HIGHWOODS PROPERTIES, INC., 10-K filed on 2/9/2011
Annual Report
Consolidated Balance Sheets (USD $)
In Thousands
Year Ended
Dec. 31,
2010
2009
Real estate assets, at cost:
 
 
Land
$ 347,876 
$ 350,537 
Buildings and tenant improvements
2,895,779 
2,880,632 
Development in process
4,524 
0 
Land held for development
108,670 
104,148 
Total real estate assets, at cost
3,356,849 
3,335,317 
Less-accumulated depreciation
(835,165)
(781,073)
Net real estate assets
2,521,684 
2,554,244 
For-sale residential condominiums
8,225 
12,933 
Real estate and other assets, net, held for sale
1,249 
5,031 
Cash and cash equivalents
14,206 
23,699 
Restricted cash
4,399 
6,841 
Accounts receivable, net of allowance of $3,595 and $2,810, respectively
20,716 
21,069 
Mortgages and notes receivable, net of allowance of $868 and $698, respectively
19,044 
3,143 
Accrued straight-line rents receivable, net of allowance of $2,209 and $2,443, respectively
93,435 
82,600 
Investment in unconsolidated affiliates
63,607 
66,077 
Deferred financing and leasing costs, net of accumulated amortization of $59,383 and $52,129, respectively
85,059 
73,517 
Prepaid expenses and other assets
40,211 
37,947 
Total Assets
2,871,835 
2,887,101 
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
 
 
Mortgages and notes payable
1,522,945 
1,469,155 
Accounts payable, accrued expenses and other liabilities
106,716 
117,328 
Financing obligations
33,114 
37,706 
Total Liabilities
1,662,775 
1,624,189 
Commitments and contingencies
 
 
Noncontrolling interests in the Operating Partnership
120,838 
129,769 
Equity:
 
 
Common Stock, $.01 par value, 200,000,000 authorized shares; 71,690,487 and 71,285,303 shares issued and outstanding, respectively
717 
713 
Additional paid-in capital
1,766,886 
1,751,398 
Distributions in excess of net income available for common stockholders
(761,785)
(701,932)
Accumulated other comprehensive loss
(3,648)
(3,811)
Total Stockholders' Equity
1,083,762 
1,127,960 
Noncontrolling interests in consolidated affiliates
4,460 
5,183 
Total Equity
1,088,222 
1,133,143 
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity
2,871,835 
2,887,101 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred Stock, $.01 par value, 50,000,000 authorized shares
$ 52,500 
$ 52,500 
Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data
Dec. 31, 2010
Dec. 31, 2009
Assets:
 
 
Accounts receivable, allowance
$ 3,595 
$ 2,810 
Mortgages and notes receivable, allowance
868 
698 
Accrued straight-line rents receivable, allowance
2,209 
2,443 
Deferred financing and leasing costs, accumulated amortization
59,383 
52,129 
Equity:
 
 
Preferred Stock, par value (in dollars per share)
0.01 
0.01 
Preferred Stock, shares authorized (in shares)
50,000,000 
50,000,000 
Common stock, par value (in dollars per share)
0.01 
0.01 
Common stock, shares authorized (in shares)
200,000,000 
200,000,000 
Common stock, shares issued (in shares)
71,690,487 
71,285,303 
Common Stock, shares outstanding (in shares)
71,690,487 
71,285,303 
Series A Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred stock, liquidation preference (in dollars per share)
1,000 
1,000 
Preferred stock, shares outstanding (in shares)
29,092 
29,092 
Preferred stock, shares issued (in shares)
29,092 
29,092 
Series B Cumulative Redeemable Preferred Shares [Member]
 
 
Equity:
 
 
Preferred stock, liquidation preference (in dollars per share)
$ 25 
$ 25 
Preferred stock, shares outstanding (in shares)
2,100,000 
2,100,000 
Preferred stock, shares issued (in shares)
2,100,000 
2,100,000 
Consolidated Statements of Income (USD $)
In Thousands, except Per Share data
Year Ended
Dec. 31,
2010
2009
2008
Income Statement [Abstract]
 
 
 
Rental and other revenues
$ 463,321 
$ 450,154 
$ 445,268 
Operating expenses:
 
 
 
Rental property and other expenses
164,388 
162,812 
159,984 
Depreciation and amortization
135,793 
130,028 
122,835 
Impairment of assets held for use
0 
2,554 
3,407 
General and administrative
32,948 
36,682 
38,043 
Total operating expenses
333,129 
332,076 
324,269 
Interest expense:
 
 
 
Contractual
87,726 
81,982 
92,858 
Amortization of deferred financing costs
3,385 
2,760 
2,716 
Financing obligations
2,261 
2,063 
2,918 
Total interest expense
93,372 
86,805 
98,492 
Other income:
 
 
 
Interest and other income
6,362 
8,262 
3,825 
Gain/(loss) on debt extinguishment
(705)
1,287 
0 
Total other income
5,657 
9,549 
3,825 
Income from continuing operations before disposition of property, condominiums and investments in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
42,477 
40,822 
26,332 
Gains on disposition of property
74 
266 
781 
Gains on disposition of for-sale residential condominiums
276 
922 
5,617 
Gains on disposition of investments in unconsolidated affiliates
25,330 
0 
0 
Equity in earnings of unconsolidated affiliates
3,821 
5,421 
5,878 
Income from continuing operations
71,978 
47,431 
38,608 
Discontinued operations:
 
 
 
Income/(loss) from discontinued operations
411 
(7,203)
(21,483)
Net gains/(losses) on disposition of discontinued operations
(86)
21,466 
18,485 
Total discontinued operations
325 
14,263 
(2,998)
Net income
72,303 
61,694 
35,610 
Net (income) attributable to noncontrolling interests in the Operating Partnership
(3,320)
(3,197)
(1,577)
Net (income) attributable to noncontrolling interests in consolidated affiliates
(485)
(11)
(2,041)
Dividends on Preferred Stock
(6,708)
(6,708)
(9,804)
Excess of Preferred Stock redemption/repurchase cost over carrying value
0 
0 
(108)
Net income available for common stockholders
61,790 
51,778 
22,080 
Earnings per common share - basic:
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
0.86 
0.56 
0.42 
Income/(loss) from discontinued operations available for common stockholders (in dollars per share)
0 
0.20 
(0.05)
Net income available for common stockholders (in dollars per share)
0.86 
0.76 
0.37 
Weighted average Common Shares outstanding - basic (in shares)
71,578 
67,971 
59,320 
Earnings per common share - diluted:
 
 
 
Income from continuing operations available for common stockholders (in dollars per share)
0.86 
0.56 
0.42 
Income/(loss) from discontinued operations available for common stockholders (in dollars per share)
0 
0.20 
(0.05)
Net income available for common stockholders (in dollars per share)
0.86 
0.76 
0.37 
Weighted average Common Shares outstanding - diluted (in shares)
75,578 
72,079 
63,492 
Net income available for common stockholders:
 
 
 
Income from continuing operations available for common stockholders
61,482 
38,318 
24,889 
Income/(loss) from discontinued operations available for common stockholders
308 
13,460 
(2,809)
Net income available for common stockholders
$ 61,790 
$ 51,778 
$ 22,080 
Consolidated Statements of Equity (USD $)
In Thousands, except Share data
Common Stock
Series A Cumulative Redeemable Preferred Shares [Member]
Series B Cumulative Redeemable Preferred Shares [Member]
Additional Paid-In Capital
Accumulated Other Comprehensive Loss
Non-Controlling Interests in Consolidated Affiliates
Distributions in Excess of Net Earnings
Total
Balance - Shares (in shares) at Dec. 31, 2007
57,167,193 
 
 
 
 
 
 
 
Balance at Dec. 31, 2007
$ 572 
$ 82,937 
$ 52,500 
$ 1,392,154 
$ (938)
$ 6,803 
$ (561,093)
$ 972,935 
Issuances of Common Stock - Shares (in shares)
6,171,621 
 
 
 
 
 
 
 
Issuances of Common Stock
62 
0 
0 
209,922 
0 
0 
0 
209,984 
Conversion of Common Units to Common Stock - Shares (in shares)
66,814 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
1 
0 
0 
2,021 
0 
0 
0 
2,022 
Dividends on Common Stock
0 
0 
0 
0 
0 
0 
(100,268)
(100,268)
Dividends on Preferred Stock
0 
0 
0 
0 
0 
0 
(9,804)
(9,804)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
0 
0 
0 
3,826 
0 
0 
0 
3,826 
Contributions from noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
625 
0 
625 
Distributions to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
(3,293)
0 
(3,293)
Issuances of restricted stock, net - Shares (in shares)
166,077 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
0 
0 
0 
0 
0 
0 
0 
Redemptions/repurchases of Preferred Stock
0 
(53,845)
0 
1,454 
0 
0 
(108)
(52,499)
Share-based compensation expense
1 
0 
0 
6,716 
0 
0 
0 
6,717 
Net (income) attributable to noncontrolling interests in the Operating Partnership
0 
0 
0 
0 
0 
0 
(1,577)
(1,577)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
2,041 
(2,041)
0 
Comprehensive income:
 
 
 
 
 
 
 
 
Net income
0 
0 
0 
0 
0 
0 
35,610 
35,610 
Other comprehensive income
0 
0 
0 
0 
(3,854)
0 
0 
(3,854)
Total comprehensive income
 
 
 
 
 
 
 
31,756 
Balance at Dec. 31, 2008
636 
29,092 
52,500 
1,616,093 
(4,792)
6,176 
(639,281)
1,060,424 
Balance - Shares (in shares) at Dec. 31, 2008
63,571,705 
 
 
 
 
 
 
 
Issuances of Common Stock - Shares (in shares)
7,296,816 
 
 
 
 
 
 
 
Issuances of Common Stock
73 
0 
0 
150,868 
0 
0 
0 
150,941 
Conversion of Common Units to Common Stock - Shares (in shares)
176,042 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
2 
0 
0 
5,589 
0 
0 
0 
5,591 
Dividends on Common Stock
0 
0 
0 
0 
0 
0 
(114,429)
(114,429)
Dividends on Preferred Stock
0 
0 
0 
0 
0 
0 
(6,708)
(6,708)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
0 
0 
0 
(27,717)
0 
0 
0 
(27,717)
Distributions to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
(1,004)
0 
(1,004)
Issuances of restricted stock, net - Shares (in shares)
240,740 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
0 
0 
0 
0 
0 
0 
0 
Share-based compensation expense
2 
0 
0 
6,565 
0 
0 
0 
6,567 
Net (income) attributable to noncontrolling interests in the Operating Partnership
0 
0 
0 
0 
0 
0 
(3,197)
(3,197)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
11 
(11)
0 
Comprehensive income:
 
 
 
 
 
 
 
 
Net income
0 
0 
0 
0 
0 
0 
61,694 
61,694 
Other comprehensive income
0 
0 
0 
0 
981 
0 
0 
981 
Total comprehensive income
 
 
 
 
 
 
 
62,675 
Balance at Dec. 31, 2009
713 
29,092 
52,500 
1,751,398 
(3,811)
5,183 
(701,932)
1,133,143 
Balance - Shares (in shares) at Dec. 31, 2009
71,285,303 
 
 
 
 
 
 
71,285,303 
Issuances of Common Stock - Shares (in shares)
143,907 
 
 
 
 
 
 
 
Issuances of Common Stock
1 
0 
0 
2,997 
0 
0 
0 
2,998 
Conversion of Common Units to Common Stock - Shares (in shares)
97,134 
 
 
 
 
 
 
 
Conversion of Common Units to Common Stock
1 
0 
0 
3,060 
0 
0 
0 
3,061 
Dividends on Common Stock
0 
0 
0 
0 
0 
0 
(121,643)
(121,643)
Dividends on Preferred Stock
0 
0 
0 
0 
0 
0 
(6,708)
(6,708)
Adjustment of noncontrolling interests in the Operating Partnership to fair value
0 
0 
0 
2,721 
0 
0 
0 
2,721 
Distributions to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
(568)
0 
(568)
Acquisition of noncontrolling interest in consolidated affiliate
0 
0 
0 
140 
0 
(640)
0 
(500)
Issuances of restricted stock, net - Shares (in shares)
164,143 
 
 
 
 
 
 
 
Issuances of restricted stock, net
0 
0 
0 
0 
0 
0 
0 
0 
Share-based compensation expense
2 
0 
0 
6,570 
0 
0 
0 
6,572 
Net (income) attributable to noncontrolling interests in the Operating Partnership
0 
0 
0 
0 
0 
0 
(3,320)
(3,320)
Net (income) attributable to noncontrolling interests in consolidated affiliates
0 
0 
0 
0 
0 
485 
(485)
0 
Comprehensive income:
 
 
 
 
 
 
 
 
Net income
0 
0 
0 
0 
0 
0 
72,303 
72,303 
Other comprehensive income
0 
0 
0 
0 
163 
0 
0 
163 
Total comprehensive income
 
 
 
 
 
 
 
72,466 
Balance at Dec. 31, 2010
$ 717 
$ 29,092 
$ 52,500 
$ 1,766,886 
$ (3,648)
$ 4,460 
$ (761,785)
$ 1,088,222 
Balance - Shares (in shares) at Dec. 31, 2010
71,690,487 
 
 
 
 
 
 
71,690,487 
Consolidated Statements of Cash Flows (USD $)
In Thousands
Year Ended
Dec. 31,
2010
2009
2008
Operating activities:
 
 
 
Net income
$ 72,303 
$ 61,694 
$ 35,610 
Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
Depreciation and amortization
136,158 
131,883 
127,620 
Amortization of lease incentives
1,239 
1,110 
1,041 
Share-based compensation expense
6,572 
6,567 
6,717 
Additions to allowance for doubtful accounts
4,009 
5,639 
3,391 
Amortization of deferred financing costs
3,385 
2,760 
2,716 
Amortization of past cash flow hedges
237 
(249)
181 
Impairment of assets held for use
0 
13,518 
32,846 
(Gain)/loss on debt extinguishment
705 
(1,287)
0 
Net (gains)/losses on disposition of property
12 
(21,732)
(19,266)
Gains on disposition of for-sale residential condominiums
(276)
(922)
(5,617)
Gains on disposition of investment in unconsolidated affiliates
(25,330)
0 
0 
Equity in earnings of unconsolidated affiliates
(3,821)
(5,421)
(5,878)
Changes in financing obligations
708 
392 
80 
Distributions of earnings from unconsolidated affiliates
4,433 
4,180 
5,994 
Changes in operating assets and liabilities:
 
 
 
Accounts receivable
(3,290)
(2,819)
(3,362)
Prepaid expenses and other assets
370 
(2,629)
(352)
Accrued straight-line rents receivable
(11,889)
(6,521)
(7,868)
Accounts payable, accrued expenses and other liabilities
5,012 
2,957 
(16,031)
Net cash provided by operating activities
190,537 
189,120 
157,822 
Investing activities:
 
 
 
Additions to real estate assets and deferred leasing costs
(102,717)
(151,482)
(231,422)
Net proceeds from disposition of real estate assets
6,801 
77,288 
64,858 
Net proceeds from disposition of for-sale residential condominiums
4,952 
12,196 
27,140 
Proceeds from disposition of investment in unconsolidated affiliates
15,000 
0 
0 
Distributions of capital from unconsolidated affiliates
1,933 
3,955 
3,214 
Repayments of mortgages and notes receivable
329 
459 
1,624 
Contributions to unconsolidated affiliates
(2,875)
(952)
(12,741)
Changes in restricted cash and other investing activities
(1,578)
(3,288)
12,984 
Net cash used in investing activities
(78,155)
(61,824)
(134,343)
Financing activities:
 
 
 
Dividends on Common Stock
(121,643)
(114,429)
(100,268)
Redemptions/repurchases of Preferred Stock
0 
0 
(52,499)
Dividends on Preferred Stock
(6,708)
(6,708)
(9,804)
Distributions to noncontrolling interests in the Operating Partnership
(6,469)
(6,832)
(6,678)
Distributions to noncontrolling interests in consolidated affiliates
(568)
(1,004)
(3,293)
Acquisition of noncontrolling interest in consolidated affiliate
(500)
0 
0 
Net proceeds from the issuance of Common Stock
2,998 
150,941 
209,984 
Repurchase of Common Units from noncontrolling interests
0 
0 
(3,293)
Borrowings on revolving credit facility
37,500 
128,000 
462,183 
Repayments of revolving credit facility
(7,500)
(291,000)
(526,983)
Borrowings on mortgages and notes payable
10,368 
217,215 
192,300 
Repayments of mortgages and notes payable
(27,004)
(188,501)
(173,259)
Borrowings on financing obligations
0 
4,184 
0 
Payments on financing obligations
(1,116)
(1,044)
(977)
Payments on debt extinguishment
(577)
0 
0 
Contributions from noncontrolling interests in consolidated affiliates
0 
0 
625 
Additions to deferred financing costs
(656)
(8,176)
(900)
Net cash used in financing activities
(121,875)
(117,354)
(12,862)
Net increase/(decrease) in cash and cash equivalents
(9,493)
9,942 
10,617 
Cash and cash equivalents at beginning of the period
23,699 
13,757 
3,140 
Cash and cash equivalents at end of the period
14,206 
23,699 
13,757 
Supplemental disclosure of cash flow information:
 
 
 
Cash paid for interest, net of amounts capitalized
86,395 
85,422 
97,518 
Supplemental disclosure of non-cash investing and financing activities:
 
 
 
Unrealized gains/(losses) on cash flow hedges
0 
937 
(1,376)
Conversion of Common Units to Common Stock
3,061 
5,591 
2,022 
Changes in accrued capital expenditures
(1,946)
(19,098)
(7,833)
Write-off of fully depreciated real estate assets
43,955 
33,006 
34,633 
Write-off of fully amortized deferred financing and leasing costs
15,719 
19,194 
14,705 
Unrealized gains/(losses) on marketable securities of non-qualified deferred compensation plan
382 
1,497 
(2,177)
Settlement of financing obligation
4,184 
0 
0 
Adjustment of noncontrolling interests in the Operating Partnership to fair value
(2,721)
27,717 
(3,826)
Unrealized gain/(loss) on tax increment financing bond
(177)
293 
(2,659)
Mortgages receivable from seller financing
17,030 
0 
0 
Assumption of mortgages and notes payable
40,306 
0 
8,348 
Issuance of Common Units to acquire real estate assets
$ 0 
$ 0 
$ 6,325 
Description of Business and Significant Accounting Policies
Description of Business and Significant Accounting Policies
1. Description of Business and Significant Accounting Policies

Description of Business

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 operates in the Southeastern and Midwestern United States. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”).

The Company is the sole general partner of the Operating Partnership. At December 31, 2010, the Company owned all of the Preferred Units and 71.3 million, or 95.0%, 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 proceeds of the issuance are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $.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 2010, the Company redeemed 97,134 Common Units for a like number of shares of Common Stock. The redemptions increased the percentage of Common Units owned by the Company from 94.8% at December 31, 2009 to 95.0% at December 31, 2010.

At December 31, 2010, the Company and/or the Operating Partnership wholly owned: 295 in-service office, industrial and retail properties, comprising 27.2 million square feet; 96 rental residential units; 26 for-sale residential condominiums; 611 acres of undeveloped land suitable for future development, of which 523 acres are considered core holdings; and an additional two office properties that are considered completed but not yet stabilized. In addition, we owned interests (50.0% or less) in 35 in-service office and industrial properties, one office property under development and 11 acres of undeveloped land suitable for future development, which includes a 12.5% interest in a 261,000 square foot office property directly owned by the Company and thus is included in the Company’s Consolidated Financial Statements, but not included in the Operating Partnership’s Consolidated Financial Statements.

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 Statements of Income for the years ended December 31, 2009 and 2008 were revised from previously reported amounts to reflect in discontinued operations the operations for those properties sold or held for sale which required discontinued operations presentation. Prior period amounts related to additions to allowance for doubtful accounts and amortization of lease commissions in our Consolidated Statements of Cash Flows have been reclassified to conform to the current period presentation.

The Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those subsidiaries in which we own a majority voting interest with the ability to control operations of the subsidiaries and where no substantive participating rights or substantive kick out rights have been granted to the noncontrolling interests. We consolidate partnerships, joint ventures and limited liability companies when we control the major operating and financial policies of the entity through majority ownership or in our capacity as general partner or managing member. Five of the 50.0% or less owned in-service office properties are consolidated. In addition, we consolidate those entities deemed to be variable interest entities in which we are determined to be the primary beneficiary. At December 31, 2010, we had involvement with no entities that we deemed to be variable interest entities. All significant intercompany transactions and accounts have been eliminated.
 
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 and Related Assets

Real estate and related assets are recorded at cost and stated at cost less accumulated depreciation. Renovations, replacements and other expenditures that improve or extend the life of assets are capitalized and depreciated over their estimated useful lives. Expenditures for ordinary maintenance and repairs are charged to expense as incurred. Depreciation is computed using the straight-line method over the estimated useful life of 40 years for buildings and depreciable land infrastructure costs, 15 years for building improvements and five to seven years for furniture, fixtures and equipment. Tenant improvements are amortized using the straight-line method over initial fixed terms of the respective leases, which generally are from three to 10 years. Depreciation expense for real estate assets was $117.6 million, $115.6 million and $111.0 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Expenditures directly related to the development and construction of real estate assets are included in net real estate assets and are stated at depreciated cost. Development expenditures include pre-construction costs essential to the development of properties, development and construction costs, interest costs on qualifying assets, real estate taxes, development personnel salaries and related costs and other costs incurred during the period of development. Interest and other carrying costs are capitalized until the building is ready for its intended use, but not later than one year from cessation of major construction activity. We consider a construction project as substantially completed and ready for its intended use upon the completion of tenant improvements. We cease capitalization on the portion that is substantially completed and occupied or held available for occupancy, and capitalize only those costs associated with the portion under construction.

Expenditures directly related to the leasing of properties are included in deferred financing and leasing costs and are stated at amortized cost. Such expenditures are part of the investment necessary to execute leases and, therefore, are classified as investment activities in the statement of cash flows. All leasing commissions paid to third parties for new leases or lease renewals are capitalized. Internal leasing costs include primarily compensation, benefits and other costs, such as legal fees related to leasing activities, which are incurred in connection with successfully securing leases of properties. Capitalized leasing costs are amortized on a straight-line basis over the initial fixed terms of the respective leases, which generally are from three to 10 years. Estimated costs related to unsuccessful activities are expensed as incurred.

We record liabilities for the performance of asset retirement activities when the obligation to perform such activities is unconditional, whether or not the timing or method of settlement of the obligation may be conditional on a future event.

Upon the acquisition of real estate assets, we assess the fair value of acquired tangible assets such as land, buildings and tenant improvements, intangible assets such as above and below market leases, acquired in-place leases, customer relationships and other identified intangible assets and assumed liabilities. We assess fair value based on estimated cash flow projections that utilize discount and/or capitalization rates as well as available market information. The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant.

The above and below market rate portions of leases acquired in connection with property acquisitions are recorded in deferred financing and leasing costs or in accounts payable, accrued expenses and other liabilities at their fair value. Fair value is calculated as the present value of the difference between (1) the contractual amounts to be paid pursuant to each in-place lease and (2) our estimate of fair market lease rates for each corresponding in-place lease, using a discount rate that reflects the risks associated with the leases acquired and measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases. The capitalized above-market lease values are amortized as a reduction of base rental revenue over the remaining term of the respective leases and the accrued below-market lease values are amortized as an increase to base rental revenue over the remaining term of the respective leases and any below market option periods.

In-place leases acquired are recorded at their fair value in deferred financing and leasing costs and are amortized to depreciation and amortization expense over the remaining term of the respective lease. The value of in-place leases is based on our evaluation of the specific characteristics of each customer’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, current market conditions, the customer’s credit quality and costs to execute similar leases. In estimating carrying costs, we include real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. In estimating costs to execute similar leases, we consider tenant improvements, leasing commissions and legal and other related expenses.

Real estate and other assets are classified as long-lived assets held for use and as long-lived assets held for sale. Real estate is classified as held for sale when the Company’s Board of Directors, or its investment committee has approved the sale of the asset, a legally enforceable contract has been executed and the buyer’s due diligence period has expired.

Impairment of Long-Lived Assets and Investments in Unconsolidated Affiliates

With respect to assets classified as held for use, if events or changes in circumstances (such as a significant decline in occupancy, identification of materially adverse legal or environmental factors, change in our designation of an asset to non-core which impacts the anticipated holding period or market value less than cost) indicate that the carrying value may be impaired, an impairment analysis is performed. Such analysis is generally performed at the property level, except when an asset is part of an interdependent group (e.g. office park) and consists of determining whether the asset’s carrying amount will be recovered from its undiscounted estimated future operating and residual cash flows. These cash flows are estimated based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for customers, changes in market rental rates, costs to operate each property and expected ownership periods. For properties under development, the cash flows are based on expected service potential of the asset (group) when development is substantially complete. If the carrying amount of a held for use asset exceeds the sum of its undiscounted future operating and residual cash flows, an impairment loss is recorded for the difference between estimated fair value of the asset and the carrying amount. We generally estimate the fair value of assets held for use by using discounted cash flow analysis. In some instances, appraisal information may be available and is used in addition to the discounted cash flow analysis. As the factors used in generating these cash flows are difficult to predict and are subject to future events that may alter our assumptions, the discounted and/or undiscounted future operating and residual cash flows estimated by us in our impairment analyses or those established by appraisal may not be achieved and we may be required to recognize future impairment losses on our properties held for use.

We record assets held for sale (including for-sale residential condominiums) at the lower of the carrying amount or estimated fair value. Fair value of assets held for sale is equal to the estimated or contracted sales price with a potential buyer, less costs to sell. The impairment loss, if any, is the amount by which the carrying amount exceeds the estimated fair value.

We analyze our investments in unconsolidated affiliates for impairment. Such analysis consists of determining whether an expected loss in market value of an investment is other than temporary by evaluating the length of time and the extent to which the market value has been less than cost, the financial condition and near-term prospects of the investee, and our intent and ability to retain our investment for a period of time sufficient to allow for any anticipated recovery in market value. As the factors used in this analysis are difficult to predict and are subject to future events that may alter our assumptions, we may be required to recognize future impairment losses on our investments in unconsolidated affiliates.

Sales of Real Estate

For sales transactions meeting the requirements for full profit recognition, the related assets and liabilities are removed from the balance sheet and the resultant gain or loss is recorded in the period the transaction closes. For sales transactions with continuing involvement after the sale, if the continuing involvement with the property is limited by the terms of the sales contract, profit is recognized at the time of sale and is reduced by the maximum exposure to loss related to the nature of the continuing involvement. Sales to entities in which we have or receive an interest are accounted for using partial sale accounting.

For transactions that do not meet the criteria for a sale, we evaluate the nature of the continuing involvement, including put and call provisions, if present, and account for the transaction as a financing arrangement, profit-sharing arrangement, leasing arrangement or other alternate method of accounting, rather than as a sale, based on the nature and extent of the continuing involvement. Some transactions may have numerous forms of continuing involvement. In those cases, we determine which method is most appropriate based on the substance of the transaction.

If we have an obligation to repurchase the property at a higher price or at a future indeterminable value (such as fair market value), or we guarantee the return of the buyer’s investment or a return on that investment for an extended period, we account for such transaction as a financing arrangement. For transactions treated as financing arrangements, we record the amounts received from the buyer as a financing obligation and continue to keep the property and related accounts recorded in our Consolidated Financial Statements. The results of operations of the property, net of expenses other than depreciation, are reflected as interest expense on the financing obligation. If the transaction includes an obligation or option to repurchase the asset at a higher price, additional interest is recorded to accrete the liability to the repurchase price. For options or obligations to repurchase the asset at fair market value at the end of each reporting period, the balance of the liability is adjusted to equal the then current fair value to the extent fair value exceeds the original financing obligation. The corresponding debit or credit is recorded to a related discount account and the revised discount is amortized over the expected term until termination of the option or obligation. If it is unlikely such option will be exercised, the transaction is accounted for under the deposit method or profit-sharing method. If we have an obligation or option to repurchase at a lower price, the transaction is accounted for as a leasing arrangement. At such time as a repurchase obligation expires, a sale is recorded and gain recognized.

If we retain an interest in the buyer and provide certain rent guarantees or other forms of support where the maximum exposure to loss exceeds the gain, we account for such transaction as a profit-sharing arrangement. For transactions treated as profit-sharing arrangements, we record a profit-sharing obligation for the amount of equity contributed by the other partner and continue to keep the property and related accounts recorded in our Consolidated Financial Statements. The results of operations of the property, net of expenses other than depreciation, are allocated to the other partner for its percentage interest and reflected as “co-venture expense” in our Consolidated Financial Statements. In future periods, a sale is recorded and profit is recognized when the remaining maximum exposure to loss is reduced below the amount of gain deferred.

Rental and Other Revenues

Minimum contractual rents from leases are recognized on a straight-line basis over the terms of the respective leases. This means that, with respect to a particular lease, actual amounts billed in accordance with the lease during any given period may be higher or lower than the amount of rental revenue recognized for the period. Straight-line rental revenue is commenced when the customer assumes control of the leased premises. Accrued straight-line rents receivable represents the amount by which straight-line rental revenue exceeds rents currently billed in accordance with lease agreements. Contingent rental revenue, such as percentage rent, is accrued when the contingency is removed. Termination fee income is recognized as revenue at the later of when the customer has vacated the space or the lease has expired and the following conditions are met: a fully executed lease termination agreement has been delivered; the amount of the fee is determinable; and collectability of the fee is reasonably assured. Rental revenue reductions related to co-tenancy lease provisions, if any, are accrued when events have occurred that trigger such provisions.

Property operating cost recoveries from customers are determined on a calendar year and lease-by-lease basis. The most common types of cost reimbursements in our leases are common area maintenance (“CAM”) and real estate taxes, for which the customer pays its pro-rata share of operating and administrative expenses and real estate taxes in excess of a base year. The computation of property operating cost recovery income from customers is complex and involves numerous judgments, including the interpretation of terms and other customer lease provisions. Leases are not uniform in dealing with such cost reimbursements and there are many variations in the computation. Many customers make monthly fixed payments of CAM, real estate taxes and other cost reimbursement items. We accrue income related to these payments each month. We make quarterly accrual adjustments, positive or negative, to cost recovery income to adjust the recorded amounts to our best estimate of the final annual amounts to be billed and collected with respect to the cost reimbursements. After the end of the calendar year, we compute each customer’s final cost reimbursements and, after considering amounts paid by the customer during the year, issue a bill or credit for the appropriate amount to the customer. The differences between the amounts billed less previously received payments and the accrual adjustment are recorded as increases or decreases to cost recovery income when the final bills are prepared, which occurs during the first half of the subsequent year.

Allowance for Doubtful Accounts

Accounts receivable, accrued straight-line rents receivable and mortgages and notes receivable are reduced by an allowance for amounts that may become uncollectible in the future. We regularly evaluate the adequacy of our allowance for doubtful accounts. The evaluation primarily consists of reviewing past due account balances and considering such factors as the credit quality of our customer, historical trends of the customer and changes in customer payment terms. Additionally, with respect to customers in bankruptcy, we estimate the probable recovery through bankruptcy claims and adjust the allowance for amounts deemed uncollectible. If our assumptions regarding the collectability of receivables prove incorrect, we could experience losses in excess of our allowance for doubtful accounts. The allowance and its related receivable are written-off when we have concluded there is a low probability of collection.

Discontinued Operations

Properties that are sold or classified as held for sale are classified as discontinued operations provided that (1) the operations and cash flows of the property will be eliminated from our ongoing operations and (2) we will not have any significant continuing involvement in the operations of the property after it is sold. Interest expense is included in discontinued operations if the related loan securing the sold property is to be paid off or assumed by the buyer in connection with the sale. If the property is sold to a joint venture in which we retain an interest, the property will not be accounted for as a discontinued operation due to our significant ongoing interest in the operations through our joint venture interest. If we are retained to provide property management, leasing and/or other services for the property owner after the sale, the property generally will be accounted for as a discontinued operation because the expected cash flows related to our management and leasing activities generally will not be significant in comparison to the cash flows from the property prior to sale.

Lease Incentives

Lease incentive costs, which are payments made to or on behalf of a customer as an incentive to sign the lease, are capitalized in deferred financing and leasing costs and amortized on a straight-line basis over the respective lease terms as a reduction of rental revenues.

For-Sale Residential Condominiums

For-sale residential condominiums include completed, but unsold, condominium inventory. We initially record receipts of earnest money deposits in accounts payable, accrued expenses and other liabilities in accordance with the deposit method. We then record completed sales when units close and the remaining net cash is received. During the years ended December 31, 2010, 2009 and 2008, we received $5.3 million, $13.0 million and $28.6 million, respectively, in gross proceeds and recorded $5.0 million, $12.1 million and $23.0 million, respectively, of cost of assets sold from condominium sales.

Investments in Unconsolidated Affiliates

We account for our investments in less than majority owned joint ventures, partnerships and limited liability companies using the equity method of accounting when our interests represent a general partnership interest but substantive participating rights or substantive kick out rights have been granted to the limited partners or when our interests do not represent a general partnership interest and we do not control the major operating and financial policies of the entity. These investments are initially recorded at cost, as investments in unconsolidated affiliates, and are subsequently adjusted for our share of earnings and cash contributions and distributions. To the extent our cost basis at formation of the joint venture is different than the basis reflected at the joint venture level, the basis difference is amortized over the life of the related assets and included in our share of equity in earnings of unconsolidated affiliates.

Additionally, our joint ventures will frequently borrow funds on their own behalf to finance the acquisition of, and/or leverage the return upon, the properties being acquired by the joint ventures or to build or acquire additional buildings. Such borrowings are typically on a non-recourse or limited recourse basis. We generally are not liable for the debts of our joint ventures, except to the extent of our equity investment. In most cases, we and/or our joint venture partners are required to agree to customary limited exceptions on non-recourse loans.

Cash Equivalents

We consider highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

Restricted Cash

Restricted cash represents cash deposits that are legally restricted or held by third parties on our behalf. It includes security deposits from sales contracts on for-sale residential condominiums, construction-related escrows, property disposition proceeds set aside and designated or intended to fund future tax-deferred exchanges of qualifying real estate investments, escrows and reserves for debt service, real estate taxes and property insurance established pursuant to certain mortgage financing arrangements, and deposits given to lenders to unencumber secured properties, if any.

Income Taxes

We have elected and expect to continue to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). A corporate REIT is a legal entity that holds real estate assets and, through the payment of dividends to stockholders, is generally permitted to reduce or avoid the payment of federal and state income taxes at the corporate level. To maintain qualification as a REIT, we are required to pay dividends to our stockholders equal to at least 90.0% of our annual REIT taxable income, excluding net capital gains.

We conduct certain business activities through a taxable REIT subsidiary, as permitted under the Code. The taxable REIT subsidiary is subject to federal and state income taxes on its taxable income. We record provisions for income taxes based on its income recognized for financial statement purposes, including the effects of temporary differences between such income and the amount recognized for tax purposes.

Concentration of Credit Risk

We perform ongoing credit evaluations of our customers. At December 31, 2010, the wholly owned properties, defined as in-service properties (excluding rental residential units) to which we have title and 100.0% ownership rights (“Wholly Owned Properties”), were leased to 1,614 customers in nine primary geographic locations. The geographic locations that comprise greater than 10.0% of our annualized cash rental revenue are Raleigh, NC, Tampa, FL, Atlanta, GA, Nashville, TN and Kansas City, MO. Our customers engage in a wide variety of businesses. No single customer of the Wholly Owned Properties generated more than 10.0% of our consolidated revenues during 2010.

We maintain our cash and cash equivalents and our restricted cash at financial or other intermediary institutions. The combined account balances at each institution may exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. Additionally, from time to time in connection with tax-deferred 1031 transactions, our restricted cash balances may be commingled with other funds being held by any such intermediary institution which subjects our balance to the credit risk of the institution.

Derivative Financial Instruments

We borrow funds at a combination of fixed and variable rates. Borrowings under our revolving credit facility, construction facility and bank term loans bear interest at variable rates. Our long-term debt, which consists of secured and unsecured long-term financings and the issuance of unsecured debt securities, typically bears interest at fixed rates although some loans bear interest at variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we enter into interest rate hedge contracts such as collars, swaps, caps and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We do not hold or issue these derivative contracts for trading or speculative purposes. The interest rate on all of our variable rate debt is generally adjusted at one or three month intervals, subject to settlements under these interest rate hedge contracts. We also enter into treasury lock and similar agreements from time to time in order to limit our exposure to an increase in interest rates with respect to future debt offerings.

Our objective in using interest rate hedge contracts is to add stability to interest expense and manage our exposure to interest rate fluctuations. To accomplish this objective, we sometimes use interest rate swaps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss and is subsequently reclassified into interest expense in the period that the hedged forecasted transaction affects earnings. We do not hold these derivative contracts for trading or speculative purposes and generally do not have any derivatives that are not designated as hedges. Interest rate hedge contracts typically contain a provision whereby if we default on any of our indebtedness, we could also be declared in default on our hedge contracts.

We are exposed to certain losses in the event of nonperformance by the counterparty under any outstanding hedge contracts. We expect the counterparty, which generally is a major financial institution, to perform fully under any such contracts. However, if any counterparty were to default on its obligation under an interest rate hedge contract, we could be required to pay the full rates on our debt, even if such rates were in excess of the rate in the contract.

We account for terminated derivative instruments by recognizing the related accumulated comprehensive income/loss balance in current earnings, unless the hedged forecasted transaction continues as originally planned, in which case we continue to amortize the accumulated comprehensive income/loss into earnings over the originally designated hedge period.

Earnings Per Share

Basic earnings per share is computed by dividing net income available for common stockholders by the weighted Common Shares outstanding - basic. Diluted earnings per share is computed by dividing net income available to common stockholders plus noncontrolling interests in the Operating Partnership by the weighted Common Shares outstanding – basic plus the dilutive effect of options, warrants and convertible securities outstanding, including Common Units, using the treasury stock method. Weighted Common Shares outstanding – basic includes all unvested restricted stock since dividends received on such restricted stock are non-forfeitable.
Real Estate Assets
Real Estate Assets
2.      Real Estate Assets

Acquisitions

In the third quarter of 2010, we acquired a 336,000 square foot office property in Memphis, TN for $10.0 million in cash and the assumption of $42.6 million of 6.43% effective rate secured debt, which was recorded at fair value of $40.3 million and incurred $0.4 million of acquisition-related costs. In the fourth quarter of 2010, we acquired a 117,000 square foot office property and 32.6 acres of development land in Tampa, FL for $12.0 million in cash and incurred $0.2 million of acquisition-related costs. At the time of acquisition, the office building was vacant. Also, we acquired our partner’s interest in a joint venture that owned for-sale residential condominiums for $0.5 million in cash.

In 2009, we acquired a 220,000 square foot office building in Tampa, FL for $22.3 million in cash and incurred $0.1 million of acquisition-related costs.

In 2008, we acquired a 135,000 square foot office building in Memphis, TN in exchange for 183,587 Common Units and the assumption of $7.8 million of 8.15% effective rate secured debt, which were recorded at fair value of $6.3 million and $8.4 million, respectively.

Dispositions

During the second quarter of 2010, we sold seven office properties in Winston Salem, NC for gross proceeds of $12.9 million. In connection with this disposition, we received cash of $4.5 million and provided seller financing of $8.4 million (recorded at fair value of $8.4 million in mortgages and notes receivable) and committed to lend up to an additional $1.7 million for tenant improvements and lease commissions, of which $0.2 million was funded as of December 31, 2010. The three-year, interest-only first mortgage carries a 6.0% average interest rate. Assuming no default exists, the note can be extended by the buyer for two additional one-year periods, subject to an increase in the interest rate to 7.0% in the fourth year and to 8.0% in the fifth year. We have accounted for this disposition using the installment method, whereby the $0.4 million gain on disposition of property has been deferred and will be recognized when the seller financing is repaid.

During the second quarter of 2010, we also sold six industrial properties in Greensboro, NC for gross proceeds of $12.0 million. In connection with this disposition, we received cash of $3.4 million and provided seller financing of $8.6 million (recorded at fair value of $8.6 million in mortgages and notes receivable) and a limited rent guarantee with maximum exposure to loss of $0.7 million as of December 31, 2010. The three-year, interest-only first mortgage carries a 6.25% average interest rate. Assuming no default exists, the note can be extended by the buyer for two additional one-year periods, subject to an increase in the interest rate to 7.0% in the fourth year and to 7.75% in the fifth year. We currently have concluded that a loss from the rent guarantee is not probable. We have accounted for this disposition using the installment method, whereby the $0.3 million impairment was recognized in net gains/(losses) on disposition of discontinued operations in the second quarter of 2010.

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

In 2009, we sold 517,000 square feet of non-core retail and office properties for gross proceeds of $78.2 million and recorded gains of $21.7 million.

In 2008, we sold 744,000 square feet of office and industrial properties for gross proceeds of approximately $56.8 million and recorded net gains of $17.9 million. We also sold 38 acres of non-core land for gross sale proceeds of $9.2 million and recorded a net gain of $0.3 million.

Impairments

We recorded impairment of assets held for use of $2.6 million and $3.4 million in 2009 and 2008, respectively, on four office properties located in Winston-Salem, NC. Additionally, we recorded impairment of $11.0 million and $29.4 million in 2009 and 2008, respectively, on certain office, industrial and retail properties in Winston-Salem and Greensboro, NC that were sold in 2010 and required discontinued operations presentation. Impairments can arise from a number of factors; accordingly, there can be no assurances that we will not be required to record additional impairment charges in the future (see Note 1).

Development

As of December 31, 2010, we had one office property aggregating 60,000 square feet which was reflected as development in process due to ongoing redevelopment activities. The project is 100.0% leased.
Mortgages and Notes Receivable
Mortgages and Notes Receivable
3.      Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

   
December 31,
 
   
2010
 
2009
 
Seller financing (first mortgages)
 
$
17,180
 
$
—
 
Less allowance
   
—
   
—
 
     
17,180
   
—
 
Promissory notes
   
2,732
   
3,841
 
Less allowance
   
(868
)
 
(698
)
     
1,864
   
3,143
 
Mortgages and notes receivable, net
 
$
19,044
 
$
3,143
 

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

   
December 31,
 
   
2010
 
2009
 
Beginning notes receivable allowance
 
$
698
 
$
459
 
Bad debt expense
   
413
   
255
 
Recoveries/write-offs/other
   
(243
)
 
(16
)
Total notes receivable allowance
 
$
868
 
$
698
 

Our mortgages and notes receivable consists primarily of seller financing issued in conjunction with two disposition transactions in 2010 (see Note 2). This seller financing is evidenced by first mortgages secured by the assignment of rents and the underlying real estate assets. We conclude on the credit quality of the receivables by monitoring the leasing statistics and market fundamentals of these assets. As of December 31, 2010, the interest payments on both mortgages receivable were current and there were no 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.
Investments in Affiliates
Investments in Affiliates
4.      Investments in Affiliates

Unconsolidated Affiliates

We have retained equity interests ranging from 10.0% to 50.0% in various joint ventures with unrelated investors. We account for these unconsolidated affiliates using the equity method of accounting. As a result, the assets and liabilities of these joint ventures for which we use the equity method of accounting are not included in our Consolidated Financial Statements.
 
The following table sets forth our ownership in unconsolidated affiliates at December 31, 2010:

 
Joint Venture
 
 
Location of Properties
 
Ownership
Interest
 
Concourse Center Associates, LLC
 
Greensboro, NC
 
50.00
%
Plaza Colonnade, LLC
 
Kansas City, MO
 
50.00
%
Board of Trade Investment Company
 
Kansas City, MO
 
49.00
%
Highwoods DLF 97/26 DLF 99/32, LP
 
Atlanta, GA; Greensboro, NC; Orlando, FL
 
42.93
%
Highwoods KC Glenridge Office, LLC
 
Atlanta, GA
 
40.00
%
Highwoods KC Glenridge Land, LLC
 
Atlanta, GA
 
40.00
%
HIW-KC Orlando, LLC
 
Orlando, FL
 
40.00
%
Kessinger/Hunter, LLC
 
Kansas City, MO
 
26.50
%
Highwoods DLF Forum, LLC
 
Raleigh, NC
 
25.00
%
Highwoods DLF 98/29, LLC
 
Atlanta, GA; Charlotte, NC; Greensboro, NC; Raleigh, NC; Orlando, FL
 
22.81
%
4600 Madison Associates, LLC
 
Kansas City, MO
 
12.50
%
HIW Development B, LLC
 
Charlotte, NC
 
10.00
%

The following table sets forth combined summarized financial information for our unconsolidated affiliates:

   
December 31,
 
   
2010
 
2009
 
Balance Sheets:
             
Assets:
             
Real estate assets, net
 
$
580,257
 
$
683,257
 
All other assets, net
   
92,423
   
118,513
 
Total Assets
 
$
672,680
 
$
801,770
 
               
Liabilities and Partners’ or Shareholders’ Equity:
             
Mortgages and notes payable (1)
 
$
424,818
 
$
594,084
 
All other liabilities
   
26,267
   
32,855
 
Partners’ or shareholders’ equity
   
221,595
   
174,831
 
Total Liabilities and Partners’ or Shareholders’ Equity
 
$
672,680
 
$
801,770
 
               
Our share of historical partners’ or shareholders’ equity (2)
 
$
61,022
 
$
34,631
 
Net excess of cost of investments over the net book value of underlying net assets (2) (3)
   
2,585
   
19,038
 
Carrying value of investments in unconsolidated affiliates (2)
 
$
63,607
 
$
53,669
 
               
Our share of unconsolidated non-recourse mortgage debt (1)
 
$
150,698
 
$
238,555
 

__________
 
(1)
Our share of scheduled future principal payments, including amortization, due on mortgages and notes payable at December 31, 2010 is as follows:

2011                                                                                
 
$
4,124
 
2012                                                                                
   
22,901
 
2013                                                                                
   
23,830
 
2014 (a)                                                                                
   
64,475
 
2015                                                                                
   
1,139
 
Thereafter                                                                                
   
34,229
 
   
$
150,698
 
 
All of this joint venture debt is non-recourse to us except in the case of customary exceptions pertaining to such matters as misuse of funds, environmental conditions and material misrepresentations.
 
 
(a)
Includes our 22.81% portion of a $38.7 million mortgage payable which is callable at the lender’s sole discretion on either of the following call dates: May 1, 2014, 2019 or 2024, by giving written notice at least six months prior to the elected call date.
 
 
(2)
During the third quarter of 2006, three of our Des Moines joint ventures made cash distributions aggregating $17.0 million in connection with a debt refinancing. We received 50.0% of such distributions. As a result of these distributions, our investment account in these joint ventures became negative. We recorded the distributions as a reduction of our investment account and included the resulting negative investment balances of $12.4 million in accounts payable, accrued expenses and other liabilities at December 31, 2009. Our interests in these joint ventures were sold in the second quarter of 2010.
 
(3)
This amount represents the aggregate difference between our historical cost basis and the basis reflected at the joint venture level, which is typically depreciated over the life of the related asset.

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Income Statements:
                   
Rental and other revenues                                                                              
 
$
119,868
 
$
149,856
 
$
161,593
 
Expenses:
                   
Rental property and other expenses
   
56,868
   
72,344
   
79,647
 
Depreciation and amortization
   
31,401
   
35,537
   
34,702
 
Interest expense
   
27,956
   
35,245
   
36,117
 
Total expenses
   
116,225
   
143,126
   
150,466
 
Income before disposition of properties
   
3,643
   
6,730
   
11,127
 
Gains on disposition of properties
   
—
   
2,963
   
—
 
Net income
 
$
3,643
 
$
9,693
 
$
11,127
 
Our share of:
                   
Depreciation and amortization of real estate assets
 
$
10,471
 
$
12,839
 
$
12,751
 
Interest expense
 
$
10,545
 
$
14,074
 
$
14,587
 
Net gain on disposition of depreciable properties
 
$
—
 
$
582
 
$
—
 
Net income
 
$
1,466
 
$
2,889
 
$
3,732
 
                     
Our share of net income
 
$
1,466
 
$
2,889
 
$
3,732
 
Purchase accounting and management, leasing and other fees adjustments
   
2,355
   
2,532
   
2,146
 
Equity in earnings of unconsolidated affiliates
 
$
3,821
 
$
5,421
 
$
5,878
 
 
The following summarizes additional information related to certain of our unconsolidated affiliates:

- Highwoods DLF 97/26 DLF 99/32, L.P. (“DLF II”)

In 2009, DLF II sold one property for gross proceeds of $7.1 million and recorded an impairment charge of $0.5 million. We recorded $0.2 million as our proportionate share of this impairment charge through equity in earnings of unconsolidated affiliates in 2009.

 - Kessinger/Hunter, LLC

Kessinger/Hunter, LLC, which is managed by our joint venture partner, previously provided property management, leasing, brokerage and certain construction related services to certain of our Wholly Owned Properties in Kansas City, MO. These services were reduced by us to only leasing-related services in 2009. Kessinger/Hunter, LLC received $0.8 million, $0.5 million and $2.6 million from us for these services in 2010, 2009 and 2008, respectively.

- Highwoods-DLF Forum, LLC (“DLF Forum”)

In 2008, we contributed $12.3 million to this joint venture for a 25% ownership interest. The joint venture acquired a 635,000 square foot office park in Raleigh, NC, for approximately $113 million and obtained a $67.5 million loan secured by the property.

 - Highwoods DLF 98/29, LLC (“DLF I”)

At the formation of this joint venture in 1999, our partner contributed excess cash to the venture that was distributed to us under the joint venture agreements. We are required to repay this excess cash to our partner over time, as discussed in Note 9.

In 2009, DLF I sold a property for gross proceeds of $14.8 million and recorded a gain of $3.4 million. We recorded $0.8 million as our proportionate share of this gain through equity in earnings of unconsolidated affiliates in 2009.

 - HIW Development B, LLC

In 2009, we contributed $0.3 million to this joint venture for a 10% ownership interest. Simultaneous with the formation, this joint venture acquired land for $3.4 million to be used for development in Charlotte, NC. In 2010, we contributed an additional $1.0 million to this joint venture for the purpose of constructing a build-to-suit office property expected to cost $46.5 million when completed in 2011. We receive customary development fees for this construction.
 
 - Des Moines, IA Joint Ventures

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

 - Other Activities

We receive development, management and leasing fees for services provided to certain of our joint ventures. These fees are recognized as income to the extent of our respective joint venture partner’s interest in rental and other revenues. In the years ended December 31, 2010, 2009 and 2008, we recognized $2.7 million, $2.1 million and $2.1 million, respectively, of development, management and leasing fees from our unconsolidated joint ventures.

Consolidated Affiliates

The following summarizes our consolidated affiliates:

 - Highwoods-Markel Associates, LLC (“Markel”)

We have a 50.0% ownership interest in Markel. We are the manager and leasing agent for Markel’s properties located in Richmond, VA and receive customary management and leasing fees. We consolidate Markel since we are the general partner and control the major operating and financial policies of the joint venture. The organizational documents of Markel require the entity to be liquidated through the sale of its assets upon reaching December 31, 2100. As controlling partner, we have an obligation to cause this property-owning entity to distribute proceeds of liquidation to the noncontrolling interest partner in these partially owned properties only if the net proceeds received by the entity from the sale of our assets warrant a distribution as determined by the agreement. We estimate the value of noncontrolling interest distributions would have been approximately $13.9 million had the entity been liquidated at December 31, 2010. This estimated settlement value is based on the fair value of the underlying properties which is based on a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for customers, changes in market rental rates and costs to operate each property. If the entity’s underlying assets are worth less than the underlying liabilities on the date of such liquidation, we would have no obligation to remit any consideration to the noncontrolling interest holder.

 - SF-HIW Harborview Plaza, LP (“Harborview”)

We have a 20.0% interest in Harborview. We are the manager and leasing agent for Harborview’s property located in Tampa, FL and receive customary management and leasing fees. As further described in Note 8, we account for this joint venture as a financing obligation since our partner has the right to put its interest back to us in the future.

- Plaza Residential, LLC (“Plaza Residential”)

In 2007, through our taxable REIT subsidiary, we contributed $10.6 million for a majority owned interest in Plaza Residential, which was formed to develop and sell 139 for-sale residential condominiums constructed above an office property developed by us in Raleigh, NC. Our partner had a 7.0% ownership interest in the joint venture, performed development services for the joint venture for a market development fee and guaranteed 40.0% of the construction financing. As of December 31, 2009, we consolidated this joint venture since we own the majority interest. On December 30, 2010, we acquired our partner’s interest for $0.5 million.
Deferred Financing and Leasing Costs
Deferred Financing and Leasing Costs
5.      Deferred Financing and Leasing Costs

The following table sets forth total deferred financing and leasing costs, net of accumulated amortization. Lease intangible assets include lease commissions and above market and in-place lease intangible assets arising from purchace accounting.

   
December 31,
 
   
2010
 
2009
 
Deferred financing costs
 
$
16,412
 
$
16,811
 
Less accumulated amortization
   
(7,054
)
 
(4,549
)
     
9,358
   
12,262
 
Deferred leasing costs (including lease intangible assets and lease incentives)
   
128,030
   
108,835
 
Less accumulated amortization
   
(52,329
)
 
(47,580
)
     
75,701
   
61,255
 
Deferred financing and leasing costs, net
 
$
85,059
 
$
73,517
 

Amortization of deferred financing and leasing costs were as follows:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Amortization of deferred financing costs
 
$
3,385
 
$
2,760
 
$
2,716
 
Amortization of lease intangible assets (included in depreciation and amortization)
 
$
17,383
 
$
15,064
 
$
15,320
 
Amortization of lease incentives (included in rental and other revenues)
 
$
1,239
 
$
1,110
 
$
1,041
 

The following table sets forth scheduled future amortization for deferred financing and leasing costs as of December 31, 2010:

Years Ending December 31,
 
Amortization of Deferred Financing Costs
 
Amortization of Lease Intangible Assets
 
Amortization of Lease Incentives
 
2011                                                                                     
 
$
3,014
 
$
17,168
 
$
1,038
 
2012                                                                                     
   
2,786
   
14,291
   
938
 
2013                                                                                     
   
1,168
   
11,233
   
775
 
2014                                                                                     
   
791
   
8,545
   
617
 
2015                                                                                     
   
791
   
6,097
   
408
 
Thereafter                                                                                     
   
808
   
13,201
   
1,390
 
   
$
9,358
 
$
70,535
 
$
5,166
 

The weighted average remaining amortization periods for deferred financing costs, lease intangible assets and lease incentives were 3.4 years, 6.2 years and 7.9 years, respectively, as of December 31, 2010.

In connection with the acquisition of an office property in Memphis, TN in the third quarter of 2010, we recorded $2.8 million of above market lease intangible assets and $7.1 million of in-place lease intangible assets with weighted average amortization periods at the time of the acquisition of 7.3 and 5.9 years, respectively.
Mortgages and Notes Payable
Mortgages and Notes Payable
6.      Mortgages and Notes Payable

Our mortgages and notes payable consist of the following:

   
December 31,
 
   
2010
 
2009
 
Secured indebtedness: (1)
             
7.05% mortgage loan due 2012
 
$
186,038
 
$
188,088
 
6.03% mortgage loan due 2013
   
128,084
   
130,739
 
5.68% mortgage loan due 2013
   
113,230
   
115,958
 
5.17% (6.43% effective rate) mortgage loan due 2015 (2)
   
40,199
   
—
 
6.88% mortgage loans due 2016
   
113,386
   
114,610
 
7.50% mortgage loan due 2016
   
46,662
   
47,108
 
5.74% to 9.00% mortgage loans due between 2012 and 2016 (3) (4) (5)
   
74,691
   
82,483
 
Variable rate construction loan due 2010 (6)
   
52,109
   
41,741
 
     
754,399
   
720,727
 
Unsecured indebtedness:
             
5.85% (5.88% effective rate) notes due 2017 (7) 
   
391,046
   
390,928
 
7.50% notes due 2018
   
200,000
   
200,000
 
Variable rate term loans due between 2011 and 2012 (8)
   
147,500
   
157,500
 
Revolving credit facility due 2013 (9)
   
30,000
   
—
 
     
768,546
   
748,428
 
Total                                                                                         
 
$
1,522,945
 
$
1,469,155
 

__________
 
(1)
The mortgage loans payable are secured by real estate assets with an aggregate undepreciated book value of approximately $1.2 billion at December 31, 2010. Our fixed rate mortgage loans generally are either locked out to prepayment for all or a portion of their term or are prepayable subject to certain conditions including prepayment penalties.
 
(2)
Net of amortized fair market value discount of $2.1 million as of December 31, 2010.
 
(3)
Includes mortgage debt related to SF-HIW Harborview Plaza, LP., a consolidated 20.0% owned joint venture, of $21.5 million and $21.9 million at December 31, 2010 and 2009, respectively. See Note 8.
 
(4)
Includes mortgage debt related to Markel, a consolidated 50.0% owned joint venture, of $35.0 million and $35.8 million at December 31, 2010 and 2009, respectively. See Note 10.
 
(5)
Net of amortized fair market value premium of $0.4 million at both December 31, 2010 and 2009.
 
(6)
Maturity date does not reflect a one-year extension option available to us, except in the event of default, related to the $52.1 million outstanding on our $70.0 million secured construction facility. The interest rate is 1.12% at December 31, 2010.
 
(7)
Net of amortized original issuance discount of $0.8 million and $0.9 million at December 31, 2010 and 2009, respectively.
 
(8)
The interest rates are 3.90% and 1.36% on our $10.0 million and $137.5 million term loans, respectively, as of December 31, 2010.
 
(9)
The interest rate is 3.16% on our revolving credit facility at December 31, 2010.

The following table sets forth scheduled future principal payments, including amortization, due on our mortgages and notes payable at December 31, 2010:

 
 
Years Ending December 31,
 
Principal Amount
     
 
2011 (1) 
 
$
201,375
       
 
2012
   
224,649
       
 
2013
   
272,922
       
 
2014
   
34,841
       
 
2015
   
42,005
       
 
Thereafter
   
747,153
       
     
$
1,522,945
       

__________
 
(1)
This amount does not reflect a one-year extension option available to us, except in the event of default, related to amounts outstanding under our $70.0 million secured construction facility.

Our $400.0 million unsecured revolving credit facility is scheduled to mature on February 21, 2013 and includes an accordion feature that allows for an additional $50.0 million of borrowing capacity subject to additional lender commitments. Assuming we continue to have three publicly announced ratings from the credit rating agencies, the interest rate and facility fee under our revolving credit facility are based on the lower of the two highest publicly announced ratings. Based on our current credit ratings, the interest rate is LIBOR plus 290 basis points and the annual facility fee is 60 basis points. We expect to use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $30.0 million and $20.0 million outstanding under our revolving credit facility at December 31, 2010 and February 2, 2011, respectively. At both December 31, 2010 and February 2, 2011, we had $0.5 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 December 31, 2010 and February 2, 2011 was $369.5 million and $379.5 million, respectively.

Our $70.0 million secured construction facility, of which $52.1 million was outstanding at December 31, 2010, is scheduled to mature on December 20, 2011. Assuming no defaults have occurred, we have the option to extend the maturity date for an additional one-year period. The interest rate is LIBOR plus 85 basis points. This facility had $17.9 million of availability at December 31, 2010 and February 2, 2011.

In 2010, we repaid $10.0 million of our $20.0 million, three-year unsecured term loan. Additionally, we repaid the $5.8 million remaining balance then outstanding on the mortgage payable secured by our 96 rental residential units to unencumber these assets for a planned development project. We incurred a penalty of $0.6 million related to this early repayment, which is included in loss on debt extinguishment in 2010.

In 2009, we paid off at maturity $50.0 million of 8.125% unsecured notes and retired the remaining $107.2 million principal amount of a two-tranched secured loan. We also obtained a $20.0 million, three-year unsecured term loan bearing interest of 3.90%, a $115.0 million, six and a half-year secured loan bearing interest of 6.88% and a $47.3 million, seven-year secured loan bearing interest of 7.50%. We also repurchased $8.2 million principal amount of unsecured notes due 2017 and obtained a new $400.0 million unsecured revolving credit facility which replaced the then existing credit facility, as discussed previously.

In 2008, we obtained a $137.5 million, three-year unsecured term loan bearing interest of LIBOR plus 110 basis points. We used a portion of the proceeds to pay off at maturity $100.0 million of 7.125% unsecured notes.

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

Our revolving credit facility, bank term loan due in February 2011 ($137.5 million outstanding as of December 31, 2010) and bank term loan due in March 2012 ($10.0 million outstanding as of December 31, 2010) require us to comply with customary operating covenants and various financial requirements. If we were to fail to make a payment when due with respect to any of our other obligations with aggregate unpaid principal of $10.0 million, and such failure remains uncured for more than 120 days, the lenders under our credit facility could provide notice of their intent to accelerate all amounts due thereunder. Upon an event of default on the revolving credit facility, the lenders having at least 66.7% of the total commitments under the revolving credit facility can accelerate all borrowings then outstanding, and we could be prohibited from borrowing any further amounts under our revolving credit facility, which would adversely affect our ability to fund our operations.

The Operating Partnership has $391.0 million carrying amount of 2017 bonds outstanding and $200.0 million carrying amount of 2018 bonds outstanding. The indenture that governs these outstanding notes requires us to comply with customary operating covenants and various financial ratios. The trustee or the holders of at least 25% in principal amount of either series of bonds can accelerate the principal amount of such series upon written notice of a default that remains uncured after 60 days.

We may not be able to repay, refinance or extend any or all of our debt at maturity or upon any acceleration. If any refinancing is done at higher interest rates, the increased interest expense could adversely affect our cash flow and ability to pay distributions. Any such refinancing could also impose tighter financial ratios and other covenants that restrict our ability to take actions that could otherwise be in our best interest, such as funding new development activity, making opportunistic acquisitions, repurchasing our securities or paying distributions.

Other Information

Total interest capitalized to development projects was $1.4 million, $4.6 million and $8.3 million for the years ended December 31, 2010, 2009 and 2008, respectively.
Derivative Financial Instruments
Derivative Financial Instruments
7.      Derivative Financial Instruments

We had no outstanding interest rate hedge contracts at December 31, 2010 or 2009.

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

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Derivatives Designated as Cash Flow Hedges:
                   
Amount of unrealized gain/(loss) recognized in AOCL on derivatives (effective portion):
                   
Interest rate swaps
 
$
—
 
$
937
 
$
(1,376
)
                     
Amount of loss/(gain) reclassified out of AOCL into interest expense (effective portion):
                   
Interest rate swaps
 
$
237
 
$
(249
)
$
181
 


The following table sets forth the effect of our prior derivatives not designated as hedging instruments on interest expense:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Derivatives Not Designated as Hedging Instruments:
                   
Amount of gain/(loss) recognized in interest expense on derivative:
                   
Interest rate swaps
 
$
—
 
$
—
 
$
183
 

Financing Arrangements
Financing Arrangements
8.      Financing Arrangements

Our financing obligations consist of the following:

   
December 31,
 
   
2010
 
2009
 
SF-HIW Harborview, LP financing obligation
 
$
17,616
 
$
16,957
 
Tax increment financing bond
   
14,258
   
15,374
 
Repurchase obligation
   
—
   
4,184
 
Capitalized ground lease obligation
   
1,240
   
1,191
 
Total
 
$
33,114
 
$
37,706
 

Harborview

Our joint venture partner in Harborview has the right to put its 80.0% equity interest in the joint venture to us in exchange for cash at any time during the one-year period commencing September 11, 2014. The value of the 80.0% equity interest will be determined at the time that our partner elects to exercise its put right, if ever, based upon the then fair market value of Harborview LP’s assets and liabilities, less 3.0%, which amount was intended to cover the normal costs of a sale transaction. Because of the put option, this transaction is accounted for as a financing transaction. Accordingly, the assets, liabilities and operations related to Harborview Plaza, the property owned by Harborview LP remain in our Consolidated Financial Statements.

As a result, we established a financing obligation equal to the $12.7 million net equity contributed by the other partner. At the end of each reporting period, the balance of the gross financing obligation is adjusted to equal the greater of the original financing obligation of $12.7 million or the current fair value of the put option discussed above. This financing obligation, net of payments made to our joint venture partner, is adjusted by a related valuation allowance account, which is being amortized prospectively through September 2014 as interest expense on financing obligation. The fair value of the put option was $10.2 million and $12.2 million at December 31, 2010 and 2009, respectively. Additionally, the net income from the operations before depreciation of Harborview Plaza allocable to the 80.0% partner is recorded as interest expense on financing obligation. We continue to depreciate the property and record all of the depreciation on our books.
 
Tax Increment Financing Bond

In connection with tax increment financing for construction of a public garage related to a wholly owned office building, we are obligated to pay fixed special assessments over a 20-year period ending in 2019. The net present value of these assessments, discounted at 6.93% at the inception of the obligation, which represents the interest rate on the underlying bond financing, is recorded as a financing obligation. We receive special tax revenues and property tax rebates recorded in interest and other income, which are intended, but not guaranteed, to provide funds to pay the special assessments. We acquired the underlying bond in a privately negotiated transaction in the fourth quarter of 2007 (see Note 11).

Repurchase Obligation

In connection with a disposition in 2009 of a building located in Raleigh, NC, the buyer had a limited right to put the building to us in exchange for the sales price plus certain costs if we had been unable to satisfy a certain post-closing requirement by March 1, 2010. Accordingly, the assets, liabilities and operations of the building remained in our Consolidated Financial Statements during this contingency period. We satisfied this post-closing requirement in the first quarter of 2010 and accordingly, met the requirements to record a completed sale in the first quarter of 2010.

Capitalized Ground Lease Obligation

The capitalized ground lease obligation represents an obligation to the lessor of land on which we constructed a building. We are obligated to make fixed payments to the lessor through October 2022 and the lease provides for fixed price purchase options in the ninth and tenth years of the lease. We intend to exercise the purchase option in order to prevent an economic penalty related to conveying the building to the lessor at the expiration of the lease. The net present value of the fixed rental payments and purchase option through the ninth year was calculated at the inception of the lease using a discount rate of 7.1%. The assets and liabilities under the capital lease are recorded at the lower of the present value of minimum lease payments or the fair value. The liability accretes into interest expense each month for the difference between the interest rate on the financing obligation and the fixed payments. The accretion will continue until the liability equals the purchase option of the land in the ninth year of the lease.
Commitments and Contingencies
Commitments and Contingencies
9.      Commitments and Contingencies

Operating Ground Leases

Certain Wholly Owned Properties are subject to operating ground leases. Rental payments on these leases are adjusted periodically based on either the consumer price index or on a pre-determined schedule. Total rental property expense recorded for operating ground leases was $1.5 million, $1.6 million and $1.4 million for the years ended December 31, 2010, 2009 and 2008, respectively.

The following table sets forth our scheduled obligations for future minimum payments on operating ground leases at December 31, 2010:

2011                                                                          
 
$
1,129
 
2012                                                                          
   
1,150
 
2013                                                                          
   
1,171
 
2014                                                                          
   
1,193
 
2015                                                                          
   
1,217
 
Thereafter                                                                          
   
29,897
 
   
$
35,757
 

Completion Contracts

We have approximately $8.6 million of completion contracts at December 31, 2010. Completion contracts relate to payments to be made under current contracts for various development/construction projects, which we expect to pay in 2011.

Environmental Matters

Substantially all of our in-service and development properties have been subjected to Phase I environmental assessments and, in certain instances, Phase II environmental assessments. Such assessments and/or updates have not revealed, nor are we aware of, any environmental liability that we believe would have a material adverse effect on our Consolidated Financial Statements.

DLF I Obligation

At the formation of DLF I, the amount our partner contributed in cash to the venture and subsequently distributed to us was determined to be $7.2 million in excess of the amount required based on its ownership interest and the agreed-upon value of the real estate assets. We are required to repay this amount over 14 years, beginning in the first quarter of 1999. The $7.2 million was discounted to net present value of $3.8 million using a discount rate of 9.62% specified in the agreement. Payments of $0.6 million were made in each of the years ended December 31, 2010, 2009 and 2008. The balance at December 31, 2010 and 2009 is $1.2 million and $1.6 million, respectively, which is included in accounts payable, accrued expenses and other liabilities.

Litigation, Claims and Assessments

We are from time to time a party to a variety of legal proceedings, claims and assessments arising in the ordinary course of our business. We regularly assess the liabilities and contingencies in connection with these matters based on the latest information available. For those matters where it is probable that we have incurred or will incur a loss and the loss or range of loss can be reasonably estimated, the estimated loss is accrued and charged to income in our Consolidated Financial Statements. In other instances, because of the uncertainties related to both the probable outcome and amount or range of loss, a reasonable estimate of liability, if any, cannot be made. Based on the current expected outcome of such matters, none of these proceedings, claims or assessments is expected to have a material adverse effect on our business, financial condition, results of operations or cash flows.
Noncontrolling Interests
Noncontrolling Interests
10.    Noncontrolling Interests

Noncontrolling Interests in the Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. Net income attributable to noncontrolling interests in the Operating Partnership is computed by applying the weighted average percentage of Common Units not owned by the Company during the period, as a percent of the total number of outstanding Common Units, to the Operating Partnership’s net income for the period after deducting distributions on Preferred Units. When a noncontrolling unitholder redeems a Common Unit for a share of Common Stock or cash, the noncontrolling interests in the Operating Partnership are reduced and the Company’s share in the Operating Partnership is increased by the fair value of each security at the time of redemption.

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

   
Years Ended December 31,
 
   
2010
 
2009
 
Beginning noncontrolling interests in the Operating Partnership
 
$
129,769
 
$
111,278
 
Adjustments of noncontrolling interests in the Operating Partnership to fair value
   
(2,721
)
 
27,717
 
Conversion of Common Units to Common Stock
   
(3,061
)
 
(5,591
)
Net income attributable to noncontrolling interests in the Operating Partnership
   
3,320
   
3,197
 
Distributions to noncontrolling interests in the Operating Partnership
   
(6,469
)
 
(6,832
)
Total noncontrolling interests in the Operating Partnership
 
$
120,838
 
$
129,769
 

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

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Net income available for common stockholders
 
$
61,790
 
$
51,778
 
$
22,080
 
Increase in additional paid in capital from conversion of Common Units to Common Stock
   
3,060
   
5,589
   
2,021
 
Change from net income available for common stockholders and transfers from noncontrolling interests
 
$
64,850
 
$
57,367
 
$
24,101
 

Noncontrolling Interests in Consolidated Affiliates

At December 31, 2010, noncontrolling interests in consolidated affiliates, a component of equity, relates to our respective joint venture partners’ 50.0% interest in Markel. Our joint venture partner is an unrelated third party.
Disclosure About Fair Value of Financial Instruments
Disclosure About Fair Value of Financial Instruments
11.    Disclosure About Fair Value of Financial Instruments

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

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

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

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

We had no Level 2 assets or liabilities at December 31, 2010 and 2009.

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

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

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

       
Level 1
 
Level 3
 
   
December 31, 2010
 
Quoted Prices in Active Markets for Identical Assets or Liabilities
 
Significant Unobservable Inputs
 
Assets:
                   
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)
 
$
3,479
 
$
3,479
 
$
—
 
Tax increment financing bond (in prepaid expenses and other assets)
   
15,699
   
—
   
15,699
 
Total Assets
 
$
19,178
 
$
3,479
 
$
15,699
 
                     
Noncontrolling Interests in the Operating Partnership
 
$
120,838
 
$
120,838
 
$
—
 
                     
Liability:
                   
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)
 
$
4,091
 
$
4,091
 
$
—
 


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

The following table sets forth the changes in our Level 3 asset:

   
December 31,
 
   
2010
 
2009
 
Asset:
             
Tax Increment Financing Bond
             
Beginning balance
 
$
16,871
 
$
17,468
 
Principal repayment
   
(995
)
 
(890
)
Unrealized gain/(loss) (in AOCL)
   
(177
)
 
293
 
Ending balance
 
$
15,699
 
$
16,871
 

In 2007, we acquired a tax increment financing bond associated with a property developed by us. This bond amortizes to maturity in 2020. The estimated fair value at December 31, 2010 was $2.5 million below the outstanding principal due on the bond. If the yield-to-maturity used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.7 million lower or higher, respectively, as of December 31, 2010. Currently, we intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us and, therefore, we have recorded no credit losses related to the bond in the years ended December 31, 2010 and 2009. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

The following table sets forth the carrying amounts and fair values of our financial instruments not disclosed elsewhere:

   
Carrying Amount
 
Fair Value
 
December 31, 2010
             
Mortgages and notes receivable                                                                                                
 
$
19,044
 
$
19,093
 
Mortgages and notes payable                                                                                                
 
$
1,522,945
 
$
1,581,518
 
Financing obligations (including Harborview financing obligation)
 
$
33,114
 
$
23,880
 
               
December 31, 2009
             
Mortgages and notes receivable                                                                                                
 
$
3,143
 
$
3,143
 
Mortgages and notes payable                                                                                                
 
$
1,469,155
 
$
1,440,317
 
Financing obligations (including Harborview financing obligation)
 
$
37,706
 
$
31,664
 

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

Common Stock Offerings

In 2009, the Company sold 7.0 million shares of Common Stock for net proceeds of $144.1 million. We used a portion of the net proceeds of the offering to retire the remaining $107.2 million principal amount of a two-tranched secured loan. The remaining net proceeds from the offering were used to reduce the amount of borrowings outstanding under our revolving credit facility.

In 2008, the Company sold 5.5 million shares of Common Stock for net proceeds of $195.0 million. We used a portion of the net proceeds of the offering to repurchase 53,845 outstanding 8.625% Series A Cumulative Redeemable Preferred Shares for an aggregate purchase price of $52.5 million. The remaining net proceeds from the offering were used to reduce the amount of borrowings outstanding under our revolving credit facility.

Common Stock Dividends

Dividends declared and paid per share of Common Stock aggregated $1.70 for each of the years ended December 31, 2010, 2009 and 2008.

The following table sets forth the estimated taxability to the common stockholders of dividends per share for federal income tax purposes:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Ordinary income                                                                                            
 
$
0.41
 
$
1.09
 
$
0.97
 
Capital gains                                                                                            
   
0.44
   
0.60
   
0.20
 
Return of capital
   
0.85
   
0.01
   
0.53
 
Total
 
$
1.70
 
$
1.70
 
$
1.70
 

Our tax returns have not been examined by the Internal Revenue Service (“IRS”) and, therefore, the taxability of dividends is subject to change.

Preferred Stock

The following table sets forth our Preferred Stock:

 
Preferred Stock Issuances
 
 
Issue Date
 
Number of Shares Outstanding
 
Carrying Value
 
Liquidation
Preference Per Share
 
Optional Redemption Date
 
Annual Dividends Payable Per Share
 
       
(in thousands)
                       
December 31, 2010 and 2009:
                                 
8.625% Series A Cumulative Redeemable
 
2/12/1997
   
29
 
$
29,092
 
$
1,000
 
2/12/2027
 
$
86.25
 
8.000% Series B Cumulative Redeemable
 
9/25/1997
   
2,100
 
$
52,500
 
$
25
 
9/25/2002
 
$
2.00
 

The following table sets forth the estimated taxability to the preferred stockholders of dividends per share for federal income tax purposes:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
8.625% Series A Cumulative Redeemable:
                   
Ordinary income                                                                                            
 
$
41.80
 
$
55.86
 
$
71.20
 
Capital gains
   
44.45
   
30.39
   
15.05
 
Total
 
$
86.25
 
$
86.25
 
$
86.25
 
                     
8.000% Series B Cumulative Redeemable:
                   
Ordinary income                                                                                            
 
$
0.97
 
$
1.30
 
$
1.65
 
Capital gains
   
1.03
   
0.70
   
0.35
 
Total
 
$
2.00
 
$
2.00
 
$
2.00
 

In 2008, we repurchased 53,845 outstanding 8.625% Series A Preferred Shares for an aggregate purchase price of $52.5 million.

Warrants

Warrants to acquire Common Stock were issued in 1997 and 1999 in connection with property acquisitions. In 2010 and 2009, there were no warrants exercised. In 2008, 10,000 warrants with an exercise price of $32.50 were exercised. At December 31, 2010, there are 15,000 warrants outstanding with an exercise price of $32.50. These warrants have no expiration date.

Dividend Reinvestment Plan

We have a Dividend Reinvestment and Stock Purchase Plan under which holders of Common Stock may elect to automatically reinvest their dividends in additional shares of Common Stock and make optional cash payments for additional shares of Common Stock. We may elect to satisfy such obligations by issuing additional shares of Common Stock or instructing the plan administrator to purchase Common Stock in the open market.
Employee Benefit Plans
Employee Benefit Plans
13.    Employee Benefit Plans

Officer, Management and Director Compensation Programs

Our officers participate in an annual non-equity incentive program whereby they are eligible for incentive cash payments based on a percentage of their annual base salary. In addition to considering the pay practices of our peer group in determining each officer’s incentive payment percentage, the officer’s ability to influence our performance is also considered. Each officer has a target annual non-equity incentive payment percentage that ranges from 25% to 130% of base salary depending on the officer’s position. The officer’s actual incentive payment for the year is the product of the target annual incentive payment percentage times a “performance factor,” which can range from zero to 200%. This performance factor depends upon the relationship between how various performance criteria compare with predetermined goals. For an officer who has division responsibilities, goals for certain performance criteria are based partly on the division’s actual performance relative to that division’s established goals and partly on actual total performance. Incentive payments are accrued and expensed in the year earned and are generally paid in the first quarter of the following year.

Certain other members of management participate in an annual non-equity incentive program whereby a target annual cash incentive payment is established based upon the job responsibilities of their position. Incentive payment eligibility ranges from 10% to 30% of annual base salary. The actual incentive payment is determined by our overall performance and the individual’s performance during each year. These incentive payments are also accrued and expensed in the year earned and are generally paid in the first quarter of the following year.

The following table sets forth the number of shares of Common Stock reserved for future issuance:

   
December 31,
 
   
2010
 
2009
 
Outstanding stock options and warrants                                                                                            
   
1,495,196
   
1,482,773
 
Possible future issuance under equity incentive plans
   
2,642,620
   
3,000,000
 
     
4,137,816
   
4,482,773
 

Our officers generally receive annual grants of stock options and restricted stock on or about March 1 of each year. Restricted stock grants are also made annually to directors and certain non-officer employees. At December 31, 2010, there was remaining availability of 2.6 million shares of Common Stock reserved for future issuance under the 2009 Long Term Equity Incentive Plan, of which no more than 0.8 million can be in the form of restricted stock. At December 31, 2010, we had 128.3 million remaining shares of Common Stock authorized to be issued under our charter.

Additional total return-based restricted stock may be issued at the end of the three-year periods if actual performance exceeds certain levels of performance. Such additional shares, if any, would be fully vested when issued. No expense is recorded for additional shares of total return-based restricted stock that may be issued at the end of the three-year period since that possibility is already reflected in the grant date fair value.

Dividends received on restricted stock are non-forfeitable and are paid at the same rate and on the same date as on shares of Common Stock. Dividends paid on subsequently forfeited shares are expensed.

During the years ended December 31, 2010, 2009 and 2008, we recognized $6.6 million, $6.6 million and $6.7 million, respectively, of share-based compensation expense. Because we generally do not pay income taxes we do not realize tax benefits on share-based payments. At December 31, 2010, there was $6.2 million of total unrecognized share-based compensation costs, which will be recognized over vesting periods that have a weighted average remaining term of 2.1 years.

- Stock Options

Stock options issued prior to 2005 vest ratably over four years and remain outstanding for 10 years. Stock options issued beginning in 2005 vest ratably over a four-year period and remain outstanding for seven years. The value of all options as of the date of grant is calculated using the Black-Scholes option-pricing model and is amortized over the respective vesting or service period. The fair values of options granted during 2010, 2009 and 2008 were $4.96, $1.82 and $3.18, respectively, per option. The fair values of the options granted were determined at the grant dates using the following assumptions:

   
2010
 
2009
 
2008
 
Risk free interest rate (1)                                                                                            
 
2.58
%
2.31
%
2.67
%
Common stock dividend yield (2)                                                                                            
 
5.85
%
8.96
%
5.77
%
Expected volatility (3)                                                                                            
 
32.2
%
29.9
%
22.64
%
Average expected option life (years) (4)                                                                                            
 
5.75
 
5.75
 
5.75
 

__________
 
(1)
Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the option grants.
 
(2)
The dividend yield is calculated utilizing the dividends paid for the previous one-year period and the per share price of Common Stock on the date of grant.
 
(3)
Based on the historical volatility of Common Stock over a period relevant to the related stock option grant.
 
(4)
The average expected option life is based on an analysis of our historical data.

The following table sets forth stock option grants:

   
Options Outstanding
 
   
Number of Shares
 
Weighted Average Exercise Price
 
Balances at December 31, 2007                                                                                                       
 
1,909,821
 
$
26.45
 
Options granted                                                                                                       
 
319,091
   
29.48
 
Options cancelled                                                                                                       
 
(16,331
)
 
31.66
 
Options exercised                                                                                                       
 
(723,331
)
 
22.95
 
Balances at December 31, 2008                                                                                                       
 
1,489,250
   
28.74
 
Options granted                                                                                                       
 
394,044
   
19.00
 
Options cancelled                                                                                                       
 
(111,590
)
 
27.65
 
Options exercised                                                                                                       
 
(303,931
)
 
24.18
 
Balances at December 31, 2009                                                                                                       
 
1,467,773
   
27.15
 
Options granted                                                                                                       
 
190,826
   
29.05
 
Options exercised                                                                                                       
 
(178,403
)
 
22.54
 
Balances at December 31, 2010 (1) (2)                                                                                                       
 
1,480,196
 
$
27.95
 

__________
 
(1)
The outstanding options at December 31, 2010 had a weighted average remaining life of 3.7 years and intrinsic value of $7.2 million.
 
(2)
We have 806,782 options exercisable at December 31, 2010 with weighted average exercise price of $30.10, weighted average remaining life of 2.6 years and intrinsic value of $2.5 million. Of these exercisable options, 298,046 had exercise prices higher than the market price of our Common Stock at December 31, 2010.

Cash received or receivable from options exercised was $4.4 million, $7.4 million and $15.9 million for the years ended December 31, 2010, 2009 and 2008, respectively. The total intrinsic value of options exercised during the years ended December 31, 2010, 2009 and 2008 was $1.7 million, $2.0 million and $9.6 million, respectively. The total intrinsic value of options outstanding at December 31, 2010, 2009 and 2008 was $7.2 million, $10.3 million and $1.7 million, respectively. We generally do not permit the net cash settlement of exercised stock options, but do permit net share settlement so long as the shares received are held for at least one year. We have a policy of issuing new shares to satisfy stock option exercises.

 - Time-Based Restricted Stock

Shares of time-based restricted stock issued to officers and employees generally vest 25% on the first, second, third and fourth anniversary dates, respectively. Shares of time-based restricted stock issued to directors generally vest 25% on January 1 of each successive year after the grant date. The value of grants of time-based restricted stock is based on the market value of Common Stock as of the date of grant and is amortized to expense over the respective vesting or service periods.

The following table sets forth time-based restricted stock grants:

   
Number of Shares
 
Weighted Average Grant Date Fair Value
 
Restricted shares outstanding at December 31, 2007                                                                                                       
 
356,497
 
$
34.89
 
Awarded and issued (1)                                                                                                       
 
92,150
   
30.13
 
Vested (2)                                                                                                       
 
(113,823
)
 
33.13
 
Forfeited                                                                                                       
 
(5,029
)
 
32.11
 
Restricted shares outstanding at December 31, 2008                                                                                                       
 
329,795
   
34.21
 
Awarded and issued (1)                                                                                                       
 
128,384
   
19.33
 
Vested (2)                                                                                                       
 
(132,779
)
 
33.38
 
Forfeited                                                                                                       
 
(9,326
)
 
31.26
 
Restricted shares outstanding at December 31, 2009                                                                                                       
 
316,074
   
28.60
 
Awarded and issued (1)                                                                                                       
 
88,930
   
29.05
 
Vested (2)                                                                                                       
 
(138,745
)
 
31.81
 
Forfeited                                                                                                       
 
(1,933
)
 
25.86
 
Restricted shares outstanding at December 31, 2010                                                                                                       
 
264,326
 
$
27.08
 

__________
 
(1)
The fair value at grant date of time-based restricted stock issued during the years ended December 31, 2010, 2009 and 2008 was $2.6 million, $2.5 million and $2.8 million, respectively.
 
(2)
The vesting date fair value of time-based restricted stock that vested during the years ended December 31, 2010, 2009 and 2008 was $4.3 million, $2.9 million and $4.8 million, respectively.

 - Total Return-Based and Performance-Based Restricted Stock

During 2010, 2009 and 2008, we issued shares of total return-based restricted stock to officers that will vest from zero to 250% based on (1) our absolute total returns for the three-year periods ended December 31, 2010, 2011 and 2012, respectively, relative to defined target returns and (2) whether our total return exceeds the average total returns of a selected group of peer companies. The grant date fair value of such shares of total return-based restricted stock was determined to be 101%, 53.6% and 100%, respectively, of the market value of a share of Common Stock as of the grant date and is amortized over the respective three-year period.

During 2008, we also issued shares of performance-based restricted stock to officers that will vest pursuant to certain performance-based criteria. The performance-based criteria are based on whether or not we meet or exceed at the end of three-year performance periods certain operating and financial goals established under our Strategic Plan. To the extent actual performance equals or exceeds threshold performance goals, the portion of shares of performance-based restricted stock that vest can range from 50% to 100%. If actual performance does not meet such threshold goals, none of the performance-based restricted stock will vest. The fair value of performance-based restricted share grants is based on the market value of Common Stock as of the date of grant and the estimated performance to be achieved at the end of the three-year period. Such fair value is being amortized to expense during the period from grant date to the vesting dates, adjusting for the expected level of vesting that will occur at those dates.

The following table sets forth total return-based and performance-based restricted stock grants:

   
Number of Shares
 
Weighted Average Grant Date Fair Value
 
Restricted shares outstanding at December 31, 2007                                                                                                       
 
135,472
 
$
32.52
 
Awarded and issued (1)                                                                                                       
 
77,878
   
29.75
 
Vested (2)                                                                                                       
 
(59,892
)
 
26.82
 
Forfeited                                                                                                       
 
(2,116
)
 
29.23
 
Restricted shares outstanding at December 31, 2008                                                                                                       
 
151,342
   
33.39
 
Awarded and issued (1)                                                                                                       
 
127,594
   
15.01
 
Vested (2)                                                                                                       
 
(68,929
)
 
32.66
 
Forfeited                                                                                                       
 
(7,232
)
 
34.14
 
Restricted shares outstanding at December 31, 2009                                                                                                       
 
202,775
   
22.05
 
Awarded and issued (1)                                                                                                       
 
77,624
   
29.05
 
Vested (2)                                                                                                       
 
(47,257
)
 
38.50
 
Forfeited                                                                                                       
 
(1,307
)
 
22.99
 
Restricted shares outstanding at December 31, 2010                                                                                                       
 
231,835
 
$
21.03
 

__________
 
(1)
The fair value at grant date of performance-based and total return-based restricted stock issued during the years ended December 31, 2010, 2009 and 2008 was $2.3 million, $1.9 million and $2.3 million, respectively.
 
(2)
The vesting date fair value of performance-based and total return-based restricted stock that vested during the years ended December 31, 2010, 2009 and 2008 was $1.6 million, $2.6 million and $2.4 million, respectively.

Retirement Plan

We have adopted a retirement plan applicable to all employees, including officers, who, at the time of retirement, have at least 30 years of continuous qualified service or are at least 55 years old and have at least 10 years of continuous qualified service. Subject to advance retirement notice and execution of a non-compete agreement with us, eligible retirees are entitled to receive a pro rata amount of the annual incentive payment earned during the year of retirement. Stock options and restricted stock granted by us to such eligible retiree during his or her employment would be non-forfeitable and vest according to the terms of their original grants. The benefits of this retirement plan apply only to restricted stock and stock option grants and have been phased in 25% on March 1, 2006 and 25% on each anniversary thereof. For employees who meet the age and service eligibility requirements, 75% of their 2008 grants and 100% of their grants thereafter were deemed fully vested at the grant date, which increased compensation expense by approximately $1.1 million, $0.6 million and $0.6 million in the years ended December 31, 2010, 2009 and 2008, respectively.

Deferred Compensation

We have a non-qualified deferred compensation plan pursuant to which each officer and director could elect to defer a portion of their base salary and/or annual non-equity incentive payment (or director fees) which are invested by us in various mutual funds. We indefinitely suspended this option to defer compensation earned after January 1, 2010. These investments are recorded at fair value which aggregated $3.5 million and $6.1 million at December 31, 2010 and 2009, respectively, and are included in prepaid expenses and other assets, with an offsetting deferred compensation liability recorded in accounts payable, accrued expenses and other liabilities. Such deferred compensation is expensed in the period earned by the officers and directors. Deferred amounts ultimately payable to the officers and directors are based on the value of the related mutual fund investments. Accordingly, changes in the value of the marketable mutual fund investments are recorded in interest and other income and the corresponding offsetting changes in the deferred compensation liability are recorded in general and administration expense. As a result, there is no effect on our net income subsequent to the time the compensation is deferred and fully funded.

The following table sets forth our deferred compensation liability:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Beginning deferred compensation liability                                                                                     
 
$
6,898
 
$
6,522
 
$
7,867
 
Contributions to deferred compensation plans
   
229
   
—
   
1,574
 
Mark-to-market adjustment to deferred compensation (general and administrative expense)
   
246
   
1,497
   
(2,177
)
Distributions from deferred compensation plans
   
(3,282
)
 
(1,121
)
 
(742
)
Total deferred compensation liability
 
$
4,091
 
$
6,898
 
$
6,522
 

401(k) Savings Plan

We have a 401(k) savings plan covering substantially all employees who meet certain age and employment criteria. We contribute amounts for each participant at a rate of 75% of the employee’s contribution (up to 6% of each employee’s bi-weekly salary and cash incentives subject to statutory limits). During the years ended December 31, 2010, 2009 and 2008, we contributed $1.0 million, $1.0 million and $1.1 million, respectively, to the 401(k) savings plan. The assets of this qualified plan are not included in our Consolidated Financial Statements since the assets are not owned by us. Administrative expenses of the plan are paid by us.

Employee Stock Purchase Plan

We have an Employee Stock Purchase Plan pursuant to which employees generally may contribute up to 25.0% of their base and annual non-equity incentive compensation for the purchase of Common Stock. At the end of each three-month offering period, the contributions in each participant's account balance, which includes accrued dividends, is applied to acquire shares of Common Stock at a cost that was calculated during 2010, 2009 and 2008 at 85.0% of the lower of the average closing price on the New York Stock Exchange on the five consecutive days preceding the first day of the quarter or the five days preceding the last day of the quarter. In the years ended December 31, 2010, 2009 and 2008, the Company issued 27,378, 37,287 and 29,324 shares, respectively, of Common Stock under the Employee Stock Purchase Plan. The discount on newly issued shares is expensed by us as additional compensation and aggregated $0.1 million, $0.3 million and $0.2 million in the years ended December 31, 2010, 2009 and 2008, respectively.
Comprehensive Income and Accumulated Other Comprehensive Loss
Comprehensive Income and Accumulated Other Comprehensive Loss
14.    Comprehensive Income and Accumulated Other Comprehensive Loss

Comprehensive income represents net income plus the changes in certain amounts deferred in accumulated other comprehensive loss related to hedging activities and changes in fair market value of an available for-sale security. The following table sets forth the components of comprehensive income:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Net income                                                                                           
 
$
72,303
 
$
61,694
 
$
35,610
 
Other comprehensive income:
                   
Unrealized gain/(loss) on tax increment financing bond
   
(177
)
 
293
   
(2,659
)
Unrealized gains/(losses) on cash flow hedges
   
—
   
937
   
(1,376
)
Amortization of settled cash flow hedges
   
237
   
(249
)
 
181
 
Settlement of past cash flow hedge from disposition of investment in unconsolidated affiliate
   
103
   
—
   
—
 
Total other comprehensive income/(loss)
   
163
   
981
   
(3,854
)
Total comprehensive income
 
$
72,466
 
$
62,675
 
$
31,756
 

Accumulated other comprehensive loss represents certain amounts deferred related to hedging activities and an available for-sale security. The following table sets forth the components of accumulated other comprehensive loss:

   
December 31,
 
   
2010
 
2009
 
Tax increment financing bond                                                                                                    
 
$
2,543
 
$
2,366
 
Settled cash flow hedges
   
1,105
   
1,445
 
   
$
3,648
 
$
3,811
 

Rental and Other Revenues; Rental Property and Other Expenses
Rental and Other Revenues; Rental Property and Other Expenses
15.    Rental and Other Revenues; Rental Property And Other Expenses

Our real estate assets are leased to customers under operating leases. The minimum rental amounts under the leases are generally subject to scheduled fixed increases. Generally, the leases also require that the customers reimburse us for increases in certain costs above the base-year costs. The following table sets forth rental and other revenues from continuing operations:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Contractual rents, net                                                                                            
 
$
400,383
 
$
394,503
 
$
382,885
 
Straight-line rental income, net                                                                                            
   
11,205
   
3,521
   
6,192
 
Amortization of lease incentives                                                                                            
   
(1,239
)
 
(1,100
)
 
(1,020
)
Property operating expense recoveries, net                                                                                            
   
41,906
   
44,561
   
45,849
 
Lease termination fees                                                                                            
   
2,992
   
1,813
   
2,561
 
Fee income                                                                                            
   
5,466
   
5,155
   
5,149
 
Other miscellaneous operating revenues                                                                                            
   
2,608
   
1,701
   
3,652
 
   
$
463,321
 
$
450,154
 
$
445,268
 

The following table sets forth scheduled future minimum base rents to be received from customers for leases in effect at December 31, 2010 for the Wholly Owned Properties:

2011                                                                                
 
$
401,997
 
2012                                                                                
   
362,784
 
2013                                                                                
   
312,210
 
2014                                                                                
   
258,113
 
2015                                                                                
   
203,491
 
Thereafter                                                                                
   
665,366
 
   
$
2,203,961
 

The following table sets forth rental property and other expenses from continuing operations:

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Utilities, insurance and real estate taxes                                                                                            
 
$
91,243
 
$
91,609
 
$
86,363
 
Maintenance, cleaning and general building                                                                                            
   
57,170
   
56,413
   
57,925
 
Property management and administrative expenses
   
11,400
   
11,806
   
11,533
 
Other miscellaneous operating expenses                                                                                            
   
4,575
   
2,984
   
4,163
 
   
$
164,388
 
$
162,812
 
$
159,984
 

Discontinued Operations
Discontinued Operations
16.    Discontinued Operations

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

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Rental and other revenues                                                                                           
 
$
1,432
 
$
9,156
 
$
20,597
 
Operating expenses:
                   
Rental property and other expenses
   
656
   
3,476
   
7,887
 
Depreciation and amortization
   
365
   
1,855
   
4,785
 
Impairment of assets held for use
   
—
   
10,964
   
29,439
 
Total operating expenses
   
1,021
   
16,295
   
42,111
 
Interest expense                                                                                           
   
—
   
67
   
—
 
Other income                                                                                           
   
—
   
3
   
31
 
Income/(loss) before gains/(losses) on disposition of discontinued operations
   
411
   
(7,203
)
 
(21,483
)
Net gains/(losses) on disposition of discontinued operations
   
(86
)
 
21,466
   
18,485
 
Total discontinued operations
 
$
325
 
$
14,263
 
$
(2,998
)
                     
Carrying value of assets held for sale and assets sold that qualified for discontinued operations during the year
 
$
28,006
 
$
82,986
 
$
132,489
 

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

   
December 31,
 
   
2010
 
2009
 
Assets:
             
Land
 
$
—
 
$
867
 
Buildings and tenant improvements
   
20
   
3,876
 
Land held for development
   
1,197
   
1,197
 
Accumulated depreciation
   
—
   
(1,484
)
Net real estate assets
   
1,217
   
4,456
 
Accrued straight line rents receivable
   
—
   
289
 
Deferred leasing costs, net
   
—
   
209
 
Prepaid expenses and other assets
   
32
   
77
 
Real estate and other assets, net, held for sale
 
$
1,249
 
$
5,031
 
Tenant security deposits, deferred rents and accrued costs (1)
 
$
12
 
$
12
 
__________
 
(1)
Included in accounts payable, accrued expenses and other liabilities.
 
Earnings Per Unit
Earnings Per Share
17.    Earnings Per Share

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

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Earnings per common share - basic:
                   
Numerator:
                   
Income from continuing operations
 
$
71,978
 
$
47,431
 
$
38,608
 
Net (income) attributable to noncontrolling  interests in the Operating Partnership from continuing operations
   
(3,303
)
 
(2,394
)
 
(1,766
)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
   
(485
)
 
(11
)
 
(2,041
)
Dividends on preferred stock
   
(6,708
)
 
(6,708
)
 
(9,804
)
Excess of preferred stock redemption/repurchase cost over carrying value
   
—
   
—
   
(108
)
Income from continuing operations available for common stockholders
   
61,482
   
38,318
   
24,889
 
Income/(loss) from discontinued operations
   
325
   
14,263
   
(2,998
)
Net (income)/loss attributable to noncontrolling interests in the Operating Partnership from discontinued operations
   
(17
)
 
(803
)
 
189
 
Income/(loss) from discontinued operations available for common stockholders
   
308
   
13,460
   
(2,809
)
Net income available for common stockholders
 
$
61,790
 
$
51,778
 
$
22,080
 
Denominator:
                   
Denominator for basic earnings per Common Share – weighted average shares (1) (2)
   
71,578
   
67,971
   
59,320
 
Earnings per common share - basic:
                   
Income from continuing operations available for common stockholders
 
$
0.86
 
$
0.56
 
$
0.42
 
Income/(loss) from discontinued operations available for common stockholders
   
—
   
0.20
   
(0.05
)
Net income available for common stockholders
 
$
0.86
 
$
0.76
 
$
0.37
 
Earnings per common share - diluted:
                   
Numerator:
                   
Income from continuing operations
 
$
71,978
 
$
47,431
 
$
38,608
 
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations
   
(485
)
 
(11
)
 
(2,041
)
Dividends on preferred stock
   
(6,708
)
 
(6,708
)
 
(9,804
)
Excess of preferred stock redemption/repurchase cost over carrying value
   
—
   
—
   
(108
)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
   
64,785
   
40,712
   
26,655
 
Income/(loss) from discontinued operations available for common stockholders
   
325
   
14,263
   
(2,998
)
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership
 
$
65,110
 
$
54,975
 
$
23,657
 
Denominator:
                   
Denominator for basic earnings per Common Share –weighted average shares (1) (2)
   
71,578
   
67,971
   
59,320
 
Add:
                   
Stock options using the treasury method
   
198
   
79
   
201
 
Noncontrolling interests partnership units
   
3,802
   
4,029
   
3,971
 
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)
   
75,578
   
72,079
   
63,492
 
Earnings per common share - diluted:
                   
Income from continuing operations available for common stockholders
 
$
0.86
 
$
0.56
 
$
0.42
 
Income/(loss) from discontinued operations available for common stockholders
   
—
   
0.20
   
(0.05
)
Net income available for common stockholders
 
$
0.86
 
$
0.76
 
$
0.37
 

__________
 
 
(1)
Options and warrants aggregating approximately 0.7 million, 1.0 million and 1.4 million shares were outstanding during the years ended December 31, 2010, 2009 and 2008, respectively, but were not included in the computation of diluted earnings per share because the impact of including such shares would be anti-dilutive to the earnings per share calculation.
 
(2)
Includes all unvested restricted stock since dividends on such restricted stock are non-forfeitable.
Income Taxes
Income Taxes
18.    Income Taxes

Our Consolidated Financial Statements include the operations of our taxable REIT subsidiary, which is subject to corporate, state and local income taxes. As a REIT, we may also be subject to certain federal excise taxes if we engage in certain types of transactions.

The minimum dividend per share of Common Stock required for us to maintain our REIT status was $0.32, $0.89 and $0.76 per share in 2010, 2009 and 2008, respectively. Continued qualification as a REIT depends on our ability to satisfy the dividend distribution tests, stock ownership requirements and various other qualification tests prescribed in the Code. The tax basis of our assets (net of accumulated tax depreciation and amortization) and liabilities was approximately $2.4 billion and $1.6 billion at both December 31, 2010 and 2009.

No provision has been made for federal income taxes during the years ended December 31, 2010, 2009 and 2008 because the Company qualified as a REIT, distributed the necessary amount of taxable income and, therefore, incurred no federal income tax expense during the periods. We recorded state income tax expense in rental property and other expenses of $0.08 million, $0.6 million and $0.2 million for the years ended December 31, 2010, 2009 and 2008, respectively. The taxable REIT subsidiary has operated at a cumulative taxable loss through December 31, 2010 of approximately $7.2 million. In addition to the $2.8 million deferred tax asset for these cumulative tax loss carryforwards, the taxable REIT subsidiary also had net deferred tax liabilities of approximately $2.0 million comprised primarily of tax versus book basis differences in certain investments and depreciable assets held by the taxable REIT subsidiary. Because the future tax benefit of the cumulative losses is not assured, the approximate $0.8 million net deferred tax asset position of the taxable REIT subsidiary has been fully reserved as management does not believe that it is more likely than not that the net deferred tax asset will be realized. The tax benefit of the cumulative losses could be recognized for financial reporting purposes in future periods to the extent the taxable REIT subsidiary generates sufficient taxable income.

We are subject to federal, state and local income tax examinations by tax authorities for 2007 through 2010.
Segment Information
Segment Information
19.    Segment Information

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

Our accounting policies of the segments are the same as those used in our Consolidated Financial Statements. All operations are within the United States and, at December 31, 2010, no single customer of the Wholly Owned Properties generated more than 10% of our consolidated revenues on an annualized basis.

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

   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Rental and Other Revenues: (1)
                   
Office:
                   
Atlanta, GA                                                                
 
$
48,051
 
$
48,704
 
$
47,065
 
Greenville, SC                                                                
   
13,616
   
14,010
   
13,982
 
Kansas City, MO                                                                
   
14,822
   
14,839
   
15,349
 
Memphis, TN                                                                
   
34,982
   
30,642
   
25,852
 
Nashville, TN                                                                
   
59,151
   
60,551
   
60,192
 
Orlando, FL                                                                
   
11,615
   
11,809
   
11,402
 
Piedmont Triad, NC                                                                
   
23,350
   
23,391
   
23,418
 
Raleigh, NC                                                                
   
75,604
   
72,521
   
69,696
 
Richmond, VA                                                                
   
47,191
   
46,617
   
47,972
 
Tampa, FL                                                                
   
72,522
   
67,294
   
65,854
 
Total Office Segment                                                           
   
400,904
   
390,378
   
380,782
 
Industrial:
                   
Atlanta, GA                                                                
   
15,159
   
15,611
   
15,721
 
Piedmont Triad, NC                                                                
   
12,376
   
12,778
   
12,674
 
Total Industrial Segment                                                           
   
27,535
   
28,389
   
28,395
 
Retail:
                   
Kansas City, MO                                                                
   
33,527
   
29,997
   
34,633
 
Piedmont Triad, NC                                                                
   
—
   
185
   
221
 
Raleigh, NC                                                                
   
135
   
120
   
36
 
Total Retail Segment                                                           
   
33,662
   
30,302
   
34,890
 
Residential:
                   
Kansas City, MO                                                                
   
1,220
   
1,085
   
1,201
 
Total Residential Segment                                                           
   
1,220
   
1,085
   
1,201
 
Total Rental and Other Revenues                                                                            
 
$
463,321
 
$
450,154
 
$
445,268
 


   
Years Ended December 31,
 
   
2010
 
2009
 
2008
 
Net Operating Income: (1)
                   
Office:
                   
Atlanta, GA                                                                
 
$
30,368
 
$
30,754
 
$
28,837
 
Greenville, SC                                                                
   
8,145
   
8,706
   
8,812
 
Kansas City, MO                                                                
   
8,881
   
9,071
   
9,248
 
Memphis, TN                                                                
   
20,829
   
17,697
   
15,146
 
Nashville, TN                                                                
   
39,289
   
39,067
   
39,654
 
Orlando, FL                                                                
   
6,259
   
6,267
   
6,306
 
Piedmont Triad, NC                                                                
   
15,323
   
15,322
   
14,916
 
Raleigh, NC                                                                
   
52,258
   
48,779
   
45,745
 
Richmond, VA                                                                
   
32,052
   
32,022
   
32,225
 
Tampa, FL                                                                
   
45,482
   
40,083
   
39,349
 
Total Office Segment                                                           
   
258,886
   
247,768
   
240,238
 
Industrial:
                   
Atlanta, GA                                                                
   
10,671
   
11,606
   
11,919
 
Piedmont Triad, NC                                                                
   
9,042
   
9,740
   
9,778
 
Total Industrial Segment                                                           
   
19,713
   
21,346
   
21,697
 
Retail:
                   
Atlanta, GA (2)                                                                
   
(21
)
 
(21
)
 
(26
)
Kansas City, MO                                                                
   
19,938
   
18,174
   
22,577
 
Piedmont Triad, NC                                                                
   
—
   
12
   
177
 
Raleigh, NC (2)                                                                
   
37
   
9
   
(60
)
Total Retail Segment                                                           
   
19,954
   
18,174
   
22,668
 
Residential:
                   
Kansas City, MO                                                                
   
742
   
581
   
715
 
Raleigh, NC (2)                                                                
   
(362
)
 
(527
)
 
(34
)
Total Residential Segment                                                           
   
380
   
54
   
681
 
Total Net Operating Income                                                                            
   
298,933
   
287,342
   
285,284
 
Reconciliation to income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates:
                   
Depreciation and amortization                                                                      
   
(135,793
)
 
(130,028
)
 
(122,835
)
Impairment of assets held for use                                                                      
   
—
   
(2,554
)
 
(3,407
)
General and administrative expense
   
(32,948
)
 
(36,682
)
 
(38,043
)
Interest expense                                                                      
   
(93,372
)
 
(86,805
)
 
(98,492
)
Other income                                                                      
   
5,657
   
9,549
   
3,825
 
Income from continuing operations before disposition of property, condominiums and investment in unconsolidated affiliates and equity in earnings of unconsolidated affiliates
 
$
42,477
 
$
40,822
 
$
26,332
 

__________
 
(1)
Net of discontinued operations.
 
(2)
Consists of real estate taxes and other carrying costs associated with land held for development that is currently zoned for the respective product type.

   
December 31,
 
   
2010
 
2009
 
2008
 
Total Assets:
                   
Office:
                   
Atlanta, GA                                                                
 
$
268,772
 
$
275,464
 
$
277,472
 
Baltimore, MD                                                                
   
1,787
   
1,787
   
1,793
 
Greenville, SC                                                                
   
73,931
   
78,567
   
83,554
 
Kansas City, MO                                                                
   
84,197
   
85,681
   
87,954
 
Memphis, TN                                                                
   
270,091
   
220,722
   
187,316
 
Nashville, TN                                                                
   
326,855
   
338,124
   
348,068
 
Orlando, FL                                                                
   
47,042
   
48,821
   
50,852
 
Piedmont Triad, NC                                                                
   
126,680
   
141,971
   
148,511
 
Raleigh, NC                                                                
   
457,945
   
464,729
   
469,448
 
Richmond, VA                                                                
   
249,036
   
249,881
   
257,221
 
Tampa, FL                                                                
   
395,931
   
393,812
   
379,146
 
Total Office Segment                                                           
   
2,302,267
   
2,299,559
   
2,291,335
 
Industrial:
                   
Atlanta, GA                                                                
   
135,858
   
136,570
   
137,510
 
Kansas City, MO                                                                
   
—
   
—
   
123
 
Piedmont Triad, NC                                                                
   
79,321
   
92,300
   
100,429
 
Total Industrial Segment                                                           
   
215,179
   
228,870
   
238,062
 
Retail:
                   
Atlanta, GA                                                                
   
306
   
1,044
   
1,070
 
Kansas City, MO                                                                
   
172,116
   
175,757
   
224,603
 
Piedmont Triad, NC                                                                
   
—
   
1,082
   
10,423
 
Raleigh, NC                                                                
   
5,170
   
6,048
   
4,452
 
Total Retail Segment                                                           
   
177,592
   
183,931
   
240,548
 
Residential:
                   
Kansas City, MO                                                                
   
5,925
   
6,129
   
6,471
 
Orlando, FL                                                                
   
2,098
   
2,147
   
2,147
 
Raleigh, NC                                                                
   
9,574
   
16,291
   
28,698
 
Total Residential Segment                                                           
   
17,597
   
24,567
   
37,316
 
Corporate                                                                      
   
159,200
   
150,174
   
138,909
 
Total Assets                                                                            
 
$
2,871,835
 
$
2,887,101
 
$
2,946,170
 

Quarterly Financial Data
Quarterly Financial Data
20.    Quarterly Financial Data (Unaudited)

The following tables set forth quarterly financial information and have been adjusted to reflect discontinued operations:

   
Year Ended December 31, 2010
 
   
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Total
 
Rental and other revenues (1)
 
$
115,054
 
$
114,339
 
$
116,063
 
$
117,865
 
$
463,321
 
                                 
Income from continuing operations (1)
   
11,694
   
40,112
   
8,773
   
11,399
   
71,978
 
Income/(loss) from discontinued operations (1)
   
388
   
(63
)
 
—
   
—
   
325
 
Net income
   
12,082
   
40,049
   
8,773
   
11,399
   
72,303
 
Net (income) attributable to noncontrolling interests in the Operating Partnership
   
(520
)
 
(1,933
)
 
(366
)
 
(501
)
 
(3,320
)
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates
   
(214
)
 
(215
)
 
148
   
(204
)
 
(485
)
Dividends on preferred stock
   
(1,677
)
 
(1,677
)
 
(1,677
)
 
(1,677
)
 
(6,708
)
Net income available for common stockholders
 
$
9,671
 
$
36,224
 
$
6,878
 
$
9,017
 
$
61,790
 
                                 
Earnings per share-basic:
                               
Income from continuing operations available for common stockholders
 
$
0.13
 
$
0.51
 
$
0.10
 
$
0.12
 
$
0.86
 
Income from discontinued operations available for common stockholders
   
0.01
   
—
   
—
   
—
   
—
 
Net income available for common stockholders
 
$
0.14
 
$
0.51
 
$
0.10
 
$
0.12
 
$
0.86
 
Earnings per share-diluted:
                               
Income from continuing operations available for common stockholders
 
$
0.13
 
$
0.50
 
$
0.10
 
$
0.12
 
$
0.86
 
Income from discontinued operations available for common stockholders
   
0.01
   
—
   
—
   
—
   
—
 
Net income available for common stockholders
 
$
0.14
 
$
0.50
 
$
0.10
 
$
0.12
 
$
0.86
 


 
   
Year Ended December 31, 2009
 
   
First Quarter
 
Second Quarter
 
Third Quarter
 
Fourth Quarter
 
Total
 
Rental and other revenues (1)
 
$
112,361
 
$
111,914
 
$
113,170
 
$
112,709
 
$
450,154
 
                                 
Income from continuing operations (1)
   
11,756
   
14,928
   
12,304
   
8,443
   
47,431
 
Income/(loss) from discontinued operations (1)
   
1,444
   
22,146
   
269
   
(9,596
)
 
14,263
 
Net income/(loss)
   
13,200
   
37,074
   
12,573
   
(1,153
)
 
61,694
 
Net (income)/loss attributable to noncontrolling interests in the Operating Partnership
   
(694
)
 
(2,054
)
 
(591
)
 
142
   
(3,197
)
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates
   
(18
)
 
(116
)
 
(24
)
 
147
   
(11
)
Dividends on preferred stock
   
(1,677
)
 
(1,677
)
 
(1,677
)
 
(1,677
)
 
(6,708
)
Net income/(loss) available for common stockholders
 
$
10,811
 
$
33,227
 
$
10,281
 
$
(2,541
)
$
51,778
 
                                 
Earnings per share-basic:
                               
Income from continuing operations available for common stockholders
 
$
0.15
 
$
0.19
 
$
0.15
 
$
0.09
 
$
0.56
 
Income/(loss) from discontinued operations available for common stockholders
   
0.02
   
0.31
   
—
   
(0.13
)
 
0.20
 
Net income/(loss) available for common stockholders
 
$
0.17
 
$
0.50
 
$
0.15
 
$
(0.04
)
$
0.76
 
Earnings per share-diluted:
                               
Income from continuing operations available for common stockholders
 
$
0.15
 
$
0.19
 
$
0.14
 
$
0.09
 
$
0.56
 
Income/(loss) from discontinued operations available for common stockholders
   
0.02
   
0.31
   
—
   
(0.13
)
 
0.20
 
Net income/(loss) available for common stockholders
 
$
0.17
 
$
0.50
 
$
0.14
 
$
(0.04
)
$
0.76
 

__________
 
 
(1)
The amounts presented may not equal to the amounts previously reported in the most recent Form 10-Qs or prior 10-K for each period as a result of discontinued operations. Below is the reconciliation to the amounts previously reported:

   
Quarter Ended
 
   
March 31, 2010
 
June 30,
2010
 
September 30,
2010
 
Rental and other revenues, as reported
 
$
115,818
 
$
114,339
 
$
116,063
 
Discontinued operations
   
(764
)
 
—
   
—
 
Rental and other revenues, as adjusted
 
$
115,054
 
$
114,339
 
$
116,063
 
                     
Income from continuing operations, as reported
 
$
11,894
 
$
40,112
 
$
8,773
 
Discontinued operations
   
(200
)
 
—
   
—
 
Income from continuing operations, as adjusted
 
$
11,694
 
$
40,112
 
$
8,773
 
                     
Income/(loss) from discontinued operations, as reported
 
$
188
 
$
(63
)
$
—
 
Additional discontinued operations from properties sold subsequent to the respective reporting period
   
200
   
—
   
—
 
Income/(loss) from discontinued operations, as adjusted
 
$
388
 
$
(63
)
$
—
 

   
Quarter Ended
 
   
March 31, 2009
 
June 30,
2009
 
September 30,
2009
 
December 31,
2009
 
Rental and other revenues, as reported
 
$
113,220
 
$
111,914
 
$
113,170
 
$
113,669
 
Discontinued operations
   
(859
)
 
—
   
—
   
(960
)
Rental and other revenues, as adjusted
 
$
112,361
 
$
111,914
 
$
113,170
 
$
112,709
 
                           
Income/(loss) from continuing operations, as reported
 
$
12,029
 
$
14,928
 
$
12,304
 
$
(2,125
)
Discontinued operations
   
(273
)
 
—
   
—
   
10,568
 
Income from continuing operations, as adjusted
 
$
11,756
 
$
14,928
 
$
12,304
 
$
8,443
 
                           
Income from discontinued operations, as reported
 
$
1,171
 
$
22,146
 
$
269
 
$
972
 
Additional discontinued operations from properties sold subsequent to the respective reporting period
   
273
   
—
   
—
   
(10,568
)
Income/(loss) from discontinued operations, as adjusted
 
$
1,444
 
$
22,146
 
$
269
 
$
(9,596
)

Subsequent Events
Subsequent Events
21.    Subsequent Events

On February 2, 2011, we obtained a $200.0 million, five-year unsecured bank term loan bearing interest of LIBOR plus 220 basis points. The funding of this loan will occur on February 25, 2011 and the proceeds will be used on such date to pay off at maturity a $137.5 million unsecured bank term loan, amounts then outstanding under our revolving credit facility and for general corporate purposes.

On January 26, 2011, the Board of Directors declared a cash dividend of $0.425 per share of Common Stock payable on March 8, 2011 to stockholders of record on February 14, 2011, a cash dividend of $21.5625 per share of 8.625% Series A Cumulative Redeemable Preferred Shares payable on February 28, 2011 to stockholders of record on February 15, 2011 and a cash dividend of $0.50 per share of 8.000% Series B Cumulative Redeemable Preferred Shares payable on March 15, 2011 to stockholders of record on March 1, 2011.
Schedule II - Valuation and Qualifying Accounts
Schedule II - Valuation and Qualifying Accounts
HIGHWOODS PROPERTIES, INC.
 
HIGHWOODS REALTY LIMITED PARTNERSHIP
 
 
(in thousands)

The following table sets forth the activity of allowance for doubtful accounts:

   
Balance at
December 31,
2009
 
Additions
 
Deductions
 
Balance at
December 31,
2010
 
Allowance for Doubtful Accounts - Straight Line Rent
 
$
2,443
 
$
635
 
$
(869
)
$
2,209
 
Allowance for Doubtful Accounts - Accounts Receivable
   
2,810
   
2,961
   
(2,176
)
 
3,595
 
Allowance for Doubtful Accounts - Notes Receivable
   
698
   
413
   
(243
)
 
868
 
Totals
 
$
5,951
 
$
4,009
 
$
(3,288
)
$
6,672
 


   
Balance at
December 31,
2008
 
Additions
 
Deductions
 
Balance at
December 31,
2009
 
Allowance for Doubtful Accounts - Straight Line Rent
 
$
2,082
 
$
2,484
 
$
(2,123
)
$
2,443
 
Allowance for Doubtful Accounts - Accounts Receivable
   
1,281
   
2,900
   
(1,371
)
 
2,810
 
Allowance for Doubtful Accounts - Notes Receivable
   
459
   
255
   
(16
)
 
698
 
Totals
 
$
3,822
 
$
5,639
 
$
(3,510
)
$
5,951
 


   
Balance at
December 31,
2007
 
Additions
 
Deductions
 
Balance at
December 31,
2008
 
Allowance for Doubtful Accounts - Straight Line Rent
 
$
440
 
$
1,905
 
$
(263
)
$
2,082
 
Allowance for Doubtful Accounts - Accounts Receivable
   
935
   
1,091
   
(745
)
 
1,281
 
Allowance for Doubtful Accounts - Notes Receivable
   
68
   
395
   
(4
)
 
459
 
Totals
 
$
1,443
 
$
3,391
 
$
(1,012
)
$
3,822
 

Schedule III - Real Estate and Accumulated Depreciation
Schedule III - Real Estate and Accumulated Depreciation
HIGHWOODS PROPERTIES, INC.
 
HIGHWOODS REALTY LIMITED PARTNERSHIP
 
 
(in thousands)

The following table sets forth the activity of real estate assets and accumulated depreciation:
 
   
December 31,
 
   
2010
 
2009
 
2008
 
Real estate assets:
                   
Beginning balance
 
$
3,341,257
 
$
3,272,904
 
$
3,180,661
 
Additions:
                   
Acquisitions, development and improvements
   
104,199
   
167,624
   
184,208
 
Cost of real estate sold and retired
   
(91,914
)
 
(99,271
)
 
(91,965
)
Ending balance (a)
 
$
3,353,542
 
$
3,341,257
 
$
3,272,904
 
                     
Accumulated depreciation:
                   
Beginning balance
 
$
782,557
 
$
714,224
 
$
649,765
 
Depreciation expense
   
117,639
   
115,603
   
110,988
 
Real estate sold and retired
   
(65,031
)
 
(47,270
)
 
(46,529
)
Ending balance (b)
 
$
835,165
 
$
782,557
 
$
714,224
 

 
(a)
Reconciliation of total real estate assets to balance sheet caption:
 
   
2010
 
2009
 
2008
 
Total per Schedule III                                                                           
 
$
3,353,542
 
$
3,341,257
 
$
3,272,904
 
Development in progress exclusive of land included in Schedule III
   
4,524
   
—
   
61,938
 
Real estate assets, net, held for sale                                                                           
   
(1,217
)
 
(5,940
)
 
(1,242
)
Total real estate assets                                                                           
 
$
3,356,849
 
$
3,335,317
 
$
3,333,600
 

(b)
Reconciliation of total accumulated depreciation to balance sheet caption:
 
   
2010
 
2009
 
2008
 
Total per Schedule III                                                                           
 
$
835,165
 
$
782,557
 
$
714,224
 
Real estate assets, net, held for sale                                                                           
   
—
   
(1,484
)
 
—
 
Total accumulated depreciation                                                                           
 
$
835,165
 
$
781,073
 
$
714,224
 

HIGHWOODS PROPERTIES, INC.
 
HIGHWOODS REALTY LIMITED PARTNERSHIP
 
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 
(in thousands)
 
December 31, 2010

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Atlanta, GA
                                                   
1700 Century Circle
 
Office
 
Atlanta
     
-
 
2,482
 
2
 
(11)
 
2
 
2,471
 
2,473
 
427
 
1983
 
 5-40 yrs.
1800 Century Boulevard
 
Office
 
Atlanta
     
1,444
 
29,081
 
-
 
12,027
 
1,444
 
41,108
 
42,552
 
16,679
 
1975
 
 5-40 yrs.
1825 Century Center
 
Office
 
Atlanta
     
864
 
-
 
303
 
15,280
 
1,167
 
15,280
 
16,447
 
4,099
 
2002
 
 5-40 yrs.
1875 Century Boulevard
 
Office
 
Atlanta
     
-
 
8,924
 
-
 
2,225
 
-
 
11,149
 
11,149
 
4,279
 
1976
 
 5-40 yrs.
1900 Century Boulevard
 
Office
 
Atlanta
     
-
 
4,744
 
-
 
900
 
-
 
5,644
 
5,644
 
2,164
 
1971
 
 5-40 yrs.
2200 Century Parkway
 
Office
 
Atlanta
     
-
 
14,432
 
-
 
3,680
 
-
 
18,112
 
18,112
 
6,676
 
1971
 
 5-40 yrs.
2400 Century Center
 
Office
 
Atlanta
     
-
 
-
 
406
 
15,665
 
406
 
15,665
 
16,071
 
6,919
 
1998
 
 5-40 yrs.
2500 Century Center
 
Office
 
Atlanta
     
-
 
-
 
328
 
14,311
 
328
 
14,311
 
14,639
 
2,801
 
2005
 
 5-40 yrs.
2500/2635 Parking Garage
 
Office
 
Atlanta
     
-
 
-
 
-
 
6,242
 
-
 
6,242
 
6,242
 
795
 
2005
 
 5-40 yrs.
2600 Century Parkway
 
Office
 
Atlanta
     
-
 
10,679
 
-
 
3,706
 
-
 
14,385
 
14,385
 
4,934
 
1973
 
 5-40 yrs.
2635 Century Parkway
 
Office
 
Atlanta
     
-
 
21,643
 
-
 
3,213
 
-
 
24,856
 
24,856
 
9,348
 
1980
 
 5-40 yrs.
2800 Century Parkway
 
Office
 
Atlanta
     
-
 
20,449
 
-
 
2,923
 
-
 
23,372
 
23,372
 
7,990
 
1983
 
 5-40 yrs.
50 Glenlake
 
Office
 
Atlanta
 
 (1)
 
2,500
 
20,006
 
-
 
2,229
 
2,500
 
22,235
 
24,735
 
7,432
 
1997
 
 5-40 yrs.
6348 Northeast Expressway
 
Industrial
 
Atlanta
     
275
 
1,655
 
-
 
199
 
275
 
1,854
 
2,129
 
680
 
1978
 
 5-40 yrs.
6438 Northeast Expressway
 
Industrial
 
Atlanta
     
179
 
2,216
 
-
 
493
 
179
 
2,709
 
2,888
 
967
 
1981
 
 5-40 yrs.
Bluegrass Lakes I
 
Industrial
 
Atlanta
     
816
 
-
 
336
 
2,908
 
1,152
 
2,908
 
4,060
 
947
 
1999
 
 5-40 yrs.
Bluegrass Place I
 
Industrial
 
Atlanta
     
491
 
2,061
 
-
 
344
 
491
 
2,405
 
2,896
 
834
 
1995
 
 5-40 yrs.
Bluegrass Place II
 
Industrial
 
Atlanta
     
412
 
2,583
 
-
 
98
 
412
 
2,681
 
3,093
 
883
 
1996
 
 5-40 yrs.
Bluegrass Valley
 
Industrial
 
Atlanta
     
1,500
 
-
 
374
 
3,240
 
1,874
 
3,240
 
5,114
 
990
 
2000
 
 5-40 yrs.
Bluegrass Valley Land
 
Industrial
 
Atlanta
     
19,711
 
-
 
(14,810)
 
-
 
4,901
 
-
 
4,901
 
-
 
N/A
 
N/A
Century Plaza I
 
Office
 
Atlanta
     
1,290
 
8,567
 
-
 
3,491
 
1,290
 
12,058
 
13,348
 
3,803
 
1981
 
 5-40 yrs.
Century Plaza II
 
Office
 
Atlanta
     
1,380
 
7,733
 
-
 
1,541
 
1,380
 
9,274
 
10,654
 
2,623
 
1984
 
 5-40 yrs.
Chastain Place I
 
Industrial
 
Atlanta
     
451
 
-
 
341
 
3,359
 
792
 
3,359
 
4,151
 
1,080
 
1997
 
 5-40 yrs.
Chastain Place II
 
Industrial
 
Atlanta
     
599
 
-
 
194
 
1,578
 
793
 
1,578
 
2,371
 
519
 
1998
 
 5-40 yrs.
Chastain Place III
 
Industrial
 
Atlanta
     
539
 
-
 
173
 
1,349
 
712
 
1,349
 
2,061
 
395
 
1999
 
 5-40 yrs.
Corporate Lakes
 
Industrial
 
Atlanta
     
1,265
 
7,243
 
-
 
1,779
 
1,265
 
9,022
 
10,287
 
2,960
 
1988
 
 5-40 yrs.
DHS.ICE
 
Office
 
Atlanta
     
3,100
 
-
 
2,576
 
15,874
 
5,676
 
15,874
 
21,550
 
1,747
 
2007
 
 5-40 yrs.
FAA at Tradeport
 
Office
 
Atlanta
 
(2)
 
1,196
 
-
 
1,416
 
15,132
 
2,612
 
15,132
 
17,744
 
1,042
 
2009
 
 5-40 yrs.
Gwinnett Distribution Center
 
Industrial
 
Atlanta
     
1,119
 
5,960
 
-
 
1,596
 
1,119
 
7,556
 
8,675
 
2,711
 
1991
 
 5-40 yrs.
Henry County Land
 
Industrial
 
Atlanta
     
3,010
 
-
 
13
 
-
 
3,023
 
-
 
3,023
 
-
 
N/A
 
N/A
Highwoods Center I at Tradeport
 
Office
 
Atlanta
 
 (1)
 
307
 
-
 
139
 
2,041
 
446
 
2,041
 
2,487
 
582
 
1999
 
 5-40 yrs.
Highwoods Center II at Tradeport
 
Office
 
Atlanta
 
 (1)
 
641
 
-
 
162
 
2,620
 
803
 
2,620
 
3,423
 
713
 
1999
 
 5-40 yrs.
Highwoods Center III at Tradeport
 
Office
 
Atlanta
 
 (1)
 
409
 
-
 
130
 
2,178
 
539
 
2,178
 
2,717
 
494
 
2001
 
 5-40 yrs.
Highwoods Riverpoint IV
 
Industrial
 
Atlanta
     
1,037
 
-
 
750
 
8,732
 
1,787
 
8,732
 
10,519
 
542
 
2009
 
 5-40 yrs.
National Archives and Records Administration
 
Industrial
 
Atlanta
     
1,484
 
-
 
-
 
17,825
 
1,484
 
17,825
 
19,309
 
3,057
 
2004
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Newpoint Place I
 
Industrial
 
Atlanta
     
819
 
-
 
356
 
3,144
 
1,175
 
3,144
 
4,319
 
827
 
1998
 
 5-40 yrs.
Newpoint Place II
 
Industrial
 
Atlanta
     
1,499
 
-
 
394
 
3,188
 
1,893
 
3,188
 
5,081
 
1,028
 
1999
 
 5-40 yrs.
Newpoint Place III
 
Industrial
 
Atlanta
     
668
 
-
 
253
 
2,325
 
921
 
2,325
 
3,246
 
942
 
1998
 
 5-40 yrs.
Newpoint Place IV
 
Industrial
 
Atlanta
     
989
 
-
 
406
 
4,551
 
1,395
 
4,551
 
5,946
 
1,695
 
2001
 
 5-40 yrs.
Newpoint Place V
 
Industrial
 
Atlanta
     
2,150
 
-
 
816
 
9,101
 
2,966
 
9,101
 
12,067
 
1,446
 
2007
 
 5-40 yrs.
Norcross I & II
 
Industrial
 
Atlanta
     
323
 
2,000
 
-
 
698
 
323
 
2,698
 
3,021
 
949
 
1970
 
 5-40 yrs.
Nortel
 
Office
 
Atlanta
     
3,342
 
32,111
 
-
 
375
 
3,342
 
32,486
 
35,828
 
10,434
 
1998
 
 5-40 yrs.
 River Point Land
 
Industrial
 
Atlanta
     
7,250
 
-
 
4,551
 
2,547
 
11,801
 
2,547
 
14,348
 
75
 
N/A
 
N/A
 South Park Residential Land
 
Multi-Family
 
Atlanta
     
50
 
-
 
7
 
-
 
57
 
-
 
57
 
-
 
N/A
 
N/A
 South Park Site Land
 
Industrial
 
Atlanta
     
1,204
 
-
 
754
 
-
 
1,958
 
-
 
1,958
 
-
 
N/A
 
N/A
 Southside Distribution Center
 
Industrial
 
Atlanta
     
804
 
4,553
 
-
 
2,093
 
804
 
6,646
 
7,450
 
2,141
 
1988
 
5-40 yrs.
 Tradeport  I
 
Industrial
 
Atlanta
     
557
 
-
 
261
 
2,518
 
818
 
2,518
 
3,336
 
866
 
1999
 
5-40 yrs.
 Tradeport II
 
Industrial
 
Atlanta
     
557
 
-
 
261
 
2,000
 
818
 
2,000
 
2,818
 
599
 
1999
 
5-40 yrs.
 Tradeport III
 
Industrial
 
Atlanta
     
673
 
-
 
370
 
2,650
 
1,043
 
2,650
 
3,693
 
647
 
1999
 
5-40 yrs.
 Tradeport IV
 
Industrial
 
Atlanta
     
667
 
-
 
365
 
3,675
 
1,032
 
3,675
 
4,707
 
721
 
2001
 
5-40 yrs.
 Tradeport Land
 
Industrial
 
Atlanta
     
5,243
 
-
 
(387)
 
-
 
4,856
 
-
 
4,856
 
-
 
N/A
 
N/A
Tradeport V
 
Industrial
 
Atlanta
     
463
 
-
 
180
 
2,109
 
643
 
2,109
 
2,752
 
523
 
2002
 
 5-40 yrs.
Two Point Royal
 
Office
 
Atlanta
 
 (1)
 
1,793
 
14,964
 
-
 
2,821
 
1,793
 
17,785
 
19,578
 
5,627
 
1997
 
 5-40 yrs.
                                                     
Baltimore, MD
                                                   
Sportsman Club Land
 
Office
 
Baltimore
     
24,931
 
-
 
(23,147)
 
-
 
1,784
 
-
 
1,784
 
-
 
N/A
 
N/A
                                                     
Greenville, SC
                                                   
Brookfield Plaza
 
Office
 
Greenville
     
1,500
 
8,514
 
-
 
2,519
 
1,500
 
11,033
 
12,533
 
4,001
 
1987
 
 5-40 yrs.
Brookfield-Jacobs-Sirrine
 
Office
 
Greenville
     
3,050
 
17,280
 
(23)
 
4,533
 
3,027
 
21,813
 
24,840
 
8,132
 
1990
 
 5-40 yrs.
MetLife @ Brookfield
 
Office
 
Greenville
     
1,039
 
-
 
352
 
10,563
 
1,391
 
10,563
 
11,954
 
4,230
 
2001
 
 5-40 yrs.
Patewood I
 
Office
 
Greenville
     
942
 
5,117
 
-
 
1,408
 
942
 
6,525
 
7,467
 
2,761
 
1985
 
 5-40 yrs.
Patewood II
 
Office
 
Greenville
     
942
 
5,176
 
-
 
1,223
 
942
 
6,399
 
7,341
 
2,601
 
1987
 
 5-40 yrs.
Patewood III
 
Office
 
Greenville
     
842
 
4,776
 
-
 
2,088
 
842
 
6,864
 
7,706
 
3,223
 
1989
 
 5-40 yrs.
Patewood IV
 
Office
 
Greenville
     
1,219
 
6,918
 
-
 
2,220
 
1,219
 
9,138
 
10,357
 
4,006
 
1989
 
 5-40 yrs.
Patewood V
 
Office
 
Greenville
     
1,690
 
9,589
 
-
 
2,125
 
1,690
 
11,714
 
13,404
 
4,642
 
1990
 
 5-40 yrs.
Patewood VI
 
Office
 
Greenville
     
2,360
 
-
 
321
 
7,938
 
2,681
 
7,938
 
10,619
 
2,604
 
1999
 
 5-40 yrs.
                                                     
Kansas City, MO
                                                   
Country Club Plaza
 
Mixed-Use
 
Kansas City
     
14,286
 
146,879
 
(198)
 
116,782
 
14,088
 
263,661
 
277,749
 
82,557
 
1920-2002
 
 5-40 yrs.
Land - Hotel Land - Valencia
 
Office
 
Kansas City
     
978
 
-
 
111
 
-
 
1,089
 
-
 
1,089
 
-
 
N/A
 
N/A
Neptune Apartments
 
Multi-Family
 
Kansas City
     
1,098
 
6,282
 
-
 
665
 
1,098
 
6,947
 
8,045
 
2,125
 
1988
 
 5-40 yrs.
One Ward Parkway
 
Office
 
Kansas City
     
681
 
3,937
 
-
 
1,613
 
681
 
5,550
 
6,231
 
1,705
 
1980
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Park Plaza
 
Office
 
Kansas City
 
 (3)
 
1,384
 
6,410
 
-
 
2,111
 
1,384
 
8,521
 
9,905
 
3,029
 
1983
 
 5-40 yrs.
Two Brush Creek
 
Office
 
Kansas City
     
984
 
4,402
 
-
 
1,257
 
984
 
5,659
 
6,643
 
1,690
 
1983
 
 5-40 yrs.
Valencia Place Office
 
Office
 
Kansas City
 
 (3)
 
1,576
 
-
 
970
 
33,792
 
2,546
 
33,792
 
36,338
 
11,101
 
1999
 
 5-40 yrs.
                                                     
Memphis, TN
                     
-
                           
3400 Players Club Parkway
 
Office
 
Memphis
     
1,005
 
-
 
207
 
5,376
 
1,212
 
5,376
 
6,588
 
1,879
 
1997
 
 5-40 yrs.
6000 Poplar Ave
 
Office
 
Memphis
     
2,340
 
11,385
 
(849)
 
4,220
 
1,491
 
15,605
 
17,096
 
3,961
 
1985
 
 5-40 yrs.
6060 Poplar Ave
 
Office
 
Memphis
     
1,980
 
8,677
 
(404)
 
2,504
 
1,576
 
11,181
 
12,757
 
2,979
 
1987
 
 5-40 yrs.
Atrium I & II
 
Office
 
Memphis
     
1,570
 
6,253
 
-
 
2,350
 
1,570
 
8,603
 
10,173
 
3,127
 
1984
 
 5-40 yrs.
Centrum
 
Office
 
Memphis
     
1,013
 
5,580
 
-
 
2,003
 
1,013
 
7,583
 
8,596
 
2,372
 
1979
 
 5-40 yrs.
Comcast Corporation
 
Office
 
Memphis
     
946
 
-
 
-
 
8,621
 
946
 
8,621
 
9,567
 
984
 
2008
 
 5-40 yrs.
International Place II
 
Office
 
Memphis
 
 (4)
 
4,884
 
27,782
 
-
 
4,206
 
4,884
 
31,988
 
36,872
 
11,982
 
1988
 
 5-40 yrs.
Penn Marc
 
Office
 
Memphis
 
 7,703
 
3,607
 
10,240
 
-
 
1,196
 
3,607
 
11,436
 
15,043
 
1,056
 
2008
 
 5-40 yrs.
Shadow Creek I
 
Office
 
Memphis
     
924
 
-
 
466
 
7,039
 
1,390
 
7,039
 
8,429
 
2,126
 
2000
 
 5-40 yrs.
Shadow Creek II
 
Office
 
Memphis
     
734
 
-
 
467
 
7,540
 
1,201
 
7,540
 
8,741
 
2,351
 
2001
 
 5-40 yrs.
Southwind Office Center A
 
Office
 
Memphis
     
1,004
 
5,694
 
282
 
1,307
 
1,286
 
7,001
 
8,287
 
2,382
 
1991
 
 5-40 yrs.
Southwind Office Center B
 
Office
 
Memphis
     
1,366
 
7,754
 
-
 
1,149
 
1,366
 
8,903
 
10,269
 
3,261
 
1990
 
 5-40 yrs.
Southwind Office Center C
 
Office
 
Memphis
     
1,070
 
-
 
221
 
5,015
 
1,291
 
5,015
 
6,306
 
1,457
 
1998
 
 5-40 yrs.
Southwind Office Center D
 
Office
 
Memphis
     
744
 
-
 
193
 
4,761
 
937
 
4,761
 
5,698
 
1,339
 
1999
 
 5-40 yrs.
The Colonnade
 
Office
 
Memphis
     
1,300
 
6,481
 
267
 
181
 
1,567
 
6,662
 
8,229
 
2,204
 
1998
 
 5-40 yrs.
ThyssenKrupp
 
Office
 
Memphis
     
1,040
 
-
 
25
 
8,344
 
1,065
 
8,344
 
9,409
 
1,468
 
2007
 
 5-40 yrs.
FBI Jackson
 
Office
 
Memphis
 
 (2)
 
871
 
-
 
296
 
36,719
 
1,167
 
36,719
 
37,886
 
1,381
 
2007
 
 5-40 yrs.
Crescent Center
 
Office
 
Memphis
 
 40,199
 
7,875
 
32,756
 
-
 
749
 
7,875
 
33,505
 
41,380
 
613
 
1986
 
 5-40 yrs.
Triad Center
 
Office
 
Memphis
     
1,253
 
-
 
-
 
31,782
 
1,253
 
31,782
 
33,035
 
707
 
2009
 
 5-40 yrs.
                                                     
Nashville, TN
                                                   
3322 West End
 
Office
 
Nashville
     
3,025
 
27,490
 
-
 
3,644
 
3,025
 
31,134
 
34,159
 
9,000
 
1986
 
 5-40 yrs.
3401 West End
 
Office
 
Nashville
     
5,862
 
22,917
 
-
 
5,542
 
5,862
 
28,459
 
34,321
 
11,144
 
1982
 
 5-40 yrs.
5310 Maryland Way
 
Office
 
Nashville
     
1,863
 
7,201
 
-
 
226
 
1,863
 
7,427
 
9,290
 
2,695
 
1994
 
 5-40 yrs.
BNA Corporate Center
 
Office
 
Nashville
     
-
 
18,506
 
-
 
8,147
 
-
 
26,653
 
26,653
 
9,484
 
1985
 
 5-40 yrs.
Century City Plaza I
 
Office
 
Nashville
     
903
 
6,919
 
-
 
(2,411)
 
903
 
4,508
 
5,411
 
1,706
 
1987
 
 5-40 yrs.
Cool Springs 1 & 2 Deck
 
Office
 
Nashville
 
 (5)
 
-
 
-
 
-
 
3,958
 
-
 
3,958
 
3,958
 
314
 
2007
 
 5-40 yrs.
Cool Springs 3 &4 Deck
 
Office
 
Nashville
     
-
 
-
 
-
 
4,418
 
-
 
4,418
 
4,418
 
415
 
2007
 
 5-40 yrs.
Cool Springs I
 
Office
 
Nashville
 
 (5)
 
1,583
 
-
 
15
 
12,163
 
1,598
 
12,163
 
13,761
 
3,637
 
1999
 
 5-40 yrs.
Cool Springs II
 
Office
 
Nashville
 
 (5)
 
1,824
 
-
 
346
 
17,523
 
2,170
 
17,523
 
19,693
 
4,756
 
1999
 
 5-40 yrs.
Cool Springs III
 
Office
 
Nashville
 
 (5)
 
1,631
 
-
 
804
 
17,957
 
2,435
 
17,957
 
20,392
 
3,571
 
2006
 
 5-40 yrs.
Cool Springs IV
 
Office
 
Nashville
     
1,715
 
-
 
-
 
20,326
 
1,715
 
20,326
 
22,041
 
1,364
 
2008
 
 5-40 yrs.
Cool Springs V
 
Office
 
Nashville
     
3,688
 
-
 
295
 
52,391
 
3,983
 
52,391
 
56,374
 
5,062
 
2007
 
 5-40 yrs.
Harpeth on the Green II
 
Office
 
Nashville
 
 (1)
 
1,419
 
5,677
 
-
 
1,279
 
1,419
 
6,956
 
8,375
 
2,529
 
1984
 
 5-40 yrs.
Harpeth on the Green III
 
Office
 
Nashville
 
 (1)
 
1,660
 
6,649
 
-
 
2,014
 
1,660
 
8,663
 
10,323
 
2,910
 
1987
 
 5-40 yrs.
Harpeth on the Green IV
 
Office
 
Nashville
 
 (1)
 
1,713
 
6,842
 
-
 
1,468
 
1,713
 
8,310
 
10,023
 
3,043
 
1989
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Harpeth on The Green V
 
Office
 
Nashville
 
 (1)
 
662
 
-
 
197
 
4,188
 
859
 
4,188
 
5,047
 
1,408
 
1998
 
 5-40 yrs.
Hickory Trace
 
Office
 
Nashville
 
 (4)
 
1,164
 
-
 
164
 
4,929
 
1,328
 
4,929
 
6,257
 
1,171
 
2001
 
5-40 yrs.
Highwoods Plaza I
 
Office
 
Nashville
 
 (1)
 
1,552
 
-
 
307
 
8,346
 
1,859
 
8,346
 
10,205
 
3,055
 
1996
 
 5-40 yrs.
Highwoods Plaza II
 
Office
 
Nashville
 
 (1)
 
1,448
 
-
 
307
 
5,772
 
1,755
 
5,772
 
7,527
 
1,905
 
1997
 
 5-40 yrs.
Lakeview Ridge II
 
Office
 
Nashville
 
 (1)
 
605
 
-
 
187
 
4,232
 
792
 
4,232
 
5,024
 
1,363
 
1998
 
 5-40 yrs.
Lakeview Ridge III
 
Office
 
Nashville
 
 (1)
 
1,073
 
-
 
400
 
10,042
 
1,473
 
10,042
 
11,515
 
3,794
 
1999
 
 5-40 yrs.
Seven Springs - Land I
 
Office
 
Nashville
     
3,122
 
-
 
1,399
 
-
 
4,521
 
-
 
4,521
 
-
 
N/A
 
N/A
Seven Springs - Land  II
 
Office
 
Nashville
     
3,715
 
-
 
(1,025)
 
-
 
2,690
 
-
 
2,690
 
-
 
N/A
 
N/A
Seven Springs I
 
Office
 
Nashville
     
2,076
 
-
 
592
 
12,721
 
2,668
 
12,721
 
15,389
 
3,902
 
2002
 
 5-40 yrs.
SouthPointe
 
Office
 
Nashville
     
1,655
 
-
 
310
 
6,406
 
1,965
 
6,406
 
8,371
 
1,948
 
1998
 
 5-40 yrs.
Southwind Land
 
Office
 
Nashville
     
3,662
 
-
 
(874)
 
-
 
2,788
 
-
 
2,788
 
-
 
N/A
 
N/A
The Ramparts at Brentwood
 
Office
 
Nashville
     
2,394
 
12,806
 
-
 
1,912
 
2,394
 
14,718
 
17,112
 
3,909
 
1986
 
 5-40 yrs.
Westwood South
 
Office
 
Nashville
 
 (1)
 
2,106
 
-
 
382
 
8,480
 
2,488
 
8,480
 
10,968
 
2,353
 
1999
 
 5-40 yrs.
Winners Circle
 
Office
 
Nashville
 
 (1)
 
1,497
 
7,258
 
-
 
751
 
1,497
 
8,009
 
9,506
 
2,595
 
1987
 
 5-40 yrs.
                                                     
Orlando, FL
                                                   
Berkshire at Metro Center
 
Office
 
Orlando
     
1,265
 
-
 
672
 
12,802
 
1,937
 
12,802
 
14,739
 
1,793
 
2007
 
 5-40 yrs.
Capital Plaza III
 
Office
 
Orlando
     
2,994
 
-
 
18
 
-
 
3,012
 
-
 
3,012
 
-
 
N/A
 
 N/A
Eola Park Land
 
Office
 
Orlando
     
2,027
 
-
 
-
 
-
 
2,027
 
-
 
2,027
 
-
 
N/A
 
 N/A
In Charge Institute
 
Office
 
Orlando
     
501
 
-
 
95
 
1,797
 
596
 
1,797
 
2,393
 
472
 
2000
 
 5-40 yrs.
MetroWest 1 Land
 
Office
 
Orlando
     
1,100
 
-
 
51
 
-
 
1,151
 
-
 
1,151
 
-
 
N/A
 
 N/A
Metrowest Center
 
Office
 
Orlando
     
1,354
 
7,687
 
269
 
2,072
 
1,623
 
9,759
 
11,382
 
4,004
 
1988
 
 5-40 yrs.
MetroWest Land
 
Office
 
Orlando
     
2,034
 
-
 
(148)
 
-
 
1,886
 
-
 
1,886
 
-
 
N/A
 
 N/A
Windsor at Metro Center
 
Office
 
Orlando
     
-
 
-
 
2,060
 
7,809
 
2,060
 
7,809
 
9,869
 
1,514
 
2002
 
 5-40 yrs.
                                                     
Piedmont Triad, NC
                                                   
101 Stratford
 
Office
 
Piedmont Triad
     
1,205
 
6,916
 
-
 
1,469
 
1,205
 
8,385
 
9,590
 
3,005
 
1986
 
 5-40 yrs.
150 Stratford
 
Office
 
Piedmont Triad
     
2,788
 
11,511
 
-
 
1,056
 
2,788
 
12,567
 
15,355
 
4,998
 
1991
 
 5-40 yrs.
160 Stratford - Land
 
Office
 
Piedmont Triad
     
967
 
-
 
-
 
120
 
967
 
120
 
1,087
 
14
 
N/A
 
N/A
6348 Burnt Poplar
 
Industrial
 
Piedmont Triad
     
724
 
2,900
 
-
 
352
 
724
 
3,252
 
3,976
 
1,401
 
1990
 
 5-40 yrs.
6350 Burnt Poplar
 
Industrial
 
Piedmont Triad
     
341
 
1,374
 
-
 
249
 
341
 
1,623
 
1,964
 
585
 
1992
 
 5-40 yrs.
7341 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
113
 
841
 
-
 
288
 
113
 
1,129
 
1,242
 
445
 
1988
 
 5-40 yrs.
7343 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
72
 
555
 
-
 
216
 
72
 
771
 
843
 
261
 
1988
 
 5-40 yrs.
7345 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
66
 
492
 
-
 
234
 
66
 
726
 
792
 
239
 
1988
 
 5-40 yrs.
7347 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
97
 
719
 
-
 
256
 
97
 
975
 
1,072
 
325
 
1988
 
 5-40 yrs.
7349 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
53
 
393
 
-
 
80
 
53
 
473
 
526
 
173
 
1988
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
7351 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
106
 
788
 
-
 
159
 
106
 
947
 
1,053
 
333
 
1988
 
 5-40 yrs.
7353 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
123
 
912
 
-
 
41
 
123
 
953
 
1,076
 
367
 
1988
 
 5-40 yrs.
7355 West Friendly Avenue
 
Industrial
 
Piedmont Triad
     
72
 
538
 
-
 
187
 
72
 
725
 
797
 
271
 
1988
 
 5-40 yrs.
Airpark East-Building 1
 
Office
 
Piedmont Triad
     
379
 
1,516
 
-
 
450
 
379
 
1,966
 
2,345
 
753
 
1990
 
 5-40 yrs.
Airpark East-Building 2
 
Office
 
Piedmont Triad
     
462
 
1,849
 
-
 
409
 
462
 
2,258
 
2,720
 
805
 
1986
 
 5-40 yrs.
Airpark East-Building 3
 
Office
 
Piedmont Triad
     
322
 
1,293
 
-
 
393
 
322
 
1,686
 
2,008
 
602
 
1986
 
 5-40 yrs.
Airpark East-Building A
 
Office
 
Piedmont Triad
     
510
 
2,921
 
-
 
1,721
 
510
 
4,642
 
5,152
 
1,756
 
1986
 
 5-40 yrs.
Airpark East-Building B
 
Office
 
Piedmont Triad
     
739
 
3,237
 
-
 
900
 
739
 
4,137
 
4,876
 
1,781
 
1988
 
 5-40 yrs.
Airpark East-Building C
 
Office
 
Piedmont Triad
 
 (4)
 
2,393
 
9,576
 
-
 
2,137
 
2,393
 
11,713
 
14,106
 
4,399
 
1990
 
 5-40 yrs.
Airpark East-Building D
 
Office
 
Piedmont Triad
 
 (4)
 
850
 
-
 
699
 
3,898
 
1,549
 
3,898
 
5,447
 
1,333
 
1997
 
 5-40 yrs.
Airpark East-Copier Consultants
 
Industrial
 
Piedmont Triad
     
224
 
1,068
 
-
 
301
 
224
 
1,369
 
1,593
 
590
 
1990
 
 5-40 yrs.
Airpark East-HewlettPackard
 
Office
 
Piedmont Triad
     
465
 
-
 
380
 
963
 
845
 
963
 
1,808
 
383
 
1996
 
 5-40 yrs.
Airpark East-Highland
 
Industrial
 
Piedmont Triad
     
145
 
1,081
 
-
 
301
 
145
 
1,382
 
1,527
 
481
 
1990
 
 5-40 yrs.
Airpark East-Inacom Building
 
Office
 
Piedmont Triad
     
265
 
-
 
270
 
938
 
535
 
938
 
1,473
 
321
 
1996
 
 5-40 yrs.
Airpark East-Service Center 1
 
Industrial
 
Piedmont Triad
     
237
 
1,103
 
-
 
114
 
237
 
1,217
 
1,454
 
483
 
1985
 
 5-40 yrs.
Airpark East-Service Center 2
 
Industrial
 
Piedmont Triad
     
192
 
946
 
-
 
339
 
192
 
1,285
 
1,477
 
485
 
1985
 
 5-40 yrs.
Airpark East-Service Center 3
 
Industrial
 
Piedmont Triad
     
305
 
1,219
 
-
 
158
 
305
 
1,377
 
1,682
 
556
 
1985
 
 5-40 yrs.
Airpark East-Service Center 4
 
Industrial
 
Piedmont Triad
     
225
 
928
 
-
 
65
 
225
 
993
 
1,218
 
401
 
1985
 
 5-40 yrs.
Airpark East-Service Court
 
Industrial
 
Piedmont Triad
     
171
 
777
 
-
 
164
 
171
 
941
 
1,112
 
367
 
1990
 
 5-40 yrs.
Airpark East-Simplex
 
Office
 
Piedmont Triad
     
271
 
-
 
239
 
892
 
510
 
892
 
1,402
 
365
 
1997
 
 5-40 yrs.
Airpark East-Warehouse 1
 
Industrial
 
Piedmont Triad
     
356
 
1,613
 
-
 
293
 
356
 
1,906
 
2,262
 
799
 
1985
 
 5-40 yrs.
Airpark East-Warehouse 2
 
Industrial
 
Piedmont Triad
     
374
 
1,523
 
-
 
334
 
374
 
1,857
 
2,231
 
688
 
1985
 
 5-40 yrs.
Airpark East-Warehouse 3
 
Industrial
 
Piedmont Triad
     
341
 
1,486
 
-
 
530
 
341
 
2,016
 
2,357
 
862
 
1986
 
 5-40 yrs.
Airpark East-Warehouse 4
 
Industrial
 
Piedmont Triad
     
659
 
2,676
 
-
 
760
 
659
 
3,436
 
4,095
 
1,350
 
1988
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Airpark North - DC1
 
Industrial
 
Piedmont Triad
     
860
 
2,919
 
-
 
494
 
860
 
3,413
 
4,273
 
1,505
 
1986
 
 5-40 yrs.
Airpark North - DC2
 
Industrial
 
Piedmont Triad
     
1,302
 
4,392
 
-
 
703
 
1,302
 
5,095
 
6,397
 
2,150
 
1987
 
 5-40 yrs.
Airpark North - DC3
 
Industrial
 
Piedmont Triad
     
450
 
1,517
 
-
 
672
 
450
 
2,189
 
2,639
 
780
 
1988
 
 5-40 yrs.
Airpark North - DC4
 
Industrial
 
Piedmont Triad
     
452
 
1,514
 
-
 
148
 
452
 
1,662
 
2,114
 
684
 
1988
 
 5-40 yrs.
Airpark South Warehouse 1
 
Industrial
 
Piedmont Triad
     
546
 
-
 
-
 
2,591
 
546
 
2,591
 
3,137
 
928
 
1998
 
 5-40 yrs.
Airpark South Warehouse 2
 
Industrial
 
Piedmont Triad
     
749
 
-
 
-
 
2,509
 
749
 
2,509
 
3,258
 
725
 
1999
 
 5-40 yrs.
Airpark South Warehouse 3
 
Industrial
 
Piedmont Triad
     
603
 
-
 
-
 
2,273
 
603
 
2,273
 
2,876
 
615
 
1999
 
 5-40 yrs.
Airpark South Warehouse 4
 
Industrial
 
Piedmont Triad
     
499
 
-
 
-
 
2,073
 
499
 
2,073
 
2,572
 
599
 
1999
 
 5-40 yrs.
Airpark South Warehouse 6
 
Industrial
 
Piedmont Triad
     
1,733
 
-
 
-
 
5,394
 
1,733
 
5,394
 
7,127
 
2,341
 
1999
 
 5-40 yrs.
Airpark West 1
 
Office
 
Piedmont Triad
     
944
 
3,831
 
-
 
1,011
 
944
 
4,842
 
5,786
 
1,784
 
1984
 
 5-40 yrs.
Airpark West 2
 
Office
 
Piedmont Triad
     
887
 
3,550
 
-
 
497
 
887
 
4,047
 
4,934
 
1,667
 
1985
 
 5-40 yrs.
Airpark West 4
 
Office
 
Piedmont Triad
     
227
 
907
 
-
 
388
 
227
 
1,295
 
1,522
 
539
 
1985
 
 5-40 yrs.
Airpark West 5
 
Office
 
Piedmont Triad
     
243
 
971
 
-
 
221
 
243
 
1,192
 
1,435
 
479
 
1985
 
 5-40 yrs.
Airpark West 6
 
Office
 
Piedmont Triad
     
327
 
1,309
 
-
 
811
 
327
 
2,120
 
2,447
 
728
 
1985
 
 5-40 yrs.
Brigham Road - Land
 
Industrial
 
Piedmont Triad
     
7,059
 
-
 
(3,720)
 
-
 
3,339
 
-
 
3,339
 
-
 
N/A
 
N/A
Consolidated Center/ Building I
 
Office
 
Piedmont Triad
     
625
 
2,183
 
(235)
 
306
 
390
 
2,489
 
2,879
 
1,143
 
1983
 
 5-40 yrs.
Consolidated Center/ Building II
 
Office
 
Piedmont Triad
     
625
 
4,435
 
(203)
 
(963)
 
422
 
3,472
 
3,894
 
1,610
 
1983
 
 5-40 yrs.
Consolidated Center/ Building III
 
Office
 
Piedmont Triad
     
680
 
3,572
 
(217)
 
(963)
 
463
 
2,609
 
3,072
 
1,189
 
1989
 
 5-40 yrs.
Consolidated Center/ Building IV
 
Office
 
Piedmont Triad
     
376
 
1,655
 
(123)
 
(348)
 
253
 
1,307
 
1,560
 
614
 
1989
 
 5-40 yrs.
Deep River Corporate Center
 
Office
 
Piedmont Triad
     
1,041
 
5,892
 
-
 
1,106
 
1,041
 
6,998
 
8,039
 
2,427
 
1989
 
 5-40 yrs.
Enterprise Warehouse I
 
Industrial
 
Piedmont Triad
     
453
 
-
 
360
 
2,873
 
813
 
2,873
 
3,686
 
701
 
2002
 
 5-40 yrs.
Enterprise Warehouse II
 
Industrial
 
Piedmont Triad
     
2,733
 
-
 
881
 
12,337
 
3,614
 
12,337
 
15,951
 
2,023
 
2006
 
 5-40 yrs.
Enterprise Warehouse III
 
Industrial
 
Piedmont Triad
     
814
 
-
 
-
 
3,589
 
814
 
3,589
 
4,403
 
275
 
2007
 
 5-40 yrs.
Forsyth Corporate Center
 
Office
 
Piedmont Triad
     
329
 
1,867
 
-
 
1,031
 
329
 
2,898
 
3,227
 
1,268
 
1985
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Highwoods Park Building I
 
Office
 
Piedmont Triad
     
1,476
 
-
 
-
 
8,501
 
1,476
 
8,501
 
9,977
 
2,525
 
2001
 
 5-40 yrs.
Jefferson Pilot Land
 
Office
 
Piedmont Triad
     
11,759
 
-
 
(4,311)
 
-
 
7,448
 
-
 
7,448
 
-
 
N/A
 
 N/A
Regency One-Piedmont Center
 
Industrial
 
Piedmont Triad
     
515
 
-
 
383
 
2,357
 
898
 
2,357
 
3,255
 
804
 
1996
 
 5-40 yrs.
Regency Two-Piedmont Center
 
Industrial
 
Piedmont Triad
     
435
 
-
 
288
 
2,153
 
723
 
2,153
 
2,876
 
677
 
1996
 
 5-40 yrs.
7023 Albert Pick
 
Office
 
Piedmont Triad
 
 (1)
 
834
 
3,459
 
-
 
435
 
834
 
3,894
 
4,728
 
1,487
 
1989
 
 5-40 yrs.
The Knollwood -380 Retail
 
Office
 
Piedmont Triad
     
-
 
1
 
-
 
252
 
-
 
253
 
253
 
152
 
1995
 
 5-40 yrs.
The Knollwood-370
 
Office
 
Piedmont Triad
     
1,826
 
7,495
 
-
 
933
 
1,826
 
8,428
 
10,254
 
3,249
 
1994
 
 5-40 yrs.
The Knollwood-380
 
Office
 
Piedmont Triad
     
2,989
 
12,028
 
-
 
2,898
 
2,989
 
14,926
 
17,915
 
6,121
 
1990
 
 5-40 yrs.
US Airways
 
Office
 
Piedmont Triad
     
1,450
 
11,375
 
-
 
1,000
 
1,450
 
12,375
 
13,825
 
4,097
 
1970-1987
 
 5-40 yrs.
Westpoint Business Park-Luwabahnson
 
Office
 
Piedmont Triad
     
347
 
1,389
 
-
 
97
 
347
 
1,486
 
1,833
 
571
 
1990
 
 5-40 yrs.
                                                     
Raleigh, NC
                                                   
3600 Glenwood Avenue
 
Office
 
Raleigh
     
-
 
10,994
 
-
 
3,075
 
-
 
14,069
 
14,069
 
4,096
 
1986
 
 5-40 yrs.
3737 Glenwood Avenue
 
Office
 
Raleigh
     
-
 
-
 
318
 
14,739
 
318
 
14,739
 
15,057
 
4,435
 
1999
 
 5-40 yrs.
4101 Research Commons
 
Office
 
Raleigh
     
1,348
 
8,346
 
220
 
(1,453)
 
1,568
 
6,893
 
8,461
 
2,398
 
1999
 
 5-40 yrs.
4201 Research Commons
 
Office
 
Raleigh
     
1,204
 
11,858
 
-
 
(2,949)
 
1,204
 
8,909
 
10,113
 
3,402
 
1991
 
 5-40 yrs.
4301 Research Commons
 
Office
 
Raleigh
     
900
 
8,237
 
-
 
1,114
 
900
 
9,351
 
10,251
 
3,908
 
1989
 
 5-40 yrs.
4401 Research Commons
 
Office
 
Raleigh
     
1,249
 
9,387
 
-
 
2,018
 
1,249
 
11,405
 
12,654
 
4,375
 
1987
 
 5-40 yrs.
4501 Research Commons
 
Office
 
Raleigh
     
785
 
5,856
 
-
 
1,791
 
785
 
7,647
 
8,432
 
3,045
 
1985
 
 5-40 yrs.
4800 North Park
 
Office
 
Raleigh
     
2,678
 
17,630
 
-
 
8,519
 
2,678
 
26,149
 
28,827
 
10,503
 
1985
 
 5-40 yrs.
4900 North Park
 
Office
 
Raleigh
 
 397
 
770
 
1,983
 
-
 
553
 
770
 
2,536
 
3,306
 
1,152
 
1984
 
 5-40 yrs.
5000 North Park
 
Office
 
Raleigh
     
1,010
 
4,612
 
(49)
 
2,444
 
961
 
7,056
 
8,017
 
3,264
 
1980
 
 5-40 yrs.
801 Corporate Center
 
Office
 
Raleigh
 
 (5)
 
828
 
-
 
272
 
10,263
 
1,100
 
10,263
 
11,363
 
2,876
 
2002
 
 5-40 yrs.
Blue Ridge I
 
Office
 
Raleigh
 
 (1)
 
722
 
4,606
 
-
 
1,344
 
722
 
5,950
 
6,672
 
2,732
 
1982
 
 5-40 yrs.
Blue Ridge II
 
Office
 
Raleigh
 
 (1)
 
462
 
1,410
 
-
 
374
 
462
 
1,784
 
2,246
 
977
 
1988
 
 5-40 yrs.
Cape Fear
 
Office
 
Raleigh
     
131
 
1,630
 
-
 
787
 
131
 
2,417
 
2,548
 
2,073
 
1979
 
 5-40 yrs.
Catawba
 
Office
 
Raleigh
     
125
 
1,635
 
-
 
2,386
 
125
 
4,021
 
4,146
 
2,474
 
1980
 
 5-40 yrs.
CentreGreen One - Weston
 
Office
 
Raleigh
 
 (4)
 
1,529
 
-
 
(378)
 
8,570
 
1,151
 
8,570
 
9,721
 
2,043
 
2000
 
 5-40 yrs.
CentreGreen Two - Weston
 
Office
 
Raleigh
 
 (4)
 
1,653
 
-
 
(389)
 
8,950
 
1,264
 
8,950
 
10,214
 
2,292
 
2001
 
 5-40 yrs.
CentreGreen Three Land - Weston
 
Office
 
Raleigh
     
1,876
 
-
 
(384)
 
-
 
1,492
 
-
 
1,492
 
-
 
N/A
 
N/A
CentreGreen Four
 
Office
 
Raleigh
 
 (4)
 
1,779
 
-
 
(397)
 
10,674
 
1,382
 
10,674
 
12,056
 
3,037
 
2002
 
 5-40 yrs.
CentreGreen Five
 
Office
 
Raleigh
     
1,280
 
-
 
69
 
12,657
 
1,349
 
12,657
 
14,006
 
1,231
 
2008
 
 5-40 yrs.
Cottonwood
 
Office
 
Raleigh
     
609
 
3,244
 
-
 
1,237
 
609
 
4,481
 
5,090
 
2,155
 
1983
 
 5-40 yrs.
Dogwood
 
Office
 
Raleigh
     
766
 
2,769
 
-
 
524
 
766
 
3,293
 
4,059
 
1,436
 
1983
 
 5-40 yrs.
EPA
 
Office
 
Raleigh
     
2,597
 
-
 
-
 
1,661
 
2,597
 
1,661
 
4,258
 
707
 
2003
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
GlenLake  Land
 
Office
 
Raleigh
     
13,003
 
-
 
(4,900)
 
134
 
8,103
 
134
 
8,237
 
28
 
N/A
 
N/A
GlenLake Bldg I
 
Office
 
Raleigh
 
 (4)
 
924
 
-
 
1,324
 
21,752
 
2,248
 
21,752
 
24,000
 
5,332
 
2002
 
 5-40 yrs.
GlenLake Four
 
Office
 
Raleigh
 
 (5)
 
1,659
 
-
 
493
 
22,357
 
2,152
 
22,357
 
24,509
 
3,503
 
2006
 
 5-40 yrs.
 GlenLake Six
 
Office
 
Raleigh
     
941
 
-
 
16
 
22,018
 
957
 
22,018
 
22,975
 
1,702
 
2008
 
 5-40 yrs.
Healthsource
 
Office
 
Raleigh
 
 (5)
 
1,304
 
-
 
540
 
13,655
 
1,844
 
13,655
 
15,499
 
5,449
 
1996
 
 5-40 yrs.
Highwoods Centre-Weston
 
Office
 
Raleigh
 
 (1)
 
531
 
-
 
(267)
 
8,682
 
264
 
8,682
 
8,946
 
2,364
 
1998
 
 5-40 yrs.
Highwoods Office Center North Land
 
Office
 
Raleigh
     
357
 
49
 
-
 
-
 
357
 
49
 
406
 
28
 
N/A
 
N/A
Highwoods Tower One
 
Office
 
Raleigh
     
203
 
16,744
 
-
 
3,488
 
203
 
20,232
 
20,435
 
9,623
 
1991
 
 5-40 yrs.
Highwoods Tower Two
 
Office
 
Raleigh
     
365
 
-
 
503
 
20,829
 
868
 
20,829
 
21,697
 
4,651
 
2001
 
 5-40 yrs.
Inveresk Land Parcel 2
 
Office
 
Raleigh
     
657
 
-
 
197
 
-
 
854
 
-
 
854
 
-
 
N/A
 
N/A
Inveresk Land Parcel 3
 
Office
 
Raleigh
     
548
 
-
 
306
 
-
 
854
 
-
 
854
 
-
 
N/A
 
N/A
Maplewood
 
Office
 
Raleigh
 
 (1)
 
149
 
-
 
107
 
3,335
 
256
 
3,335
 
3,591
 
940
 
2001
 
 5-40 yrs.
Overlook
 
Office
 
Raleigh
     
398
 
-
 
293
 
9,402
 
691
 
9,402
 
10,093
 
2,912
 
1999
 
 5-40 yrs.
Pamlico
 
Office
 
Raleigh
     
289
 
-
 
-
 
13,612
 
289
 
13,612
 
13,901
 
8,333
 
1980
 
 5-40 yrs.
ParkWest One - Weston
 
Office
 
Raleigh
     
242
 
-
 
-
 
3,430
 
242
 
3,430
 
3,672
 
849
 
2001
 
 5-40 yrs.
ParkWest Two - Weston
 
Office
 
Raleigh
     
356
 
-
 
-
 
4,292
 
356
 
4,292
 
4,648
 
1,382
 
2001
 
 5-40 yrs.
ParkWest Three - Land - Weston
 
Office
 
Raleigh
     
306
 
-
 
-
 
-
 
306
 
-
 
306
 
-
 
N/A
 
N/A
Progress Center Renovation
 
Office
 
Raleigh
     
-
 
-
 
-
 
362
 
-
 
362
 
362
 
160
 
2003
 
 5-40 yrs.
Raleigh Corp Center Lot D
 
Office
 
Raleigh
     
1,211
 
-
 
8
 
-
 
1,219
 
-
 
1,219
 
-
 
N/A
 
N/A
 RBC Plaza
 
Mixed-Use
 
Raleigh
 
 46,662
 
1,206
 
-
 
-
 
70,710
 
1,206
 
70,710
 
71,916
 
4,922
 
2008
 
 5-40 yrs.
Rexwoods Center I
 
Office
 
Raleigh
     
878
 
3,730
 
-
 
1,116
 
878
 
4,846
 
5,724
 
2,430
 
1990
 
 5-40 yrs.
Rexwoods Center II
 
Office
 
Raleigh
     
362
 
1,818
 
-
 
617
 
362
 
2,435
 
2,797
 
1,136
 
1993
 
 5-40 yrs.
Rexwoods Center III
 
Office
 
Raleigh
     
919
 
2,816
 
-
 
722
 
919
 
3,538
 
4,457
 
1,651
 
1992
 
 5-40 yrs.
Rexwoods Center IV
 
Office
 
Raleigh
     
586
 
-
 
-
 
3,449
 
586
 
3,449
 
4,035
 
1,355
 
1995
 
 5-40 yrs.
Rexwoods Center V
 
Office
 
Raleigh
     
1,301
 
-
 
184
 
5,190
 
1,485
 
5,190
 
6,675
 
1,661
 
1998
 
 5-40 yrs.
Riverbirch
 
Office
 
Raleigh
     
469
 
4,038
 
(469)
 
(3,828)
 
-
 
210
 
210
 
-
 
1987
 
 5-40 yrs.
Situs I
 
Office
 
Raleigh
     
692
 
4,646
 
178
 
(1,154)
 
870
 
3,492
 
4,362
 
1,185
 
1996
 
 5-40 yrs.
Situs II
 
Office
 
Raleigh
     
718
 
6,254
 
181
 
(1,288)
 
899
 
4,966
 
5,865
 
1,571
 
1998
 
 5-40 yrs.
Situs III
 
Office
 
Raleigh
     
440
 
4,078
 
119
 
(1,008)
 
559
 
3,070
 
3,629
 
800
 
2000
 
 5-40 yrs.
Six Forks Center I
 
Office
 
Raleigh
     
666
 
2,665
 
-
 
1,316
 
666
 
3,981
 
4,647
 
1,659
 
1982
 
 5-40 yrs.
Six Forks Center II
 
Office
 
Raleigh
     
1,086
 
4,533
 
-
 
1,492
 
1,086
 
6,025
 
7,111
 
2,397
 
1983
 
 5-40 yrs.
Six Forks Center III
 
Office
 
Raleigh
     
862
 
4,411
 
-
 
2,228
 
862
 
6,639
 
7,501
 
2,690
 
1987
 
 5-40 yrs.
Smoketree Tower
 
Office
 
Raleigh
     
2,353
 
11,743
 
-
 
3,227
 
2,353
 
14,970
 
17,323
 
6,138
 
1984
 
 5-40 yrs.
Sycamore
 
Office
 
Raleigh
     
255
 
-
 
217
 
5,184
 
472
 
5,184
 
5,656
 
1,637
 
1997
 
 5-40 yrs.
Weston Land
 
Mixed-Use
 
Raleigh
     
22,771
 
-
 
(7,169)
 
-
 
15,602
 
-
 
15,602
 
-
 
N/A
 
N/A
Willow Oak
 
Office
 
Raleigh
     
458
 
-
 
268
 
5,154
 
726
 
5,154
 
5,880
 
1,908
 
1995
 
 5-40 yrs.
Other Property
 
Other
 
Raleigh
     
48
 
9,496
 
720
 
4,834
 
768
 
14,330
 
15,098
 
7,236
 
N/A
 
N/A
                                                     
Richmond, VA
                                                   
4900 Cox Road
 
Office
 
Richmond
     
1,324
 
5,311
 
-
 
2,921
 
1,324
 
8,232
 
9,556
 
2,801
 
1991
 
 5-40 yrs.
Colonnade Building
 
Office
 
Richmond
 
 (4)
 
1,364
 
6,105
 
-
 
747
 
1,364
 
6,852
 
8,216
 
1,554
 
2003
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
Dominion Place - Pitts Parcel
 
Office
 
Richmond
     
1,101
 
-
 
(332)
 
-
 
769
 
-
 
769
 
-
 
N/A
 
N/A
Essex Plaza
 
Office
 
Richmond
 
 10,717
 
1,581
 
13,299
 
-
 
(1,849)
 
1,581
 
11,450
 
13,031
 
3,096
 
1999
 
 5-40 yrs.
Grove Park I
 
Office
 
Richmond
     
713
 
-
 
319
 
5,213
 
1,032
 
5,213
 
6,245
 
1,656
 
1997
 
 5-40 yrs.
Hamilton Beach
 
Office
 
Richmond
     
1,086
 
4,345
 
-
 
1,969
 
1,086
 
6,314
 
7,400
 
2,450
 
1986
 
 5-40 yrs.
Highwoods Commons
 
Office
 
Richmond
     
521
 
-
 
446
 
3,319
 
967
 
3,319
 
4,286
 
1,084
 
1999
 
 5-40 yrs.
Highwoods One
 
Office
 
Richmond
     
1,688
 
-
 
-
 
10,984
 
1,688
 
10,984
 
12,672
 
3,631
 
1996
 
 5-40 yrs.
Highwoods Two
 
Office
 
Richmond
 
 (4)
 
786
 
-
 
213
 
6,026
 
999
 
6,026
 
7,025
 
1,968
 
1997
 
 5-40 yrs.
Highwoods Five
 
Office
 
Richmond
     
783
 
-
 
-
 
5,544
 
783
 
5,544
 
6,327
 
1,804
 
1998
 
 5-40 yrs.
Highwoods Plaza
 
Office
 
Richmond
     
909
 
-
 
176
 
5,644
 
1,085
 
5,644
 
6,729
 
1,347
 
2000
 
 5-40 yrs.
Innsbrooke Centre
 
Office
 
Richmond
 
 5,079
 
1,300
 
6,958
 
(144)
 
(414)
 
1,156
 
6,544
 
7,700
 
1,079
 
1987
 
 5-40 yrs.
Innslake Center
 
Office
 
Richmond
 
 (1)
 
845
 
-
 
195
 
5,386
 
1,040
 
5,386
 
6,426
 
1,237
 
2001
 
 5-40 yrs.
Liberty Mutual
 
Office
 
Richmond
     
1,205
 
4,825
 
-
 
839
 
1,205
 
5,664
 
6,869
 
2,091
 
1990
 
 5-40 yrs.
Markel American
 
Office
 
Richmond
 
 8,447
 
1,300
 
13,259
 
72
 
(4,617)
 
1,372
 
8,642
 
10,014
 
1,547
 
1998
 
 5-40 yrs.
Markel Plaza
 
Office
 
Richmond
 
 10,717
 
1,700
 
17,081
 
(386)
 
(5,389)
 
1,314
 
11,692
 
13,006
 
2,015
 
1989
 
 5-40 yrs.
North Park
 
Office
 
Richmond
     
2,163
 
8,659
 
(14)
 
1,964
 
2,149
 
10,623
 
12,772
 
4,126
 
1989
 
 5-40 yrs.
North Shore Commons  A
 
Office
 
Richmond
 
 (4)
 
951
 
-
 
-
 
11,469
 
951
 
11,469
 
12,420
 
3,483
 
2002
 
 5-40 yrs.
North Shore Commons  B - Land
 
Office
 
Richmond
 
 (4)
 
2,067
 
-
 
(103)
 
11,513
 
1,964
 
11,513
 
13,477
 
1,595
 
N/A
 
 N/A
North Shore Commons  C - Land
 
Office
 
Richmond
     
1,497
 
-
 
-
 
-
 
1,497
 
-
 
1,497
 
-
 
N/A
 
 N/A
North Shore Commons  D - Land
 
Office
 
Richmond
     
1,261
 
-
 
-
 
-
 
1,261
 
-
 
1,261
 
-
 
N/A
 
N/A
Nucklos Corner Land
 
Office
 
Richmond
     
1,259
 
-
 
-
 
-
 
1,259
 
-
 
1,259
 
-
 
N/A
 
N/A
One Shockoe Plaza
 
Office
 
Richmond
     
-
 
-
 
356
 
15,143
 
356
 
15,143
 
15,499
 
5,874
 
1996
 
 5-40 yrs.
Pavilion Land
 
Office
 
Richmond
     
181
 
46
 
20
 
(46)
 
201
 
-
 
201
 
-
 
N/A
 
N/A
Rhodia Building
 
Office
 
Richmond
     
1,600
 
8,864
 
-
 
3
 
1,600
 
8,867
 
10,467
 
2,283
 
1996
 
 5-40 yrs.
Sadler & Cox Land
 
Office
 
Richmond
     
1,535
 
-
 
-
 
-
 
1,535
 
-
 
1,535
 
-
 
N/A
 
 N/A
Saxon Capital Building
 
Office
 
Richmond
 
 (4)
 
1,918
 
-
 
337
 
13,550
 
2,255
 
13,550
 
15,805
 
2,988
 
2005
 
 5-40 yrs.
Stony Point F Land
 
Office
 
Richmond
     
1,841
 
-
 
-
 
-
 
1,841
 
-
 
1,841
 
-
 
N/A
 
 N/A
Stony Point I
 
Office
 
Richmond
 
 (4)
 
1,384
 
11,630
 
59
 
2,010
 
1,443
 
13,640
 
15,083
 
4,426
 
1990
 
 5-40 yrs.
Stony Point II
 
Office
 
Richmond
     
1,240
 
-
 
-
 
11,594
 
1,240
 
11,594
 
12,834
 
3,338
 
1999
 
 5-40 yrs.
Stony Point III
 
Office
 
Richmond
 
 (4)
 
995
 
-
 
-
 
9,664
 
995
 
9,664
 
10,659
 
2,947
 
2002
 
 5-40 yrs.
Stony Point IV
 
Office
 
Richmond
     
955
 
-
 
-
 
11,644
 
955
 
11,644
 
12,599
 
2,178
 
2006
 
 5-40 yrs.
Technology Park 1
 
Office
 
Richmond
     
541
 
2,166
 
-
 
270
 
541
 
2,436
 
2,977
 
936
 
1991
 
 5-40 yrs.
Technology Park 2
 
Office
 
Richmond
     
264
 
1,058
 
-
 
114
 
264
 
1,172
 
1,436
 
442
 
1991
 
 5-40 yrs.
Vantage Place A
 
Office
 
Richmond
 
 (4)
 
203
 
811
 
-
 
224
 
203
 
1,035
 
1,238
 
436
 
1987
 
 5-40 yrs.
Vantage Place B
 
Office
 
Richmond
 
 (4)
 
233
 
931
 
-
 
194
 
233
 
1,125
 
1,358
 
439
 
1988
 
 5-40 yrs.
Vantage Place C
 
Office
 
Richmond
 
 (4)
 
235
 
940
 
-
 
288
 
235
 
1,228
 
1,463
 
472
 
1987
 
 5-40 yrs.
Vantage Place D
 
Office
 
Richmond
 
 (4)
 
218
 
873
 
-
 
243
 
218
 
1,116
 
1,334
 
406
 
1988
 
 5-40 yrs.
Vantage Pointe
 
Office
 
Richmond
 
 (4)
 
1,089
 
4,500
 
-
 
947
 
1,089
 
5,447
 
6,536
 
2,163
 
1990
 
 5-40 yrs.
Virginia Mutual
 
Office
 
Richmond
     
1,301
 
6,036
 
-
 
383
 
1,301
 
6,419
 
7,720
 
1,660
 
1996
 
 5-40 yrs.
Waterfront Plaza
 
Office
 
Richmond
     
585
 
2,347
 
-
 
911
 
585
 
3,258
 
3,843
 
1,296
 
1988
 
 5-40 yrs.
West Shore I
 
Office
 
Richmond
 
 (1)
 
332
 
1,431
 
-
 
313
 
332
 
1,744
 
2,076
 
671
 
1995
 
 5-40 yrs.
West Shore II
 
Office
 
Richmond
 
 (1)
 
489
 
2,181
 
-
 
384
 
489
 
2,565
 
3,054
 
908
 
1995
 
 5-40 yrs.
West Shore III
 
Office
 
Richmond
 
 (1)
 
961
 
-
 
141
 
4,247
 
1,102
 
4,247
 
5,349
 
1,309
 
1997
 
 5-40 yrs.

               
Initial Costs
 
Costs Capitalized
Subsequent to Acquisition
 
Gross Value at Close of Period
           
Description
 
Segment
Type
 
City
 
2010
Encumbrance
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Land
 
Bldg &
Improv
 
Total
Assets
 
Accumulated Depreciation
 
Date of
Construction
 
Life on
Which
Depreciation
is Calculated
                                                     
                                                     
South Florida
                                                   
The 1800 Eller Drive Building
 
Office
 
South Florida
     
-
 
9,851
 
-
 
2,098
 
-
 
11,949
 
11,949
 
4,480
 
1983
 
 5-40 yrs.
                                                     
Tampa, FL
                                                   
380 Park Place
 
Office
 
Tampa
     
1,502
 
-
 
240
 
6,624
 
1,742
 
6,624
 
8,366
 
1,600
 
2001
 
5-40 yrs.
4200 Cypress
 
Office
 
Tampa
     
2,673
 
16,470
 
-
 
101
 
2,673
 
16,571
 
19,244
 
997
 
1989
 
5-40 yrs.
Anchor Glass
 
Office
 
Tampa
     
1,281
 
11,318
 
-
 
1,732
 
1,281
 
13,050
 
14,331
 
4,489
 
1988
 
 5-40 yrs.
Avion Park Land
 
Office
 
Tampa
     
5,237
 
-
 
-
 
1,487
 
5,237
 
1,487
 
6,724
 
83
 
N/A
 
N/A
Bayshore
 
Office
 
Tampa
     
2,276
 
11,817
 
-
 
1,116
 
2,276
 
12,933
 
15,209
 
4,423
 
1990
 
 5-40 yrs.
FBI Field Office
 
Office
 
Tampa
 
 (5)
 
4,054
 
-
 
406
 
27,241
 
4,460
 
27,241
 
31,701
 
4,600
 
2005
 
 5-40 yrs.
Feathersound Corporate Center II
 
Office
 
Tampa
     
802
 
7,463
 
-
 
1,959
 
802
 
9,422
 
10,224
 
3,142
 
1986
 
 5-40 yrs.
Harborview Plaza
 
Office
 
Tampa
 
 21,502
 
3,537
 
29,944
 
969
 
(454)
 
4,506
 
29,490
 
33,996
 
10,044
 
2001
 
 5-40 yrs.
Highwoods Preserve I
 
Office
 
Tampa
 
 (5)
 
991
 
-
 
-
 
22,192
 
991
 
22,192
 
23,183
 
6,113
 
1999
 
 5-40 yrs.
Highwoods Preserve Land
 
Office
 
Tampa
     
1,485
 
-
 
485
 
-
 
1,970
 
-
 
1,970
 
-
 
N/A
 
N/A
Highwoods Preserve V
 
Office
 
Tampa
 
 (5)
 
881
 
-
 
-
 
27,263
 
881
 
27,263
 
28,144
 
8,096
 
2001
 
 5-40 yrs.
HIW Bay Center I
 
Office
 
Tampa
     
3,565
 
-
 
(64)
 
37,558
 
3,501
 
37,558
 
41,059
 
4,440
 
2007
 
 5-40 yrs.
HIW Bay Center II
 
Office
 
Tampa
     
3,482
 
-
 
-
 
-
 
3,482
 
-
 
3,482
 
-
 
N/A
 
N/A
HIW Preserve VII
 
Office
 
Tampa
     
790
 
-
 
-
 
12,513
 
790
 
12,513
 
13,303
 
1,161
 
2007
 
 5-40 yrs.
HIW Preserve VII Garage
 
Office
 
Tampa
     
-
 
-
 
-
 
6,789
 
-
 
6,789
 
6,789
 
665
 
2007
 
 5-40 yrs.
Horizon
 
Office
 
Tampa
     
-
 
6,257
 
-
 
2,414
 
-
 
8,671
 
8,671
 
3,187
 
1980
 
 5-40 yrs.
LakePointe I
 
Office
 
Tampa
     
2,106
 
89
 
-
 
35,301
 
2,106
 
35,390
 
37,496
 
11,465
 
1986
 
 5-40 yrs.
LakePointe II
 
Office
 
Tampa
     
2,000
 
15,848
 
672
 
7,197
 
2,672
 
23,045
 
25,717
 
6,782
 
1999
 
 5-40 yrs.
Lakeside
 
Office
 
Tampa
     
-
 
7,369
 
-
 
1,747
 
-
 
9,116
 
9,116
 
3,233
 
1978
 
 5-40 yrs.
Lakeside/Parkside Garage
 
Office
 
Tampa
     
-
 
-
 
-
 
3,224
 
-
 
3,224
 
3,224
 
497
 
2004
 
 5-40 yrs.
One Harbour Place
 
Office
 
Tampa
     
2,016
 
25,252
 
-
 
5,163
 
2,016
 
30,415
 
32,431
 
8,604
 
1985
 
 5-40 yrs.
Parkside
 
Office
 
Tampa
     
-
 
9,407
 
-
 
3,513
 
-
 
12,920
 
12,920
 
4,804
 
1979
 
 5-40 yrs.
Pavilion
 
Office
 
Tampa
     
-
 
16,394
 
-
 
2,117
 
-
 
18,511
 
18,511
 
6,086
 
1982
 
 5-40 yrs.
Pavilion Parking Garage
 
Office
 
Tampa
     
-
 
-
 
-
 
5,600
 
-
 
5,600
 
5,600
 
1,568
 
1999
 
 5-40 yrs.
Spectrum
 
Office
 
Tampa
     
1,454
 
14,502
 
-
 
5,450
 
1,454
 
19,952
 
21,406
 
6,293
 
1984
 
 5-40 yrs.
Tower Place
 
Office
 
Tampa
 
 (5)
 
3,218
 
19,898
 
-
 
2,534
 
3,218
 
22,432
 
25,650
 
8,605
 
1988
 
 5-40 yrs.
Westshore Square
 
Office
 
Tampa
     
1,126
 
5,186
 
-
 
476
 
1,126
 
5,662
 
6,788
 
1,801
 
1976
 
 5-40 yrs.
Independence Park Land
 
Office
 
Tampa
     
4,943
 
-
 
-
 
-
 
4,943
 
-
 
4,943
 
-
 
N/A
 
N/A
Independence Park
 
Office
 
Tampa
     
2,531
 
4,526
 
-
 
-
 
2,531
 
4,526
 
7,057
 
10
 
1983
 
 5-40 yrs.
                                                     
               
479,058
 
1,347,397
 
(21,315)
 
1,548,402
 
457,743
 
2,895,799
 
3,353,542
 
835,165
       
                                                     

 
 
2010 Encumbrance Notes
 
(1)
These assets are pledged as collateral for a $128,084,000 first mortgage loan.
 
(2)
These assets are pledged as collateral for a $52,109,000 first mortgage loan.
 
(3)
These assets are pledged as collateral for a $186,038,000 first mortgage loan.
 
(4)
These assets are pledged as collateral for a $123,359,000 first mortgage loan.
 
(5)
These assets are pledged as collateral for a $113,386,000 first mortgage loan.
Document Information
Year Ended
Dec. 31, 2010
Document Type
10-K 
Amendment Flag
FALSE 
Document Period End Date
2010-12-31 
Entity Information
Year Ended
Dec. 31, 2010
Jun. 30, 2010
Entity Registrant Name
HIGHWOODS PROPERTIES INC 
 
Entity Central Index Key
0000921082 
 
Current Fiscal Year End Date
12/31 
 
Entity Well-known Seasoned Issuer
Yes 
 
Entity Voluntary Filers
No 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Large Accelerated Filer 
 
Entity Public Float
 
1,963,562,043 
Entity Common Stock, Shares Outstanding
71,690,487 
 
Document Fiscal Year Focus
2010 
 
Document Fiscal Period Focus
FY