HIGHWOODS PROPERTIES, INC., 10-Q filed on 10/28/2010
Quarterly Report
Consolidated Balance Sheets (USD $)
In Thousands
9 Months Ended
Sep. 30, 2010
Year Ended
Dec. 31, 2009
Real estate assets, at cost:
 
 
Land
$ 345,531 
$ 350,537 
Buildings and tenant improvements
2,900,749 
2,880,632 
Land held for development
104,010 
104,148 
Total real estate assets, at cost
3,350,290 
3,335,317 
Less-accumulated depreciation
(818,347)
(781,073)
Net real estate assets
2,531,943 
2,554,244 
For-sale residential condominiums
9,576 
12,933 
Real estate and other assets, net, held for sale
1,249 
5,031 
Cash and cash equivalents
20,969 
23,699 
Restricted cash
4,757 
6,841 
Accounts receivable, net of allowance of $3,157 and $2,810, respectively
22,426 
21,069 
Mortgages and notes receivable, net of allowance of $950 and $698, respectively
19,942 
3,143 
Accrued straight-line rents receivable, net of allowance of $2,457 and $2,443, respectively
90,001 
82,600 
Investment in unconsolidated affiliates
62,456 
66,077 
Deferred financing and leasing costs, net of accumulated amortization of $55,143 and $52,129, respectively
75,069 
73,517 
Prepaid expenses and other assets
39,796 
37,947 
Total Assets
2,878,184 
2,887,101 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,501,624 
1,469,155 
Accounts payable, accrued expenses and other liabilities
112,738 
117,328 
Financing obligations
33,625 
37,706 
Total Liabilities
1,647,987 
1,624,189 
Commitments and contingencies
 
 
Noncontrolling interests in the Operating Partnership
123,293 
129,769 
Equity:
 
 
Common stock, $.01 par value, 200,000,000 authorized shares; 71,656,232 and 71,285,303 shares issued and outstanding, respectively
717 
713 
Additional paid-in capital
1,762,968 
1,751,398 
Distributions in excess of net income available for common stockholders
(740,356)
(701,932)
Accumulated other comprehensive loss
(2,975)
(3,811)
Total Stockholders' Equity
1,101,946 
1,127,960 
Noncontrolling interests in consolidated affiliates
4,958 
5,183 
Total Equity
1,106,904 
1,133,143 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
2,878,184 
2,887,101 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares
$ 52,500 
$ 52,500 
Parenthetical Data to The Consolidated Balance Sheets (USD $)
In Thousands, except Share data
Sep. 30, 2010
Dec. 31, 2009
Assets:
 
 
Accounts receivable, allowance
$ 3,157 
$ 2,810 
Mortgages and notes receivable, allowance
950 
698 
Accrued straight-line rents receivable, allowance
2,457 
2,443 
Deferred financing and leasing costs, accumulated amortization
55,143 
52,129 
Equity:
 
 
Preferred Stock, par value
0.01 
0.01 
Preferred Stock, shares authorized
50,000,000 
50,000,000 
Common stock, par value
0.01 
0.01 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares issued
71,656,232 
71,285,303 
Common stock, shares outstanding
71,656,232 
71,285,303 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred stock, liquidation preference
1,000 
1,000 
Preferred stock, shares outstanding
29,092 
29,092 
Preferred stock, shares issued
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred stock, liquidation preference
$ 25 
$ 25 
Preferred stock, shares outstanding
2,100,000 
2,100,000 
Preferred stock, shares issued
2,100,000 
2,100,000 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data
3 Months Ended
Sep. 30,		 9 Months Ended
Sep. 30,
2010
2009
2010
2009
Income Statement [Abstract]
 
 
 
 
Rental and other revenues
$ 116,063 
$ 113,170 
$ 345,456 
$ 337,445 
Operating expenses:
 
 
 
 
Rental property and other expenses
43,505 
42,564 
123,544 
121,743 
Depreciation and amortization
34,281 
32,367 
100,363 
97,590 
General and administrative
8,882 
9,485 
24,369 
27,286 
Total operating expenses
86,668 
84,416 
248,276 
246,619 
Interest expense:
 
 
 
 
Contractual
22,020 
20,001 
65,527 
60,525 
Amortization of deferred financing costs
858 
627 
2,528 
1,978 
Financing obligations
460 
706 
1,330 
2,151 
Total interest expense
23,338 
21,334 
69,385 
64,654 
Other income:
 
 
 
 
Interest and other income
1,710 
3,324 
4,376 
6,615 
Gain/(loss) on debt extinguishment
(85)
657 
(85)
1,287 
Total other income
1,625 
3,981 
4,291 
7,902 
Income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
7,682 
11,401 
32,086 
34,074 
Gains on disposition of property
19 
34 
55 
247 
Gains on disposition of for-sale residential condominiums
54 
187 
407 
823 
Gains on disposition of investment in unconsolidated affiliates
0 
0 
25,330 
0 
Equity in earnings of unconsolidated affiliates
1,018 
682 
2,701 
3,844 
Income from continuing operations
8,773 
12,304 
60,579 
38,988 
Discontinued operations:
 
 
 
 
Income from discontinued operations
0 
646 
411 
3,220 
Net gains/(losses) on disposition of discontinued operations
0 
(377)
(86)
20,639 
Total discontinued operations
0 
269 
325 
23,859 
Net income
8,773 
12,573 
60,904 
62,847 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(366)
(591)
(2,819)
(3,339)
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates
148 
(24)
(281)
(158)
Dividends on preferred stock
(1,677)
(1,677)
(5,031)
(5,031)
Net income available for common stockholders
6,878 
10,281 
52,773 
54,319 
Earnings per common share - basic:
 
 
 
 
Income from continuing operations available for common stockholders
0.10 
0.15 
0.74 
0.47 
Income from discontinued operations available for common stockholders
0 
0 
0 
0.34 
Net income available for common stockholders
0.10 
0.15 
0.74 
0.81 
Weighted average Common Shares outstanding - basic
71,631 
70,902 
71,549 
66,912 
Earnings per common share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders
0.10 
0.14 
0.74 
0.47 
Income from discontinued operations available for common stockholders
0 
0 
0 
0.34 
Net income available for common stockholders
0.10 
0.14 
0.74 
0.81 
Weighted average Common Shares outstanding - diluted
75,638 
75,072 
75,537 
71,024 
Dividends declared per Common Share
0.425 
0.425 
1.275 
1.275 
Net income available for common stockholders:
 
 
 
 
Income from continuing operations available for common stockholders
6,878 
10,027 
52,465 
31,851 
Income from discontinued operations available for common stockholders
0 
254 
308 
22,468 
Net income available for common stockholders
$ 6,878 
$ 10,281 
$ 52,773 
$ 54,319 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data
Common Stock
Series A Cumulative Redeemable Preferred Shares [Member]
Series B Cumulative Redeemable Preferred Shares [Member]
Additional Paid-In Capital
Accumulated Other Comprehensive Loss
Non-Controlling Interests in Consolidated Affiliates
Distributions in Excess of Net Earnings
Total
Balance - Shares at Dec. 31, 2008
63,571,705 
 
 
 
 
 
 
 
Balance at Dec. 31, 2008
$ 636 
$ 29,092 
$ 52,500 
$ 1,616,093 
$ (4,792)
$ 6,176 
$ (639,281)
$ 1,060,424 
Issuances of Common Stock - Shares
7,156,203 
 
 
 
 
 
 
 
Issuances of Common Stock
72 
0 
0 
147,238 
0 
0 
0 
147,310 
Conversion of Common Units to Common Stock - Shares
101,935 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
1 
0 
0 
3,240 
0 
0 
0 
3,241 
Dividends on Common Stock
0 
0 
0 
0 
0 
0 
(84,221)
(84,221)
Dividends on Preferred Stock
0 
0 
0 
0 
0 
0 
(5,031)
(5,031)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
0 
0 
0 
(18,497)
0 
0 
0 
(18,497)
Distributions to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
(796)
0 
(796)
Issuances of restricted stock, net - Shares
240,740 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
0 
0 
0 
0 
0 
0 
0 
Share-based compensation expense
2 
0 
0 
5,202 
0 
0 
0 
5,204 
Net (income) attributable to noncontrolling interests in the Operating Partnership
0 
0 
0 
0 
0 
0 
(3,339)
(3,339)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
158 
(158)
0 
Comprehensive income:
 
 
 
 
 
 
 
 
Net income
0 
0 
0 
0 
0 
0 
62,847 
62,847 
Other comprehensive income
0 
0 
0 
0 
813 
0 
0 
813 
Total comprehensive income
 
 
 
 
 
 
 
63,660 
Balance at Sep. 30, 2009
711 
29,092 
52,500 
1,753,276 
(3,979)
5,538 
(669,183)
1,167,955 
Balance - Shares at Sep. 30, 2009
71,070,583 
 
 
 
 
 
 
 
Balance - Shares at Dec. 31, 2009
71,285,303 
 
 
 
 
 
 
71,285,303 
Balance at Dec. 31, 2009
713 
29,092 
52,500 
1,751,398 
(3,811)
5,183 
(701,932)
1,133,143 
Issuances of Common Stock - Shares
112,815 
 
 
 
 
 
 
 
Issuances of Common Stock
1 
0 
0 
2,075 
0 
0 
0 
2,076 
Conversion of Common Units to Common Stock - Shares
93,971 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
1 
0 
0 
2,957 
0 
0 
0 
2,958 
Dividends on Common Stock
0 
0 
0 
0 
0 
0 
(91,197)
(91,197)
Dividends on Preferred Stock
0 
0 
0 
0 
0 
0 
(5,031)
(5,031)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
0 
0 
0 
1,480 
0 
0 
0 
1,480 
Distributions to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
(506)
0 
(506)
Issuances of restricted stock, net - Shares
164,143 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
0 
0 
0 
0 
0 
0 
0 
Share-based compensation expense
2 
0 
0 
5,058 
0 
0 
0 
5,060 
Net (income) attributable to noncontrolling interests in the Operating Partnership
0 
0 
0 
0 
0 
0 
(2,819)
(2,819)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
281 
(281)
0 
Comprehensive income:
 
 
 
 
 
 
 
 
Net income
0 
0 
0 
0 
0 
0 
60,904 
60,904 
Other comprehensive income
0 
0 
0 
0 
836 
0 
0 
836 
Total comprehensive income
 
 
 
 
 
 
 
61,740 
Balance at Sep. 30, 2010
$ 717 
$ 29,092 
$ 52,500 
$ 1,762,968 
$ (2,975)
$ 4,958 
$ (740,356)
$ 1,106,904 
Balance - Shares at Sep. 30, 2010
71,656,232 
 
 
 
 
 
 
71,656,232 
Consolidated Statements of Cash Flows (USD $)
In Thousands
9 Months Ended
Sep. 30,
2010
2009
Operating activities:
 
 
Net income
$ 60,904 
$ 62,847 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
100,728 
99,199 
Amortization of lease incentives
807 
866 
Share-based compensation expense
5,060 
5,204 
Additions to allowance for doubtful accounts
3,605 
4,530 
Amortization of deferred financing costs
2,528 
1,978 
Amortization of past cash-flow hedges
262 
(229)
(Gain)/loss on debt extinguishment
85 
(1,287)
Net (gains)/losses on disposition of property
31 
(20,886)
Gains on disposition of for-sale residential condominiums
(407)
(823)
Gains on disposition of investment in unconsolidated affiliates
(25,330)
0 
Equity in earnings of unconsolidated affiliates
(2,701)
(3,844)
Changes in financing obligations
103 
869 
Distributions of earnings from unconsolidated affiliates
2,933 
3,076 
Changes in operating assets and liabilities:
 
 
Accounts receivable
(4,689)
(534)
Prepaid expenses and other assets
(195)
(1,627)
Accrued straight-line rents receivable
(8,477)
(5,058)
Accounts payable, accrued expenses and other liabilities
7,407 
10,548 
Net cash provided by operating activities
142,654 
154,829 
Investing activities:
 
 
Additions to real estate assets and deferred leasing costs
(66,370)
(101,675)
Net proceeds from disposition of real estate assets
6,801 
61,926 
Net proceeds from disposition of for-sale residential condominiums
3,732 
7,940 
Proceeds from disposition of investment in unconsolidated affiliates
15,000 
0 
Distributions of capital from unconsolidated affiliates
1,591 
3,257 
Repayments of mortgages and notes receivable
231 
356 
Contributions to unconsolidated affiliates
(907)
(922)
Changes in restricted cash and other investing activities
2,396 
(15,506)
Net cash used in investing activities
(37,526)
(44,624)
Financing activities:
 
 
Dividends on Common Stock
(91,197)
(84,221)
Dividends on Preferred Stock
(5,031)
(5,031)
Distributions to noncontrolling interests in the Operating Partnership
(4,857)
(5,168)
Distributions to noncontrolling interests in consolidated affiliates
(506)
(796)
Net proceeds from the issuance of Common Stock
2,076 
147,310 
Borrowings on revolving credit facility
4,000 
128,000 
Repayments of revolving credit facility
(4,000)
(291,000)
Borrowings on mortgages and notes payable
10,368 
217,215 
Repayments of mortgages and notes payable
(18,205)
(185,084)
Additions to deferred financing costs
(506)
(3,118)
Net cash used in financing activities
(107,858)
(81,893)
Net increase/(decrease) in cash and cash equivalents
(2,730)
28,312 
Cash and cash equivalents at beginning of the period
23,699 
13,757 
Cash and cash equivalents at end of the period
20,969 
42,069 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
66,435 
64,734 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized gains on cash-flow hedges
0 
591 
Conversion of Common Units to Common Stock
2,958 
3,241 
Change in accrued capital expenditures
890 
(9,560)
Write-off of fully depreciated real estate assets
34,703 
24,991 
Write-off of fully amortized deferred financing and leasing costs
11,521 
14,592 
Unrealized gains/(losses) on marketable securities of non-qualified deferred compensation plan
489 
(109)
Settlement of financing obligation
4,184 
0 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(1,480)
18,497 
Unrealized gain on tax increment financing bond
471 
451 
Mortgages receivable from seller financing
17,030 
0 
Assumption of mortgages and notes payable
$ 40,306 
$ 0 
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies
1.      Description of Business and Significant Accounting Policies

Description of Business

The Company is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that operates in the Southeastern and Midwestern United States. The Company conducts virtually all of its activities through the Operating Partnership. At September 30, 2010, the Company and/or the Operating Partnership wholly owned 294 in-service office, industrial and retail properties, comprising 27.1 million square feet; 96 rental residential units; 580 acres of undeveloped land suitable for future development, of which 490 acres are considered core holdings; one 100% pre-leased office property under re-development; one recently developed office property that is in service but not yet stabilized; and 30 for-sale residential condominiums (which are owned through a consolidated, majority-owned joint venture).

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

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States (“GAAP”). Our Consolidated Statements of Income for the three and nine months ended September 30, 2009 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties sold or held for sale during the 12 months ended September 30, 2010 which required discontinued operations presentation. Prior period amounts related to additions to allowance for doubtful accounts and amortization of lease commissions in our Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

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

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

Use of Estimates

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

Recently Issued Accounting Standards

Beginning with our 2010 Annual Report on Form 10-K, we will be required to provide enhanced disclosure about our financial receivables, such as our mortgages and notes receivable, and our policy for measuring credit losses related to those receivables.
Real Estate Assets
Real Estate Assets
2.      Real Estate Assets

Acquisitions

During the third quarter of 2010, we acquired a 336,000 square foot office property in Memphis, TN for $10.0 million in cash and the assumption of secured debt, which was recorded at fair value of $40.3 million with an implied interest rate of 6.4%. The debt matures in November 2015. We have incurred or expect to incur $0.4 million of acquisition-related expenses and approximately $2.3 million of near-term building improvements. In connection with this acquisition, we recorded $2.8 million of above market lease intangible assets and $7.1 million of in-place lease intangible assets with weighted average amortization periods at the time of acquisition of 7.3 and 5.9 years, respectively.

Dispositions

During the second quarter of 2010, we sold seven office properties in Winston Salem, NC for gross proceeds of $12.9 million. In connection with this disposition, we received cash of $4.5 million and provided seller financing of $8.4 million (recorded at fair value of $8.4 million in mortgages and notes receivable) and committed to lend up to an additional $1.7 million for tenant improvements and lease commissions, of which $0.2 million was funded as of September 30, 2010. The three-year, interest-only first mortgage carries a 6.0% average interest rate. Assuming no default exists, the note can be extended by the buyer for two additional one-year periods, subject to an increase in the interest rate to 7.0% in the fourth year and to 8.0% in the fifth year. We have accounted for this disposition using the installment method, whereby the $0.4 million gain on disposition of property has been deferred and will be recognized when the seller financing is repaid.

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

During the first quarter of 2010, we recorded a completed sale in connection with the disposition of an office property in Raleigh, NC in the fourth quarter of 2009 where the buyer’s right to compel us to repurchase the property expired. Accordingly, we recognized the $0.2 million gain on disposition of property in the first quarter of 2010.

Investments in Affiliates
Investments in Affiliates
3.      Investment in Affiliates

Unconsolidated Affiliates

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Income Statements:
                         
Revenues                                                                      
 
$
26,517
 
$
36,152
 
$
93,819
 
$
112,368
 
Expenses:
                         
Rental property and other expenses
   
12,664
   
17,805
   
45,463
   
54,510
 
Depreciation and amortization
   
6,730
   
9,092
   
24,108
   
26,817
 
Interest expense
   
6,094
   
8,743
   
21,892
   
26,584
 
Total expenses
   
25,488
   
35,640
   
91,463
   
107,911
 
Income before disposition of property
   
1,029
   
512
   
2,356
   
4,457
 
Gains/(losses) on disposition of property
   
—
   
(463
)
 
—
   
2,963
 
Net income
 
$
1,029
 
$
49
 
$
2,356
 
$
7,420
 
Our share of:
                         
Net income (1)
 
$
1,018
 
$
682
 
$
2,701
 
$
3,844
 
Depreciation and amortization of real estate assets
 
$
2,115
 
$
3,352
 
$
8,193
 
$
9,825
 
Interest expense
 
$
2,190
 
$
3,491
 
$
8,368
 
$
10,611
 
Gain/(loss) on disposition of property
 
$
—
 
$
(199
)
$
—
 
$
582
 
__________
 
(1)
Our share of net income differs from our weighted average ownership percentage in the joint ventures’ net income due to our purchase accounting and other adjustments related primarily to management and leasing fees.

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

We own a majority interest in Plaza Residential, LLC (“Plaza Residential”), a joint venture which was formed to develop and sell 139 for-sale residential condominiums constructed above an office tower developed by us in Raleigh, NC. For-sale residential condominiums in our Consolidated Balance Sheets include 30 and 40 completed, but unsold, condominiums owned by Plaza Residential at September 30, 2010 and December 31, 2009, respectively. We initially record receipts of earnest money deposits in accounts payable, accrued expenses and other liabilities in accordance with the deposit method. We then record completed sales when units close and the remaining net cash is received. During the three months ended September 30, 2010 and 2009, we received $0.6 million and $2.9 million, respectively, in gross proceeds and recorded $0.5 million and $2.7 million, respectively, of cost of goods sold from condominium sales activity. During the nine months ended September 30, 2010 and 2009, we received $4.0 million and $8.4 million, respectively, in gross proceeds and had $3.6 million and $7.6 million, respectively, of cost of goods sold from condominium sales activity.

Deferred Financing and Leasing Costs
Deferred Financing and Leasing Costs
4.      Deferred Financing and Leasing Costs

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

   
September 30,
2010
 
December 31,
2009
 
Deferred financing costs
 
$
17,078
 
$
16,811
 
Less accumulated amortization
   
(6,917
)
 
(4,549
)
     
10,161
   
12,262
 
Deferred leasing costs
   
113,134
   
108,835
 
Less accumulated amortization
   
(48,226
)
 
(47,580
)
     
64,908
   
61,255
 
Deferred financing and leasing costs, net                                                                                              
 
$
75,069
 
$
73,517
 

Amortization of deferred financing and leasing costs were as follows:

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Amortization of deferred financing costs
 
$
858
 
$
627
 
$
2,528
 
$
1,978
 
Amortization of lease commissions (included in depreciation and amortization)
 
$
3,912
 
$
3,806
 
$
11,495
 
$
11,598
 
Amortization of lease incentives (included in rental and other revenues)
 
$
270
 
$
318
 
$
807
 
$
866
 

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

   
Amortization of Deferred Financing Costs
 
Amortization of Lease Commissions
 
Amortization of Lease Incentives
 
September 30, 2010 through December 31, 2010
 
$
788
 
$
3,855
 
$
261
 
2011                                                                                     
   
2,680
   
13,825
   
982
 
2012                                                                                     
   
2,526
   
11,390
   
881
 
2013                                                                                     
   
897
   
9,151
   
683
 
2014                                                                                     
   
520
   
7,015
   
512
 
Thereafter                                                                                     
   
2,750
   
14,947
   
1,406
 
   
$
10,161
 
$
60,183
 
$
4,725
 

The weighted average remaining amortization periods for deferred financing and leasing costs were 3.6 years and 6.3 years, respectively, as of September 30, 2010.
Mortgages and Notes Payable
Mortgages and Notes Payable
5.      Mortgages and Notes Payable

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

   
September 30,
2010
 
December 31,
2009
 
Secured indebtedness                                                                                                      
 
$
763,107
 
$
720,727
 
Unsecured indebtedness                                                                                                      
   
738,517
   
748,428
 
Total mortgages and notes payable                                                                                                
 
$
1,501,624
 
$
1,469,155
 

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

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

Our $70.0 million secured construction facility, of which $52.1 million was outstanding at September 30, 2010, is initially scheduled to mature on December 20, 2010. The outstanding balance increased in the third quarter of 2010 due to the use of proceeds to reduce the balance outstanding under a bank term loan due in March 2012. Assuming no defaults have occurred, we have options to extend the maturity date for two successive one-year periods. During the third quarter of 2010, we submitted our notice to extend the maturity date by one year. Upon payment of the extension fee and assuming no default exists at December 20, 2010, the facility will be extended until December 20, 2011. The interest rate is LIBOR plus 85 basis points. This facility had $17.9 million of availability at September 30, 2010 and October 21, 2010.

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

6.      Derivative Financial Instruments

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Derivatives Designated as Cash-flow Hedges:
                         
Unrealized gain recognized in AOCL on derivatives (effective portion):
                         
Interest rate hedge contracts
 
$
—
 
$
177
 
$
—
 
$
591
 
                           
(Gain)/loss reclassified out of AOCL into interest expense (effective portion):
                         
Interest rate hedge contracts
 
$
(25
)
$
(89
)
$
262
 
$
(229
)

Noncontrolling Interests
Noncontrolling Interests

7.      Noncontrolling Interests

Noncontrolling Interests in the Operating Partnership

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

   
Nine Months Ended
September 30,
 
   
2010
 
2009
 
Beginning noncontrolling interests in the Operating Partnership
 
$
129,769
 
$
111,278
 
Adjustments of noncontrolling interests in the Operating Partnership to fair value
   
(1,480
)
 
18,497
 
Conversion of Common Units to Common Stock
   
(2,958
)
 
(3,241
)
Net income attributable to noncontrolling interests in the Operating Partnership
   
2,819
   
3,339
 
Distributions to noncontrolling interests in the Operating Partnership
   
(4,857
)
 
(5,168
)
Total noncontrolling interests in the Operating Partnership
 
$
123,293
 
$
124,705
 

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Net income available for common stockholders
 
$
6,878
 
$
10,281
 
$
52,773
 
$
54,319
 
Conversion of Common Units to Common Stock
   
—
   
3,052
   
2,958
   
3,241
 
Change in equity from net income available for common stockholders and conversion of Common Units to Common Stock
 
$
6,878
 
$
13,333
 
$
55,731
 
$
57,560
 

Noncontrolling Interests in Consolidated Affiliates

Noncontrolling interests in consolidated affiliates relates to our respective joint venture partners’ 50.0% interest in Highwoods-Markel Associates, LLC and both legal and estimated economic interests of 7% in Plaza Residential. Each of our joint venture partners is an unrelated third party.

Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments
8.      Disclosure About Fair Value of Financial Instruments

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

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

Our Level 1 assets are investments in marketable securities which we use to pay benefits under our non-qualified deferred compensation plan. Our Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. Our Level 1 liability is our non-qualified deferred compensation obligation.
 
Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. We had no Level 2 assets or liabilities at September 30, 2010 and December 31, 2009.

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

Our Level 3 assets are our tax increment financing bond, which is not routinely traded but whose fair value is determined using an estimate of projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds, and real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using independent appraisals.

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

       
Level 1
 
Level 3
 
   
September 30,
2010
 
Quoted Prices in Active Markets for Identical Assets or Liabilities
 
Significant
Unobservable
Inputs
 
Assets:
                   
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
$
3,232
 
$
3,232
 
$
—
 
Tax increment financing bond (in prepaid expenses and other assets)
   
17,342
   
—
   
17,342
 
Total Assets
 
$
20,574
 
$
3,232
 
$
17,342
 
                     
Noncontrolling Interests in the Operating Partnership
 
$
123,293
 
$
123,293
 
$
—
 
                     
Liability:
                   
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
$
3,846
 
$
3,846
 
$
—
 

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Asset:
                         
Tax Increment Financing Bond
                         
Beginning balance
 
$
17,017
 
$
17,660
 
$
16,871
 
$
17,468
 
Unrealized gain (in AOCL)
   
325
   
259
   
471
   
451
 
Ending balance
 
$
17,342
 
$
17,919
 
$
17,342
 
$
17,919
 

In the fourth quarter of 2007, we acquired a tax increment financing bond associated with a property developed by us. This bond amortizes to maturity in 2020. The estimated fair value at September 30, 2010 was $1.9 million below the outstanding principal due on the bond. If the yield-to-maturity used to fair value this bond was 100 basis points higher, the fair value of the bond would have been $0.8 million lower as of September 30, 2010. If the yield-to-maturity used to fair value this bond was 100 basis points lower, the fair value of the bond would have been $0.8 million higher as of September 30, 2010. Currently, we intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us and, therefore, we have recorded no credit losses related to the bond in the three and nine months ended September 30, 2010 and 2009. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

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

   
Carrying
Amount
 
Fair Value
 
September 30, 2010
             
Cash and cash equivalents
 
$
20,969
 
$
20,969
 
Restricted cash
 
$
4,757
 
$
4,757
 
Accounts, mortgages and notes receivable
 
$
42,368
 
$
42,481
 
Marketable securities of non-qualified deferred compensation plan
 
$
3,232
 
$
3,232
 
Tax increment financing bond
 
$
17,342
 
$
17,342
 
Mortgages and notes payable
 
$
1,501,624
 
$
1,597,621
 
Financing obligations
 
$
33,625
 
$
22,861
 
Non-qualified deferred compensation obligation
 
$
3,846
 
$
3,846
 
Noncontrolling interests in the Operating Partnership
 
$
123,293
 
$
123,293
 
               
December 31, 2009
             
Cash and cash equivalents
 
$
23,699
 
$
23,699
 
Restricted cash
 
$
6,841
 
$
6,841
 
Accounts, mortgages and notes receivable
 
$
24,212
 
$
24,212
 
Marketable securities of non-qualified deferred compensation plan
 
$
6,135
 
$
6,135
 
Tax increment financing bond
 
$
16,871
 
$
16,871
 
Mortgages and notes payable
 
$
1,469,155
 
$
1,440,317
 
Financing obligations
 
$
37,706
 
$
31,664
 
Non-qualified deferred compensation obligation
 
$
6,898
 
$
6,898
 
Noncontrolling interests in the Operating Partnership
 
$
129,769
 
$
129,769
 
 
The carrying values of our cash and cash equivalents, restricted cash, accounts receivable, marketable securities of non-qualified deferred compensation plan, tax increment financing bond, non-qualified deferred compensation obligation and noncontrolling interests in the Operating Partnership are equal to or approximate fair value. The fair values of our mortgages and notes receivable, mortgages and notes payable and financing obligations were estimated using the income or market approaches to approximate the price that would be paid in an orderly transaction between market participants on the respective measurement dates.
Share-Based Payments
Share-Based Payments

9.      Share-Based Payments

During the nine months ended September 30, 2010, we granted 190,826 stock options at an exercise price equal to the closing market price of a share of our Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted-average grant date fair value per share of $4.96. During the nine months ended September 30, 2010, we also granted 89,635 shares of time-based restricted stock and 78,151 shares of total return-based restricted stock with weighted-average grant date fair values per share of $29.05 and $29.75, respectively. We recorded stock-based compensation expense of $1.6 million each during the three months ended September 30, 2010 and 2009 and $5.1 million and $5.2 million during the nine months ended September 30, 2010 and 2009, respectively. At September 30, 2010, there was $8.4 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 1.7 years.

Comprehensive Income and Accumulated Other Comprehensive Loss
Comprehensive Income and Accumulated Other Comprehensive Loss

10.      Comprehensive Income and Accumulated Other Comprehensive Loss

The following table sets forth the components of comprehensive income:

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Net income                                                                               
 
$
8,773
 
$
12,573
 
$
60,904
 
$
62,847
 
Other comprehensive income/(loss):
                         
Unrealized gain on tax increment financing bond
   
325
   
259
   
471
   
451
 
Unrealized gains on cash-flow hedges
   
—
   
177
   
—
   
591
 
Amortization of past cash-flow hedges
   
(25
)
 
(89
)
 
262
   
(229
)
Settlement of past cash-flow hedge from disposition of investment in unconsolidated affiliate
   
—
   
—
   
103
   
—
 
Total other comprehensive income
   
300
   
347
   
836
   
813
 
Total comprehensive income
 
$
9,073
 
$
12,920
 
$
61,740
 
$
63,660
 

The following table sets forth the components of AOCL:

   
September 30,
2010
 
December 31,
2009
 
Tax increment financing bond                                                                                                      
 
$
1,895
 
$
2,366
 
Past cash-flow hedges                                                                                                      
   
1,080
   
1,445
 
Total accumulated other comprehensive loss                                                                                                
 
$
2,975
 
$
3,811
 

Discontinued Operations
Discontinued Operations
11.      Discontinued Operations

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Rental and other revenues                                                                                     
 
$
—
 
$
1,455
 
$
1,432
 
$
7,837
 
Operating expenses:
                         
Rental property and other expenses
   
—
   
488
   
656
   
3,010
 
Depreciation and amortization
   
—
   
322
   
365
   
1,609
 
Total operating expenses
   
—
   
810
   
1,021
   
4,619
 
Other income                                                                                     
   
—
   
1
   
—
   
2
 
Income before net gains/(losses) on disposition of discontinued operations
   
—
   
646
   
411
   
3,220
 
Net gains/(losses) on disposition of discontinued operations
   
—
   
(377
)
 
(86
)
 
20,639
 
Total discontinued operations                                                                                     
 
$
—
 
$
269
 
$
325
 
$
23,859
 

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

   
September 30,
2010
 
December 31,
2009
 
Assets:
             
Land
 
$
—
 
$
867
 
Buildings and tenant improvements                                                                                                 
   
—
   
3,876
 
Land held for development                                                                                                 
   
1,217
   
1,197
 
Total real estate assets                                                                                            
   
1,217
   
5,940
 
Less accumulated depreciation                                                                                                 
   
—
   
(1,484
)
Net real estate assets
   
1,217
   
4,456
 
Deferred leasing costs, net
   
—
   
209
 
Accrued straight line rents receivable
   
—
   
289
 
Prepaid expenses and other assets
   
32
   
77
 
Real estate and other assets, net, held for sale
 
$
1,249
 
$
5,031
 
Liabilities of real estate and other assets, net, held for sale (1)
 
$
12
 
$
12
 
__________
 
(1)
Included in accounts payable, accrued expenses and other liabilities.
 
Earnings Per Share
Earnings Per Share
 
12.      Earnings Per Share

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Earnings per Common Share - basic:
                         
Numerator:
                         
Income from continuing operations
 
$
8,773
 
$
12,304
 
$
60,579
 
$
38,988
 
Net (income) attributable to noncontrolling  interests in the Operating Partnership from continuing operations
   
(366
)
 
(576
)
 
(2,802
)
 
(1,948
)
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates from continuing operations
   
148
   
(24
)
 
(281
)
 
(158
)
Dividends on Preferred Stock
   
(1,677
)
 
(1,677
)
 
(5,031
)
 
(5,031
)
Income from continuing operations available for common stockholders
   
6,878
   
10,027
   
52,465
   
31,851
 
Income from discontinued operations
   
—
   
269
   
325
   
23,859
 
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
   
—
   
(15
)
 
(17
)
 
(1,391
)
Income from discontinued operations available for common stockholders
   
—
   
254
   
308
   
22,468
 
Net income available for common stockholders
 
$
6,878
 
$
10,281
 
$
52,773
 
$
54,319
 
Denominator:
                         
Denominator for basic earnings per Common Share – weighted average shares
   
71,631
   
70,902
   
71,549
   
66,912
 
Earnings per Common Share – basic:
                         
Income from continuing operations available for common stockholders
 
$
0.10
 
$
0.15
 
$
0.74
 
$
0.47
 
Income from discontinued operations available for common stockholders
   
—
   
—
   
—
   
0.34
 
Net income available for common stockholders
 
$
0.10
 
$
0.15
 
$
0.74
 
$
   0.81
 
Earnings per Common Share - diluted:
                         
Numerator:
                         
Income from continuing operations
 
$
8,773
 
$
12,304
 
$
60,579
 
$
38,988
 
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates from continuing operations
   
148
   
(24
)
 
(281
)
 
(158
)
Dividends on Preferred Stock
   
(1,677
)
 
(1,677
)
 
(5,031
)
 
(5,031
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
   
7,244
   
10,603
   
55,267
   
33,799
 
Income from discontinued operations available for common stockholders
   
—
   
269
   
325
   
23,859
 
Net income available for common stockholders before net income attributable to noncontrolling interests in the Operating Partnership
 
$
7,244
 
$
10,872
 
$
55,592
 
$
57,658
 
Denominator:
                         
Denominator for basic earnings per Common Share –weighted average shares
   
71,631
   
70,902
   
71,549
   
66,912
 
Add:
                         
Stock options using the treasury method
   
210
   
121
   
183
   
52
 
Noncontrolling interests partnership units
   
3,797
   
4,049
   
3,805
   
4,060
 
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
   
75,638
   
75,072
   
75,537
   
71,024
 
Earnings per Common Share – diluted:
                         
Income from continuing operations available for common stockholders
 
$
0.10
 
$
0.14
 
$
0.74
 
$
0.47
 
Income from discontinued operations available for common stockholders
   
—
   
—
   
—
   
0.34
 
Net income available for common stockholders
 
$
0.10
 
$
0.14
 
$
0.74
 
$
0.81
 
__________
 
(1)
Options and warrants aggregating 0.7 million and 0.9 million shares were outstanding during the three months ended September 30, 2010 and 2009, respectively, and 0.7 million and 1.2 million shares were outstanding during the nine months ended September 30, 2010 and 2009, respectively, but were not included in the computation of diluted earnings per Common Share because the impact of including such shares would be anti-dilutive.

Segment Information
Segment Information

13.      Segment Information

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

Our accounting policies of the segments are the same as those used in our Consolidated Financial Statements. All operations are within the United States and, at September 30, 2010, no single customer of the Wholly Owned Properties generated more than 9.4% of our consolidated revenues on an annualized basis.

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

   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Rental and Other Revenues: (1)
                         
Office:
                         
Atlanta, GA
 
$
11,870
 
$
12,617
 
$
36,069
 
$
36,213
 
Greenville, SC
   
3,312
   
3,429
   
10,440
   
10,668
 
Kansas City, MO
   
3,673
   
3,742
   
11,045
   
11,200
 
Memphis, TN
   
9,692
   
8,185
   
24,889
   
22,615
 
Nashville, TN
   
14,599
   
14,901
   
44,564
   
45,498
 
Orlando, FL
   
2,920
   
3,110
   
8,985
   
8,903
 
Piedmont Triad, NC
   
5,802
   
5,720
   
17,722
   
17,575
 
Raleigh, NC
   
18,814
   
18,205
   
56,070
   
54,509
 
Richmond, VA
   
12,210
   
12,173
   
35,486
   
35,114
 
Tampa, FL
   
17,831
   
17,480
   
53,810
   
50,600
 
Total Office Segment
   
100,723
   
99,562
   
299,080
   
292,895
 
Industrial:
                         
Atlanta, GA
   
3,660
   
3,904
   
11,478
   
11,775
 
Piedmont Triad, NC
   
3,259
   
2,859
   
9,324
   
9,872
 
Total Industrial Segment
   
6,919
   
6,763
   
20,802
   
21,647
 
Retail:
                         
Kansas City, MO
   
8,103
   
6,466
   
24,540
   
21,755
 
Piedmont Triad, NC
   
—
   
47
   
(40
)
 
161
 
Raleigh, NC
   
30
   
30
   
105
   
90
 
Total Retail Segment
   
8,133
   
6,543
   
24,605
   
22,006
 
Residential:
                         
Kansas City, MO                                                         
   
288
   
302
   
969
   
897
 
Total Residential Segment
   
288
   
302
   
969
   
897
 
Total Rental and Other Revenues                                                                    
 
$
116,063
 
$
113,170
 
$
345,456
 
$
337,445
 


   
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
 
   
2010
 
2009
 
2010
 
2009
 
Net Operating Income: (1)
                         
Office:
                         
Atlanta, GA
 
$
7,394
 
$
7,894
 
$
22,864
 
$
22,903
 
Greenville, SC
   
1,858
   
2,014
   
6,308
   
6,643
 
Kansas City, MO
   
2,160
   
2,342
   
6,700
   
6,845
 
Memphis, TN
   
5,507
   
4,844
   
15,015
   
12,893
 
Nashville, TN
   
9,490
   
9,713
   
29,426
   
29,648
 
Orlando, FL
   
1,555
   
1,637
   
4,891
   
4,667
 
Piedmont Triad, NC
   
3,843
   
3,638
   
11,698
   
11,535
 
Raleigh, NC
   
12,611
   
11,945
   
38,445
   
36,735
 
Richmond, VA
   
7,632
   
7,837
   
23,988
   
23,897
 
Tampa, FL
   
10,903
   
10,246
   
32,716
   
29,630
 
Total Office Segment
   
62,953
   
62,110
   
192,051
   
185,396
 
Industrial:
                         
Atlanta, GA
   
2,493
   
2,903
   
8,056
   
8,906
 
Piedmont Triad, NC
   
2,460
   
2,087
   
6,835
   
7,630
 
Total Industrial Segment
   
4,953
   
4,990
   
14,891
   
16,536
 
Retail:
                         
Atlanta, GA (2)
   
(5
)
 
(6
)
 
(16
)
 
(18
)
Kansas City, MO
   
4,569
   
3,494
   
14,668
   
13,454
 
Piedmont Triad, NC (2)
   
—
   
(72
)
 
(40
)
 
18
 
Raleigh, NC (2)
   
10
   
(1
)
 
29
   
9
 
Total Retail Segment
   
4,574
   
3,415
   
14,641
   
13,463
 
Residential:
                         
Kansas City, MO
   
168
   
163
   
594
   
517
 
Raleigh, NC (2)
   
(90
)
 
(72
)
 
(265
)
 
(210
)
Total Residential Segment
   
78
   
91
   
329
   
307
 
Total Net Operating Income                                                                    
   
72,558
   
70,606
   
221,912
   
215,702
 
Reconciliation to income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
                         
Depreciation and amortization
   
(34,281
)
 
(32,367
)
 
(100,363
)
 
(97,590
)
General and administrative expense
   
(8,882
)
 
(9,485
)
 
(24,369
)
 
(27,286
)
Interest expense
   
(23,338
)
 
(21,334
)
 
(69,385
)
 
(64,654
)
Interest and other income
   
1,625
   
3,981
   
4,291
   
7,902
 
Income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
 
$
7,682
 
$
11,401
 
$
32,086
 
$
34,074
 
__________
 
(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.

Document Information
9 Months Ended
Sep. 30, 2010
Document Type
10-Q 
Amendment Flag
FALSE 
Document Period End Date
2010-09-30 
Entity Information
9 Months Ended
Sep. 30, 2010
Jun. 30, 2009
Entity [Text Block]
HIGHWOODS PROPERTIES INC 
 
Entity Registrant Name
HIGHWOODS PROPERTIES INC 
 
Entity Central Index Key
0000921082 
 
Current Fiscal Year End Date
12/31 
 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Public Float
 
1,564,176,615 
Entity Common Stock, Shares Outstanding
71,656,232 
 
Document Fiscal Year Focus
2010 
 
Document Fiscal Period Focus
Q3