,000)
$ 0 
 
$ 0 
$ 0 
$ (437,000)
$ (122,000)
 
$ (437,000)
$ (182,000)
$ 0 
 
$ 0 
$ 0 
$ (437,000)
$ (122,000)
 
Investments In and Advances To Affiliates (Details) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Income Statements:
 
 
Rental and other revenues
$ 23,516,000 
$ 24,820,000 
Expenses:
 
 
Rental property and other expenses
11,209,000 
11,416,000 
Depreciation and amortization
6,146,000 
6,565,000 
Impairments of real estate assets
4,790,000 
7,180,000 
Interest expense
4,739,000 
5,830,000 
Total expenses
26,884,000 
30,991,000 
Loss before disposition of properties
(3,368,000)
(6,171,000)
Gains on disposition of properties
24,000 
Net loss
(3,344,000)
(6,171,000)
Our share of:
 
 
Depreciation and amortization of real estate assets
2,015,000 
2,098,000 
Impairments of real estate assets
1,020,000 
1,002,000 
Interest expense
1,752,000 
1,980,000 
Our share of gains recorded on disposition of property
421,000 
Net income/(loss)
4,000 
(795,000)
Our share of net income/(loss)
4,000 
(795,000)
Adjustments for management and other fees
432,000 
633,000 
Equity in earnings/(losses) of unconsolidated affiliates
436,000 
(162,000)
Percentage of equity interest in joint ventures, maximum (in hundredths)
50.00% 
 
Highwoods DLF 98/29, LLC Joint Venture [Member]
 
 
Expenses:
 
 
Impairments of real estate assets
4,790,000 
 
Our share of:
 
 
Impairments of real estate assets
1,020,000 
 
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
 
 
Expenses:
 
 
Gains on disposition of properties
24,000 
 
Our share of:
 
 
Our share of gains recorded on disposition of property
421,000 
 
Proceeds received from disposition of property
10,100,000 
 
Closing credits for free rent
300,000 
 
Highwoods Realty Limited Partnership [Member]
 
 
Income Statements:
 
 
Rental and other revenues
22,479,000 
23,797,000 
Expenses:
 
 
Rental property and other expenses
10,608,000 
10,801,000 
Depreciation and amortization
5,835,000 
6,254,000 
Impairments of real estate assets
4,790,000 
7,180,000 
Interest expense
4,578,000 
5,663,000 
Total expenses
25,811,000 
29,898,000 
Loss before disposition of properties
(3,332,000)
(6,101,000)
Gains on disposition of properties
24,000 
Net loss
(3,308,000)
(6,101,000)
Our share of:
 
 
Depreciation and amortization of real estate assets
1,976,000 
2,059,000 
Impairments of real estate assets
1,020,000 
1,002,000 
Interest expense
1,732,000 
1,959,000 
Our share of gains recorded on disposition of property
421,000 
Net income/(loss)
8,000 
(786,000)
Our share of net income/(loss)
8,000 
(786,000)
Adjustments for management and other fees
375,000 
626,000 
Equity in earnings/(losses) of unconsolidated affiliates
383,000 
(160,000)
Percentage of equity interest in joint ventures, maximum (in hundredths)
50.00% 
 
Highwoods Realty Limited Partnership [Member] |
Highwoods DLF 98/29, LLC Joint Venture [Member]
 
 
Expenses:
 
 
Impairments of real estate assets
4,790,000 
 
Our share of:
 
 
Impairments of real estate assets
1,020,000 
 
Highwoods Realty Limited Partnership [Member] |
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
 
 
Expenses:
 
 
Gains on disposition of properties
24,000 
 
Our share of:
 
 
Our share of gains recorded on disposition of property
421,000 
 
Proceeds received from disposition of property
10,100,000 
 
Closing credits for free rent
$ 300,000 
 
Intangible Assets and Below Market Lease Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, accumulated amortization
$ (82,472)
 
$ (77,219)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
176,816 
 
169,094 
Acquired above market lease intangible assets
2,777 
 
 
Acquired in-place lease intangible assets
11,561 
 
 
Assumed below market lease liabilities
(1,329)
 
 
Deferred Financing Costs [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, gross
21,426 
 
21,759 
Deferred financing and leasing costs, accumulated amortization
(8,648)
 
(7,862)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
12,778 
 
13,897 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
949 
902 
 
Deferred Leasing Costs [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, gross
237,862 
 
224,554 
Deferred financing and leasing costs, accumulated amortization
(73,824)
 
(69,357)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
164,038 
 
155,197 
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
145,968 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
8,359 
6,440 
 
Lease Incentives [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,544 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
383 
343 
 
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
7,256 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
466 
270 
 
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,270 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
137 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Acquisition-related below market lease liabilities, gross
37,538 
 
37,019 
Acquisition-related below market lease liabilities, accumulated amortization
(4,319)
 
(3,383)
Acquisition-related below market lease liabilities, net
33,219 
 
33,636 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of acquisition-related below market lease liabilities
(1,122)
(544)
 
Highwoods Realty Limited Partnership [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, accumulated amortization
(82,472)
 
(77,219)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
176,816 
 
169,094 
Acquired above market lease intangible assets
2,777 
 
 
Acquired in-place lease intangible assets
11,561 
 
 
Assumed below market lease liabilities
(1,329)
 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Financing Costs [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, gross
21,426 
 
21,759 
Deferred financing and leasing costs, accumulated amortization
(8,648)
 
(7,862)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
12,778 
 
13,897 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
949 
902 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Leasing Costs [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, gross
237,862 
 
224,554 
Deferred financing and leasing costs, accumulated amortization
(73,824)
 
(69,357)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
164,038 
 
155,197 
Highwoods Realty Limited Partnership [Member] |
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
145,968 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
8,359 
6,440 
 
Highwoods Realty Limited Partnership [Member] |
Lease Incentives [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,544 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
383 
343 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
7,256 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
466 
270 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,270 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of intangible assets
137 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
Acquisition-related below market lease liabilities, gross
37,538 
 
37,019 
Acquisition-related below market lease liabilities, accumulated amortization
(4,319)
 
(3,383)
Acquisition-related below market lease liabilities, net
33,219 
 
33,636 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
Amortization of acquisition-related below market lease liabilities
$ (1,122)
$ (544)
 
Intangible Assets and Below Market Lease Liabilities - Scheduled Future Amortization (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Dec. 31, 2012
Scheduled future amortization of intangible assets [Abstract]
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
$ 176,816 
$ 169,094 
Deferred Financing Costs [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
2,768 
 
2014
3,249 
 
2015
2,614 
 
2016
1,515 
 
2017
1,226 
 
Thereafter
1,406 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
12,778 
13,897 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
5 years 
 
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
24,305 
 
2014
28,125 
 
2015
22,845 
 
2016
18,485 
 
2017
15,591 
 
Thereafter
36,617 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
145,968 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
6 years 7 months 7 days 
 
Lease Incentives [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
965 
 
2014
1,154 
 
2015
926 
 
2016
734 
 
2017
660 
 
Thereafter
2,105 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,544 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
7 years 7 months 7 days 
 
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
1,372 
 
2014
1,537 
 
2015
1,252 
 
2016
1,023 
 
2017
908 
 
Thereafter
1,164 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
7,256 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
5 years 4 months 25 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
4 years 11 months 
 
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
416 
 
2014
553 
 
2015
553 
 
2016
553 
 
2017
553 
 
Thereafter
1,642 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,270 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
7 years 8 months 15 days 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
Scheduled future amortization of below market lease liabilities [Abstract]
 
 
April 1, 2013 through December 31, 2013
(3,087)
 
2014
(4,009)
 
2015
(3,746)
 
2016
(3,443)
 
2017
(3,208)
 
Thereafter
(15,726)
 
Total scheduled future amortization of acquisition-related below market lease liabilities
(33,219)
(33,636)
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived below market lease liabilities, average useful life (in years)
9 years 9 months 20 days 
 
Assumed finite-lived below market lease liabilities, average useful life (in years)
9 years 4 months 
 
in-Place Lease Intangible Assets [Member]
 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Acquired finite-lived intangible assets, average useful life (in years)
4 years 10 months 
 
Highwoods Realty Limited Partnership [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
176,816 
169,094 
Highwoods Realty Limited Partnership [Member] |
Deferred Financing Costs [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
2,768 
 
2014
3,249 
 
2015
2,614 
 
2016
1,515 
 
2017
1,226 
 
Thereafter
1,406 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
12,778 
13,897 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
5 years 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
24,305 
 
2014
28,125 
 
2015
22,845 
 
2016
18,485 
 
2017
15,591 
 
Thereafter
36,617 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
145,968 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
6 years 7 months 7 days 
 
Highwoods Realty Limited Partnership [Member] |
Lease Incentives [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
965 
 
2014
1,154 
 
2015
926 
 
2016
734 
 
2017
660 
 
Thereafter
2,105 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,544 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
7 years 7 months 7 days 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
1,372 
 
2014
1,537 
 
2015
1,252 
 
2016
1,023 
 
2017
908 
 
Thereafter
1,164 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
7,256 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
5 years 4 months 25 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
4 years 11 months 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
April 1, 2013 through December 31, 2013
416 
 
2014
553 
 
2015
553 
 
2016
553 
 
2017
553 
 
Thereafter
1,642 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,270 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived intangible assets, average useful life (in years)
7 years 8 months 15 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
   
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
Scheduled future amortization of below market lease liabilities [Abstract]
 
 
April 1, 2013 through December 31, 2013
(3,087)
 
2014
(4,009)
 
2015
(3,746)
 
2016
(3,443)
 
2017
(3,208)
 
Thereafter
(15,726)
 
Total scheduled future amortization of acquisition-related below market lease liabilities
$ (33,219)
$ (33,636)
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Finite-lived below market lease liabilities, average useful life (in years)
9 years 9 months 20 days 
 
Assumed finite-lived below market lease liabilities, average useful life (in years)
9 years 4 months 
 
Highwoods Realty Limited Partnership [Member] |
in-Place Lease Intangible Assets [Member]
 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
Acquired finite-lived intangible assets, average useful life (in years)
4 years 10 months 
 
Mortgages and Notes Payable (Details) (USD $)
3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Mar. 31, 2013
Revolving Credit Facility due 2015 [Member]
Apr. 19, 2013
Revolving Credit Facility due 2015 [Member]
Mar. 31, 2013
Variable Rate Term Loan due 2016 [Member]
Mar. 31, 2013
Secured indebtedness [Member]
Dec. 31, 2012
Secured indebtedness [Member]
Mar. 31, 2013
Unsecured indebtedness [Member]
Dec. 31, 2012
Unsecured indebtedness [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Revolving Credit Facility due 2015 [Member]
Apr. 19, 2013
Highwoods Realty Limited Partnership [Member]
Revolving Credit Facility due 2015 [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Variable Rate Term Loan due 2016 [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Secured indebtedness [Member]
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Secured indebtedness [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Unsecured indebtedness [Member]
Dec. 31, 2012
Highwoods Realty Limited Partnership [Member]
Unsecured indebtedness [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgages and notes payable
$ 1,896,300,000 
 
$ 1,859,162,000 
 
 
 
$ 547,150,000 
$ 549,607,000 
$ 1,349,150,000 
$ 1,309,555,000 
$ 1,896,300,000 
 
$ 1,859,162,000 
 
 
 
$ 547,150,000 
$ 549,607,000 
$ 1,349,150,000 
$ 1,309,555,000 
Aggregate undepreciated book value of secured real estate assets
 
 
 
 
 
 
967,300,000 
 
 
 
 
 
 
 
 
 
967,300,000 
 
 
 
Maximum borrowing capacity on revolving credit facility
 
 
 
475,000,000 
 
 
 
 
 
 
 
 
 
475,000,000 
 
 
 
 
 
 
Maturity date on revolving credit facility
 
 
 
Jul. 27, 2015 
 
 
 
 
 
 
 
 
 
Jul. 27, 2015 
 
 
 
 
 
 
Additional borrowing capacity on revolving credit facility
 
 
 
75,000,000 
 
 
 
 
 
 
 
 
 
75,000,000 
 
 
 
 
 
 
Credit facility, interest rate basis
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
Credit facility, current interest rate (in hundredths)
 
 
 
1.50% 
 
 
 
 
 
 
 
 
 
1.50% 
 
 
 
 
 
 
Annual facility fee (in hundredths)
 
 
 
0.35% 
 
 
 
 
 
 
 
 
 
0.35% 
 
 
 
 
 
 
Amount outstanding on revolving credit facility
 
 
 
97,500,000 
94,500,000 
 
 
 
 
 
 
 
 
97,500,000 
94,500,000 
 
 
 
 
 
Outstanding letters of credit on revolving credit facility
 
 
 
100,000 
100,000 
 
 
 
 
 
 
 
 
100,000 
100,000 
 
 
 
 
 
Unused borrowing capacity on revolving credit facility
 
 
 
377,400,000 
380,400,000 
 
 
 
 
 
 
 
 
377,400,000 
380,400,000 
 
 
 
 
 
Debt instrument maturity date
 
 
 
 
 
Feb. 28, 2016 
 
 
 
 
 
 
 
 
 
Feb. 28, 2016 
 
 
 
 
Principal amount of debt
 
 
 
 
 
200,000,000 
 
 
 
 
 
 
 
 
 
200,000,000 
 
 
 
 
Early repayment of debt
 
 
 
 
 
35,000,000 
 
 
 
 
 
 
 
 
 
35,000,000 
 
 
 
 
Loss on extinguishment of debt
$ (164,000)
$ 0 
 
 
 
$ 200,000 
 
 
 
 
$ (164,000)
$ 0 
 
 
 
$ 200,000 
 
 
 
 
Derivative Financial Instruments (Details) (USD $)
3 Months Ended
Mar. 31, 2013
swaps
Mar. 31, 2012
Dec. 31, 2012
Derivative [Line Items]
 
 
 
Number of derivative instruments obtained
 
 
Derivative maturity date
Jan. 01, 2019 
 
 
Amount of borrowings outstanding
$ 225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
 
Expected increase to interest expense
3,300,000 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities [Abstract]
 
 
 
Interest rate swaps
8,261,000 
 
9,369,000 
Amount of unrealized gains recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
Interest rate swaps
280,000 
1,104,000 
 
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
Interest rate swaps
788,000 
(33,000)
 
Highwoods Realty Limited Partnership [Member]
 
 
 
Derivative [Line Items]
 
 
 
Number of derivative instruments obtained
 
 
Derivative maturity date
Jan. 01, 2019 
 
 
Amount of borrowings outstanding
225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
 
Expected increase to interest expense
3,300,000 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities [Abstract]
 
 
 
Interest rate swaps
8,261,000 
 
9,369,000 
Amount of unrealized gains recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
Interest rate swaps
280,000 
1,104,000 
 
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
Interest rate swaps
$ 788,000 
$ (33,000)
 
Noncontrolling Interests (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Noncontrolling Interests in the Operating Partnership [Roll Forward]
 
 
Beginning noncontrolling interests in the Operating Partnership
$ 124,869 
$ 110,655 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
23,802 
14,366 
Conversions of Common Units to Common Stock
(351)
(63)
Net income attributable to noncontrolling interests in the Operating Partnership
581 
827 
Distributions to noncontrolling interests in the Operating Partnership
(1,584)
(1,584)
Total noncontrolling interests in the Operating Partnership
147,317 
124,201 
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
 
 
Net income available for common stockholders
12,349 
16,694 
Increase in additional paid in capital from conversions of Common Units to Common Stock
351 
63 
Change from net income available for common stockholders and transfers from noncontrolling interests
$ 12,700 
$ 16,757 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
Highwoods Realty Limited Partnership [Member]
 
 
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, 2013
Dec. 31, 2012
Assets:
 
 
Mortgages and notes receivable, at fair value
$ 25,638 1
$ 24,725 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529 
3,354 
Tax increment financing bond (in prepaid expenses and other assets)
14,324 
14,496 
Impaired real estate assets
9,002 
 
Total Assets
52,493 
42,575 
Noncontrolling Interests in the Operating Partnership
147,317 
124,869 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
2,024,509 1
1,987,364 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261 
9,369 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529 
3,354 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375 
563 
Financing obligations, at fair value
23,986 1
23,252 1
Total Liabilities
2,060,660 
2,023,902 
Level 1 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529 
3,354 
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets
 
Total Assets
3,529 
3,354 
Noncontrolling Interests in the Operating Partnership
147,317 
124,869 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529 
3,354 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
3,529 
3,354 
Level 2 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
16,990 
16,077 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets
 
Total Assets
16,990 
16,077 
Noncontrolling Interests in the Operating Partnership
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
2,024,509 
1,987,364 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261 
9,369 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
2,032,770 
1,996,733 
Level 3 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
8,648 
8,648 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
14,324 
14,496 
Impaired real estate assets
9,002 
 
Total Assets
31,974 
23,144 
Noncontrolling Interests in the Operating Partnership
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375 
563 
Financing obligations, at fair value
23,986 
23,252 
Total Liabilities
24,361 
23,815 
Highwoods Realty Limited Partnership [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
25,638 1
24,725 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529 
3,354 
Tax increment financing bond (in prepaid expenses and other assets)
14,324 
14,496 
Impaired real estate assets
9,002 
 
Total Assets
52,493 
42,575 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
2,024,509 1
1,987,364 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261 
9,369 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529 
3,354 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375 
563 
Financing obligations, at fair value
23,986 1
23,252 1
Total Liabilities
2,060,660 
2,023,902 
Highwoods Realty Limited Partnership [Member] |
Level 1 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,529 
3,354 
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets
 
Total Assets
3,529 
3,354 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,529 
3,354 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
3,529 
3,354 
Highwoods Realty Limited Partnership [Member] |
Level 2 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
16,990 
16,077 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets
 
Total Assets
16,990 
16,077 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
2,024,509 
1,987,364 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
8,261 
9,369 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
Financing obligations, at fair value
Total Liabilities
2,032,770 
1,996,733 
Highwoods Realty Limited Partnership [Member] |
Level 3 [Member]
 
 
Assets:
 
 
Mortgages and notes receivable, at fair value
8,648 
8,648 
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
14,324 
14,496 
Impaired real estate assets
9,002 
 
Total Assets
31,974 
23,144 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
375 
563 
Financing obligations, at fair value
23,986 
23,252 
Total Liabilities
$ 24,361 
$ 23,815 
Disclosure About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Dec. 31, 2011
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Unrealized gains (in AOCL)
$ 390,000 
$ 287,000 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,508,000 
2,022,000 
1,898,000 
2,309,000 
Contingent Consideration to Acquire Real Estate Assets [Member]
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
563,000 
 
 
Unrealized gains (in general and administrative)
(188,000)
 
 
Ending balance
375,000 
 
 
Fair value of Level 3 liability
375,000 
 
 
Payout percentage (in hundredths)
50.00% 
 
 
 
Tax Increment Financing Bond [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
14,496,000 
14,788,000 
 
 
Principal repayment
(562,000)
 
 
Unrealized gains (in AOCL)
390,000 
287,000 
 
 
Ending balance
14,324,000 
15,075,000 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,500,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
500,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
500,000 
 
 
 
Fair value of Level 3 asset
14,324,000 
15,075,000 
 
 
Discount rate (in hundredths)
10.40% 
 
 
 
Impaired Real Estate Assets [Member]
 
 
 
 
Impaired real estate assets [Abstract]
 
 
 
 
Fair value of Level 3 asset
9,002,000 
 
 
 
Impaired Real Estate Assets [Member] |
Minimum [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Discount rate (in hundredths)
9.00% 
 
 
 
Impaired real estate assets [Abstract]
 
 
 
 
Capitalization rate (in hundredths)
8.50% 
 
 
 
Impaired Real Estate Assets [Member] |
Maximum [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Discount rate (in hundredths)
10.00% 
 
 
 
Impaired real estate assets [Abstract]
 
 
 
 
Capitalization rate (in hundredths)
9.50% 
 
 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Unrealized gains (in AOCL)
390,000 
287,000 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,508,000 
2,022,000 
1,898,000 
2,309,000 
Highwoods Realty Limited Partnership [Member] |
Contingent Consideration to Acquire Real Estate Assets [Member]
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
563,000 
 
 
Unrealized gains (in general and administrative)
(188,000)
 
 
Ending balance
375,000 
 
 
Fair value of Level 3 liability
375,000 
 
 
Payout percentage (in hundredths)
50.00% 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Tax Increment Financing Bond [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Beginning balance
14,496,000 
14,788,000 
 
 
Principal repayment
(562,000)
 
 
Unrealized gains (in AOCL)
390,000 
287,000 
 
 
Ending balance
14,324,000 
15,075,000 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,500,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
500,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
500,000 
 
 
 
Fair value of Level 3 asset
$ 14,324,000 
$ 15,075,000 
 
 
Discount rate (in hundredths)
10.40% 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Impaired Real Estate Assets [Member] |
Minimum [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Discount rate (in hundredths)
9.00% 
 
 
 
Impaired real estate assets [Abstract]
 
 
 
 
Capitalization rate (in hundredths)
8.50% 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Impaired Real Estate Assets [Member] |
Maximum [Member]
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
Discount rate (in hundredths)
10.00% 
 
 
 
Impaired real estate assets [Abstract]
 
 
 
 
Capitalization rate (in hundredths)
9.50% 
 
 
 
Share-Based Payments (Details) (USD $)
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock-based compensation expense
$ 3,440,000 
$ 2,422,000 
Total unrecognized stock-based compensation costs
7,200,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
2 years 8 months 13 days 
 
Stock Options [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock options granted
168,700 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
$ 6.50 
 
Time-Based Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock shares granted
79,080 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
$ 36.35 
 
Total Return-Based Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock shares granted
65,486 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
$ 31.73 
 
Highwoods Realty Limited Partnership [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock-based compensation expense
3,440,000 
2,422,000 
Total unrecognized stock-based compensation costs
$ 7,200,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
2 years 8 months 13 days 
 
Highwoods Realty Limited Partnership [Member] |
Stock Options [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Stock options granted
168,700 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
$ 6.50 
 
Highwoods Realty Limited Partnership [Member] |
Time-Based Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock shares granted
79,080 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
$ 36.35 
 
Highwoods Realty Limited Partnership [Member] |
Total Return-Based Restricted Stock [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
Restricted stock shares granted
65,486 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
$ 31.73 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
Tax increment financing bond, beginning balance
$ (1,898)
$ (2,309)
 
Unrealized gains on tax increment financing bond
390 
287 
 
Tax increment financing bond, ending balance
(1,508)
(2,022)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
Cash flow hedges, beginning balance
(10,730)
(3,425)
 
Unrealized gains on cash flow hedges
280 
1,104 
 
Amortization of cash flow hedges
788 1
(33)1
 
Cash flow hedges, ending balance
(9,662)
(2,354)
 
Total accumulated other comprehensive loss
(11,170)
(4,376)
(12,628)
Highwoods Realty Limited Partnership [Member]
 
 
 
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
Tax increment financing bond, beginning balance
(1,898)
(2,309)
 
Unrealized gains on tax increment financing bond
390 
287 
 
Tax increment financing bond, ending balance
(1,508)
(2,022)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
Cash flow hedges, beginning balance
(10,730)
(3,425)
 
Unrealized gains on cash flow hedges
280 
1,104 
 
Amortization of cash flow hedges
788 1
(33)1
 
Cash flow hedges, ending balance
(9,662)
(2,354)
 
Total accumulated other comprehensive loss
$ (11,170)
$ (4,376)
$ (12,628)
Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Dec. 31, 2012
Discontinued operations [Abstract]
 
 
 
Rental and other revenues
$ 345 
$ 5,478 
 
Operating expenses:
 
 
 
Rental property and other expenses
103 
1,939 
 
Depreciation and amortization
148 
1,532 
 
Total operating expenses
251 
3,471 
 
Interest expense
125 
 
Income from discontinued operations
94 
1,882 
 
Impairments of real estate assets held for sale
(713)
 
Net gains on disposition of discontinued operations
1,244 
5,134 
 
Total discontinued operations
625 
7,016 
 
Assets, held for sale [Abstract]
 
 
 
Land
658 
 
2,482 
Buildings and tenant improvements
6,690 
 
23,106 
Less accumulated depreciation
(2,991)
 
(8,017)
Net real estate assets
4,357 
 
17,571 
Accrued straight line rents receivable
26 
 
408 
Deferred leasing costs, net
11 
 
929 
Prepaid expenses and other assets
 
30 
Real estate and other assets, net, held for sale
4,394 
 
18,938 
Orlando, FL Office Properties Disposition (3/2013) [Member]
 
 
 
Assets, held for sale [Abstract]
 
 
 
Number of office properties included in real estate and other assets, net, held for sale
 
 
Atlanta, GA Industrial Properties Held For Sale (3/2013) [Member]
 
 
 
Assets, held for sale [Abstract]
 
 
 
Number of industrial properties included in real estate and other assets, net, held for sale
 
Highwoods Realty Limited Partnership [Member]
 
 
 
Discontinued operations [Abstract]
 
 
 
Rental and other revenues
345 
5,478 
 
Operating expenses:
 
 
 
Rental property and other expenses
103 
1,939 
 
Depreciation and amortization
148 
1,532 
 
Total operating expenses
251 
3,471 
 
Interest expense
125 
 
Income from discontinued operations
94 
1,882 
 
Impairments of real estate assets held for sale
(713)
 
Net gains on disposition of discontinued operations
1,244 
5,134 
 
Total discontinued operations
625 
7,016 
 
Assets, held for sale [Abstract]
 
 
 
Land
658 
 
2,482 
Buildings and tenant improvements
6,690 
 
23,106 
Less accumulated depreciation
(2,991)
 
(8,017)
Net real estate assets
4,357 
 
17,571 
Accrued straight line rents receivable
26 
 
408 
Deferred leasing costs, net
11 
 
929 
Prepaid expenses and other assets
 
30 
Real estate and other assets, net, held for sale
$ 4,394 
 
$ 18,938 
Highwoods Realty Limited Partnership [Member] |
Orlando, FL Office Properties Disposition (3/2013) [Member]
 
 
 
Assets, held for sale [Abstract]
 
 
 
Number of office properties included in real estate and other assets, net, held for sale
 
 
Highwoods Realty Limited Partnership [Member] |
Atlanta, GA Industrial Properties Held For Sale (3/2013) [Member]
 
 
 
Assets, held for sale [Abstract]
 
 
 
Number of industrial properties included in real estate and other assets, net, held for sale
 
Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Numerator:
 
 
Income from continuing operations
$ 13,135 
$ 11,316 
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(553)
(483)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203)
(184)
Dividends on Preferred Stock
(627)
(627)
Income from continuing operations available for common stockholders
11,752 
10,022 
Income from discontinued operations
625 
7,016 
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(28)
(344)
Income from discontinued operations available for common stockholders
597 
6,672 
Net income available for common stockholders
12,349 
16,694 
Denominator:
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
81,029,000 1 2
72,836,000 1 2
Earnings per Common Share - basic:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.14 
$ 0.14 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.01 
$ 0.09 
Net income available for common stockholders (in dollars per share)
$ 0.15 
$ 0.23 
Numerator:
 
 
Income from continuing operations
13,135 
11,316 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203)
(184)
Dividends on Preferred Stock
(627)
(627)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,305 
10,505 
Income from discontinued operations available for common stockholders
625 
7,016 
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
12,930 
17,521 
Denominator:
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
81,029,000 1 2
72,836,000 1 2
Stock options using the treasury method
108,000 
132,000 
Noncontrolling interests Common Units
3,725,000 
3,728,000 
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares) (1)
84,862,000 2
76,696,000 2
Earnings per Common Share - diluted:
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.14 
$ 0.14 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.01 
$ 0.09 
Net income available for common stockholders (in dollars per share)
$ 0.15 
$ 0.23 
Earnings per Common Unit - diluted:
 
 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
500,000 
600,000 
Highwoods Realty Limited Partnership [Member]
 
 
Numerator:
 
 
Income from continuing operations
13,082 
11,318 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203)
(184)
Distributions on Preferred Units
(627)
(627)
Income from continuing operations available for common unitholders
12,252 
10,507 
Income from discontinued operations available for common unitholders
625 
7,016 
Net income available for common unitholders
12,877 
17,523 
Denominator:
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
84,345,000 1 2
76,155,000 1 2
Earnings per Common Unit - basic:
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.14 
$ 0.14 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.01 
$ 0.09 
Net income available for common unitholders (in dollars per share)
$ 0.15 
$ 0.23 
Numerator:
 
 
Income from continuing operations
13,082 
11,318 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(203)
(184)
Distributions on Preferred Units
(627)
(627)
Income from continuing operations available for common unitholders
12,252 
10,507 
Income from discontinued operations available for common unitholders
625 
7,016 
Net income available for common unitholders
$ 12,877 
$ 17,523 
Denominator:
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
84,345,000 1 2
76,155,000 1 2
Stock options using the treasury method
108,000 
132,000 
Denominator for diluted earnings per Common Unit - adjusted weighted average units and assumed conversions (in shares)
84,453,000 2
76,287,000 2
Earnings per Common Unit - diluted:
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.14 
0.14 
Income from discontinued operations available for common unitholders (in dollars per share)
0.01 
0.09 
Net income available for common unitholders (in dollars per share)
0.15 
0.23 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
500,000 
600,000 
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
$ 137,030 
$ 124,894 
Total Net Operating Income
88,089 
80,516 
Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
Depreciation and amortization
(42,144)
(36,983)
Impairments of real estate assets
(415)
General and administrative expense
(10,582)
(9,673)
Interest expense
(23,868)
(24,677)
Interest and Other income
1,619 
2,230 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
12,699 
11,413 
Total Office Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
121,473 1
109,867 1
Total Net Operating Income
78,053 1
70,649 1
Office Atlanta, GA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
17,535 
14,908 
Total Net Operating Income
11,170 
9,728 
Office Greenville, SC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,229 
3,503 
Total Net Operating Income
1,889 
2,132 
Office Kansas City, MO [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,970 
3,602 
Total Net Operating Income
2,564 
2,332 
Office Memphis, TN [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,383 
9,256 
Total Net Operating Income
5,632 
5,555 
Office Nashville, TN [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
14,076 
13,862 
Total Net Operating Income
9,690 
9,652 
Office Orlando, FL [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
2,222 
2,158 
Total Net Operating Income
1,079 
1,064 
Office Piedmont Triad, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
6,891 
5,079 
Total Net Operating Income
4,356 
3,232 
Office Pittsburgh, PA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
13,693 
9,084 
Total Net Operating Income
7,423 
4,280 
Office Raleigh, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
20,668 
19,775 
Total Net Operating Income
14,631 
13,959 
Office Richmond, VA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
11,777 
11,507 
Total Net Operating Income
8,116 
7,880 
Office Tampa, FL [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
18,029 
17,133 
Total Net Operating Income
11,503 
10,835 
Total Industrial Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
6,091 1
6,105 1
Total Net Operating Income
4,432 1
4,443 1
Industrial Atlanta, GA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
2,968 
2,941 
Total Net Operating Income
2,186 
2,156 
Industrial Piedmont Triad, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,123 
3,164 
Total Net Operating Income
2,246 
2,287 
Total Retail Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,466 1
8,922 1
Total Net Operating Income
5,623 1
5,533 1
Retail Kansas City, MO [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,466 
8,922 
Total Net Operating Income
5,623 
5,533 
Total Residential Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Net Operating Income
1
(87)1
Residential Raleigh, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Net Operating Income
(87)
Corporate and Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Net Operating Income
(19)2
(22)2
Highwoods Realty Limited Partnership [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
137,030 
124,894 
Total Net Operating Income
88,063 
80,578 
Reconciliation to income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates:
 
 
Depreciation and amortization
(42,144)
(36,983)
Impairments of real estate assets
(415)
General and administrative expense
(10,556)
(9,735)
Interest expense
(23,868)
(24,677)
Interest and Other income
1,619 
2,230 
Income from continuing operations before disposition of condominiums and equity in earnings/(losses) of unconsolidated affiliates
12,699 
11,413 
Highwoods Realty Limited Partnership [Member] |
Total Office Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
121,473 1
109,867 1
Total Net Operating Income
78,031 1
70,703 1
Highwoods Realty Limited Partnership [Member] |
Office Atlanta, GA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
17,535 
14,908 
Total Net Operating Income
11,167 
9,735 
Highwoods Realty Limited Partnership [Member] |
Office Greenville, SC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,229 
3,503 
Total Net Operating Income
1,888 
2,134 
Highwoods Realty Limited Partnership [Member] |
Office Kansas City, MO [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,970 
3,602 
Total Net Operating Income
2,563 
2,334 
Highwoods Realty Limited Partnership [Member] |
Office Memphis, TN [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,383 
9,256 
Total Net Operating Income
5,630 
5,559 
Highwoods Realty Limited Partnership [Member] |
Office Nashville, TN [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
14,076 
13,862 
Total Net Operating Income
9,687 
9,659 
Highwoods Realty Limited Partnership [Member] |
Office Orlando, FL [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
2,222 
2,158 
Total Net Operating Income
1,079 
1,065 
Highwoods Realty Limited Partnership [Member] |
Office Piedmont Triad, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
6,891 
5,079 
Total Net Operating Income
4,355 
3,234 
Highwoods Realty Limited Partnership [Member] |
Office Pittsburgh, PA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
13,693 
9,084 
Total Net Operating Income
7,421 
4,284 
Highwoods Realty Limited Partnership [Member] |
Office Raleigh, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
20,668 
19,775 
Total Net Operating Income
14,627 
13,970 
Highwoods Realty Limited Partnership [Member] |
Office Richmond, VA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
11,777 
11,507 
Total Net Operating Income
8,114 
7,886 
Highwoods Realty Limited Partnership [Member] |
Office Tampa, FL [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
18,029 
17,133 
Total Net Operating Income
11,500 
10,843 
Highwoods Realty Limited Partnership [Member] |
Total Industrial Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
6,091 1
6,105 1
Total Net Operating Income
4,430 1
4,447 1
Highwoods Realty Limited Partnership [Member] |
Industrial Atlanta, GA [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
2,968 
2,941 
Total Net Operating Income
2,185 
2,158 
Highwoods Realty Limited Partnership [Member] |
Industrial Piedmont Triad, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
3,123 
3,164 
Total Net Operating Income
2,245 
2,289 
Highwoods Realty Limited Partnership [Member] |
Total Retail Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,466 1
8,922 1
Total Net Operating Income
5,621 1
5,537 1
Highwoods Realty Limited Partnership [Member] |
Retail Kansas City, MO [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Rental and Other Revenues
9,466 
8,922 
Total Net Operating Income
5,621 
5,537 
Highwoods Realty Limited Partnership [Member] |
Total Residential Segment [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Net Operating Income
1
(87)1
Highwoods Realty Limited Partnership [Member] |
Residential Raleigh, NC [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Net Operating Income
(87)
Highwoods Realty Limited Partnership [Member] |
Corporate and Other [Member]
 
 
Segment Reporting Information [Line Items]
 
 
Total Net Operating Income
$ (19)2
$ (22)2
Subsequent Events (Details) (USD $)
3 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended
Mar. 31, 2013
Mar. 31, 2012
Apr. 15, 2013
Atlanta, GA Industrial Property Disposition (3/2013) [Member]
property
Apr. 24, 2013
Atlanta, GA Industrial Property/Land Disposition (3/2013) [Member]
property
Apr. 17, 2013
Highwoods DLF 98/29, LLC Joint Venture [Member]
Mar. 31, 2013
Highwoods Realty Limited Partnership [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Apr. 15, 2013
Highwoods Realty Limited Partnership [Member]
Atlanta, GA Industrial Property Disposition (3/2013) [Member]
property
Apr. 24, 2013
Highwoods Realty Limited Partnership [Member]
Atlanta, GA Industrial Property/Land Disposition (3/2013) [Member]
property
Apr. 17, 2013
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
 
 
Number of industrial real estate properties sold
 
 
 
 
 
 
Proceeds received from sale of real estate
 
 
$ 4,500,000 
$ 38,700,000 
 
 
 
$ 4,500,000 
$ 38,700,000 
 
Closing credits for free rent
 
 
122,000 
1,279,000 
 
 
 
122,000 
1,279,000 
 
Closing credits for unfunded tenant improvements
 
 
 
1,803,000 
 
 
 
 
1,803,000 
 
Gain/(loss) on disposition of discontinued operations
1,244,000 
5,134,000 
15,000 
13,177,000 
 
1,244,000 
5,134,000 
15,000 
13,177,000 
 
Proceeds received from disposition of property
 
 
 
 
6,000,000 
 
 
 
 
6,000,000 
Gains on disposition of properties
24,000 
 
 
43,000 
24,000 
 
 
43,000 
Our share of gains recorded on disposition of property
$ 421,000 
$ 0 
 
 
$ 9,000 
$ 421,000 
$ 0 
 
 
$ 9,000