HIGHWOODS PROPERTIES, INC., 10-Q filed on 10/30/2012
Quarterly Report
Document and Entity Information Document
9 Months Ended
Sep. 30, 2012
Oct. 22, 2012
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
Sep. 30, 2012 
 
Document Fiscal Year Focus
2012 
 
Document Fiscal Period Focus
Q3 
 
Amendment Flag
false 
 
Entity Common Stock, Shares Outstanding
 
78,529,922 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Consolidated Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Real estate assets, at cost:
 
 
Land
$ 371,478 
$ 355,694 
Buildings and tenant improvements
3,200,350 
3,009,155 
Development in process
11,566 
Land held for development
102,482 
105,206 
Total real estate assets
3,685,876 
3,470,055 
Less-accumulated depreciation
(926,668)
(869,046)
Net real estate assets
2,759,208 
2,601,009 
For-sale residential condominiums
1,238 
4,751 
Real estate and other assets, net, held for sale
124,273 
Cash and cash equivalents
9,086 
11,188 
Restricted cash
21,578 
26,666 
Accounts receivable, net of allowance of $3,437 and $3,548, respectively
21,144 
30,093 
Mortgages and notes receivable, net of allowance of $211 and $61, respectively
16,943 
18,600 
Accrued straight-line rents receivable, net of allowance of $1,076 and $1,294, respectively
112,660 
99,490 
Investments in and advances to unconsolidated affiliates
78,406 
100,367 
Deferred financing and leasing costs, net of accumulated amortization of $73,579 and $62,319, respectively
149,170 
127,774 
Prepaid expenses and other assets, net of accumulated amortization of $12,585 and $15,089, respectively
40,452 
36,781 
Total Assets
3,209,885 
3,180,992 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity: [Abstract]
 
 
Mortgages and notes payable
1,778,555 
1,868,906 
Accounts payable, accrued expenses and other liabilities
152,053 
148,607 
Financing obligations
27,791 
30,150 
Liabilities, net, held for sale
35,815 
Total Liabilities
1,958,399 
2,083,478 
Commitments and contingencies
   
   
Noncontrolling interests in the Operating Partnership
123,141 
110,655 
Equity: [Abstract]
 
 
8.625% Series A Cumulative Redeemable Preferred Shares, $.01 par value, 50,000,000 authorized shares, liquidation preference $1,000 per share; 29,077 shares issued and outstanding
29,077 
29,077 
Common Stock, $.01 par value, 200,000,000 authorized shares; 78,529,922 and 72,647,697 shares issued and outstanding, respectively
785 
726 
Additional paid-in capital
1,985,322 
1,803,997 
Distributions in excess of net income available for common stockholders
(877,962)
(845,853)
Accumulated other comprehensive loss
(13,426)
(5,734)
Total Stockholders' Equity
1,123,796 
982,213 
Noncontrolling interests in consolidated affiliates
4,549 
4,646 
Total Equity
1,128,345 
986,859 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
3,209,885 
3,180,992 
Highwoods Realty Limited Partnership [Member]
 
 
Real estate assets, at cost:
 
 
Land
371,478 
355,694 
Buildings and tenant improvements
3,200,350 
3,009,155 
Development in process
11,566 
Land held for development
102,482 
105,206 
Total real estate assets
3,685,876 
3,470,055 
Less-accumulated depreciation
(926,668)
(869,046)
Net real estate assets
2,759,208 
2,601,009 
For-sale residential condominiums
1,238 
4,751 
Real estate and other assets, net, held for sale
124,273 
Cash and cash equivalents
9,174 
11,151 
Restricted cash
21,578 
26,666 
Accounts receivable, net of allowance of $3,437 and $3,548, respectively
21,144 
30,093 
Mortgages and notes receivable, net of allowance of $211 and $61, respectively
16,943 
18,600 
Accrued straight-line rents receivable, net of allowance of $1,076 and $1,294, respectively
112,660 
99,490 
Investments in and advances to unconsolidated affiliates
77,364 
99,296 
Deferred financing and leasing costs, net of accumulated amortization of $73,579 and $62,319, respectively
149,170 
127,774 
Prepaid expenses and other assets, net of accumulated amortization of $12,585 and $15,089, respectively
40,410 
36,781 
Total Assets
3,208,889 
3,179,884 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity: [Abstract]
 
 
Mortgages and notes payable
1,778,555 
1,868,906 
Accounts payable, accrued expenses and other liabilities
151,963 
148,607 
Financing obligations
27,791 
30,150 
Liabilities, net, held for sale
35,815 
Total Liabilities
1,958,309 
2,083,478 
Commitments and contingencies
   
   
Redeemable Operating Partnership Units: [Abstract]
 
 
Common Units, 3,775,016 and 3,729,518 outstanding, respectively
123,141 
110,655 
Series A Preferred Units, liquidation preference $1,000 per unit; 29,077 units issued and outstanding
29,077 
29,077 
Total Redeemable Operating Partnership Units
152,218 
139,732 
Equity: [Abstract]
 
 
General partner Common Units, 818,961 and 759,684 outstanding, respectively
11,069 
9,575 
Limited partner Common Units, 77,302,152 and 71,479,204 outstanding, respectively
1,096,170 
948,187 
Accumulated other comprehensive loss
(13,426)
(5,734)
Noncontrolling interests in consolidated affiliates
4,549 
4,646 
Total Equity
1,098,362 
956,674 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity
$ 3,208,889 
$ 3,179,884 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2012
Dec. 31, 2011
Assets: [Abstract]
 
 
Accounts receivable allowance
$ 3,437 
$ 3,548 
Mortgages and notes receivable allowance
211 
61 
Accrued straight-line rents receivable allowance
1,076 
1,294 
Deferred financing and leasing costs, accumulated amortization
73,579 
62,319 
Prepaid expenses and other assets, accumulated amortization
12,585 
15,089 
Equity: [Abstract]
 
 
Series A Preferred Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Series A Preferred Stock, authorized shares (in shares)
50,000,000 
50,000,000 
Series A Preferred Stock, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Stock, shares issued (in shares)
29,077 
29,077 
Series A Preferred Stock, shares outstanding (in shares)
29,077 
29,077 
Common Stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common Stock, authorized shares (in shares)
200,000,000 
200,000,000 
Common Stock, shares issued (in shares)
78,529,922 
72,647,697 
Common Stock, shares outstanding (in shares)
78,529,922 
72,647,697 
Highwoods Realty Limited Partnership [Member]
 
 
Assets: [Abstract]
 
 
Accounts receivable allowance
3,437 
3,548 
Mortgages and notes receivable allowance
211 
61 
Accrued straight-line rents receivable allowance
1,076 
1,294 
Deferred financing and leasing costs, accumulated amortization
73,579 
62,319 
Prepaid expenses and other assets, accumulated amortization
$ 12,585 
$ 15,089 
Equity: [Abstract]
 
 
Common Stock, par value (in dollars per share)
$ 0.01 
 
Redeemable Operating Partnership Units: [Abstract]
 
 
Redeemable Common Units outstanding (in shares)
3,775,016 
3,729,518 
Series A Preferred Units, liquidation preference (in dollars per share)
$ 1,000 
$ 1,000 
Series A Preferred Units, issued (in shares)
29,077 
29,077 
Series A Preferred Units, outstanding (in shares)
29,077 
29,077 
Common Units: [Abstract]
 
 
General partners' capital account, units outstanding (in shares)
818,961 
759,684 
Limited partners' capital account, units outstanding (in shares)
77,302,152 
71,479,204 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Rental and other revenues
$ 128,214 
$ 117,265 
$ 382,120 
$ 339,497 
Operating expenses:
 
 
 
 
Rental property and other expenses
47,233 
44,031 
138,132 
122,358 
Depreciation and amortization
38,651 
35,051 
115,755 
99,659 
Impairments of real estate assets
2,429 
2,429 
General and administrative
9,725 
12,212 
28,298 
27,983 
Total operating expenses
95,609 
93,723 
282,185 
252,429 
Interest expense:
 
 
 
 
Contractual
22,910 
23,264 
70,309 
68,444 
Amortization of deferred financing costs
907 
806 
2,709 
2,448 
Financing obligations
(205)
201 
(357)
584 
Total interest expense
23,612 
24,271 
72,661 
71,476 
Other income:
 
 
 
 
Interest and other income
1,916 
1,505 
5,883 
5,277 
Losses on debt extinguishment
(973)
(24)
Total other income
1,916 
1,505 
4,910 
5,253 
Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
10,909 
776 
32,184 
20,845 
Gains on disposition of property
262 
462 
Gains/(losses) on for-sale residential condominiums
80 
(476)
255 
(322)
Gains on disposition of investments in unconsolidated affiliates
2,282 
2,282 
Equity in earnings of unconsolidated affiliates
1,324 
1,113 
2,670 
3,933 
Income from continuing operations
12,313 
3,957 
35,109 
27,200 
Discontinued operations:
 
 
 
 
Income from discontinued operations
547 
1,714 
4,062 
5,348 
Net gains on disposition of discontinued operations
22,936 
2,573 
29,455 
2,573 
Total discontinued operations
23,483 
4,287 
33,517 
7,921 
Net income
35,796 
8,244 
68,626 
35,121 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,653)
(366)
(3,166)
(1,496)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(159)
(249)
(566)
(554)
Dividends on Preferred Stock
(627)
(627)
(1,881)
(3,926)
Excess of Preferred Stock redemption/repurchase cost over carrying value
(1,895)
Net income available for common stockholders
33,357 
7,002 
63,013 
27,250 
Earnings per Common Share - basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.04 
$ 0.42 
$ 0.28 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.29 
$ 0.06 
$ 0.42 
$ 0.10 
Net income available for common stockholders (in dollars per share)
$ 0.44 
$ 0.10 
$ 0.84 
$ 0.38 
Weighted average Common Shares outstanding - basic (in shares)
76,590 1 2
72,492 1 2
74,703 1 2
72,176 1 2
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.14 
$ 0.04 
$ 0.42 
$ 0.28 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.29 
$ 0.06 
$ 0.42 
$ 0.10 
Net income available for common stockholders (in dollars per share)
$ 0.43 
$ 0.10 
$ 0.84 
$ 0.38 
Weighted average Common Shares outstanding - diluted (in shares)
80,495 1
76,402 1
78,568 1
76,127 1
Dividends declared per Common Share (in dollars per share)
$ 0.425 
$ 0.425 
$ 1.275 
$ 1.275 
Net income available for common stockholders:
 
 
 
 
Income from continuing operations available for common stockholders
10,980 
2,928 
31,090 
19,724 
Income from discontinued operations available for common stockholders
22,377 
4,074 
31,923 
7,526 
Net income available for common stockholders
33,357 
7,002 
63,013 
27,250 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Rental and other revenues
128,214 
117,265 
382,120 
339,497 
Operating expenses:
 
 
 
 
Rental property and other expenses
47,159 
43,963 
137,937 
122,376 
Depreciation and amortization
38,651 
35,051 
115,755 
99,659 
Impairments of real estate assets
2,429 
2,429 
General and administrative
9,799 
12,280 
28,493 
27,965 
Total operating expenses
95,609 
93,723 
282,185 
252,429 
Interest expense:
 
 
 
 
Contractual
22,910 
23,264 
70,309 
68,444 
Amortization of deferred financing costs
907 
806 
2,709 
2,448 
Financing obligations
(205)
201 
(357)
584 
Total interest expense
23,612 
24,271 
72,661 
71,476 
Other income:
 
 
 
 
Interest and other income
1,916 
1,505 
5,883 
5,277 
Losses on debt extinguishment
(973)
(24)
Total other income
1,916 
1,505 
4,910 
5,253 
Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
10,909 
776 
32,184 
20,845 
Gains on disposition of property
262 
462 
Gains/(losses) on for-sale residential condominiums
80 
(476)
255 
(322)
Gains on disposition of investments in unconsolidated affiliates
2,282 
2,282 
Equity in earnings of unconsolidated affiliates
1,328 
1,113 
2,679 
3,945 
Income from continuing operations
12,317 
3,957 
35,118 
27,212 
Discontinued operations:
 
 
 
 
Income from discontinued operations
547 
1,714 
4,062 
5,348 
Net gains on disposition of discontinued operations
22,936 
2,573 
29,455 
2,573 
Total discontinued operations
23,483 
4,287 
33,517 
7,921 
Net income
35,800 
8,244 
68,635 
35,133 
Net (income) attributable to noncontrolling interests in consolidated affiliates
(159)
(249)
(566)
(554)
Distributions on Preferred Units
(627)
(627)
(1,881)
(3,926)
Excess of Preferred Unit redemption/repurchase cost over carrying value
(1,895)
Net income available for common unitholders
35,014 
7,368 
66,188 
28,758 
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.15 
$ 0.04 
$ 0.42 
$ 0.28 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.29 
$ 0.06 
$ 0.43 
$ 0.10 
Net income available for common unitholders (in dollars per share)
$ 0.44 
$ 0.10 
$ 0.85 
$ 0.38 
Weighted average Common Units outstanding - basic (in shares)
79,949 1 2
75,855 1 2
78,032 1 2
75,549 1 2
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.15 
0.04 
0.42 
0.28 
Income from discontinued operations available for common unitholders (in dollars per share)
0.29 
0.06 
0.43 
0.10 
Net income available for common unitholders (in dollars per share)
0.44 
0.10 
0.85 
0.38 
Weighted average Common Units outstanding - diluted (in shares)
80,086 1
75,993 1
78,159 1
75,718 1
Distributions declared per Common Unit (in dollars per unit)
$ 0.425 
$ 0.425 
$ 1.275 
$ 1.275 
Net income available for common unitholders:
 
 
 
 
Income from continuing operations available for common unitholders
11,531 
3,081 
32,671 
20,837 
Income from discontinued operations available for common unitholders
23,483 
4,287 
33,517 
7,921 
Net income available for common unitholders
$ 35,014 
$ 7,368 
$ 66,188 
$ 28,758 
Consolidated Statements of Comprehensive Income (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Comprehensive income/(loss):
 
 
 
 
Net income
$ 35,796 
$ 8,244 
$ 68,626 
$ 35,121 
Other comprehensive income/(loss):
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
(101)
600 
482 
129 
Unrealized losses on cash flow hedges
(3,337)
(10,424)
Amortization of cash flow hedges
791 
(30)
2,250 
(87)
Total other comprehensive income/(loss)
(2,647)
570 
(7,692)
42 
Total comprehensive income
33,149 
8,814 
60,934 
35,163 
Less-comprehensive (income) attributable to noncontrolling interests
(1,812)
(615)
(3,732)
(2,050)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership
31,337 
8,199 
57,202 
33,113 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Comprehensive income/(loss):
 
 
 
 
Net income
35,800 
8,244 
68,635 
35,133 
Other comprehensive income/(loss):
 
 
 
 
Unrealized gains/(losses) on tax increment financing bond
(101)
600 
482 
129 
Unrealized losses on cash flow hedges
(3,337)
(10,424)
Amortization of cash flow hedges
791 
(30)
2,250 
(87)
Total other comprehensive income/(loss)
(2,647)
570 
(7,692)
42 
Total comprehensive income
33,153 
8,814 
60,943 
35,175 
Less-comprehensive (income) attributable to noncontrolling interests
(159)
(249)
(566)
(554)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership
$ 32,994 
$ 8,565 
$ 60,377 
$ 34,621 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data, unless otherwise specified
Total
Highwoods Realty Limited Partnership [Member]
Common Stock [Member]
Series A Cumulative Redeemable Preferred Shares [Member]
Series B Cumulative Redeemable Preferred Shares [Member]
General Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Limited Partner Common Units [Member]
Highwoods Realty Limited Partnership [Member]
Additional Paid-in Capital [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income (Loss) [Member]
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Noncontrolling Interests in Consolidated Affiliates [Member]
Highwoods Realty Limited Partnership [Member]
Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance at Dec. 31, 2010
$ 1,088,222 
$ 1,005,466 
$ 717 
$ 29,092 
$ 52,500 
$ 10,044 
$ 994,610 
$ 1,766,886 
$ (3,648)
$ (3,648)
$ 4,460 
$ 4,460 
$ (761,785)
Balance (in shares) at Dec. 31, 2010
 
 
71,690,487 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
22,043 
 
 
 
220 
21,823 
 
 
 
 
Distributions paid on Common Units
 
(96,197)
 
 
 
(962)
(95,235)
 
 
 
 
Distributions paid on Preferred Units
 
(3,926)
 
 
 
(39)
(3,887)
 
 
 
 
Issuances of Common Stock - Shares
 
 
711,234 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
22,043 
 
 
 
22,036 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
43,308 
 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
1,344 
 
 
 
1,344 
 
 
Dividends on Common Stock
(91,900)
 
 
 
 
 
(91,900)
Dividends on Preferred Stock
(3,926)
 
 
 
 
 
(3,926)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
10,177 
 
 
 
10,177 
 
 
Distributions to noncontrolling interests in consolidated affiliates
(391)
(391)
(391)
(391)
Issuances of restricted stock - Shares
 
 
134,352 
 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
Redemptions/repurchases of Preferred Stock
(52,515)
 
(15)
(52,500)
 
 
1,895 
 
 
(1,895)
Share-based compensation expense
4,771 
4,771 
48 
4,723 
4,769 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
14,239 
 
 
 
144 
14,095 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,496)
 
 
 
 
 
(1,496)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(6)
(548)
554 
554 
(554)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
35,121 
35,133 
351 
34,782 
35,121 
Other comprehensive income/(loss)
42 
42 
42 
42 
Total comprehensive income
35,163 
35,175 
 
 
 
 
 
 
 
 
 
 
 
Balance at Sep. 30, 2011
1,011,492 
981,180 
726 
29,077 
9,800 
970,363 
1,807,107 
(3,606)
(3,606)
4,623 
4,623 
(826,435)
Balance (in shares) at Sep. 30, 2011
 
 
72,579,381 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(366)
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
8,244 
8,244 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss)
570 
570 
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
8,814 
8,814 
 
 
 
 
 
 
 
 
 
 
 
Balance at Sep. 30, 2011
1,011,492 
981,180 
 
 
 
 
 
 
 
 
 
 
 
Balance at Dec. 31, 2011
986,859 
956,674 
726 
29,077 
 
9,575 
948,187 
1,803,997 
(5,734)
(5,734)
4,646 
4,646 
(845,853)
Balance (in shares) at Dec. 31, 2011
72,647,697 
 
72,647,697 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Units, net
 
188,973 
 
 
 
1,890 
187,083 
 
 
 
 
Distributions paid on Common Units
 
(99,334)
 
 
 
(994)
(98,340)
 
 
 
 
Distributions paid on Preferred Units
 
(1,881)
 
 
 
(19)
(1,862)
 
 
 
 
Issuances of Common Stock - Shares
 
 
5,701,974 
 
 
 
 
 
 
 
 
 
 
Issuances of Common Stock, net
186,674 
 
57 
 
 
 
186,617 
 
 
Conversions of Common Units to Common Stock - Shares
 
 
21,366 
 
 
 
 
 
 
 
 
 
 
Conversions of Common Units to Common Stock
731 
 
 
 
 
731 
 
 
Dividends on Common Stock
(95,122)
 
 
 
 
 
 
(95,122)
Dividends on Preferred Stock
(1,881)
 
 
 
 
 
 
(1,881)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(12,485)
 
 
 
 
(12,485)
 
 
Distributions to noncontrolling interests in consolidated affiliates
(663)
(663)
 
(663)
(663)
Issuances of restricted stock - Shares
 
 
158,885 
 
 
 
 
 
 
 
 
 
 
Issuances of restricted stock
 
 
 
 
 
 
Share-based compensation expense
6,464 
6,464 
 
65 
6,399 
6,462 
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner
 
(12,814)
 
 
 
(128)
(12,686)
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(3,166)
 
 
 
 
 
 
(3,166)
Net (income) attributable to noncontrolling interests in consolidated affiliates
 
(6)
(560)
566 
566 
(566)
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
68,626 
68,635 
 
686 
67,949 
68,626 
Other comprehensive income/(loss)
(7,692)
(7,692)
 
(7,692)
(7,692)
Total comprehensive income
60,934 
60,943 
 
 
 
 
 
 
 
 
 
 
 
Balance at Sep. 30, 2012
1,128,345 
1,098,362 
785 
29,077 
 
11,069 
1,096,170 
1,985,322 
(13,426)
(13,426)
4,549 
4,549 
(877,962)
Balance (in shares) at Sep. 30, 2012
78,529,922 
 
78,529,922 
 
 
 
 
 
 
 
 
 
 
Balance at Jun. 30, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(1,653)
 
 
 
 
 
 
 
 
 
 
 
 
Comprehensive income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
35,796 
35,800 
 
 
 
 
 
 
 
 
 
 
 
Other comprehensive income/(loss)
(2,647)
(2,647)
 
 
 
 
 
 
 
 
 
 
 
Total comprehensive income
33,149 
33,153 
 
 
 
 
 
 
 
 
 
 
 
Balance at Sep. 30, 2012
$ 1,128,345 
$ 1,098,362 
 
 
 
 
 
 
 
 
 
 
 
Balance (in shares) at Sep. 30, 2012
78,529,922 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Operating activities:
 
 
Net income
$ 68,626 
$ 35,121 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
117,764 
103,594 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
358 
1,347 
Share-based compensation expense
6,464 
4,771 
Allowance for losses on accounts and accrued straight-line rents receivable
1,235 
1,586 
Amortization of deferred financing costs
2,709 
2,448 
Amortization of cash flow hedges
2,250 
(87)
Impairments of real estate assets
2,429 
Losses on debt extinguishment
973 
24 
Net gains on disposition of property
(29,455)
(3,035)
(Gains)/losses on for-sale residential condominiums
(255)
322 
Gains on disposition of investments in unconsolidated affiliates
(2,282)
Equity in earnings of unconsolidated affiliates
(2,670)
(3,933)
Changes in financing obligations
(1,010)
(339)
Distributions of earnings from unconsolidated affiliates
3,249 
3,400 
Changes in operating assets and liabilities:
 
 
Accounts receivable
5,310 
(3,493)
Prepaid expenses and other assets
(3,258)
(586)
Accrued straight-line rents receivable
(13,609)
(9,280)
Accounts payable, accrued expenses and other liabilities
(20,663)
4,118 
Net cash provided by operating activities
138,018 
136,125 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(158,200)
(75,510)
Investments in development in process
(5,392)
(5,835)
Investments in tenant improvements and deferred leasing costs
(61,821)
(59,692)
Investments in building improvements
(27,229)
(9,521)
Net proceeds from disposition of real estate assets
152,456 
16,530 
Net proceeds from disposition of for-sale residential condominiums
3,768 
2,770 
Proceeds from disposition of investments in unconsolidated affiliates
4,756 
Distributions of capital from unconsolidated affiliates
1,035 
1,304 
Repayments of mortgages and notes receivable
1,657 
338 
Investments in and advances to unconsolidated affiliates
(3,928)
(39,665)
Changes in restricted cash and other investing activities
2,904 
(15,598)
Net cash used in investing activities
(94,750)
(180,123)
Financing activities:
 
 
Dividends on Common Stock
(95,122)
(91,900)
Redemptions/repurchases of Preferred Stock
(52,515)
Dividends on Preferred Stock
(1,881)
(3,926)
Distributions to noncontrolling interests in the Operating Partnership
(4,733)
(4,818)
Distributions to noncontrolling interests in consolidated affiliates
(663)
(391)
Proceeds from the issuance of Common Stock
191,667 
22,043 
Costs paid for the issuance of Common Stock
(2,745)
Repurchase of shares related to tax withholdings
(2,248)
Borrowings on revolving credit facility
219,800 
285,400 
Repayments of revolving credit facility
(492,800)
(150,400)
Borrowings on mortgages and notes payable
225,000 
200,000 
Repayments of mortgages and notes payable
(77,264)
(156,602)
Payments on financing obligations
(1,316)
Additions to deferred financing costs and other financing activities
(3,065)
(6,011)
Net cash provided by/(used in) financing activities
(45,370)
40,880 
Net decrease in cash and cash equivalents
(2,102)
(3,118)
Cash and cash equivalents at beginning of the period
11,188 
14,206 
Cash and cash equivalents at end of the period
9,086 
11,088 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
72,793 
69,321 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized losses on cash flow hedges
(10,424)
Conversions of Common Units to Common Stock
731 
1,344 
Changes in accrued capital expenditures
1,829 
3,707 
Write-off of fully depreciated real estate assets
36,918 
39,039 
Write-off of fully amortized deferred financing and leasing costs
14,189 
13,683 
Unrealized gains/(losses) on marketable securities of non-qualified deferred compensation plan
310 
(354)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
12,485 
(10,177)
Unrealized gains/(losses) on tax increment financing bond
482 
129 
Assumption of mortgages and notes payable related to acquisition activities
192,367 
Reduction of advances to unconsolidated affiliates related to acquisition activities
26,000 
Issuances of Common Units to acquire real estate assets
2,299 
Highwoods Realty Limited Partnership [Member]
 
 
Operating activities:
 
 
Net income
68,635 
35,133 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
Depreciation and amortization
117,764 
103,594 
Amortization of lease incentives and acquisition-related intangible assets and liabilities
358 
1,347 
Share-based compensation expense
6,464 
4,771 
Allowance for losses on accounts and accrued straight-line rents receivable
1,235 
1,586 
Amortization of deferred financing costs
2,709 
2,448 
Amortization of cash flow hedges
2,250 
(87)
Impairments of real estate assets
2,429 
Losses on debt extinguishment
973 
24 
Net gains on disposition of property
(29,455)
(3,035)
(Gains)/losses on for-sale residential condominiums
(255)
322 
Gains on disposition of investments in unconsolidated affiliates
(2,282)
Equity in earnings of unconsolidated affiliates
(2,679)
(3,945)
Changes in financing obligations
(1,010)
(339)
Distributions of earnings from unconsolidated affiliates
3,230 
3,382 
Changes in operating assets and liabilities:
 
 
Accounts receivable
5,310 
(3,493)
Prepaid expenses and other assets
(3,216)
(542)
Accrued straight-line rents receivable
(13,609)
(9,280)
Accounts payable, accrued expenses and other liabilities
(20,753)
4,118 
Net cash provided by operating activities
137,951 
136,151 
Investing activities:
 
 
Investments in acquired real estate and related intangible assets, net of cash acquired
(158,200)
(75,510)
Investments in development in process
(5,392)
(5,835)
Investments in tenant improvements and deferred leasing costs
(61,821)
(59,692)
Investments in building improvements
(27,229)
(9,521)
Net proceeds from disposition of real estate assets
152,456 
16,530 
Net proceeds from disposition of for-sale residential condominiums
3,768 
2,770 
Proceeds from disposition of investments in unconsolidated affiliates
4,756 
Distributions of capital from unconsolidated affiliates
1,035 
1,304 
Repayments of mortgages and notes receivable
1,657 
338 
Investments in and advances to unconsolidated affiliates
(3,928)
(39,665)
Changes in restricted cash and other investing activities
2,904 
(15,598)
Net cash used in investing activities
(94,750)
(180,123)
Financing activities:
 
 
Distributions on Common Units
(99,334)
(96,197)
Redemptions/repurchases of Preferred Units
(52,515)
Distributions on Preferred Units
(1,881)
(3,926)
Distributions to noncontrolling interests in consolidated affiliates
(663)
(391)
Proceeds from the issuance of Common Units
191,667 
22,043 
Costs paid for the issuance of Common Units
(2,745)
Repurchase of units related to tax withholdings
(2,248)
Borrowings on revolving credit facility
219,800 
285,400 
Repayments of revolving credit facility
(492,800)
(150,400)
Borrowings on mortgages and notes payable
225,000 
200,000 
Repayments of mortgages and notes payable
(77,264)
(156,602)
Payments on financing obligations
(1,316)
Additions to deferred financing costs and other financing activities
(3,394)
(6,615)
Net cash provided by/(used in) financing activities
(45,178)
40,797 
Net decrease in cash and cash equivalents
(1,977)
(3,175)
Cash and cash equivalents at beginning of the period
11,151 
14,198 
Cash and cash equivalents at end of the period
9,174 
11,023 
Supplemental disclosure of cash flow information:
 
 
Cash paid for interest, net of amounts capitalized
72,793 
69,321 
Supplemental disclosure of non-cash investing and financing activities:
 
 
Unrealized losses on cash flow hedges
(10,424)
Changes in accrued capital expenditures
1,829 
3,707 
Write-off of fully depreciated real estate assets
36,918 
39,039 
Write-off of fully amortized deferred financing and leasing costs
14,189 
13,683 
Unrealized gains/(losses) on marketable securities of non-qualified deferred compensation plan
310 
(354)
Adjustment of Redeemable Common Units to fair value
10,187 
(14,843)
Unrealized gains/(losses) on tax increment financing bond
482 
129 
Assumption of mortgages and notes payable related to acquisition activities
192,367 
Reduction of advances to unconsolidated affiliates related to acquisition activities
26,000 
Issuances of Common Units to acquire real estate assets
$ 2,299 
$ 0 
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 September 30, 2012, the Company and/or the Operating Partnership wholly owned: 299 in-service office, industrial and retail properties, comprising 29.0 million square feet; five for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At September 30, 2012, the Company owned all of the Preferred Units and 78.1 million, or 95.4%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.8 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the nine months ended September 30, 2012, the Company redeemed 21,366 Common Units for a like number of shares of Common Stock and issued 66,864 Common Units to acquire real estate assets. As a result of this activity, the percentage of Common Units owned by the Company increased from 95.1% at December 31, 2011 to 95.4% at September 30, 2012.

Common Stock Offerings
 
The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and nine months ended September 30, 2012, the Company issued 2,867,768 and 5,490,244 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.22 and $33.33 per share, respectively, raising net proceeds, after sales commissions and expenses, of $93.8 million and $180.2 million, respectively.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Balance Sheet at December 31, 2011 was recast 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 September 30, 2012. Our Consolidated Statements of Income for the three and nine months ended September 30, 2011 were recast from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations. Prior period amounts related to capital expenditures in our Consolidated Statements of Cash Flows have been disaggregated 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 intercompany transactions and accounts have been eliminated. At September 30, 2012 and December 31, 2011, we had involvement with no entities that we concluded to be variable interest entities.

1.    Description of Business and Significant Accounting Policies – Continued

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2011 Annual Report on Form 10-K.

Use of Estimates

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

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

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At September 30, 2012, the Company and/or the Operating Partnership wholly owned: 299 in-service office, industrial and retail properties, comprising 29.0 million square feet; five for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At September 30, 2012, the Company owned all of the Preferred Units and 78.1 million, or 95.4%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.8 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the nine months ended September 30, 2012, the Company redeemed 21,366 Common Units for a like number of shares of Common Stock and issued 66,864 Common Units to acquire real estate assets. As a result of this activity, the percentage of Common Units owned by the Company increased from 95.1% at December 31, 2011 to 95.4% at September 30, 2012.

Common Stock Offerings
 
The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and nine months ended September 30, 2012, the Company issued 2,867,768 and 5,490,244 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.22 and $33.33 per share, respectively, raising net proceeds, after sales commissions and expenses, of $93.8 million and $180.2 million, respectively.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Balance Sheet at December 31, 2011 was revised from previously reported amounts to reflect in real estate and other assets, net, held for sale those properties which qualified as held for sale during the three months ended September 30, 2012. Our Consolidated Statements of Income for the three and nine months ended September 30, 2011 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties that qualified for discontinued operations. Prior period amounts related to capital expenditures in our Consolidated Statements of Cash Flows have been disaggregated to conform to the current period presentation.

Our Consolidated Financial Statements include wholly owned subsidiaries and those entities in which we have the controlling financial interest. All intercompany transactions and accounts have been eliminated. At September 30, 2012 and December 31, 2011, we had involvement with no entities that we concluded to be variable interest entities.

1.    Description of Business and Significant Accounting Policies – Continued

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim consolidated financial statements presented in this Quarterly Report on Form 10-Q as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2011 Annual Report on Form 10-K.

Use of Estimates

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

Recently Issued Accounting Standards
 
As a result of adopting certain new or amended accounting pronouncements in the first quarter of 2012, we have enhanced our disclosure of assets and liabilities measured at fair value and elected to continue use of credit valuation adjustments on a net basis by counterparty as part of the calculation to determine the fair value of our derivatives. Our disclosures now include: (1) significant transfers between Levels 1 and 2 of the fair value hierarchy, if any; (2) additional quantitative and qualitative information regarding fair value measurements categorized as Level 3 of the fair value hierarchy; and (3) the hierarchy classification for items whose fair value is not recorded on our Consolidated Balance Sheets but was disclosed previously in our Notes to Consolidated Financial Statements. Additionally, we have presented comprehensive income in a separate financial statement entitled Consolidated Statements of Comprehensive Income.
Real Estate Assets
Real Estate Assets
 
Acquisitions
 
During the third quarter of 2012, we acquired three properties for a total purchase price of $161.2 million, consisting of (1) a 492,000 square foot office property in Atlanta, GA for $144.9 million and (2) two medical office properties in Greensboro, NC for $16.3 million, which included the issuance of 66,864 Common Units and contingent consideration with fair value at the acquisition date of $0.7 million. We expensed approximately $0.7 million of acquisition costs related to these transactions. 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.

The following table sets forth a summary of the assets acquired and liabilities assumed in the acquisition of the office property in Atlanta, GA discussed above:

 
Total
Purchase Price Allocation
Real estate assets
$
135,128

Acquisition-related intangible assets (in deferred financing and leasing costs)
21,637

Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(11,875
)
Total allocation
$
144,890



2.    Real Estate Assets - Continued

During the third quarter of 2011, we acquired a six-building, 1,540,000 square foot office complex in Pittsburgh, PA and a 503,000 square foot office building in Atlanta, GA for a purchase price of $188.5 million and $78.3 million, respectively.

The following table sets forth our rental and other revenues and net income, adjusted for interest expense and depreciation and amortization related to purchase price allocations and acquisition costs assuming: (1) the 492,000 square foot office building in Atlanta, GA was acquired on January 1, 2011, with proforma adjustments being included in the three and nine months ended September 30, 2012 and 2011 and (2) the office complex in Pittsburgh, PA and the 503,000 square foot office building in Atlanta, GA were acquired on January 1, 2010, with proforma adjustments being included in the three and nine months ended September 30, 2011.

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Proforma rental and other revenues
$
132,632

 
$
132,269

 
$
395,161

 
$
385,246

Proforma net income
$
35,765

 
$
7,626

 
$
68,526

 
$
33,268

Proforma earnings per share - basic
$
0.43

 
$
0.09

 
$
0.84

 
$
0.35

Proforma earnings per share - diluted
$
0.43

 
$
0.09

 
$
0.84

 
$
0.35



During the second quarter of 2012, we also acquired a 178,300 square foot office property in Cary, NC from our DLF I joint venture for an agreed upon value of $26.0 million by reducing the balance of the advance due to us from the joint venture.

Dispositions

During the third quarter of 2012, we sold:

an office property in Kansas City, MO for $6.5 million and recorded gain on disposition of discontinued operations of $1.9 million.

five office buildings in Nashville, TN for $41.0 million and recorded gain on disposition of discontinued operations of $7.0 million.

three buildings in Jackson, MS and Atlanta, GA for $86.5 million and recorded gain on disposition of discontinued operations of $14.0 million.

During the second quarter of 2012, we sold an office property in Pinellas County, FL for gross proceeds of $9.5 million and recorded gain on disposition of discontinued operations of $1.4 million related to this disposition.

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million and recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.
Real Estate Assets
 
Acquisitions
 
During the third quarter of 2012, we acquired three properties for a total purchase price of $161.2 million, consisting of (1) a 492,000 square foot office property in Atlanta, GA for $144.9 million and (2) two medical office properties in Greensboro, NC for $16.3 million, which included the issuance of 66,864 Common Units and contingent consideration with fair value at the acquisition date of $0.7 million. We expensed approximately $0.7 million of acquisition costs related to these transactions. 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.

The following table sets forth a summary of the assets acquired and liabilities assumed in the acquisition of the office property in Atlanta, GA discussed above:

 
Total
Purchase Price Allocation
Real estate assets
$
135,128

Acquisition-related intangible assets (in deferred financing and leasing costs)
21,637

Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(11,875
)
Total allocation
$
144,890




2.    Real Estate Assets - Continued

During the third quarter of 2011, we acquired a six-building, 1,540,000 square foot office complex in Pittsburgh, PA and a 503,000 square foot office building in Atlanta, GA for a purchase price of $188.5 million and $78.3 million, respectively.

The following table sets forth our rental and other revenues and net income, adjusted for interest expense and depreciation and amortization related to purchase price allocations and acquisition costs assuming: (1) the 492,000 square foot office building in Atlanta, GA was acquired on January 1, 2011, with proforma adjustments being included in the three and nine months ended September 30, 2012 and 2011 and (2) the office complex in Pittsburgh, PA and the 503,000 square foot office building in Atlanta, GA were acquired on January 1, 2010, with proforma adjustments being included in the three and nine months ended September 30, 2011.

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Proforma rental and other revenues
$
132,632

 
$
132,269

 
$
395,161

 
$
385,246

Proforma net income
$
35,769

 
$
7,626

 
$
68,535

 
$
33,280

Proforma earnings per share - basic
$
0.44

 
$
0.09

 
$
0.85

 
$
0.36

Proforma earnings per share - diluted
$
0.44

 
$
0.09

 
$
0.85

 
$
0.36



During the second quarter of 2012, we also acquired a 178,300 square foot office property in Cary, NC from our DLF I joint venture for an agreed upon value of $26.0 million by reducing the balance of the advance due to us from the joint venture.
 
Dispositions
 
During the third quarter of 2012, we sold:

an office property in Kansas City, MO for $6.5 million and recorded gain on disposition of discontinued operations of $1.9 million.

five office buildings in Nashville, TN for $41.0 million and recorded gain on disposition of discontinued operations of $7.0 million.

three buildings in Jackson, MS and Atlanta, GA for $86.5 million and recorded gain on disposition of discontinued operations of $14.0 million.

During the second quarter of 2012, we sold an office property in Pinellas County, FL for gross proceeds of $9.5 million and recorded gain on disposition of discontinued operations of $1.4 million related to this disposition.
 
During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million and recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.
Mortgages and Notes Receivable
Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
September 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,301

 
1,481

Less allowance
(211
)
 
(61
)
 
1,090

 
1,420

Mortgages and notes receivable, net
$
16,943

 
$
18,600



Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010. This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectability of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of September 30, 2012, the payments on both mortgages receivable were current and there were no other indications of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value.

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
118

 
$
617

 
$
61

 
$
868

Bad debt expense

 

 

 
184

Recoveries/write-offs/other
93

 
(72
)
 
150

 
(507
)
Total notes receivable allowance
$
211

 
$
545

 
$
211

 
$
545

Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

 
September 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,301

 
1,481

Less allowance
(211
)
 
(61
)
 
1,090

 
1,420

Mortgages and notes receivable, net
$
16,943

 
$
18,600



Our mortgages and notes receivable consist primarily of seller financing issued in conjunction with two disposition transactions in 2010. This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We evaluate the collectability of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of September 30, 2012, the payments on both mortgages receivable were current and there were no other indications of impairment on the receivables. We may be required to take impairment charges in the future if and to the extent the underlying collateral diminishes in value.

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
118

 
$
617

 
$
61

 
$
868

Bad debt expense

 

 

 
184

Recoveries/write-offs/other
93

 
(72
)
 
150

 
(507
)
Total notes receivable allowance
$
211

 
$
545

 
$
211

 
$
545

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

Unconsolidated Affiliates

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
25,051

 
$
25,623

 
$
75,920

 
$
75,619

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
11,624

 
10,805

 
35,706

 
33,576

Depreciation and amortization
6,355

 
6,759

 
18,839

 
19,670

Impairments of real estate assets

 

 
7,180

 

Interest expense
4,980

 
5,976

 
16,077

 
17,841

Total expenses
22,959

 
23,540

 
77,802

 
71,087

Income/(loss) before disposition of properties
2,092

 
2,083

 
(1,882
)
 
4,532

Gains on disposition of properties

 

 
6,275

 

Net income
$
2,092


$
2,083

 
$
4,393

 
$
4,532

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
2,028

 
$
2,066

 
$
5,801

 
$
6,192

Impairments of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,775

 
$
1,965

 
$
5,598

 
$
6,159

Net income
$
914

 
$
442

 
$
1,252

 
$
2,112

 
 
 
 
 
 
 
 
Our share of net income
$
914

 
$
442

 
$
1,252

 
$
2,112

Adjustments for management and other fees
410

 
671

 
1,418

 
1,821

Equity in earnings of unconsolidated affiliates
$
1,324

 
$
1,113

 
$
2,670

 
$
3,933



During the second quarter of 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to December 31, 2012. In the second quarter of 2012, the outstanding balance of the loan was reduced to $13.0 million as a result of our acquisition of an office property from the joint venture. We recorded interest income from this loan in interest and other income of $0.1 million and $0.5 million during the three months ended September 30, 2012 and 2011, respectively, and $0.8 million and $0.8 million during the nine months ended September 30, 2012 and 2011, respectively.

During the second quarter of 2012, our DLF II joint venture obtained a $50.0 million, three-year secured mortgage loan from a third party lender, bearing a fixed interest rate of 3.5% on $39.1 million of the loan and a floating interest rate of LIBOR plus 250 basis points on $10.9 million of the loan, which was used by the joint venture to repay a secured loan at maturity to a third party lender.

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


4.    Investments in and Advances to Affiliates - Continued

Consolidated Affiliates

During the third quarter of 2012, we provided a three-year, $20.8 million interest-only secured loan to our Harborview Plaza joint venture that is scheduled to mature in September 2015, which the joint venture used to repay a secured loan at maturity to a third party lender. This new loan bears interest at LIBOR plus 500 basis points, subject to a LIBOR floor of 0.5%.
Investments in and Advances to Affiliates

Unconsolidated Affiliates

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
24,062

 
$
24,618

 
$
72,916

 
$
72,576

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
11,024

 
10,239

 
33,901

 
31,765

Depreciation and amortization
6,044

 
6,437

 
17,905

 
18,736

Impairments of real estate assets

 

 
7,180

 

Interest expense
4,817

 
5,802

 
15,583

 
17,310

Total expenses
21,885

 
22,478

 
74,569

 
67,811

Income/(loss) before disposition of properties
2,177

 
2,140

 
(1,653
)
 
4,765

Gains on disposition of properties

 

 
6,275

 

Net income
$
2,177

 
$
2,140

 
$
4,622

 
$
4,765

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
1,989

 
$
2,028

 
$
5,684

 
$
6,078

Impairments of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,754

 
$
1,944

 
$
5,536

 
$
6,093

Net income
$
925

 
$
448

 
$
1,281

 
$
2,142

 
 
 
 
 
 
 
 
Our share of net income
$
925

 
$
448

 
$
1,281

 
$
2,142

Adjustments for management and other fees
403

 
665

 
1,398

 
1,803

Equity in earnings of unconsolidated affiliates
$
1,328

 
$
1,113

 
$
2,679

 
$
3,945



During the second quarter of 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to December 31, 2012. In the second quarter of 2012, the outstanding balance of the loan was reduced to $13.0 million as a result of our acquisition of an office property from the joint venture. We recorded interest income from this loan in interest and other income of $0.1 million and $0.5 million during the three months ended September 30, 2012 and 2011, respectively, and $0.8 million and $0.8 million during the nine months ended September 30, 2012 and 2011, respectively.
 
During the second quarter of 2012, our DLF II joint venture obtained a $50.0 million, three-year secured mortgage loan from a third party lender, bearing a fixed interest rate of 3.5% on $39.1 million of the loan and a floating interest rate of LIBOR plus 250 basis points on $10.9 million of the loan, which was used by the joint venture to repay a secured loan at maturity to a third party lender.
 
During the first quarter of 2012, we recorded $1.0 million as our share of impairments of real estate assets on two office properties in our DLF I joint venture, due to a decline in projected occupancy and a change in the assumed holding period of those assets, which reduced the expected future cash flows from the properties.

4.    Investments in and Advances to Affiliates - Continued

Consolidated Affiliates

During the third quarter of 2012, we provided a three-year, $20.8 million interest-only secured loan to our Harborview Plaza joint venture that is scheduled to mature in September 2015, which the joint venture used to repay a secured loan at maturity to a third party lender. This new loan bears interest at LIBOR plus 500 basis points, subject to a LIBOR floor of 0.5%.
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:
 
 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
19,952

 
$
18,044

Less accumulated amortization
(8,115
)
 
(5,797
)
 
11,837

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
202,797

 
172,049

Less accumulated amortization
(65,464
)
 
(56,522
)
 
137,333

 
115,527

Deferred financing and leasing costs, net
$
149,170

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
28,015

 
$
16,441

Less accumulated amortization
(2,556
)
 
(971
)
 
$
25,459

 
$
15,470

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
907

 
$
806

 
$
2,709

 
$
2,448

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,836

 
$
5,189

 
$
20,542

 
$
13,945

Amortization of lease incentives (in rental and other revenues)
$
393

 
$
369

 
$
1,075

 
$
1,010

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
433

 
$
239

 
$
1,027

 
$
617

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
46

 
$

 
$
46

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(647
)
 
$
(230
)
 
$
(1,744
)
 
$
(280
)


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)
October 1 through December 31, 2012
 
$
1,069

 
$
7,020

 
$
349

 
$
293

 
$
140

 
$
(802
)
2013
 
3,381

 
25,080

 
1,286

 
991

 
553

 
(3,168
)
2014
 
3,009

 
21,190

 
1,134

 
734

 
553

 
(3,106
)
2015
 
2,395

 
17,216

 
902

 
549

 
553

 
(2,894
)
2016
 
1,024

 
14,047

 
708

 
489

 
553

 
(2,603
)
Thereafter
 
959

 
37,292

 
2,536

 
969

 
2,196

 
(12,886
)
 
 
$
11,837

 
$
121,845

 
$
6,915

 
$
4,025

 
$
4,548

 
$
(25,459
)
Weighted average remaining amortization periods as of September 30, 2012 (in years)
 
3.6

 
7.1

 
7.6

 
5.6

 
8.2

 
9.9



The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2012 acquisition activity:

 
 
Above Market Lease Intangible Assets
 
In-Place Lease Intangible Assets
 
Tax Abatement Intangible Assets
 
Below Market Lease Liabilities
Amount recorded from acquisition activity
 
$
1,285

 
$
21,479

 
$
4,593

 
$
(11,875
)
Weighted average remaining amortization periods (in years)
 
5.3

 
9.2

 
8.2

 
11.3



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:
 
 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
19,952

 
$
18,044

Less accumulated amortization
(8,115
)
 
(5,797
)
 
11,837

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
202,797

 
172,049

Less accumulated amortization
(65,464
)
 
(56,522
)
 
137,333

 
115,527

Deferred financing and leasing costs, net
$
149,170

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
28,015

 
$
16,441

Less accumulated amortization
(2,556
)
 
(971
)
 
$
25,459

 
$
15,470


 
The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
907

 
$
806

 
$
2,709

 
$
2,448

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,836

 
$
5,189

 
$
20,542

 
$
13,945

Amortization of lease incentives (in rental and other revenues)
$
393

 
$
369

 
$
1,075

 
$
1,010

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
433

 
$
239

 
$
1,027

 
$
617

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
46

 
$

 
$
46

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(647
)
 
$
(230
)
 
$
(1,744
)
 
$
(280
)

 

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)
October 1 through December 31, 2012
 
$
1,069

 
$
7,020

 
$
349

 
$
293

 
$
140

 
$
(802
)
2013
 
3,381

 
25,080

 
1,286

 
991

 
553

 
(3,168
)
2014
 
3,009

 
21,190

 
1,134

 
734

 
553

 
(3,106
)
2015
 
2,395

 
17,216

 
902

 
549

 
553

 
(2,894
)
2016
 
1,024

 
14,047

 
708

 
489

 
553

 
(2,603
)
Thereafter
 
959

 
37,292

 
2,536

 
969

 
2,196

 
(12,886
)
 
 
$
11,837

 
$
121,845

 
$
6,915

 
$
4,025

 
$
4,548

 
$
(25,459
)
Weighted average remaining amortization periods as of September 30, 2012 (in years)
 
3.6

 
7.1

 
7.6

 
5.6

 
8.2

 
9.9



The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2012 acquisition activity:

 
 
Above Market Lease Intangible Assets
 
In-Place Lease Intangible Assets
 
Tax Abatement Intangible Assets
 
Below Market Lease Liabilities
Amount recorded from acquisition activity
 
$
1,285

 
$
21,479

 
$
4,593

 
$
(11,875
)
Weighted average remaining amortization periods (in years)
 
5.3

 
9.2

 
8.2

 
11.3

Mortgages and Notes Payable
Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

 
September 30,
2012
 
December 31,
2011
Secured indebtedness
$
685,390

 
$
715,742

Unsecured indebtedness
1,093,165

 
1,153,164

Total mortgages and notes payable
$
1,778,555

 
$
1,868,906



At September 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,148.2 million.


6.    Mortgages and Notes Payable - Continued

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. 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 $89.0 million and $59.5 million outstanding under our revolving credit facility at September 30, 2012 and October 22, 2012, respectively. At both September 30, 2012 and October 22, 2012, 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 September 30, 2012 and October 22, 2012 was $385.9 million and $415.4 million, respectively.

During the third quarter of 2012, we paid down the amount outstanding under our variable rate construction loan by $34.3 million.

During the second quarter of 2012, we repurchased $12.1 million principal amount of unsecured notes due March 2017 bearing interest of 5.85% for a purchase price of 107.5% of par value. We recorded $1.0 million of loss on debt extinguishment related to this repurchase.

During the first quarter of 2012, we obtained a $225.0 million, seven-year unsecured bank term loan bearing interest of LIBOR plus 190 basis points. This floating interest rate effectively was fixed by the interest rate swaps discussed in Note 7. The proceeds were used to pay off amounts then outstanding under our revolving credit facility.

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

The following table sets forth our mortgages and notes payable:

 
September 30,
2012
 
December 31,
2011
Secured indebtedness
$
685,390

 
$
715,742

Unsecured indebtedness
1,093,165

 
1,153,164

Total mortgages and notes payable
$
1,778,555

 
$
1,868,906



At September 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,148.2 million.


6.    Mortgages and Notes Payable - Continued

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. 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 $89.0 million and $59.5 million outstanding under our revolving credit facility at September 30, 2012 and October 22, 2012, respectively. At both September 30, 2012 and October 22, 2012, 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 September 30, 2012 and October 22, 2012 was $385.9 million and $415.4 million, respectively.

During the third quarter of 2012, we paid down the amount outstanding under our variable rate construction loan by $34.3 million.

During the second quarter of 2012, we repurchased $12.1 million principal amount of unsecured notes due March 2017 bearing interest of 5.85% for a purchase price of 107.5% of par value. We recorded $1.0 million of loss on debt extinguishment related to this repurchase.
 
During the first quarter of 2012, we obtained a $225.0 million, seven-year unsecured bank term loan bearing interest of LIBOR plus 190 basis points. This floating interest rate effectively was fixed by the interest rate swaps discussed in Note 7. The proceeds were used to pay off amounts then outstanding under our revolving credit facility.

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

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. 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 nine months ended September 30, 2012. As of September 30, 2012, we have not posted any collateral related to our interest rate swap liability.

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 October 1, 2012 through September 30, 2013, we estimate that $3.3 million will be reclassified as an increase to interest expense.

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

 
September 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
10,274

 
$
2,202




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 September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(3,337
)
 
$

 
$
(10,424
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
791

 
$
(30
)
 
$
2,250

 
$
(87
)
Derivative Financial Instruments
 
We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. 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 nine months ended September 30, 2012. As of September 30, 2012, we have not posted any collateral related to our interest rate swap liability.
 
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 October 1, 2012 through September 30, 2013, we estimate that $3.3 million will be reclassified as an increase to interest expense.
 
The following table sets forth the fair value of our derivative instruments:
 
 
September 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
10,274

 
$
2,202




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 September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(3,337
)
 
$

 
$
(10,424
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
791

 
$
(30
)
 
$
2,250

 
$
(87
)
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.
 
The following table sets forth noncontrolling interests in the Operating Partnership:
 
 
Nine Months Ended September 30,
 
2012
 
2011
Beginning noncontrolling interests in the Operating Partnership
$
110,655

 
$
120,838

Adjustments of noncontrolling interests in the Operating Partnership to fair value
12,485

 
(10,177
)
Issuances of Common Units
2,299

 

Conversion of Common Units to Common Stock
(731
)
 
(1,344
)
Net income attributable to noncontrolling interests in the Operating Partnership
3,166

 
1,496

Distributions to noncontrolling interests in the Operating Partnership
(4,733
)
 
(4,818
)
Total noncontrolling interests in the Operating Partnership
$
123,141

 
$
105,995

The following table sets forth net income available for common stockholders and transfers from noncontrolling interests in the Operating Partnership:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Net income available for common stockholders
$
33,357

 
$
7,002

 
$
63,013

 
$
27,250

Increase in additional paid in capital from conversion of Common Units to Common Stock
100

 
709

 
731

 
1,344

Issuances of Common Units
(2,299
)
 

 
(2,299
)
 

Change from net income available for common stockholders and transfers from noncontrolling interests
$
31,158

 
$
7,711

 
$
61,445

 
$
28,594


8.
Noncontrolling Interests - Continued

Noncontrolling Interests in Consolidated Affiliates
 
At September 30, 2012, noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties located in Richmond, VA. Our joint venture partner is an unrelated third party.

Noncontrolling Interests
 
Noncontrolling Interests in Consolidated Affiliates
 
At September 30, 2012, noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties located in Richmond, VA. Our joint venture partner is an unrelated third party.
Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments

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

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

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

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

Our Level 2 asset is the fair value of our mortgages and notes receivable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants.
 
Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants and (2) interest rate swaps whose fair value is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.
 
Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
 
Our Level 3 assets include our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by 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
 
September 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,382

 
$

 
$
17,382

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264

 
3,264

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,270

 

 

 
15,270

Total Assets
$
35,916

 
$
3,264

 
$
17,382

 
$
15,270

Noncontrolling Interests in the Operating Partnership
$
123,141

 
$
123,141

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,889,775

 
$

 
$
1,889,775

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274

 

 
10,274

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,264

 
3,264

 

 

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

 

 

 
563

Financing obligations, at fair value (1)
18,930

 

 

 
18,930

Total Liabilities
$
1,922,806

 
$
3,264

 
$
1,900,049

 
$
19,493

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

 
$

 
$
18,990

 
$

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

 
3,149

 

 

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

 

 

 
14,788

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

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Noncontrolling Interests in the Operating Partnership
$
110,655

 
$
110,655

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,959,438

 
$

 
$
1,959,438

 
$

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

 

 
2,202

 

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

 
3,149

 

 

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

 

 

 
18,866

Total Liabilities
$
1,983,655

 
$
3,149

 
$
1,961,640

 
$
18,866


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

(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, respectively.

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 on a recurring basis:

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,371

 
$
15,228

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
(101
)
 
600

 
482

 
129

Ending balance
$
15,270

 
$
15,828

 
$
15,270

 
$
15,828

Liability:
 
 
 
 
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
 
 
 
 
Beginning balance
$
677

 
$

 
$
677

 
$

Unrealized gains (in general and administrative)
(114
)
 

 
(114
)
 

Ending balance
$
563

 
$

 
$
563

 
$



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 September 30, 2012 was $1.8 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 $0.6 million higher, respectively, as of September 30, 2012. 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 and nine months ended September 30, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

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

 
Fair Value at
September 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Tax increment financing bond
$
15,270

 
Income approach
 
Discount rate
 
10.73
%
Contingent consideration to acquire real estate assets
$
563

 
Income approach
 
Payout percentage
 
75.00
%
Disclosure About Fair Value of Financial Instruments

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

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

Our Level 1 assets are investments in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan. Our Level 1 liability is our non-qualified deferred compensation obligation.

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

Our Level 2 asset is the fair value of our mortgages and notes receivable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants.

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 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, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by 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
 
September 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,382

 
$

 
$
17,382

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264

 
3,264

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,270

 

 

 
15,270

Total Assets
$
35,916

 
$
3,264

 
$
17,382

 
$
15,270

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,889,775

 
$

 
$
1,889,775

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274

 

 
10,274

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,264

 
3,264

 

 

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

 

 

 
563

Financing obligations, at fair value (1)
18,930

 

 

 
18,930

Total Liabilities
$
1,922,806

 
$
3,264

 
$
1,900,049

 
$
19,493



9.
Disclosure About Fair Value of Financial Instruments - Continued
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$

 
$
18,990

 
$

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

 
3,149

 

 

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

 

 

 
14,788

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

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,959,438

 
$

 
$
1,959,438

 
$

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

 

 
2,202

 

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

 
3,149

 

 

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

 

 

 
18,866

Total Liabilities
$
1,983,655

 
$
3,149

 
$
1,961,640

 
$
18,866

__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, respectively.
 
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 on a recurring basis:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,371

 
$
15,228

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
(101
)
 
600

 
482

 
129

Ending balance
$
15,270

 
$
15,828

 
$
15,270

 
$
15,828

Liability:
 
 
 
 
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
 
 
 
 
Beginning balance
$
677

 
$

 
$
677

 
$

Unrealized gains (in general and administrative)
(114
)
 

 
(114
)
 

Ending balance
$
563

 
$

 
$
563

 
$


 
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 September 30, 2012 was $1.8 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 $0.6 million higher, respectively, as of September 30, 2012. 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 and nine months ended September 30, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

9.
Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets on a recurring basis:
 
 
Fair Value at
September 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Tax increment financing bond
$
15,270

 
Income approach
 
Discount rate
 
10.73
%
Contingent consideration to acquire real estate assets
$
563

 
Income approach
 
Payout percentage
 
75.00
%
Share-Based Payments
Share-based Payments

During the nine months ended September 30, 2012, we granted 190,886 stock options with an exercise price equal to the closing market price of a share of our Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $5.47. During the nine months ended September 30, 2012, we also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.3 million during the three months ended September 30, 2012 and 2011, respectively, and $6.5 million and $4.8 million during the nine months ended September 30, 2012 and 2011, respectively. At September 30, 2012, there was $5.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.5 years.
Share-based Payments

During the nine months ended September 30, 2012, the Company granted 190,886 stock options with an exercise price equal to the closing market price of a share of its Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $5.47. During the nine months ended September 30, 2012, the Company also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.3 million during the three months ended September 30, 2012 and 2011, respectively, and $6.5 million and $4.8 million during the nine months ended September 30, 2012 and 2011, respectively. At September 30, 2012, there was $5.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.5 years.
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

 
Nine Months Ended September 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains on tax increment financing bond
482

 
129

Ending balance
(1,827
)
 
(2,414
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(10,424
)
 

Amortization of cash flow hedges
2,250

 
(87
)
Ending balance
(11,599
)
 
(1,192
)
Total accumulated other comprehensive loss
$
(13,426
)
 
$
(3,606
)
Accumulated Other Comprehensive Loss

The following table sets forth the components of accumulated other comprehensive loss:

 
Nine Months Ended September 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains/(losses) on tax increment financing bond
482

 
129

Ending balance
(1,827
)
 
(2,414
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(10,424
)
 

Amortization of cash flow hedges
2,250

 
(87
)
Ending balance
(11,599
)
 
(1,192
)
Total accumulated other comprehensive loss
$
(13,426
)
 
$
(3,606
)
Discontinued Operations
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,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
875

 
$
5,301

 
$
10,120

 
$
16,219

Operating expenses:
 
 
 
 
 
 
 
Rental property and other expenses
293

 
2,199

 
3,766

 
6,572

Depreciation and amortization

 
1,269

 
2,009

 
3,935

Total operating expenses
293

 
3,468

 
5,775

 
10,507

Interest expense
35

 
119

 
283

 
364

Income from discontinued operations
547

 
1,714

 
4,062

 
5,348

Net gains on disposition of discontinued operations
22,936

 
2,573

 
29,455

 
2,573

Total discontinued operations
$
23,483

 
$
4,287

 
$
33,517

 
$
7,921


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

 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$

 
$
14,077

Buildings and tenant improvements

 
135,013

Less-accumulated depreciation

 
(32,254
)
Net real estate assets

 
116,836

Accrued straight-line rents receivable

 
6,520

Deferred leasing costs, net

 
811

Prepaid expenses and other assets

 
106

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

 
$
124,273

Liabilities:
 
 
 
Mortgages and notes payable
$

 
$
34,307

Accrued expenses and other liabilities

 
214

Financing obligations

 
1,294

Liabilities, net, held for sale
$

 
$
35,815



As of September 30, 2012, there were no real estate and other assets, net, held for sale. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL, one office property and 96 residential units in Kansas City, MO and three buildings in Jackson, MS and Atlanta, GA. All of these properties qualified for discontinued operations.
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,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
875

 
$
5,301

 
$
10,120

 
$
16,219

Operating expenses:

 

 

 

Rental property and other expenses
293

 
2,199

 
3,766

 
6,572

Depreciation and amortization

 
1,269

 
2,009

 
3,935

Total operating expenses
293

 
3,468

 
5,775

 
10,507

Interest expense
35

 
119

 
283

 
364

Income from discontinued operations
547

 
1,714

 
4,062

 
5,348

Net gains on disposition of discontinued operations
22,936

 
2,573

 
29,455

 
2,573

Total discontinued operations
$
23,483

 
$
4,287

 
$
33,517

 
$
7,921



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

 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$

 
$
14,077

Buildings and tenant improvements

 
135,013

Less-accumulated depreciation

 
(32,254
)
Net real estate assets

 
116,836

Accrued straight-line rents receivable

 
6,520

Deferred leasing costs, net

 
811

Prepaid expenses and other assets

 
106

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

 
$
124,273

Liabilities:
 
 
 
Mortgages and notes payable
$

 
$
34,307

Accrued expenses and other liabilities

 
214

Financing obligations

 
1,294

Liabilities, net, held for sale
$

 
$
35,815



As of September 30, 2012, there were no real estate and other assets, net, held for sale. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL, one office property and 96 residential units in Kansas City, MO and three buildings in Jackson, MS and Atlanta, GA. All of these properties qualified for discontinued operations.
Earnings Per Share
Earnings Per Share

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Share - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,313

 
$
3,957

 
$
35,109

 
$
27,200

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(547
)
 
(153
)
 
(1,572
)
 
(1,101
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common stockholders
10,980

 
2,928

 
31,090

 
19,724

Income from discontinued operations
23,483

 
4,287

 
33,517

 
7,921

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(1,106
)
 
(213
)
 
(1,594
)
 
(395
)
Income from discontinued operations available for common stockholders
22,377

 
4,074

 
31,923

 
7,526

Net income available for common stockholders
$
33,357

 
$
7,002

 
$
63,013

 
$
27,250

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
76,590

 
72,492

 
74,703

 
72,176

Earnings per Common Share - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.15

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common stockholders
0.29

 
0.06

 
0.42

 
0.10

Net income available for common stockholders
$
0.44

 
$
0.10

 
$
0.84

 
$
0.38

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,313

 
$
3,957

 
$
35,109

 
$
27,200

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
11,527

 
3,081

 
32,662

 
20,825

Income from discontinued operations available for common stockholders
23,483

 
4,287

 
33,517

 
7,921

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
35,010

 
$
7,368

 
$
66,179

 
$
28,746

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
76,590

 
72,492

 
74,703

 
72,176

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
137

 
138

 
127

 
169

Noncontrolling interests Common Units
3,768

 
3,772

 
3,738

 
3,782

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
80,495

 
76,402

 
78,568

 
76,127

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

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common stockholders
0.29

 
0.06

 
0.42

 
0.10

Net income available for common stockholders
$
0.43

 
$
0.10

 
$
0.84

 
$
0.38

__________

13.
Earnings Per Share - Continued

(1)
There were 0.5 million and 0.4 million options outstanding during the three months ended September 30, 2012 and 2011, respectively, and 0.5 million and 0.3 million options outstanding during the nine months ended September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on 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 September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,317

 
$
3,957

 
$
35,118

 
$
27,212

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common unitholders
11,531

 
3,081

 
32,671

 
20,837

Income from discontinued operations available for common unitholders
23,483

 
4,287

 
33,517

 
7,921

Net income available for common unitholders
$
35,014

 
$
7,368

 
$
66,188

 
$
28,758

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
79,949

 
75,855

 
78,032

 
75,549

Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common unitholders
0.29

 
0.06

 
0.43

 
0.10

Net income available for common unitholders
$
0.44

 
$
0.10

 
$
0.85

 
$
0.38

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,317

 
$
3,957

 
$
35,118

 
$
27,212

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common unitholders
11,531

 
3,081

 
32,671

 
20,837

Income from discontinued operations available for common unitholders
23,483

 
4,287

 
33,517

 
7,921

Net income available for common unitholders
$
35,014

 
$
7,368

 
$
66,188

 
$
28,758

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
79,949

 
75,855

 
78,032

 
75,549

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
137

 
138

 
127

 
169

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
80,086

 
75,993

 
78,159

 
75,718

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common unitholders
0.29

 
0.06

 
0.43

 
0.10

Net income available for common unitholders
$
0.44

 
$
0.10

 
$
0.85

 
$
0.38

__________
(1)
There were 0.5 million and 0.4 million options outstanding during the three months ended September 30, 2012 and 2011, respectively, and 0.5 million and 0.3 million options outstanding during the nine months ended September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on 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 September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
14,074

 
$
12,167

 
$
44,315

 
$
34,701

Greenville, SC
3,297

 
3,617

 
10,289

 
10,558

Kansas City, MO
4,015

 
3,412

 
11,176

 
10,371

Memphis, TN
9,106

 
9,393

 
27,612

 
27,808

Nashville, TN
14,289

 
13,793

 
42,471

 
40,106

Orlando, FL
2,747

 
2,676

 
8,189

 
7,612

Piedmont Triad, NC
5,603

 
4,913

 
15,753

 
15,546

Pittsburgh, PA
9,485

 
1,568

 
27,681

 
1,568

Raleigh, NC
20,585

 
20,047

 
60,758

 
59,462

Richmond, VA
11,852

 
13,375

 
35,453

 
36,425

Tampa, FL
17,615

 
17,370

 
52,324

 
50,808

Total Office Segment
112,668

 
102,331

 
336,021

 
294,965

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,215

 
3,293

 
9,522

 
9,989

Piedmont Triad, NC
3,142

 
3,151

 
9,392

 
8,953

Total Industrial Segment
6,357

 
6,444

 
18,914

 
18,942

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,189

 
8,490

 
27,185

 
25,590

Total Retail Segment
9,189

 
8,490

 
27,185

 
25,590

Total Rental and Other Revenues
$
128,214

 
$
117,265

 
$
382,120

 
$
339,497


14.
Segment Information - Continued

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
8,700

 
$
7,402

 
$
28,215

 
$
21,555

Greenville, SC
1,807

 
2,096

 
5,989

 
6,238

Kansas City, MO
2,547

 
2,000

 
7,064

 
6,255

Memphis, TN
5,381

 
5,166

 
16,234

 
15,297

Nashville, TN
9,777

 
9,273

 
29,262

 
27,275

Orlando, FL
1,368

 
1,378

 
4,214

 
3,829

Piedmont Triad, NC
3,330

 
2,895

 
9,780

 
9,944

Pittsburgh, PA
4,952

 
888

 
13,859

 
888

Raleigh, NC
13,907

 
13,900

 
42,045

 
41,386

Richmond, VA
7,868

 
7,767

 
24,283

 
23,852

Tampa, FL
11,077

 
10,786

 
32,721

 
31,475

Total Office Segment
70,714

 
63,551

 
213,666

 
187,994

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,331

 
2,406

 
6,936

 
7,417

Piedmont Triad, NC
2,257

 
2,251

 
6,852

 
6,582

Total Industrial Segment
4,588

 
4,657

 
13,788

 
13,999

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,679

 
5,026

 
16,534

 
15,146

Total Retail Segment
5,679

 
5,026

 
16,534

 
15,146

Total Net Operating Income
80,981

 
73,234

 
243,988

 
217,139

Reconciliation to income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(38,651
)
 
(35,051
)
 
(115,755
)
 
(99,659
)
Impairments of assets held for use

 
(2,429
)
 

 
(2,429
)
General and administrative
(9,725
)
 
(12,212
)
 
(28,298
)
 
(27,983
)
Interest expense
(23,612
)
 
(24,271
)
 
(72,661
)
 
(71,476
)
Other income
1,916

 
1,505

 
4,910

 
5,253

Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
$
10,909

 
$
776

 
$
32,184

 
$
20,845

__________
(1)
Net of discontinued operations.
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 September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
14,074

 
$
12,167

 
$
44,315

 
$
34,701

Greenville, SC
3,297

 
3,617

 
10,289

 
10,558

Kansas City, MO
4,015

 
3,412

 
11,176

 
10,371

Memphis, TN
9,106

 
9,393

 
27,612

 
27,808

Nashville, TN
14,289

 
13,793

 
42,471

 
40,106

Orlando, FL
2,747

 
2,676

 
8,189

 
7,612

Piedmont Triad, NC
5,603

 
4,913

 
15,753

 
15,546

Pittsburgh, PA
9,485

 
1,568

 
27,681

 
1,568

Raleigh, NC
20,585

 
20,047

 
60,758

 
59,462

Richmond, VA
11,852

 
13,375

 
35,453

 
36,425

Tampa, FL
17,615

 
17,370

 
52,324

 
50,808

Total Office Segment
112,668

 
102,331

 
336,021

 
294,965

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,215

 
3,293

 
9,522

 
9,989

Piedmont Triad, NC
3,142

 
3,151

 
9,392

 
8,953

Total Industrial Segment
6,357

 
6,444

 
18,914

 
18,942

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,189

 
8,490

 
27,185

 
25,590

Total Retail Segment
9,189

 
8,490

 
27,185

 
25,590

Total Rental and Other Revenues
$
128,214

 
$
117,265

 
$
382,120

 
$
339,497



14.
Segment Information - Continued

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
8,708

 
$
7,409

 
$
28,239

 
$
21,556

Greenville, SC
1,809

 
2,098

 
5,994

 
6,237

Kansas City, MO
2,549

 
2,002

 
7,070

 
6,254

Memphis, TN
5,386

 
5,171

 
16,247

 
15,295

Nashville, TN
9,786

 
9,282

 
29,285

 
27,271

Orlando, FL
1,369

 
1,379

 
4,217

 
3,829

Piedmont Triad, NC
3,333

 
2,898

 
9,788

 
9,943

Pittsburgh, PA
4,957

 
888

 
13,862

 
888

Raleigh, NC
13,920

 
13,913

 
42,083

 
41,383

Richmond, VA
7,875

 
7,774

 
24,302

 
23,851

Tampa, FL
11,087

 
10,797

 
32,750

 
31,473

Total Office Segment
70,779

 
63,611

 
213,837

 
187,980

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,333

 
2,408

 
6,942

 
7,416

Piedmont Triad, NC
2,259

 
2,253

 
6,857

 
6,581

Total Industrial Segment
4,592

 
4,661

 
13,799

 
13,997

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,684

 
5,030

 
16,547

 
15,144

Total Retail Segment
5,684

 
5,030

 
16,547

 
15,144

Total Net Operating Income
81,055

 
73,302

 
244,183

 
217,121

Reconciliation to income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(38,651
)
 
(35,051
)
 
(115,755
)
 
(99,659
)
Impairments of assets held for use

 
(2,429
)
 

 
(2,429
)
General and administrative
(9,799
)
 
(12,280
)
 
(28,493
)
 
(27,965
)
Interest expense
(23,612
)
 
(24,271
)
 
(72,661
)
 
(71,476
)
Other income
1,916

 
1,505

 
4,910

 
5,253

Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
$
10,909

 
$
776

 
$
32,184

 
$
20,845

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

On October 11, 2012, we modified our $200.0 million, five-year unsecured bank term loan, which was originally scheduled to mature in February 2016. The loan is now scheduled to mature in January 2018 and the interest rate was reduced from LIBOR plus 220 basis points to LIBOR plus 165 basis points. We incurred $0.9 million of deferred financing fees in connection with the modification, which will be amortized along with existing unamortized deferred loan fees over the remaining term of the new loan. Proceeds from two new participants, aggregating $35.0 million, were used to reduce amounts outstanding under our revolving credit facility. Two of the original participants, which still hold an aggregate $35.0 million of the principal balance under the original term loan, will be fully paid off on or before February 25, 2013.

On October 18, 2012, we acquired an additional medical office property in Greensboro, NC for a purchase price of $13.3 million. This purchase price includes the assumption of secured debt expected to be recorded at fair value of $7.9 million, with an effective interest rate of 4.06%, including amortization of deferred financing costs. This debt matures in August 2014. We expect to expense approximately $0.1 million of acquisition costs related to this transaction.
Subsequent Events

On October 11, 2012, we modified our existing $200.0 million, five-year unsecured bank term, which was originally scheduled to mature in February 2016. The loan is now scheduled to mature in January 2018 and the interest rate was reduced from LIBOR plus 220 basis points to LIBOR plus 165 basis points. We incurred $0.9 million of deferred financing fees in connection with the modification, which will be amortized along with existing unamortized deferred loan fees over the remaining term of the new loan. Proceeds from two new participants, aggregating $35.0 million, were used to reduce amounts outstanding under our revolving credit facility. Two of the original participants, which still hold an aggregate $35.0 million of the principal balance under the original term loan, will be fully paid off on or before February 25, 2013.

On October 18, 2012, we acquired an additional medical office property in Greensboro, NC for a purchase price of $13.3 million. This purchase price includes the assumption of secured debt expected to be recorded at fair value of $7.9 million, with an effective interest rate of 4.06%, including amortization of deferred financing costs. This debt matures in August 2014. We expect to expense approximately $0.1 million of acquisition costs related to this transaction.
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.
Real Estate Assets Real Estate Assets (Tables)
The following table sets forth a summary of the assets acquired and liabilities assumed in the acquisition of the office property in Atlanta, GA discussed above:

 
Total
Purchase Price Allocation
Real estate assets
$
135,128

Acquisition-related intangible assets (in deferred financing and leasing costs)
21,637

Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(11,875
)
Total allocation
$
144,890


The following table sets forth our rental and other revenues and net income, adjusted for interest expense and depreciation and amortization related to purchase price allocations and acquisition costs assuming: (1) the 492,000 square foot office building in Atlanta, GA was acquired on January 1, 2011, with proforma adjustments being included in the three and nine months ended September 30, 2012 and 2011 and (2) the office complex in Pittsburgh, PA and the 503,000 square foot office building in Atlanta, GA were acquired on January 1, 2010, with proforma adjustments being included in the three and nine months ended September 30, 2011.

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Proforma rental and other revenues
$
132,632

 
$
132,269

 
$
395,161

 
$
385,246

Proforma net income
$
35,765

 
$
7,626

 
$
68,526

 
$
33,268

Proforma earnings per share - basic
$
0.43

 
$
0.09

 
$
0.84

 
$
0.35

Proforma earnings per share - diluted
$
0.43

 
$
0.09

 
$
0.84

 
$
0.35

The following table sets forth a summary of the assets acquired and liabilities assumed in the acquisition of the office property in Atlanta, GA discussed above:

 
Total
Purchase Price Allocation
Real estate assets
$
135,128

Acquisition-related intangible assets (in deferred financing and leasing costs)
21,637

Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(11,875
)
Total allocation
$
144,890

During the third quarter of 2011, we acquired a six-building, 1,540,000 square foot office complex in Pittsburgh, PA and a 503,000 square foot office building in Atlanta, GA for a purchase price of $188.5 million and $78.3 million, respectively.

The following table sets forth our rental and other revenues and net income, adjusted for interest expense and depreciation and amortization related to purchase price allocations and acquisition costs assuming: (1) the 492,000 square foot office building in Atlanta, GA was acquired on January 1, 2011, with proforma adjustments being included in the three and nine months ended September 30, 2012 and 2011 and (2) the office complex in Pittsburgh, PA and the 503,000 square foot office building in Atlanta, GA were acquired on January 1, 2010, with proforma adjustments being included in the three and nine months ended September 30, 2011.

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Proforma rental and other revenues
$
132,632

 
$
132,269

 
$
395,161

 
$
385,246

Proforma net income
$
35,769

 
$
7,626

 
$
68,535

 
$
33,280

Proforma earnings per share - basic
$
0.44

 
$
0.09

 
$
0.85

 
$
0.36

Proforma earnings per share - diluted
$
0.44

 
$
0.09

 
$
0.85

 
$
0.36

Mortgages and Notes Receivable (Tables)
The following table sets forth our mortgages and notes receivable:

 
September 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,301

 
1,481

Less allowance
(211
)
 
(61
)
 
1,090

 
1,420

Mortgages and notes receivable, net
$
16,943

 
$
18,600

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
118

 
$
617

 
$
61

 
$
868

Bad debt expense

 

 

 
184

Recoveries/write-offs/other
93

 
(72
)
 
150

 
(507
)
Total notes receivable allowance
$
211

 
$
545

 
$
211

 
$
545

The following table sets forth our mortgages and notes receivable:

 
September 30,
2012
 
December 31,
2011
Seller financing (first mortgages)
$
15,853

 
$
17,180

Less allowance

 

 
15,853

 
17,180

Promissory notes
1,301

 
1,481

Less allowance
(211
)
 
(61
)
 
1,090

 
1,420

Mortgages and notes receivable, net
$
16,943

 
$
18,600

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Beginning notes receivable allowance
$
118

 
$
617

 
$
61

 
$
868

Bad debt expense

 

 

 
184

Recoveries/write-offs/other
93

 
(72
)
 
150

 
(507
)
Total notes receivable allowance
$
211

 
$
545

 
$
211

 
$
545

Investments In and Advances To Affiliates (Tables)
We have equity interests of up to 50.0% in various joint ventures with unrelated third parties and a secured debt interest in one of those joint ventures, as described below. The following table sets forth the combined, summarized income statements for our unconsolidated joint ventures on the purchase accounting basis:

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
25,051

 
$
25,623

 
$
75,920

 
$
75,619

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
11,624

 
10,805

 
35,706

 
33,576

Depreciation and amortization
6,355

 
6,759

 
18,839

 
19,670

Impairments of real estate assets

 

 
7,180

 

Interest expense
4,980

 
5,976

 
16,077

 
17,841

Total expenses
22,959

 
23,540

 
77,802

 
71,087

Income/(loss) before disposition of properties
2,092

 
2,083

 
(1,882
)
 
4,532

Gains on disposition of properties

 

 
6,275

 

Net income
$
2,092


$
2,083

 
$
4,393

 
$
4,532

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
2,028

 
$
2,066

 
$
5,801

 
$
6,192

Impairments of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,775

 
$
1,965

 
$
5,598

 
$
6,159

Net income
$
914

 
$
442

 
$
1,252

 
$
2,112

 
 
 
 
 
 
 
 
Our share of net income
$
914

 
$
442

 
$
1,252

 
$
2,112

Adjustments for management and other fees
410

 
671

 
1,418

 
1,821

Equity in earnings of unconsolidated affiliates
$
1,324

 
$
1,113

 
$
2,670

 
$
3,933

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Income Statements:
 
 
 
 
 
 
 
Rental and other revenues
$
24,062

 
$
24,618

 
$
72,916

 
$
72,576

Expenses:
 
 
 
 
 
 
 
Rental property and other expenses
11,024

 
10,239

 
33,901

 
31,765

Depreciation and amortization
6,044

 
6,437

 
17,905

 
18,736

Impairments of real estate assets

 

 
7,180

 

Interest expense
4,817

 
5,802

 
15,583

 
17,310

Total expenses
21,885

 
22,478

 
74,569

 
67,811

Income/(loss) before disposition of properties
2,177

 
2,140

 
(1,653
)
 
4,765

Gains on disposition of properties

 

 
6,275

 

Net income
$
2,177

 
$
2,140

 
$
4,622

 
$
4,765

Our share of:
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
$
1,989

 
$
2,028

 
$
5,684

 
$
6,078

Impairments of real estate assets
$

 
$

 
$
1,002

 
$

Interest expense
$
1,754

 
$
1,944

 
$
5,536

 
$
6,093

Net income
$
925

 
$
448

 
$
1,281

 
$
2,142

 
 
 
 
 
 
 
 
Our share of net income
$
925

 
$
448

 
$
1,281

 
$
2,142

Adjustments for management and other fees
403

 
665

 
1,398

 
1,803

Equity in earnings of unconsolidated affiliates
$
1,328

 
$
1,113

 
$
2,679

 
$
3,945

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:
 
 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
19,952

 
$
18,044

Less accumulated amortization
(8,115
)
 
(5,797
)
 
11,837

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
202,797

 
172,049

Less accumulated amortization
(65,464
)
 
(56,522
)
 
137,333

 
115,527

Deferred financing and leasing costs, net
$
149,170

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
28,015

 
$
16,441

Less accumulated amortization
(2,556
)
 
(971
)
 
$
25,459

 
$
15,470

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
907

 
$
806

 
$
2,709

 
$
2,448

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,836

 
$
5,189

 
$
20,542

 
$
13,945

Amortization of lease incentives (in rental and other revenues)
$
393

 
$
369

 
$
1,075

 
$
1,010

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
433

 
$
239

 
$
1,027

 
$
617

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
46

 
$

 
$
46

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(647
)
 
$
(230
)
 
$
(1,744
)
 
$
(280
)

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)
October 1 through December 31, 2012
 
$
1,069

 
$
7,020

 
$
349

 
$
293

 
$
140

 
$
(802
)
2013
 
3,381

 
25,080

 
1,286

 
991

 
553

 
(3,168
)
2014
 
3,009

 
21,190

 
1,134

 
734

 
553

 
(3,106
)
2015
 
2,395

 
17,216

 
902

 
549

 
553

 
(2,894
)
2016
 
1,024

 
14,047

 
708

 
489

 
553

 
(2,603
)
Thereafter
 
959

 
37,292

 
2,536

 
969

 
2,196

 
(12,886
)
 
 
$
11,837

 
$
121,845

 
$
6,915

 
$
4,025

 
$
4,548

 
$
(25,459
)
Weighted average remaining amortization periods as of September 30, 2012 (in years)
 
3.6

 
7.1

 
7.6

 
5.6

 
8.2

 
9.9

The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2012 acquisition activity:

 
 
Above Market Lease Intangible Assets
 
In-Place Lease Intangible Assets
 
Tax Abatement Intangible Assets
 
Below Market Lease Liabilities
Amount recorded from acquisition activity
 
$
1,285

 
$
21,479

 
$
4,593

 
$
(11,875
)
Weighted average remaining amortization periods (in years)
 
5.3

 
9.2

 
8.2

 
11.3

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
 
 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Deferred financing costs
$
19,952

 
$
18,044

Less accumulated amortization
(8,115
)
 
(5,797
)
 
11,837

 
12,247

Deferred leasing costs (including lease incentives and acquisition-related intangible assets)
202,797

 
172,049

Less accumulated amortization
(65,464
)
 
(56,522
)
 
137,333

 
115,527

Deferred financing and leasing costs, net
$
149,170

 
$
127,774

 
 
 
 
Liabilities (in accounts payable, accrued expenses and other liabilities):
 
 
 
Acquisition-related below market lease liabilities
$
28,015

 
$
16,441

Less accumulated amortization
(2,556
)
 
(971
)
 
$
25,459

 
$
15,470

The following table sets forth amortization of intangible assets and acquisition-related below market lease liabilities:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Amortization of deferred financing costs
$
907

 
$
806

 
$
2,709

 
$
2,448

Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)
$
6,836

 
$
5,189

 
$
20,542

 
$
13,945

Amortization of lease incentives (in rental and other revenues)
$
393

 
$
369

 
$
1,075

 
$
1,010

Amortization of acquisition-related intangible assets (in rental and other revenues)
$
433

 
$
239

 
$
1,027

 
$
617

Amortization of acquisition-related intangible assets (in rental property and other expenses)
$
46

 
$

 
$
46

 
$

Amortization of acquisition-related below market lease liabilities (in rental and other revenues)
$
(647
)
 
$
(230
)
 
$
(1,744
)
 
$
(280
)
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)
October 1 through December 31, 2012
 
$
1,069

 
$
7,020

 
$
349

 
$
293

 
$
140

 
$
(802
)
2013
 
3,381

 
25,080

 
1,286

 
991

 
553

 
(3,168
)
2014
 
3,009

 
21,190

 
1,134

 
734

 
553

 
(3,106
)
2015
 
2,395

 
17,216

 
902

 
549

 
553

 
(2,894
)
2016
 
1,024

 
14,047

 
708

 
489

 
553

 
(2,603
)
Thereafter
 
959

 
37,292

 
2,536

 
969

 
2,196

 
(12,886
)
 
 
$
11,837

 
$
121,845

 
$
6,915

 
$
4,025

 
$
4,548

 
$
(25,459
)
Weighted average remaining amortization periods as of September 30, 2012 (in years)
 
3.6

 
7.1

 
7.6

 
5.6

 
8.2

 
9.9

The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2012 acquisition activity:

 
 
Above Market Lease Intangible Assets
 
In-Place Lease Intangible Assets
 
Tax Abatement Intangible Assets
 
Below Market Lease Liabilities
Amount recorded from acquisition activity
 
$
1,285

 
$
21,479

 
$
4,593

 
$
(11,875
)
Weighted average remaining amortization periods (in years)
 
5.3

 
9.2

 
8.2

 
11.3

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

 
September 30,
2012
 
December 31,
2011
Secured indebtedness
$
685,390

 
$
715,742

Unsecured indebtedness
1,093,165

 
1,153,164

Total mortgages and notes payable
$
1,778,555

 
$
1,868,906

The following table sets forth our mortgages and notes payable:

 
September 30,
2012
 
December 31,
2011
Secured indebtedness
$
685,390

 
$
715,742

Unsecured indebtedness
1,093,165

 
1,153,164

Total mortgages and notes payable
$
1,778,555

 
$
1,868,906

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

 
September 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
10,274

 
$
2,202

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(3,337
)
 
$

 
$
(10,424
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
791

 
$
(30
)
 
$
2,250

 
$
(87
)
The following table sets forth the fair value of our derivative instruments:
 
 
September 30,
2012
 
December 31,
2011
Liability Derivatives:
 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
 
 
 
Interest rate swaps
$
10,274

 
$
2,202

The following table sets forth the effect of our cash flow hedges on AOCL and interest expense:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Derivatives Designated as Cash Flow Hedges:
 
 
 
 
 
 
 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
(3,337
)
 
$

 
$
(10,424
)
 
$

Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
 
 
 
 
 
 
 
Interest rate swaps
$
791

 
$
(30
)
 
$
2,250

 
$
(87
)
Noncontrolling Interests (Tables)
The following table sets forth noncontrolling interests in the Operating Partnership:
 
 
Nine Months Ended September 30,
 
2012
 
2011
Beginning noncontrolling interests in the Operating Partnership
$
110,655

 
$
120,838

Adjustments of noncontrolling interests in the Operating Partnership to fair value
12,485

 
(10,177
)
Issuances of Common Units
2,299

 

Conversion of Common Units to Common Stock
(731
)
 
(1,344
)
Net income attributable to noncontrolling interests in the Operating Partnership
3,166

 
1,496

Distributions to noncontrolling interests in the Operating Partnership
(4,733
)
 
(4,818
)
Total noncontrolling interests in the Operating Partnership
$
123,141

 
$
105,995

The following table sets forth net income available for common stockholders and transfers from noncontrolling interests in the Operating Partnership:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Net income available for common stockholders
$
33,357

 
$
7,002

 
$
63,013

 
$
27,250

Increase in additional paid in capital from conversion of Common Units to Common Stock
100

 
709

 
731

 
1,344

Issuances of Common Units
(2,299
)
 

 
(2,299
)
 

Change from net income available for common stockholders and transfers from noncontrolling interests
$
31,158

 
$
7,711

 
$
61,445

 
$
28,594

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
 
September 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,382

 
$

 
$
17,382

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264

 
3,264

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,270

 

 

 
15,270

Total Assets
$
35,916

 
$
3,264

 
$
17,382

 
$
15,270

Noncontrolling Interests in the Operating Partnership
$
123,141

 
$
123,141

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,889,775

 
$

 
$
1,889,775

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274

 

 
10,274

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,264

 
3,264

 

 

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

 

 

 
563

Financing obligations, at fair value (1)
18,930

 

 

 
18,930

Total Liabilities
$
1,922,806

 
$
3,264

 
$
1,900,049

 
$
19,493

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

 
$

 
$
18,990

 
$

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

 
3,149

 

 

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

 

 

 
14,788

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

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Noncontrolling Interests in the Operating Partnership
$
110,655

 
$
110,655

 
$

 
$

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,959,438

 
$

 
$
1,959,438

 
$

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

 

 
2,202

 

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

 
3,149

 

 

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

 

 

 
18,866

Total Liabilities
$
1,983,655

 
$
3,149

 
$
1,961,640

 
$
18,866

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 on a recurring basis:

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,371

 
$
15,228

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
(101
)
 
600

 
482

 
129

Ending balance
$
15,270

 
$
15,828

 
$
15,270

 
$
15,828

Liability:
 
 
 
 
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
 
 
 
 
Beginning balance
$
677

 
$

 
$
677

 
$

Unrealized gains (in general and administrative)
(114
)
 

 
(114
)
 

Ending balance
$
563

 
$

 
$
563

 
$

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

 
Fair Value at
September 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Tax increment financing bond
$
15,270

 
Income approach
 
Discount rate
 
10.73
%
Contingent consideration to acquire real estate assets
$
563

 
Income approach
 
Payout percentage
 
75.00
%
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
 
September 30, 2012
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
17,382

 
$

 
$
17,382

 
$

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264

 
3,264

 

 

Tax increment financing bond (in prepaid expenses and other assets)
15,270

 

 

 
15,270

Total Assets
$
35,916

 
$
3,264

 
$
17,382

 
$
15,270

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,889,775

 
$

 
$
1,889,775

 
$

Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274

 

 
10,274

 

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,264

 
3,264

 

 

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

 

 

 
563

Financing obligations, at fair value (1)
18,930

 

 

 
18,930

Total Liabilities
$
1,922,806

 
$
3,264

 
$
1,900,049

 
$
19,493



9.
Disclosure About Fair Value of Financial Instruments - Continued
 
 
 
 
Level 1
 
Level 2
 
Level 3
 
December 31, 2011
 
Quoted Prices
in Active
Markets for Identical Assets or Liabilities
 
Significant Observable Inputs
 
Significant Unobservable Inputs
Assets:
 
 
 
 
 
 
 
Mortgages and notes receivable, at fair value (1)
$
18,990

 
$

 
$
18,990

 
$

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

 
3,149

 

 

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

 

 

 
14,788

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

 

 

 
12,767

Total Assets
$
49,694

 
$
3,149

 
$
18,990

 
$
27,555

Liabilities:
 
 
 
 
 
 
 
Mortgages and notes payable, at fair value (1)
$
1,959,438

 
$

 
$
1,959,438

 
$

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

 

 
2,202

 

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

 
3,149

 

 

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

 

 

 
18,866

Total Liabilities
$
1,983,655

 
$
3,149

 
$
1,961,640

 
$
18,866

__________
(1)    Amounts carried at historical cost on our Consolidated Balance Sheets at September 30, 2012 and December 31, 2011, respectively.
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 on a recurring basis:
 
 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Asset:
 
 
 
 
 
 
 
Tax Increment Financing Bond:
 
 
 
 
 
 
 
Beginning balance
$
15,371

 
$
15,228

 
$
14,788

 
$
15,699

Unrealized gains/(losses) (in AOCL)
(101
)
 
600

 
482

 
129

Ending balance
$
15,270

 
$
15,828

 
$
15,270

 
$
15,828

Liability:
 
 
 
 
 
 
 
Contingent Consideration to Acquire Real Estate Assets:
 
 
 
 
 
 
 
Beginning balance
$
677

 
$

 
$
677

 
$

Unrealized gains (in general and administrative)
(114
)
 

 
(114
)
 

Ending balance
$
563

 
$

 
$
563

 
$

The following table sets forth quantitative information about the unobservable inputs of our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets on a recurring basis:
 
 
Fair Value at
September 30, 2012
 
Valuation
Technique
 
Unobservable
Input
 
Rate/ Percentage
Tax increment financing bond
$
15,270

 
Income approach
 
Discount rate
 
10.73
%
Contingent consideration to acquire real estate assets
$
563

 
Income approach
 
Payout percentage
 
75.00
%
Accumulated Other Comprehensive Loss (Tables)
The following table sets forth the components of accumulated other comprehensive loss:

 
Nine Months Ended September 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains on tax increment financing bond
482

 
129

Ending balance
(1,827
)
 
(2,414
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(10,424
)
 

Amortization of cash flow hedges
2,250

 
(87
)
Ending balance
(11,599
)
 
(1,192
)
Total accumulated other comprehensive loss
$
(13,426
)
 
$
(3,606
)
The following table sets forth the components of accumulated other comprehensive loss:

 
Nine Months Ended September 30,
 
2012
 
2011
Tax increment financing bond:
 
 
 
Beginning balance
$
(2,309
)
 
$
(2,543
)
Unrealized gains/(losses) on tax increment financing bond
482

 
129

Ending balance
(1,827
)
 
(2,414
)
Cash flow hedges:
 
 
 
Beginning balance
(3,425
)
 
(1,105
)
Unrealized losses on cash flow hedges
(10,424
)
 

Amortization of cash flow hedges
2,250

 
(87
)
Ending balance
(11,599
)
 
(1,192
)
Total accumulated other comprehensive loss
$
(13,426
)
 
$
(3,606
)
Discontinued Operations (Tables)
The following table sets forth our operations which required classification as discontinued operations:

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
875

 
$
5,301

 
$
10,120

 
$
16,219

Operating expenses:
 
 
 
 
 
 
 
Rental property and other expenses
293

 
2,199

 
3,766

 
6,572

Depreciation and amortization

 
1,269

 
2,009

 
3,935

Total operating expenses
293

 
3,468

 
5,775

 
10,507

Interest expense
35

 
119

 
283

 
364

Income from discontinued operations
547

 
1,714

 
4,062

 
5,348

Net gains on disposition of discontinued operations
22,936

 
2,573

 
29,455

 
2,573

Total discontinued operations
$
23,483

 
$
4,287

 
$
33,517

 
$
7,921


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

 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$

 
$
14,077

Buildings and tenant improvements

 
135,013

Less-accumulated depreciation

 
(32,254
)
Net real estate assets

 
116,836

Accrued straight-line rents receivable

 
6,520

Deferred leasing costs, net

 
811

Prepaid expenses and other assets

 
106

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

 
$
124,273

Liabilities:
 
 
 
Mortgages and notes payable
$

 
$
34,307

Accrued expenses and other liabilities

 
214

Financing obligations

 
1,294

Liabilities, net, held for sale
$

 
$
35,815

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Rental and other revenues
$
875

 
$
5,301

 
$
10,120

 
$
16,219

Operating expenses:

 

 

 

Rental property and other expenses
293

 
2,199

 
3,766

 
6,572

Depreciation and amortization

 
1,269

 
2,009

 
3,935

Total operating expenses
293

 
3,468

 
5,775

 
10,507

Interest expense
35

 
119

 
283

 
364

Income from discontinued operations
547

 
1,714

 
4,062

 
5,348

Net gains on disposition of discontinued operations
22,936

 
2,573

 
29,455

 
2,573

Total discontinued operations
$
23,483

 
$
4,287

 
$
33,517

 
$
7,921

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

 
September 30,
2012
 
December 31,
2011
Assets:
 
 
 
Land
$

 
$
14,077

Buildings and tenant improvements

 
135,013

Less-accumulated depreciation

 
(32,254
)
Net real estate assets

 
116,836

Accrued straight-line rents receivable

 
6,520

Deferred leasing costs, net

 
811

Prepaid expenses and other assets

 
106

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

 
$
124,273

Liabilities:
 
 
 
Mortgages and notes payable
$

 
$
34,307

Accrued expenses and other liabilities

 
214

Financing obligations

 
1,294

Liabilities, net, held for sale
$

 
$
35,815

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

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Share - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,313

 
$
3,957

 
$
35,109

 
$
27,200

Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(547
)
 
(153
)
 
(1,572
)
 
(1,101
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common stockholders
10,980

 
2,928

 
31,090

 
19,724

Income from discontinued operations
23,483

 
4,287

 
33,517

 
7,921

Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(1,106
)
 
(213
)
 
(1,594
)
 
(395
)
Income from discontinued operations available for common stockholders
22,377

 
4,074

 
31,923

 
7,526

Net income available for common stockholders
$
33,357

 
$
7,002

 
$
63,013

 
$
27,250

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
76,590

 
72,492

 
74,703

 
72,176

Earnings per Common Share - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common stockholders
$
0.15

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common stockholders
0.29

 
0.06

 
0.42

 
0.10

Net income available for common stockholders
$
0.44

 
$
0.10

 
$
0.84

 
$
0.38

Earnings per Common Share - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,313

 
$
3,957

 
$
35,109

 
$
27,200

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Dividends on Preferred Stock
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Stock redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
11,527

 
3,081

 
32,662

 
20,825

Income from discontinued operations available for common stockholders
23,483

 
4,287

 
33,517

 
7,921

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
$
35,010

 
$
7,368

 
$
66,179

 
$
28,746

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
76,590

 
72,492

 
74,703

 
72,176

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
137

 
138

 
127

 
169

Noncontrolling interests Common Units
3,768

 
3,772

 
3,738

 
3,782

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
80,495

 
76,402

 
78,568

 
76,127

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

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common stockholders
0.29

 
0.06

 
0.42

 
0.10

Net income available for common stockholders
$
0.43

 
$
0.10

 
$
0.84

 
$
0.38

__________

13.
Earnings Per Share - Continued

(1)
There were 0.5 million and 0.4 million options outstanding during the three months ended September 30, 2012 and 2011, respectively, and 0.5 million and 0.3 million options outstanding during the nine months ended September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.
The following table sets forth the computation of basic and diluted earnings per unit:

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,317

 
$
3,957

 
$
35,118

 
$
27,212

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common unitholders
11,531

 
3,081

 
32,671

 
20,837

Income from discontinued operations available for common unitholders
23,483

 
4,287

 
33,517

 
7,921

Net income available for common unitholders
$
35,014

 
$
7,368

 
$
66,188

 
$
28,758

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit – weighted average units (1) (2)
79,949

 
75,855

 
78,032

 
75,549

Earnings per Common Unit - basic:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common unitholders
0.29

 
0.06

 
0.43

 
0.10

Net income available for common unitholders
$
0.44

 
$
0.10

 
$
0.85

 
$
0.38

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
Income from continuing operations
$
12,317

 
$
3,957

 
$
35,118

 
$
27,212

Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159
)
 
(249
)
 
(566
)
 
(554
)
Distributions on Preferred Units
(627
)
 
(627
)
 
(1,881
)
 
(3,926
)
Excess of Preferred Unit redemption/repurchase cost over carrying value

 

 

 
(1,895
)
Income from continuing operations available for common unitholders
11,531

 
3,081

 
32,671

 
20,837

Income from discontinued operations available for common unitholders
23,483

 
4,287

 
33,517

 
7,921

Net income available for common unitholders
$
35,014

 
$
7,368

 
$
66,188

 
$
28,758

Denominator:
 
 
 
 
 
 
 
Denominator for basic earnings per Common Unit –weighted average units (1) (2)
79,949

 
75,855

 
78,032

 
75,549

Add:
 
 
 
 
 
 
 
Stock options using the treasury method
137

 
138

 
127

 
169

Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)
80,086

 
75,993

 
78,159

 
75,718

Earnings per Common Unit - diluted:
 
 
 
 
 
 
 
Income from continuing operations available for common unitholders
$
0.15

 
$
0.04

 
$
0.42

 
$
0.28

Income from discontinued operations available for common unitholders
0.29

 
0.06

 
0.43

 
0.10

Net income available for common unitholders
$
0.44

 
$
0.10

 
$
0.85

 
$
0.38

__________
(1)
There were 0.5 million and 0.4 million options outstanding during the three months ended September 30, 2012 and 2011, respectively, and 0.5 million and 0.3 million options outstanding during the nine months ended September 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.
(2)
Includes all unvested restricted stock since dividends on 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 September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
14,074

 
$
12,167

 
$
44,315

 
$
34,701

Greenville, SC
3,297

 
3,617

 
10,289

 
10,558

Kansas City, MO
4,015

 
3,412

 
11,176

 
10,371

Memphis, TN
9,106

 
9,393

 
27,612

 
27,808

Nashville, TN
14,289

 
13,793

 
42,471

 
40,106

Orlando, FL
2,747

 
2,676

 
8,189

 
7,612

Piedmont Triad, NC
5,603

 
4,913

 
15,753

 
15,546

Pittsburgh, PA
9,485

 
1,568

 
27,681

 
1,568

Raleigh, NC
20,585

 
20,047

 
60,758

 
59,462

Richmond, VA
11,852

 
13,375

 
35,453

 
36,425

Tampa, FL
17,615

 
17,370

 
52,324

 
50,808

Total Office Segment
112,668

 
102,331

 
336,021

 
294,965

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,215

 
3,293

 
9,522

 
9,989

Piedmont Triad, NC
3,142

 
3,151

 
9,392

 
8,953

Total Industrial Segment
6,357

 
6,444

 
18,914

 
18,942

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,189

 
8,490

 
27,185

 
25,590

Total Retail Segment
9,189

 
8,490

 
27,185

 
25,590

Total Rental and Other Revenues
$
128,214

 
$
117,265

 
$
382,120

 
$
339,497


14.
Segment Information - Continued

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
8,700

 
$
7,402

 
$
28,215

 
$
21,555

Greenville, SC
1,807

 
2,096

 
5,989

 
6,238

Kansas City, MO
2,547

 
2,000

 
7,064

 
6,255

Memphis, TN
5,381

 
5,166

 
16,234

 
15,297

Nashville, TN
9,777

 
9,273

 
29,262

 
27,275

Orlando, FL
1,368

 
1,378

 
4,214

 
3,829

Piedmont Triad, NC
3,330

 
2,895

 
9,780

 
9,944

Pittsburgh, PA
4,952

 
888

 
13,859

 
888

Raleigh, NC
13,907

 
13,900

 
42,045

 
41,386

Richmond, VA
7,868

 
7,767

 
24,283

 
23,852

Tampa, FL
11,077

 
10,786

 
32,721

 
31,475

Total Office Segment
70,714

 
63,551

 
213,666

 
187,994

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,331

 
2,406

 
6,936

 
7,417

Piedmont Triad, NC
2,257

 
2,251

 
6,852

 
6,582

Total Industrial Segment
4,588

 
4,657

 
13,788

 
13,999

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,679

 
5,026

 
16,534

 
15,146

Total Retail Segment
5,679

 
5,026

 
16,534

 
15,146

Total Net Operating Income
80,981

 
73,234

 
243,988

 
217,139

Reconciliation to income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(38,651
)
 
(35,051
)
 
(115,755
)
 
(99,659
)
Impairments of assets held for use

 
(2,429
)
 

 
(2,429
)
General and administrative
(9,725
)
 
(12,212
)
 
(28,298
)
 
(27,983
)
Interest expense
(23,612
)
 
(24,271
)
 
(72,661
)
 
(71,476
)
Other income
1,916

 
1,505

 
4,910

 
5,253

Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
$
10,909

 
$
776

 
$
32,184

 
$
20,845

__________
(1)
Net of discontinued operations.
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,
 
2012
 
2011
 
2012
 
2011
Rental and Other Revenues: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
14,074

 
$
12,167

 
$
44,315

 
$
34,701

Greenville, SC
3,297

 
3,617

 
10,289

 
10,558

Kansas City, MO
4,015

 
3,412

 
11,176

 
10,371

Memphis, TN
9,106

 
9,393

 
27,612

 
27,808

Nashville, TN
14,289

 
13,793

 
42,471

 
40,106

Orlando, FL
2,747

 
2,676

 
8,189

 
7,612

Piedmont Triad, NC
5,603

 
4,913

 
15,753

 
15,546

Pittsburgh, PA
9,485

 
1,568

 
27,681

 
1,568

Raleigh, NC
20,585

 
20,047

 
60,758

 
59,462

Richmond, VA
11,852

 
13,375

 
35,453

 
36,425

Tampa, FL
17,615

 
17,370

 
52,324

 
50,808

Total Office Segment
112,668

 
102,331

 
336,021

 
294,965

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
3,215

 
3,293

 
9,522

 
9,989

Piedmont Triad, NC
3,142

 
3,151

 
9,392

 
8,953

Total Industrial Segment
6,357

 
6,444

 
18,914

 
18,942

Retail:
 
 
 
 
 
 
 
Kansas City, MO
9,189

 
8,490

 
27,185

 
25,590

Total Retail Segment
9,189

 
8,490

 
27,185

 
25,590

Total Rental and Other Revenues
$
128,214

 
$
117,265

 
$
382,120

 
$
339,497



14.
Segment Information - Continued

 
Three Months Ended September 30,
 
Nine Months Ended September 30,
 
2012
 
2011
 
2012
 
2011
Net Operating Income: (1)
 
 
 
 
 
 
 
Office:
 
 
 
 
 
 
 
Atlanta, GA
$
8,708

 
$
7,409

 
$
28,239

 
$
21,556

Greenville, SC
1,809

 
2,098

 
5,994

 
6,237

Kansas City, MO
2,549

 
2,002

 
7,070

 
6,254

Memphis, TN
5,386

 
5,171

 
16,247

 
15,295

Nashville, TN
9,786

 
9,282

 
29,285

 
27,271

Orlando, FL
1,369

 
1,379

 
4,217

 
3,829

Piedmont Triad, NC
3,333

 
2,898

 
9,788

 
9,943

Pittsburgh, PA
4,957

 
888

 
13,862

 
888

Raleigh, NC
13,920

 
13,913

 
42,083

 
41,383

Richmond, VA
7,875

 
7,774

 
24,302

 
23,851

Tampa, FL
11,087

 
10,797

 
32,750

 
31,473

Total Office Segment
70,779

 
63,611

 
213,837

 
187,980

Industrial:
 
 
 
 
 
 
 
Atlanta, GA
2,333

 
2,408

 
6,942

 
7,416

Piedmont Triad, NC
2,259

 
2,253

 
6,857

 
6,581

Total Industrial Segment
4,592

 
4,661

 
13,799

 
13,997

Retail:
 
 
 
 
 
 
 
Kansas City, MO
5,684

 
5,030

 
16,547

 
15,144

Total Retail Segment
5,684

 
5,030

 
16,547

 
15,144

Total Net Operating Income
81,055

 
73,302

 
244,183

 
217,121

Reconciliation to income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
 
 
 
 
 
 
 
Depreciation and amortization
(38,651
)
 
(35,051
)
 
(115,755
)
 
(99,659
)
Impairments of assets held for use

 
(2,429
)
 

 
(2,429
)
General and administrative
(9,799
)
 
(12,280
)
 
(28,493
)
 
(27,965
)
Interest expense
(23,612
)
 
(24,271
)
 
(72,661
)
 
(71,476
)
Other income
1,916

 
1,505

 
4,910

 
5,253

Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
$
10,909

 
$
776

 
$
32,184

 
$
20,845

__________
(1)
Net of discontinued operations.
Description of Business and Significant Accounting Policies (Details) (USD $)
In Millions, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
executives
acre
properties
sqft
property
Sep. 30, 2012
executives
acre
properties
sqft
property
Dec. 31, 2011
Description of Business and Significant Accounting Policies [Line Items]
 
 
 
In-service office, industrial and retail properties (in units)
299 
299 
 
Square footage of commercial property (in sq feet)
29,005,899 
29,005,899 
 
Residential condominiums for sale (in units)
 
Undeveloped land suitable for future development (in acres)
581 
581 
 
Undeveloped land considered core holdings (in acres)
518 
518 
 
Office properties under/planned for development (in units)
 
Common Units of partnership owned (in shares)
78,100,000 
78,100,000 
 
Percentage of ownership of Common Units
95.40% 
95.40% 
95.10% 
Number of officers of the Company who are also limited partners
 
Number of directors of the Company who are also limited partners
 
Common Units of partnership not owned by the Company (in shares)
3,800,000 
3,800,000 
 
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 
$ 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)
 
21,366 
 
Common Units issued to acquire real estate assets (in shares)
66,864 
66,864 
 
Number of Common Stock sold at the market during period (in shares)
2,867,768 
5,490,244 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 33.22 
$ 33.33 
 
Net proceeds of Common Stock sold at the market during period
$ 93.8 
$ 180.2 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
Description of Business and Significant Accounting Policies [Line Items]
 
 
 
In-service office, industrial and retail properties (in units)
299 
299 
 
Square footage of commercial property (in sq feet)
29,005,899 
29,005,899 
 
Residential condominiums for sale (in units)
 
Undeveloped land suitable for future development (in acres)
581 
581 
 
Undeveloped land considered core holdings (in acres)
518 
518 
 
Office properties under/planned for development (in units)
 
Common Units of partnership owned (in shares)
78,100,000 
78,100,000 
 
Percentage of ownership of Common Units
95.40% 
95.40% 
95.10% 
Number of officers of the Company who are also limited partners
 
Number of directors of the Company who are also limited partners
 
Common Units of partnership not owned by the Company (in shares)
3,800,000 
3,800,000 
 
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)
 
21,366 
 
Common Units issued to acquire real estate assets (in shares)
66,864 
66,864 
 
Number of Common Stock sold at the market during period (in shares)
2,867,768 
5,490,244 
 
Average price of Common Stock sold at the market during period (in dollars per share)
$ 33.22 
$ 33.33 
 
Net proceeds of Common Stock sold at the market during period
$ 93.8 
$ 180.2 
 
Real Estate Assets (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 3 Months Ended
Sep. 30, 2012
property
Sep. 30, 2011
Sep. 30, 2012
property
Sep. 30, 2011
Sep. 30, 2012
Atlanta, GA Office Property Acquisition (2012) [Member]
sqft
Sep. 30, 2012
Greensboro, NC Medical Office Properties Acquisition [Member]
property
Sep. 30, 2011
Pittsburgh PA Office Property Acquisition [Member]
property
sqft
Sep. 30, 2011
Atlanta GA Office Property Acquisition [Member]
sqft
Jun. 30, 2012
Cary, NC Office Property Acquisition [Member]
sqft
Sep. 30, 2012
Kansas City, MO Office Property Disposition (2012) [Member]
Sep. 30, 2012
Nashville, TN Office Properties Disposition [Member]
property
Sep. 30, 2012
Atlanta, GA and Jackson, MS Office Properties Disposition [Member]
property
Mar. 31, 2012
Kansas City, MO Rental Residential Disposition [Member]
properties
Jun. 30, 2012
Pinellas County, FL Office Property Disposition [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
property
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
property
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Atlanta, GA Office Property Acquisition (2012) [Member]
sqft
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Greensboro, NC Medical Office Properties Acquisition [Member]
property
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Pittsburgh PA Office Property Acquisition [Member]
sqft
property
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Atlanta GA Office Property Acquisition [Member]
sqft
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Cary, NC Office Property Acquisition [Member]
sqft
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Kansas City, MO Office Property Disposition (2012) [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Nashville, TN Office Properties Disposition [Member]
property
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Atlanta, GA and Jackson, MS Office Properties Disposition [Member]
property
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Kansas City, MO Rental Residential Disposition [Member]
properties
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Pinellas County, FL Office Property Disposition [Member]
Acquisitions [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of office properties acquired
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rentable square feet of acquisition (in sq. ft)
 
 
 
 
492,000 
 
1,540,000 
503,000 
178,300 
 
 
 
 
 
 
 
 
 
492,000 
 
1,540,000 
503,000 
178,300 
 
 
 
 
 
Acquisition purchase price
$ 161,200,000 
 
$ 161,200,000 
 
$ 144,900,000 
$ 16,300,000 
$ 188,500,000 
$ 78,300,000 
$ 26,000,000 
 
 
 
 
 
$ 161,200,000 
 
$ 161,200,000 
 
$ 144,900,000 
$ 16,300,000 
$ 188,500,000 
$ 78,300,000 
$ 26,000,000 
 
 
 
 
 
Common Units issued to acquire real estate assets (in shares)
66,864 
 
66,864 
 
 
66,864 
 
 
 
 
 
 
 
 
66,864 
 
66,864 
 
 
66,864 
 
 
 
 
 
 
 
 
Contingent consideration at fair value
563,000 
 
563,000 
 
 
700,000 
 
 
 
 
 
 
 
 
563,000 
 
563,000 
 
 
700,000 
 
 
 
 
 
 
 
 
Acquisition-related costs
700,000 
 
 
 
540,000 
113,000 
 
 
 
 
 
 
 
 
700,000 
 
 
 
500,000 
100,000 
 
 
 
 
 
 
 
 
Business Acquisition, Purchase Price Allocation [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate assets
135,128,000 
 
135,128,000 
 
 
 
 
 
 
 
 
 
 
 
135,128,000 
 
135,128,000 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related intangible assets (in deferred financing and leasing costs)
21,637,000 
 
21,637,000 
 
 
 
 
 
 
 
 
 
 
 
21,637,000 
 
21,637,000 
 
 
 
 
 
 
 
 
 
 
 
Acquisition-related below market lease liabilities (in accounts payable, accrued expenses and other liabilities)
(11,875,000)
 
(11,875,000)
 
 
 
 
 
 
 
 
 
 
 
(11,875,000)
 
(11,875,000)
 
 
 
 
 
 
 
 
 
 
 
Total allocation
144,890,000 
 
144,890,000 
 
 
 
 
 
 
 
 
 
 
 
144,890,000 
 
144,890,000 
 
 
 
 
 
 
 
 
 
 
 
Business Acquisition, Pro Forma Information [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Pro forma rental and other revenues
132,632,000 
132,269,000 
395,161,000 
385,246,000 
 
 
 
 
 
 
 
 
 
 
132,632,000 
132,269,000 
395,161,000 
385,246,000 
 
 
 
 
 
 
 
 
 
 
Pro forma net income
35,765,000 
7,626,000 
68,526,000 
33,268,000 
 
 
 
 
 
 
 
 
 
 
35,769,000 
7,626,000 
68,535,000 
33,280,000 
 
 
 
 
 
 
 
 
 
 
Pro forma earnings per share - basic
$ 0.43 
$ 0.09 
$ 0.84 
$ 0.35 
 
 
 
 
 
 
 
 
 
 
$ 0.44 
$ 0.09 
$ 0.85 
$ 0.36 
 
 
 
 
 
 
 
 
 
 
Pro forma earnings per share - diluted
$ 0.43 
$ 0.09 
$ 0.84 
$ 0.35 
 
 
 
 
 
 
 
 
 
 
$ 0.44 
$ 0.09 
$ 0.85 
$ 0.36 
 
 
 
 
 
 
 
 
 
 
Pro forma, assumption date of acquisition
 
 
 
 
Jan. 01, 2011 
 
Jan. 01, 2010 
Jan. 01, 2010 
 
 
 
 
 
 
 
 
 
 
Jan. 01, 2011 
 
Jan. 01, 2010 
Jan. 01, 2010 
 
 
 
 
 
 
Dispositions [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of rental residential units
 
 
 
 
 
 
 
 
 
 
 
 
96 
 
 
 
 
 
 
 
 
 
 
 
 
 
96 
 
Number of office properties sold
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross proceeds from the sale of real estate
 
 
 
 
 
 
 
 
 
6,500,000 
41,000,000 
86,500,000 
11,000,000 
9,500,000 
 
 
 
 
 
 
 
 
 
6,500,000 
41,000,000 
86,500,000 
11,000,000 
9,500,000 
Gains on disposition of discontinued operations
$ 22,936,000 
$ 2,573,000 
$ 29,455,000 
$ 2,573,000 
 
 
 
 
 
$ 1,900,000 
$ 7,000,000 
$ 14,000,000 
$ 5,100,000 
$ 1,400,000 
$ 22,936,000 
$ 2,573,000 
$ 29,455,000 
$ 2,573,000 
 
 
 
 
 
$ 1,900,000 
$ 7,000,000 
$ 14,000,000 
$ 5,100,000 
$ 1,400,000 
Mortgages and Notes Receivable (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, allowance
$ (211)
$ (545)
$ (211)
$ (545)
 
Mortgages and notes receivable, net
16,943 
 
16,943 
 
18,600 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
118 
617 
61 
868 
 
Bad debt expense
184 
 
Recoveries/write-offs/other
93 
(72)
150 
(507)
 
Total notes receivable allowance
211 
545 
211 
545 
 
Seller Financing [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
15,853 
 
15,853 
 
17,180 
Mortgages and notes receivable, allowance
 
 
Mortgages and notes receivable, net
15,853 
 
15,853 
 
17,180 
Number of transactions with seller financing
 
 
 
 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
Total notes receivable allowance
 
 
Promissory Notes [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
1,301 
 
1,301 
 
1,481 
Mortgages and notes receivable, allowance
(211)
 
(211)
 
(61)
Mortgages and notes receivable, net
1,090 
 
1,090 
 
1,420 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
61 
Total notes receivable allowance
211 
 
211 
 
61 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, allowance
(211)
(545)
(211)
(545)
 
Mortgages and notes receivable, net
16,943 
 
16,943 
 
18,600 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
118 
617 
61 
868 
 
Bad debt expense
184 
 
Recoveries/write-offs/other
93 
(72)
150 
(507)
 
Total notes receivable allowance
211 
545 
211 
545 
 
Highwoods Realty Limited Partnership [Member] |
Seller Financing [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
15,853 
 
15,853 
 
17,180 
Mortgages and notes receivable, allowance
 
 
Mortgages and notes receivable, net
15,853 
 
15,853 
 
17,180 
Number of transactions with seller financing
 
 
 
 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
Total notes receivable allowance
 
 
Highwoods Realty Limited Partnership [Member] |
Promissory Notes [Member]
 
 
 
 
 
Schedule of mortgages and notes receivable [Abstract]
 
 
 
 
 
Mortgages and notes receivable, gross
1,301 
 
1,301 
 
1,481 
Mortgages and notes receivable, allowance
(211)
 
(211)
 
(61)
Mortgages and notes receivable, net
1,090 
 
1,090 
 
1,420 
Notes receivable allowance, promissory notes [Roll Forward]
 
 
 
 
 
Beginning notes receivable allowance
 
 
 
 
61 
Total notes receivable allowance
$ 211 
 
$ 211 
 
$ 61 
Investments In and Advances To Affiliates (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
SF-Harborview Plaza, LP Joint Venture [Member]
Sep. 30, 2012
Highwoods DLF 98/29, LLC Joint Venture [Member]
Mar. 31, 2012
Highwoods DLF 98/29, LLC Joint Venture [Member]
property
Sep. 30, 2011
Highwoods DLF 98/29, LLC Joint Venture [Member]
Jun. 30, 2011
Highwoods DLF 98/29, LLC Joint Venture [Member]
Sep. 30, 2012
Highwoods DLF 98/29, LLC Joint Venture [Member]
Sep. 30, 2011
Highwoods DLF 98/29, LLC Joint Venture [Member]
Jun. 30, 2012
Highwoods DLF 98/29, LLC Joint Venture [Member]
Jun. 30, 2012
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
Sep. 30, 2012
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
SF-Harborview Plaza, LP Joint Venture [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
property
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Jun. 30, 2011
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 98/29, LLC Joint Venture [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
Income Statements:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental and other revenues
$ 25,051,000 
$ 25,623,000 
$ 75,920,000 
$ 75,619,000 
 
 
 
 
 
 
 
 
 
 
$ 24,062,000 
$ 24,618,000 
$ 72,916,000 
$ 72,576,000 
 
 
 
 
 
 
 
 
 
Expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Rental property and other expenses
11,624,000 
10,805,000 
35,706,000 
33,576,000 
 
 
 
 
 
 
 
 
 
 
11,024,000 
10,239,000 
33,901,000 
31,765,000 
 
 
 
 
 
 
 
 
 
Depreciation and amortization
6,355,000 
6,759,000 
18,839,000 
19,670,000 
 
 
 
 
 
 
 
 
 
 
6,044,000 
6,437,000 
17,905,000 
18,736,000 
 
 
 
 
 
 
 
 
 
Impairments of real estate assets
7,180,000 
 
 
 
 
 
 
 
 
 
 
7,180,000 
 
 
 
 
 
 
 
 
 
Interest expense
4,980,000 
5,976,000 
16,077,000 
17,841,000 
 
 
 
 
 
 
 
 
 
 
4,817,000 
5,802,000 
15,583,000 
17,310,000 
 
 
 
 
 
 
 
 
 
Total expenses
22,959,000 
23,540,000 
77,802,000 
71,087,000 
 
 
 
 
 
 
 
 
 
 
21,885,000 
22,478,000 
74,569,000 
67,811,000 
 
 
 
 
 
 
 
 
 
Income/(loss) before disposition of properties
2,092,000 
2,083,000 
(1,882,000)
4,532,000 
 
 
 
 
 
 
 
 
 
 
2,177,000 
2,140,000 
(1,653,000)
4,765,000 
 
 
 
 
 
 
 
 
 
Gains on disposition of properties
6,275,000 
 
 
 
 
 
 
 
 
 
 
6,275,000 
 
 
 
 
 
 
 
 
 
Net income
2,092,000 
2,083,000 
4,393,000 
4,532,000 
 
 
 
 
 
 
 
 
 
 
2,177,000 
2,140,000 
4,622,000 
4,765,000 
 
 
 
 
 
 
 
 
 
Our share of:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Depreciation and amortization of real estate assets
2,028,000 
2,066,000 
5,801,000 
6,192,000 
 
 
 
 
 
 
 
 
 
 
1,989,000 
2,028,000 
5,684,000 
6,078,000 
 
 
 
 
 
 
 
 
 
Impairments of real estate assets
1,002,000 
 
 
1,000,000 
 
 
 
 
 
 
 
1,002,000 
 
 
1,000,000 
 
 
 
 
 
 
Interest expense
1,775,000 
1,965,000 
5,598,000 
6,159,000 
 
 
 
 
 
 
 
 
 
 
1,754,000 
1,944,000 
5,536,000 
6,093,000 
 
 
 
 
 
 
 
 
 
Net income
914,000 
442,000 
1,252,000 
2,112,000 
 
 
 
 
 
 
 
 
 
 
925,000 
448,000 
1,281,000 
2,142,000 
 
 
 
 
 
 
 
 
 
Our share of net income
914,000 
442,000 
1,252,000 
2,112,000 
 
 
 
 
 
 
 
 
 
 
925,000 
448,000 
1,281,000 
2,142,000 
 
 
 
 
 
 
 
 
 
Adjustments for management and other fees
410,000 
671,000 
1,418,000 
1,821,000 
 
 
 
 
 
 
 
 
 
 
403,000 
665,000 
1,398,000 
1,803,000 
 
 
 
 
 
 
 
 
 
Equity in earnings of unconsolidated affiliates
1,324,000 
1,113,000 
2,670,000 
3,933,000 
 
 
 
 
 
 
 
 
 
 
1,328,000 
1,113,000 
2,679,000 
3,945,000 
 
 
 
 
 
 
 
 
 
Percentage of equity interest in joint ventures, maximum
50.00% 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
 
50.00% 
 
50.00% 
 
 
 
 
 
 
 
 
 
 
Advance to unconsolidated affiliate, loan amount
 
 
 
 
 
 
 
 
38,300,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
38,300,000 
 
 
 
 
Loan maturity date
 
 
 
 
 
 
 
 
Mar. 31, 2012 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar. 31, 2012 
 
 
 
 
Advance to unconsolidated affiliate, interest rate basis
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
Current interest rate (in hundredths)
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
Advance to unconsolidated affiliate, extended loan maturity date
 
 
 
 
 
Dec. 31, 2012 
 
 
 
 
 
 
 
 
 
 
 
 
 
Dec. 31, 2012 
 
 
 
 
 
 
 
Advance to unconsolidated affiliate, amount outstanding
 
 
 
 
 
 
 
 
 
 
 
13,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
13,000,000 
 
Interest income from loan to unconsolidated affiliate
 
 
 
 
 
100,000 
 
500,000 
 
800,000 
800,000 
 
 
 
 
 
 
 
 
100,000 
 
500,000 
 
800,000 
800,000 
 
 
Joint venture principal amount of debt
 
 
 
 
 
 
 
 
 
 
 
 
50,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
50,000,000 
Term of debt instrument (in years)
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
Fixed interest rate (in hundredths)
 
 
 
 
 
 
 
 
 
 
 
 
3.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
3.50% 
Amount of loan related to fixed interest rate
 
 
 
 
 
 
 
 
 
 
 
 
39,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
39,100,000 
Floating interest rate, interest rate basis
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
Current floating interest rate (in hundredths)
 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
 
 
 
 
 
 
 
 
 
 
 
 
2.50% 
Amount of loan related to floating interest rate
 
 
 
 
 
 
 
 
 
 
 
 
10,900,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
10,900,000 
Impairments of real estate assets
1,002,000 
 
 
1,000,000 
 
 
 
 
 
 
 
1,002,000 
 
 
1,000,000 
 
 
 
 
 
 
Number of impaired office properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated Affiliates [Abstract]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Advance to consolidated affiliate, loan amount
 
 
 
 
$ 20,800,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 20,800,000 
 
 
 
 
 
 
 
 
Term of debt instrument (in years)
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
 
 
Debt instrument maturity date
 
 
 
 
Sep. 30, 2015 
 
 
 
 
 
 
 
 
 
 
 
 
 
Sep. 30, 2015 
 
 
 
 
 
 
 
 
Debt instrument, interest rate basis
 
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
 
 
Debt instrument, interest rate basis spread (in hundredths)
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.00% 
 
 
 
 
 
 
 
 
Debt instrument, interest rate floor (in hundredths)
 
 
 
 
0.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
0.50% 
 
 
 
 
 
 
 
 
Intangible Assets and Below Market Lease Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, accumulated amortization
$ (73,579)
 
$ (73,579)
 
$ (62,319)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
149,170 
 
149,170 
 
127,774 
Acquired above market lease intangible assets
1,285 
 
1,285 
 
 
Acquired in-place lease intangible assets
21,479 
 
21,479 
 
 
Acquired tax abatement intangible assets
4,593 
 
4,593 
 
 
Assumed below market lease liabilities
(11,875)
 
(11,875)
 
 
Deferred Financing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
19,952 
 
19,952 
 
18,044 
Deferred financing and leasing costs, accumulated amortization
(8,115)
 
(8,115)
 
(5,797)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
11,837 
 
11,837 
 
12,247 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
907 
806 
2,709 
2,448 
 
Deferred Leasing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
202,797 
 
202,797 
 
172,049 
Deferred financing and leasing costs, accumulated amortization
(65,464)
 
(65,464)
 
(56,522)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
137,333 
 
137,333 
 
115,527 
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
121,845 
 
121,845 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
6,836 
5,189 
20,542 
13,945 
 
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
6,915 
 
6,915 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
393 
369 
1,075 
1,010 
 
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
4,025 
 
4,025 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
433 
239 
1,027 
617 
 
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
4,548 
 
4,548 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
46 
46 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Acquisition-related below market lease liabilities, gross
28,015 
 
28,015 
 
16,441 
Acquisition-related below market lease liabilities, accumulated amortization
(2,556)
 
(2,556)
 
(971)
Acquisition-related below market lease liabilities, net
25,459 
 
25,459 
 
15,470 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of acquisition-related below market lease liabilities
(647)
(230)
(1,744)
(280)
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, accumulated amortization
(73,579)
 
(73,579)
 
(62,319)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
149,170 
 
149,170 
 
127,774 
Acquired above market lease intangible assets
1,285 
 
1,285 
 
 
Acquired in-place lease intangible assets
21,479 
 
21,479 
 
 
Acquired tax abatement intangible assets
4,593 
 
4,593 
 
 
Assumed below market lease liabilities
(11,875)
 
(11,875)
 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Financing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
19,952 
 
19,952 
 
18,044 
Deferred financing and leasing costs, accumulated amortization
(8,115)
 
(8,115)
 
(5,797)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
11,837 
 
11,837 
 
12,247 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
907 
806 
2,709 
2,448 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Leasing Costs [Member]
 
 
 
 
 
Intangible assets and below market lease liabilities, net [Abstract]
 
 
 
 
 
Deferred financing and leasing costs, gross
202,797 
 
202,797 
 
172,049 
Deferred financing and leasing costs, accumulated amortization
(65,464)
 
(65,464)
 
(56,522)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
137,333 
 
137,333 
 
115,527 
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
121,845 
 
121,845 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
6,836 
5,189 
20,542 
13,945 
 
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
6,915 
 
6,915 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
393 
369 
1,075 
1,010 
 
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
4,025 
 
4,025 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
433 
239 
1,027 
617 
 
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
4,548 
 
4,548 
 
 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of intangible assets
46 
46 
 
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
28,015 
 
28,015 
 
16,441 
Acquisition-related below market lease liabilities, accumulated amortization
(2,556)
 
(2,556)
 
(971)
Acquisition-related below market lease liabilities, net
25,459 
 
25,459 
 
15,470 
Amortization of intangible assets and below market lease liabilities [Abstract]
 
 
 
 
 
Amortization of acquisition-related below market lease liabilities
$ (647)
$ (230)
$ (1,744)
$ (280)
 
Intangible Assets and Below Market Lease Liabilities Intangible Assets and Below Market Lease Liabilities - Scheduled Future Amortization (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2012
Dec. 31, 2011
Scheduled future amortization of intangible assets [Abstract]
 
 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
$ 149,170 
$ 149,170 
$ 127,774 
Deferred Financing Costs [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
1,069 
1,069 
 
2013
3,381 
3,381 
 
2014
3,009 
3,009 
 
2015
2,395 
2,395 
 
2016
1,024 
1,024 
 
Thereafter
959 
959 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
11,837 
11,837 
12,247 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
 
3 years 7 months 6 days 
 
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
7,020 
7,020 
 
2013
25,080 
25,080 
 
2014
21,190 
21,190 
 
2015
17,216 
17,216 
 
2016
14,047 
14,047 
 
Thereafter
37,292 
37,292 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
121,845 
121,845 
 
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 1 month 6 days 
 
Lease Incentives [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
349 
349 
 
2013
1,286 
1,286 
 
2014
1,134 
1,134 
 
2015
902 
902 
 
2016
708 
708 
 
Thereafter
2,536 
2,536 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,915 
6,915 
 
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 6 days 
 
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
293 
293 
 
2013
991 
991 
 
2014
734 
734 
 
2015
549 
549 
 
2016
489 
489 
 
Thereafter
969 
969 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,025 
4,025 
 
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 7 months 6 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
5 years 3 months 18 days 
 
 
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
140 
140 
 
2013
553 
553 
 
2014
553 
553 
 
2015
553 
553 
 
2016
553 
553 
 
Thereafter
2,196 
2,196 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,548 
4,548 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
 
8 years 2 months 12 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
8 years 2 months 12 days 
 
 
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
Scheduled future amortization of below market lease liabilities [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
(802)
(802)
 
2013
(3,168)
(3,168)
 
2014
(3,106)
(3,106)
 
2015
(2,894)
(2,894)
 
2016
(2,603)
(2,603)
 
Thereafter
(12,886)
(12,886)
 
Total scheduled future amortization of acquisition-related below market lease liabilities
(25,459)
(25,459)
(15,470)
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 10 months 24 days 
 
Assumed finite-lived below market lease liabilities, average useful life (in years)
11 years 3 months 18 days 
 
 
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)
9 years 2 months 12 days 
 
 
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
149,170 
149,170 
127,774 
Highwoods Realty Limited Partnership [Member] |
Deferred Financing Costs [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
1,069 
1,069 
 
2013
3,381 
3,381 
 
2014
3,009 
3,009 
 
2015
2,395 
2,395 
 
2016
1,024 
1,024 
 
Thereafter
959 
959 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
11,837 
11,837 
12,247 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
 
3 years 7 months 6 days 
 
Highwoods Realty Limited Partnership [Member] |
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
7,020 
7,020 
 
2013
25,080 
25,080 
 
2014
21,190 
21,190 
 
2015
17,216 
17,216 
 
2016
14,047 
14,047 
 
Thereafter
37,292 
37,292 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
121,845 
121,845 
 
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 1 month 6 days 
 
Highwoods Realty Limited Partnership [Member] |
Lease Incentives [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
349 
349 
 
2013
1,286 
1,286 
 
2014
1,134 
1,134 
 
2015
902 
902 
 
2016
708 
708 
 
Thereafter
2,536 
2,536 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
6,915 
6,915 
 
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 6 days 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
293 
293 
 
2013
991 
991 
 
2014
734 
734 
 
2015
549 
549 
 
2016
489 
489 
 
Thereafter
969 
969 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,025 
4,025 
 
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 7 months 6 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
5 years 3 months 18 days 
 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
 
 
 
Scheduled future amortization of intangible assets [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
140 
140 
 
2013
553 
553 
 
2014
553 
553 
 
2015
553 
553 
 
2016
553 
553 
 
Thereafter
2,196 
2,196 
 
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets
4,548 
4,548 
 
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
 
 
 
Finite-lived intangible assets, average useful life (in years)
 
8 years 2 months 12 days 
 
Acquired finite-lived intangible assets, average useful life (in years)
8 years 2 months 12 days 
 
 
Highwoods Realty Limited Partnership [Member] |
Acquisition-Related Below Market Lease Liabilities [Member]
 
 
 
Scheduled future amortization of below market lease liabilities [Abstract]
 
 
 
October 1, 2012 through December 31, 2012
(802)
(802)
 
2013
(3,168)
(3,168)
 
2014
(3,106)
(3,106)
 
2015
(2,894)
(2,894)
 
2016
(2,603)
(2,603)
 
Thereafter
(12,886)
(12,886)
 
Total scheduled future amortization of acquisition-related below market lease liabilities
$ (25,459)
$ (25,459)
$ (15,470)
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 10 months 24 days 
 
Assumed finite-lived below market lease liabilities, average useful life (in years)
11 years 3 months 18 days 
 
 
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)
9 years 2 months 12 days 
 
 
Mortgages and Notes Payable (Details) (USD $)
3 Months Ended 9 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended 9 Months Ended 3 Months Ended 3 Months Ended 3 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Sep. 30, 2012
Revolving Credit Facility due 2015 [Member]
Oct. 22, 2012
Revolving Credit Facility due 2015 [Member]
Jun. 30, 2012
5.85% (5.88% effective rate) Notes due 2017 [Member]
Sep. 30, 2012
Variable Rate Construction Loan due 2012 [Member]
Mar. 31, 2012
Variable Rate Term Loan due 2016 [Member]
Sep. 30, 2012
Secured indebtedness [Member]
Dec. 31, 2011
Secured indebtedness [Member]
Sep. 30, 2012
Unsecured indebtedness [Member]
Dec. 31, 2011
Unsecured indebtedness [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2011
Highwoods Realty Limited Partnership [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Revolving Credit Facility due 2015 [Member]
Oct. 22, 2012
Highwoods Realty Limited Partnership [Member]
Revolving Credit Facility due 2015 [Member]
Jun. 30, 2012
Highwoods Realty Limited Partnership [Member]
5.85% (5.88% effective rate) Notes due 2017 [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Variable Rate Construction Loan due 2012 [Member]
Mar. 31, 2012
Highwoods Realty Limited Partnership [Member]
Variable Rate Term Loan due 2016 [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Secured indebtedness [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Secured indebtedness [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Unsecured indebtedness [Member]
Dec. 31, 2011
Highwoods Realty Limited Partnership [Member]
Unsecured indebtedness [Member]
Debt Instrument [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mortgages and notes payable
$ 1,778,555,000 
 
$ 1,778,555,000 
 
$ 1,868,906,000 
 
 
 
 
 
$ 685,390,000 
$ 715,742,000 
$ 1,093,165,000 
$ 1,153,164,000 
$ 1,778,555,000 
 
$ 1,778,555,000 
 
$ 1,868,906,000 
 
 
 
 
 
$ 685,390,000 
$ 715,742,000 
$ 1,093,165,000 
$ 1,153,164,000 
Aggregate undepreciated book value of secured real estate assets
 
 
 
 
 
 
 
 
 
 
1,148,200,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,148,200,000 
 
 
 
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
 
 
 
 
 
89,000,000 
59,500,000 
 
 
 
 
 
 
 
 
 
 
 
 
89,000,000 
59,500,000 
 
 
 
 
 
 
 
Outstanding letters of credit on revolving credit facility
 
 
 
 
 
100,000 
100,000 
 
 
 
 
 
 
 
 
 
 
 
 
100,000 
100,000 
 
 
 
 
 
 
 
Unused borrowing capacity on revolving credit facility
 
 
 
 
 
385,900,000 
415,400,000 
 
 
 
 
 
 
 
 
 
 
 
 
385,900,000 
415,400,000 
 
 
 
 
 
 
 
Principal amount of repurchased debt
 
 
 
 
 
 
 
12,100,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
12,100,000 
 
 
 
 
 
 
Debt instrument maturity date
 
 
 
 
 
 
 
Mar. 15, 2017 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mar. 15, 2017 
 
 
 
 
 
 
Debt instrument, interest rate basis
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
 
 
 
 
 
 
 
 
 
LIBOR plus basis points 
 
 
 
 
Debt instrument, interest rate basis spread (in hundredths)
 
 
 
 
 
 
 
 
 
1.90% 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.90% 
 
 
 
 
Debt instrument, current interest rate (in hundredths)
 
 
 
 
 
 
 
5.85% 
 
 
 
 
 
 
 
 
 
 
 
 
 
5.85% 
 
 
 
 
 
 
Purchase price of debt, percentage of par value (in hundredths)
 
 
 
 
 
 
 
107.50% 
 
 
 
 
 
 
 
 
 
 
 
 
 
107.50% 
 
 
 
 
 
 
Loss on extinguishment of debt
(973,000)
(24,000)
 
 
 
1,000,000 
 
 
 
 
 
 
(973,000)
(24,000)
 
 
 
1,000,000 
 
 
 
 
 
 
Principal amount of debt
 
 
 
 
 
 
 
 
$ 34,300,000 
$ 225,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
$ 34,300,000 
$ 225,000,000 
 
 
 
 
Term of debt instrument (in years)
 
 
 
 
 
 
 
 
 
7 years 
 
 
 
 
 
 
 
 
 
 
 
 
 
7 years 
 
 
 
 
Derivative Financial Instruments (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
swaps
Sep. 30, 2011
Sep. 30, 2012
swaps
Sep. 30, 2011
Dec. 31, 2011
Derivative [Line Items]
 
 
 
 
 
Number of derivative instruments obtained
 
 
 
Term of derivative instruments (in years)
 
 
7 years 
 
 
Amount of borrowings outstanding
$ 225,000,000 
 
$ 225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
1.678% 
 
 
Cross-default minimum threshold
 
 
10,000,000 
 
 
Expected increase to interest expense
3,300,000 
 
3,300,000 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities [Abstract]
 
 
 
 
 
Interest rate swaps
10,274,000 
 
10,274,000 
 
2,202,000 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
(3,337,000)
(10,424,000)
 
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
791,000 
(30,000)
2,250,000 
(87,000)
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Derivative [Line Items]
 
 
 
 
 
Number of derivative instruments obtained
 
 
 
Term of derivative instruments (in years)
 
 
7 years 
 
 
Amount of borrowings outstanding
225,000,000 
 
225,000,000 
 
 
Interest rate under derivative instruments
1.678% 
 
1.678% 
 
 
Cross-default minimum threshold
 
 
10,000,000 
 
 
Expected increase to interest expense
3,300,000 
 
3,300,000 
 
 
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities [Abstract]
 
 
 
 
 
Interest rate swaps
10,274,000 
 
10,274,000 
 
2,202,000 
Amount of unrealized losses recognized in AOCL on derivatives (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
(3,337,000)
(10,424,000)
 
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
 
 
 
 
 
Interest rate swaps
$ 791,000 
$ (30,000)
$ 2,250,000 
$ (87,000)
 
Noncontrolling Interests (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Noncontrolling Interests in the Operating Partnership [Roll Forward]
 
 
 
 
Beginning noncontrolling interests in the Operating Partnership
 
 
$ 110,655 
$ 120,838 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
 
 
12,485 
(10,177)
Issuances of Common Units
 
 
2,299 
Conversions of Common Units to Common Stock
 
 
(731)
(1,344)
Net income attributable to noncontrolling interests in the Operating Partnership
1,653 
366 
3,166 
1,496 
Distributions to noncontrolling interests in the Operating Partnership
 
 
(4,733)
(4,818)
Total noncontrolling interests in the Operating Partnership
123,141 
105,995 
123,141 
105,995 
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
 
 
 
 
Net income available for common stockholders
33,357 
7,002 
63,013 
27,250 
Increase in additional paid in capital from conversion of Common Units to Common Stock
100 
709 
731 
1,344 
Issuances of Common Units
(2,299)
(2,299)
Change from net income available for common stockholders and transfers from noncontrolling interests
$ 31,158 
$ 7,711 
$ 61,445 
$ 28,594 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
50.00% 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Noncontrolling Interests in Consolidated Affiliates [Abstract]
 
 
 
 
Consolidated joint venture, partner's interest (in hundredths)
50.00% 
 
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
Sep. 30, 2012
Dec. 31, 2011
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
$ 17,382 1
$ 18,990 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
15,270 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
35,916 
49,694 
Noncontrolling Interests in the Operating Partnership
123,141 
110,655 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,889,775 1
1,959,438 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,264 
3,149 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
563 
 
Financing obligations, at fair value
18,930 1
18,866 1
Total Liabilities
1,922,806 
1,983,655 
Level 1 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets and for-sale residential condominiums
 
Total Assets
3,264 
3,149 
Noncontrolling Interests in the Operating Partnership
123,141 
110,655 
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)
3,264 
3,149 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
 
Financing obligations, at fair value
Total Liabilities
3,264 
3,149 
Level 2 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,382 
18,990 
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 and for-sale residential condominiums
 
Total Assets
17,382 
18,990 
Noncontrolling Interests in the Operating Partnership
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,889,775 
1,959,438 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274 
2,202 
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
1,900,049 
1,961,640 
Level 3 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
15,270 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
15,270 
27,555 
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)
563 
 
Financing obligations, at fair value
18,930 
18,866 
Total Liabilities
19,493 
18,866 
Highwoods Realty Limited Partnership [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,382 1
18,990 1
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
15,270 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
35,916 
49,694 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,889,775 1
1,959,438 1
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274 
2,202 
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
3,264 
3,149 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
563 
 
Financing obligations, at fair value
18,930 1
18,866 1
Total Liabilities
1,922,806 
1,983,655 
Highwoods Realty Limited Partnership [Member] |
Level 1 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
3,264 
3,149 
Tax increment financing bond (in prepaid expenses and other assets)
Impaired real estate assets and for-sale residential condominiums
 
Total Assets
3,264 
3,149 
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)
3,264 
3,149 
Contingent consideration to acquire real estate assets (in accounts payable, accrued expenses and other liabilities)
 
Financing obligations, at fair value
Total Liabilities
3,264 
3,149 
Highwoods Realty Limited Partnership [Member] |
Level 2 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
17,382 
18,990 
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 and for-sale residential condominiums
 
Total Assets
17,382 
18,990 
Liabilities[Abstract]
 
 
Mortgages and notes payable, at fair value
1,889,775 
1,959,438 
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)
10,274 
2,202 
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
1,900,049 
1,961,640 
Highwoods Realty Limited Partnership [Member] |
Level 3 [Member]
 
 
Assets: [Abstract]
 
 
Mortgages and notes receivable, at fair value
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
Tax increment financing bond (in prepaid expenses and other assets)
15,270 
14,788 
Impaired real estate assets and for-sale residential condominiums
 
12,767 
Total Assets
15,270 
27,555 
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)
563 
 
Financing obligations, at fair value
18,930 
18,866 
Total Liabilities
$ 19,493 
$ 18,866 
Disclosure About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Unrealized gains/(losses) (in AOCL)
$ (101,000)
$ 600,000 
$ 482,000 
$ 129,000 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,827,000 
2,414,000 
1,827,000 
2,414,000 
2,309,000 
2,543,000 
Contingent Consideration to Acquire Real Estate Assets [Member]
 
 
 
 
 
 
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Beginning balance
677,000 
677,000 
 
 
Unrealized gains (in general and administrative)
(114,000)
(114,000)
 
 
Ending balance
563,000 
563,000 
 
 
Fair value of Level 3 liability
563,000 
563,000 
 
 
Payout percentage (in hundredths)
 
 
75.00% 
 
 
 
Tax Increment Financing Bond [Member]
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Beginning balance
15,371,000 
15,228,000 
14,788,000 
15,699,000 
 
 
Unrealized gains/(losses) (in AOCL)
(101,000)
600,000 
482,000 
129,000 
 
 
Ending balance
15,270,000 
15,828,000 
15,270,000 
15,828,000 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,800,000 
 
1,800,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
500,000 
 
500,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
600,000 
 
600,000 
 
 
 
Fair value of Level 3 asset
15,270,000 
15,828,000 
15,270,000 
15,828,000 
 
 
Discount rate (in hundredths)
 
 
10.73% 
 
 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
Unrealized gains/(losses) (in AOCL)
(101,000)
600,000 
482,000 
129,000 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,827,000 
2,414,000 
1,827,000 
2,414,000 
2,309,000 
2,543,000 
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
677,000 
677,000 
 
 
Unrealized gains (in general and administrative)
(114,000)
(114,000)
 
 
Ending balance
563,000 
563,000 
 
 
Fair value of Level 3 liability
563,000 
563,000 
 
 
Payout percentage (in hundredths)
 
 
75.00% 
 
 
 
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
15,371,000 
15,228,000 
14,788,000 
15,699,000 
 
 
Unrealized gains/(losses) (in AOCL)
(101,000)
600,000 
482,000 
129,000 
 
 
Ending balance
15,270,000 
15,828,000 
15,270,000 
15,828,000 
 
 
Maturity date
Dec. 20, 2020 
 
 
 
 
 
Amount by which outstanding principal amount exceeds estimated fair value
1,800,000 
 
1,800,000 
 
 
 
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher
500,000 
 
500,000 
 
 
 
Increase in fair value of bond if yield-to-maturity was 100 basis points lower
600,000 
 
600,000 
 
 
 
Fair value of Level 3 asset
$ 15,270,000 
$ 15,828,000 
$ 15,270,000 
$ 15,828,000 
 
 
Discount rate (in hundredths)
 
 
10.73% 
 
 
 
Share-Based Payments (Details) (USD $)
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 2,000,000 
$ 1,300,000 
$ 6,464,000 
$ 4,771,000 
Total unrecognized stock-based compensation costs
5,600,000 
 
5,600,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
 
 
2 years 6 months 
 
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock options granted
 
 
190,886 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
 
 
$ 5.47 
 
Time-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
90,983 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 32.27 
 
Total Return-Based Restricted Stock [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Restricted stock shares granted
 
 
67,902 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 38.71 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
2,000,000 
1,300,000 
6,464,000 
4,771,000 
Total unrecognized stock-based compensation costs
$ 5,600,000 
 
$ 5,600,000 
 
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)
 
 
2 years 6 months 
 
Highwoods Realty Limited Partnership [Member] |
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock options granted
 
 
190,886 
 
Weighted average grant date fair value of each stock option granted (in dollars per option)
 
 
$ 5.47 
 
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
 
 
90,983 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 32.27 
 
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
 
 
67,902 
 
Weighted average grant date fair value of each restricted stock granted (in dollars per share)
 
 
$ 38.71 
 
Accumulated Other Comprehensive Loss (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
 
 
Tax increment financing bond, beginning balance
 
 
$ (2,309)
$ (2,543)
 
Unrealized gains/(losses) on tax increment financing bond
(101)
600 
482 
129 
 
Tax increment financing bond, ending balance
(1,827)
(2,414)
(1,827)
(2,414)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
 
 
Cash flow hedges, beginning balance
 
 
(3,425)
(1,105)
 
Unrealized losses on cash flow hedges
(3,337)
(10,424)
 
Amortization of cash flow hedges
791 
(30)
2,250 
(87)
 
Cash flow hedges, ending balance
(11,599)
(1,192)
(11,599)
(1,192)
 
Total accumulated other comprehensive loss
(13,426)
(3,606)
(13,426)
(3,606)
(5,734)
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
 
 
 
 
 
Tax increment financing bond, beginning balance
 
 
(2,309)
(2,543)
 
Unrealized gains/(losses) on tax increment financing bond
(101)
600 
482 
129 
 
Tax increment financing bond, ending balance
(1,827)
(2,414)
(1,827)
(2,414)
 
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
 
 
 
 
 
Cash flow hedges, beginning balance
 
 
(3,425)
(1,105)
 
Unrealized losses on cash flow hedges
(3,337)
(10,424)
 
Amortization of cash flow hedges
791 
(30)
2,250 
(87)
 
Cash flow hedges, ending balance
(11,599)
(1,192)
(11,599)
(1,192)
 
Total accumulated other comprehensive loss
$ (13,426)
$ (3,606)
$ (13,426)
$ (3,606)
$ (5,734)
Discontinued Operations (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Dec. 31, 2011
Discontinued operations [Abstract]
 
 
 
 
 
Rental and other revenues
$ 875 
$ 5,301 
$ 10,120 
$ 16,219 
 
Operating expenses:
 
 
 
 
 
Rental property and other expenses
293 
2,199 
3,766 
6,572 
 
Depreciation and amortization
1,269 
2,009 
3,935 
 
Total operating expenses
293 
3,468 
5,775 
10,507 
 
Interest expense
35 
119 
283 
364 
 
Income from discontinued operations
547 
1,714 
4,062 
5,348 
 
Net gains on disposition of discontinued operations
22,936 
2,573 
29,455 
2,573 
 
Total discontinued operations
23,483 
4,287 
33,517 
7,921 
 
Assets, held for sale [Abstract]
 
 
 
 
 
Land
 
 
14,077 
Buildings and tenant improvements
 
 
135,013 
Less accumulated depreciation
 
 
(32,254)
Net real estate assets
 
 
116,836 
Accrued straight line rents receivable
 
 
6,520 
Deferred leasing costs, net
 
 
811 
Prepaid expenses and other assets
 
 
106 
Real estate and other assets, net, held for sale
 
 
124,273 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Mortgages and notes payable
 
 
34,307 
Accrued expenses and other liabilities
 
 
214 
Financing obligations
 
 
1,294 
Liabilities, net, held for sale
 
 
35,815 
Pinellas County, FL Office Property Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Kansas City, MO Rental Residential Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of residential properties included in real estate and other assets held for sale, net
 
 
 
 
96 
Nashville, TN Office Properties Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Kansas City, MO Office Property Held For Sale [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Atlanta, GA and Jackson, MS Office Properties Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
 
Discontinued operations [Abstract]
 
 
 
 
 
Rental and other revenues
875 
5,301 
10,120 
16,219 
 
Operating expenses:
 
 
 
 
 
Rental property and other expenses
293 
2,199 
3,766 
6,572 
 
Depreciation and amortization
1,269 
2,009 
3,935 
 
Total operating expenses
293 
3,468 
5,775 
10,507 
 
Interest expense
35 
119 
283 
364 
 
Income from discontinued operations
547 
1,714 
4,062 
5,348 
 
Net gains on disposition of discontinued operations
22,936 
2,573 
29,455 
2,573 
 
Total discontinued operations
23,483 
4,287 
33,517 
7,921 
 
Assets, held for sale [Abstract]
 
 
 
 
 
Land
 
 
14,077 
Buildings and tenant improvements
 
 
135,013 
Less accumulated depreciation
 
 
(32,254)
Net real estate assets
 
 
116,836 
Accrued straight line rents receivable
 
 
6,520 
Deferred leasing costs, net
 
 
811 
Prepaid expenses and other assets
 
 
106 
Real estate and other assets, net, held for sale
 
 
124,273 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Mortgages and notes payable
 
 
34,307 
Accrued expenses and other liabilities
 
 
214 
Financing obligations
 
 
1,294 
Liabilities, net, held for sale
$ 0 
 
$ 0 
 
$ 35,815 
Highwoods Realty Limited Partnership [Member] |
Pinellas County, FL Office Property Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Kansas City, MO Rental Residential Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of residential properties included in real estate and other assets held for sale, net
 
 
 
 
96 
Highwoods Realty Limited Partnership [Member] |
Nashville, TN Office Properties Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Kansas City, MO Office Property Held For Sale [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Highwoods Realty Limited Partnership [Member] |
Atlanta, GA and Jackson, MS Office Properties Disposition [Member]
 
 
 
 
 
Liabilities, held for sale [Abstract]
 
 
 
 
 
Number of office properties included in real estate and other assets held for sale, net
 
 
 
 
Earnings Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Numerator:
 
 
 
 
Income from continuing operations
$ 12,313 
$ 3,957 
$ 35,109 
$ 27,200 
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations
(547)
(153)
(1,572)
(1,101)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159)
(249)
(566)
(554)
Dividends on Preferred Stock
(627)
(627)
(1,881)
(3,926)
Excess of Preferred Stock redemption/repurchase cost over carrying value
(1,895)
Income from continuing operations available for common stockholders
10,980 
2,928 
31,090 
19,724 
Income from discontinued operations
23,483 
4,287 
33,517 
7,921 
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations
(1,106)
(213)
(1,594)
(395)
Income from discontinued operations available for common stockholders
22,377 
4,074 
31,923 
7,526 
Net income available for common stockholders
33,357 
7,002 
63,013 
27,250 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
76,590,000 1 2
72,492,000 1 2
74,703,000 1 2
72,176,000 1 2
Earnings per Common Share - basic:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.15 
$ 0.04 
$ 0.42 
$ 0.28 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.29 
$ 0.06 
$ 0.42 
$ 0.10 
Net income available for common stockholders (in dollars per share)
$ 0.44 
$ 0.10 
$ 0.84 
$ 0.38 
Numerator:
 
 
 
 
Income from continuing operations
12,313 
3,957 
35,109 
27,200 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159)
(249)
(566)
(554)
Dividends on Preferred Stock
(627)
(627)
(1,881)
(3,926)
Excess of Preferred Stock redemption/repurchase cost over carrying value
(1,895)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
11,527 
3,081 
32,662 
20,825 
Income from discontinued operations available for common stockholders
23,483 
4,287 
33,517 
7,921 
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
35,010 
7,368 
66,179 
28,746 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Share - weighted average shares (in shares)
76,590,000 1 2
72,492,000 1 2
74,703,000 1 2
72,176,000 1 2
Stock options using the treasury method
137,000 
138,000 
127,000 
169,000 
Noncontrolling interests Common Units
3,768,000 
3,772,000 
3,738,000 
3,782,000 
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares) (1)
80,495,000 1
76,402,000 1
78,568,000 1
76,127,000 1
Earnings per Common Share - diluted:
 
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
$ 0.14 
$ 0.04 
$ 0.42 
$ 0.28 
Income from discontinued operations available for common stockholders (in dollars per share)
$ 0.29 
$ 0.06 
$ 0.42 
$ 0.10 
Net income available for common stockholders (in dollars per share)
$ 0.43 
$ 0.10 
$ 0.84 
$ 0.38 
Earnings per Common Unit - diluted:
 
 
 
 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
500,000 
400,000 
500,000 
300,000 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Numerator:
 
 
 
 
Income from continuing operations
12,317 
3,957 
35,118 
27,212 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159)
(249)
(566)
(554)
Distributions on Preferred Units
(627)
(627)
(1,881)
(3,926)
Excess of Preferred Unit redemption/repurchase cost over carrying value
(1,895)
Income from continuing operations available for common unitholders
11,531 
3,081 
32,671 
20,837 
Income from discontinued operations available for common unitholders
23,483 
4,287 
33,517 
7,921 
Net income available for common unitholders
35,014 
7,368 
66,188 
28,758 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
79,949,000 1 2
75,855,000 1 2
78,032,000 1 2
75,549,000 1 2
Earnings per Common Unit - basic:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
$ 0.15 
$ 0.04 
$ 0.42 
$ 0.28 
Income from discontinued operations available for common unitholders (in dollars per share)
$ 0.29 
$ 0.06 
$ 0.43 
$ 0.10 
Net income available for common unitholders (in dollars per share)
$ 0.44 
$ 0.10 
$ 0.85 
$ 0.38 
Numerator:
 
 
 
 
Income from continuing operations
12,317 
3,957 
35,118 
27,212 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
(159)
(249)
(566)
(554)
Distributions on Preferred Units
(627)
(627)
(1,881)
(3,926)
Excess of Preferred Unit redemption/repurchase cost over carrying value
(1,895)
Income from continuing operations available for common unitholders
11,531 
3,081 
32,671 
20,837 
Income from discontinued operations available for common unitholders
23,483 
4,287 
33,517 
7,921 
Net income available for common unitholders
$ 35,014 
$ 7,368 
$ 66,188 
$ 28,758 
Denominator:
 
 
 
 
Denominator for basic earnings per Common Unit - weighted average units (in shares)
79,949,000 1 2
75,855,000 1 2
78,032,000 1 2
75,549,000 1 2
Stock options using the treasury method
137,000 
138,000 
127,000 
169,000 
Denominator for diluted earnings per Common Unit - adjusted weighted average units and assumed conversions (in shares)
80,086,000 1
75,993,000 1
78,159,000 1
75,718,000 1
Earnings per Common Unit - diluted:
 
 
 
 
Income from continuing operations available for common unitholders (in dollars per share)
0.15 
0.04 
0.42 
0.28 
Income from discontinued operations available for common unitholders (in dollars per share)
0.29 
0.06 
0.43 
0.10 
Net income available for common unitholders (in dollars per share)
0.44 
0.10 
0.85 
0.38 
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)
500,000 
400,000 
500,000 
300,000 
Segment Information (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2012
Sep. 30, 2011
Sep. 30, 2012
Sep. 30, 2011
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
$ 128,214 
$ 117,265 
$ 382,120 
$ 339,497 
Total Net Operating Income
80,981 
73,234 
243,988 
217,139 
Reconciliation to income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
 
 
 
 
Depreciation and amortization
(38,651)
(35,051)
(115,755)
(99,659)
Impairments of real estate assets
(2,429)
(2,429)
General and administrative expense
(9,725)
(12,212)
(28,298)
(27,983)
Interest expense
(23,612)
(24,271)
(72,661)
(71,476)
Interest and Other income
1,916 
1,505 
4,910 
5,253 
Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
10,909 
776 
32,184 
20,845 
Total Office Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
112,668 1
102,331 1
336,021 1
294,965 1
Total Net Operating Income
70,714 1
63,551 1
213,666 1
187,994 1
Office Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,074 
12,167 
44,315 
34,701 
Total Net Operating Income
8,700 
7,402 
28,215 
21,555 
Office Greenville, SC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,297 
3,617 
10,289 
10,558 
Total Net Operating Income
1,807 
2,096 
5,989 
6,238 
Office Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
4,015 
3,412 
11,176 
10,371 
Total Net Operating Income
2,547 
2,000 
7,064 
6,255 
Office Memphis, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,106 
9,393 
27,612 
27,808 
Total Net Operating Income
5,381 
5,166 
16,234 
15,297 
Office Nashville, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,289 
13,793 
42,471 
40,106 
Total Net Operating Income
9,777 
9,273 
29,262 
27,275 
Office Orlando, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
2,747 
2,676 
8,189 
7,612 
Total Net Operating Income
1,368 
1,378 
4,214 
3,829 
Office Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
5,603 
4,913 
15,753 
15,546 
Total Net Operating Income
3,330 
2,895 
9,780 
9,944 
Office Pittsburgh, PA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,485 
1,568 
27,681 
1,568 
Total Net Operating Income
4,952 
888 
13,859 
888 
Office Raleigh, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
20,585 
20,047 
60,758 
59,462 
Total Net Operating Income
13,907 
13,900 
42,045 
41,386 
Office Richmond, VA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
11,852 
13,375 
35,453 
36,425 
Total Net Operating Income
7,868 
7,767 
24,283 
23,852 
Office Tampa, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
17,615 
17,370 
52,324 
50,808 
Total Net Operating Income
11,077 
10,786 
32,721 
31,475 
Total Industrial Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
6,357 1
6,444 1
18,914 1
18,942 1
Total Net Operating Income
4,588 1
4,657 1
13,788 1
13,999 1
Industrial Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,215 
3,293 
9,522 
9,989 
Total Net Operating Income
2,331 
2,406 
6,936 
7,417 
Industrial Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,142 
3,151 
9,392 
8,953 
Total Net Operating Income
2,257 
2,251 
6,852 
6,582 
Total Retail Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,189 1
8,490 1
27,185 1
25,590 1
Total Net Operating Income
5,679 1
5,026 1
16,534 1
15,146 1
Retail Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,189 
8,490 
27,185 
25,590 
Total Net Operating Income
5,679 
5,026 
16,534 
15,146 
Highwoods Realty Limited Partnership [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
128,214 
117,265 
382,120 
339,497 
Total Net Operating Income
81,055 
73,302 
244,183 
217,121 
Reconciliation to income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
 
 
 
 
Depreciation and amortization
(38,651)
(35,051)
(115,755)
(99,659)
Impairments of real estate assets
(2,429)
(2,429)
General and administrative expense
(9,799)
(12,280)
(28,493)
(27,965)
Interest expense
(23,612)
(24,271)
(72,661)
(71,476)
Interest and Other income
1,916 
1,505 
4,910 
5,253 
Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
10,909 
776 
32,184 
20,845 
Highwoods Realty Limited Partnership [Member] |
Total Office Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
112,668 1
102,331 1
336,021 1
294,965 1
Total Net Operating Income
70,779 1
63,611 1
213,837 1
187,980 1
Highwoods Realty Limited Partnership [Member] |
Office Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,074 
12,167 
44,315 
34,701 
Total Net Operating Income
8,708 
7,409 
28,239 
21,556 
Highwoods Realty Limited Partnership [Member] |
Office Greenville, SC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,297 
3,617 
10,289 
10,558 
Total Net Operating Income
1,809 
2,098 
5,994 
6,237 
Highwoods Realty Limited Partnership [Member] |
Office Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
4,015 
3,412 
11,176 
10,371 
Total Net Operating Income
2,549 
2,002 
7,070 
6,254 
Highwoods Realty Limited Partnership [Member] |
Office Memphis, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,106 
9,393 
27,612 
27,808 
Total Net Operating Income
5,386 
5,171 
16,247 
15,295 
Highwoods Realty Limited Partnership [Member] |
Office Nashville, TN [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
14,289 
13,793 
42,471 
40,106 
Total Net Operating Income
9,786 
9,282 
29,285 
27,271 
Highwoods Realty Limited Partnership [Member] |
Office Orlando, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
2,747 
2,676 
8,189 
7,612 
Total Net Operating Income
1,369 
1,379 
4,217 
3,829 
Highwoods Realty Limited Partnership [Member] |
Office Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
5,603 
4,913 
15,753 
15,546 
Total Net Operating Income
3,333 
2,898 
9,788 
9,943 
Highwoods Realty Limited Partnership [Member] |
Office Pittsburgh, PA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,485 
1,568 
27,681 
1,568 
Total Net Operating Income
4,957 
888 
13,862 
888 
Highwoods Realty Limited Partnership [Member] |
Office Raleigh, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
20,585 
20,047 
60,758 
59,462 
Total Net Operating Income
13,920 
13,913 
42,083 
41,383 
Highwoods Realty Limited Partnership [Member] |
Office Richmond, VA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
11,852 
13,375 
35,453 
36,425 
Total Net Operating Income
7,875 
7,774 
24,302 
23,851 
Highwoods Realty Limited Partnership [Member] |
Office Tampa, FL [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
17,615 
17,370 
52,324 
50,808 
Total Net Operating Income
11,087 
10,797 
32,750 
31,473 
Highwoods Realty Limited Partnership [Member] |
Total Industrial Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
6,357 1
6,444 1
18,914 1
18,942 1
Total Net Operating Income
4,592 1
4,661 1
13,799 1
13,997 1
Highwoods Realty Limited Partnership [Member] |
Industrial Atlanta, GA [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,215 
3,293 
9,522 
9,989 
Total Net Operating Income
2,333 
2,408 
6,942 
7,416 
Highwoods Realty Limited Partnership [Member] |
Industrial Piedmont Triad, NC [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
3,142 
3,151 
9,392 
8,953 
Total Net Operating Income
2,259 
2,253 
6,857 
6,581 
Highwoods Realty Limited Partnership [Member] |
Total Retail Segment [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,189 1
8,490 1
27,185 1
25,590 1
Total Net Operating Income
5,684 1
5,030 1
16,547 1
15,144 1
Highwoods Realty Limited Partnership [Member] |
Retail Kansas City, MO [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total Rental and Other Revenues
9,189 
8,490 
27,185 
25,590 
Total Net Operating Income
$ 5,684 
$ 5,030 
$ 16,547 
$ 15,144 
Subsequent Events (Details) (USD $)
3 Months Ended 0 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 1 Months Ended
Sep. 30, 2012
Oct. 11, 2012
Variable Rate Term Loan due 2016 [Member]
participants
Oct. 11, 2012
Variable Rate Term Loan due 2018 [Member]
participants
Oct. 18, 2012
Greensboro, NC Medical Office Property Acquisition [Member]
Sep. 30, 2012
Highwoods Realty Limited Partnership [Member]
Oct. 11, 2012
Highwoods Realty Limited Partnership [Member]
Variable Rate Term Loan due 2016 [Member]
participants
Oct. 11, 2012
Highwoods Realty Limited Partnership [Member]
Variable Rate Term Loan due 2018 [Member]
participants
Oct. 18, 2012
Highwoods Realty Limited Partnership [Member]
Greensboro, NC Medical Office Property Acquisition [Member]
Subsequent Event [Line Items]
 
 
 
 
 
 
 
 
Principal amount of debt
 
$ 200,000,000 
 
 
 
$ 200,000,000 
 
 
Term of debt instrument (in years)
 
5 years 
 
 
 
5 years 
 
 
Debt instrument maturity date
 
Feb. 24, 2016 
Jan. 12, 2018 
 
 
Feb. 24, 2016 
Jan. 12, 2018 
 
Debt instrument, interest rate basis
 
LIBOR plus basis points 
LIBOR plus basis points 
 
 
LIBOR plus basis points 
LIBOR plus basis points 
 
Debt instrument, interest rate basis spread (in hundredths)
 
2.20% 
1.65% 
 
 
2.20% 
1.65% 
 
Deferred financing fees
 
 
900,000 
 
 
 
900,000 
 
Number of changes in participants
 
 
 
 
Aggregate amount of debt related to changes in participants
 
35,000,000 
35,000,000 
 
 
35,000,000 
35,000,000 
 
Debt instrument, debt extinguishment date
 
Feb. 25, 2013 
 
 
 
Feb. 25, 2013 
 
 
Acquisition purchase price
161,200,000 
 
 
13,300,000 
161,200,000 
 
 
13,300,000 
Fair value of secured debt assumed from acquisition
 
 
 
7,900,000 
 
 
 
7,900,000 
Effective interest rate of debt assumed from acquisition
 
 
 
4.06% 
 
 
 
4.06% 
Maturity date of debt assumed from acquisition
 
 
 
Aug. 01, 2014 
 
 
 
Aug. 01, 2014 
Acquisition-related costs
$ 700,000 
 
 
$ 100,000 
$ 700,000 
 
 
$ 100,000