What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-09 compared with 2020-02-04 · 735 added, 559 removed, 1377 unchanged (48% of the section changed)

68 unchanged sentences

OTHER INFORMATION

Anderson, 71, was elected to join the Company’s Board of Directors effective January 29, 2020.

Anderson, who will serve on the Company’s compensation and governance committee, qualifies as an independent director under the standards of the New York Stock Exchange.

Anderson has had an extensive career in banking, finance, investment management and real estate.

He retired in June 2019 after 18 years as Chief Executive Officer of the Medical University of South Carolina Foundation.

Previously, Mr.

Anderson spent 27 years at Bank of America as President of Bank of America South Carolina and head of its Carolinas Business Banking group.

He is a life trustee of the Saul Alexander Foundation, a director and treasurer of the Winwood Farm Home for Boys, and a Senior Vice President at Plantation Services, a real estate and land management firm.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

14 unchanged sentences

and Highwoods Realty Limited Partnership included in this report.

Number Description

1 Form of Equity Distribution Agreement, dated February 5, 2020, among Highwoods Properties, Inc., Highwoods Realty Limited Partnership and each of the firms named therein (filed as part of the Company’s Current Report on Form 8-K dated February 5, 2020)

3.1 Amended and Restated Charter of the Company (filed as part of the Company’s Current Report on Form 8-K dated May 15, 2008)

14 unchanged sentences

4.13 Officers ’ Certificate Establishing the Terms of the 3.050% Notes, dated September 13, 2019 (filed as part of the Company ’ s Current Report on Form 8-K dated September 13, 2019)

Description of Registered Securities

4.14 Form of 2.600% Notes due February 1, 2031 (filed as part of the Company ’ s Current Report on Form 8-K dated August 13 , 2020)

4.15 Officers ’ Certificate Establishing the Terms of the 2.600% Notes, dated August 13, 2020 (filed as part of the Company ’ s Current Report on Form 8-K dated August 13, 2020)

4.16 Description of Registered Securities (filed as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019)

10.1 Second Restated Agreement of Limited Partnership, dated as of January 1, 2000, of the Operating Partnership (filed as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)

1 unchanged sentence

1, dated as of July 22, 2004, to the Second Restated Agreement of Limited Partnership, dated as of January 1, 2000, of the Operating Partnership (filed as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2004)

Number Description

10.3 Amendment No.

4 unchanged sentences

Retirement Plan, effective as of March 1, 2006 (filed as part of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2007)

Retirement Agreement, dated as of September 5, 2019, between the Company and Edward J.

Fritsch (filed as part of the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2019)

10.7 * Highwoods Properties, Inc.

2020 Employee Stock Purchase Plan (filed as part of the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020)

10.8 * Executive Supplemental Employment Agreement, dated as of September 1, 2015 between the Company and Theodore J.

8 unchanged sentences

Leary (filed as part of the Company ’ s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019)

Highwoods Properties, Inc.

Amended and Restated Employee Stock Purchase Plan (filed as part of the Company’s Current Report on Form 8-K dated May 12, 2010)

Amendment No.

1 to the Amended and Restated Employee Stock Purchase Plan of the Company (filed as part of the Company's Annual Report on Form 10-K for the year ended December 31, 2010)

Amendment No.

2 to the Amended and Restated Employee Stock Purchase Plan of the Company (filed as part of the Company's Annual Report on Form 10-K for the year ended December 31, 2017)

10.13 Fifth Amended and Restated Credit Agreement, dated as of October 18, 2017, by and among the Company, the Operating Partnership, Bank of America, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, Wells Fargo Bank, National Association and PNC Bank, National Association, as Co-Syndication Agents, and the Other Lenders named therein (filed as part of the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2017)

Schedule of Subsidiaries

21 Schedule of Subsidiaries (filed as part of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019)

23.1 Consent of Deloitte & Touche LLP for the Company

23.2 Consent of Deloitte & Touche LLP for the Operating Partnership

31.1 Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company

6 unchanged sentences

32.4 Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership

The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Linkbase Document

XBRL Extension Labels Linkbase

XBRL Taxonomy Extension Presentation Linkbase Document

101.INS Inline XBRL Instance Document (the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)

101.SCH Inline XBRL Taxonomy Extension Schema Document

101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Represents management contract or compensatory plan.

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We have audited the accompanying consolidated balance sheets of Highwoods Properties, Inc.

and subsidiaries (the “Company”) as of December 31, 2019 and 2018 , and the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2019 , and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

and subsidiaries (the “Company”) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

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We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Real Estate Assets - Refer to Notes 1 and 3 to the financial statements

1 unchanged sentence

The Company performs an impairment analysis of properties which begins with an evaluation of events or changes in circumstances that may indicate that the carrying value may not be recoverable, such as a significant decline in occupancy, identification of materially adverse legal or environmental factors, a change in the designation of an asset from core to non-core, which may impact the anticipated holding period, or a decline in market value to an amount less than cost.

The Company makes judgments to evaluate real estate assets for possible indications of impairment.

Changes in these judgments could have a material impact on the real estate assets identified for further analysis.

The Company makes judgments that determine whether specific real estate assets possess indicators of impairment.

Changes in those judgments could have a material impact on the real estate assets that are identified for further analysis.

Given the Company’s evaluation of possible indications of impairment of real estate assets requires management to make judgments, performing audit procedures to evaluate whether management appropriately identified events or changes in circumstances indicating that the carrying amounts of real estate assets may not be recoverable required a high degree of auditor judgment.

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◦ Inquiring of management and reading investment committee and board minutes to identify properties that should be evaluated as non-core and therefore may impact the anticipated holding period.

Testing real estate assets for possible indications of impairment, including searching for adverse asset-specific circumstances and/or market conditions by circulating a questionnaire to regional property managers.

◦ Testing real estate assets for possible indications of impairment, including searching for adverse asset-specific circumstances and/or market conditions by circulating a questionnaire to regional property managers and using reputable market surveys.

◦ With the assistance of our fair value specialists, developing an independent expectation of impairment indicators and comparing such expectation to management’s analysis.

Real Estate and Related Assets - Acquisitions - Refer to Notes 1 and 3 to the financial statements

Critical Audit Matter Description

The Company acquired a building in the central business district of Charlotte, which delivered in 2019 for a net purchase price of $399.1 million.

The Company accounted for the acquisition as an asset acquisition.

Accordingly, the purchase price paid for assets acquired and liabilities assumed was allocated, based on relative fair value as determined by management, with the assistance of third-party specialists, to land, buildings, tenant improvements and intangible assets and liabilities such as above and below market leases and acquired in-place leases.

Management assessed the relative fair value based on estimated cash flow projections that utilized discount and capitalization rates as well as available market information.

Given the allocation of relative fair value to the assets acquired and liabilities assumed required management to make significant estimates related to assumptions such as discount rates, capitalization rates, market rental rates and land values, performing audit procedures to evaluate the reasonableness of these assumptions required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the relative fair value of assets acquired and liabilities assumed included the following, among others:

We tested the effectiveness of controls over the purchase price allocation, including management’s controls over the review of the third-party appraisal, the identification of real estate assets, intangible assets and liabilities and the valuation methodology for estimating the relative fair value of assets acquired and liabilities assumed.

With the assistance of our fair value specialists, we evaluated the reasonableness of the valuation methodology, discount rates, capitalization rates, market rental rates and land values, by developing a range of independent estimates and comparing our estimates to those used by management.

We tested the mathematical accuracy of the valuation models and the source information underlying the determination of the intangible assets and liabilities fair value.

/s/ Deloitte & Touche LLP

2 unchanged sentences

We have served as the Company’s auditor since 2006.

Table on Contents

HIGHWOODS PROPERTIES, INC.

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Real estate assets, at cost:

Land $ 466,872 $ 515,095

Buildings and tenant improvements 4,981,637 5,128,150

1 unchanged sentence

Land held for development 131,474 99,163

5,839,664 5,915,114

Less-accumulated depreciation ( 1,418,379 ) ( 1,388,566 )

4 unchanged sentences

Accounts receivable 27,488 23,370

Mortgages and notes receivable, net of allowance of $0 and $44, respectively

Mortgages and notes receivable 1,341 1,501

Accrued straight-line rents receivable 259,381 234,652

1 unchanged sentence

Deferred leasing costs, net of accumulated amortization of $ 151,698 and $ 146,125 , respectively

Prepaid expenses and other assets, net of accumulated depreciation of $20,017 and $18,074,

209,329 231,347

Prepaid expenses and other assets, net of accumulated depreciation of $ 21,154 and $ 20,017 , respectively

62,885 58,996

Total Assets $ 5,209,417 $ 5,138,244

Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:

6 unchanged sentences

8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $ 1,000 per share), 28,826 and 28,859 shares issued and outstanding, respectively

28,826 28,859

Common Stock, $ 0.01 par value, 200,000,000 authorized shares;

2 unchanged sentences

Distributions in excess of net income available for common stockholders ( 686,225 ) ( 831,808 )

Accumulated other comprehensive income/(loss)

Accumulated other comprehensive loss ( 1,462 ) ( 471 )

Total Stockholders’ Equity 2,336,124 2,152,397

Noncontrolling interests in consolidated affiliates 22,046 22,010

Total Equity 2,358,170 2,174,407

Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity $ 5,209,417 $ 5,138,244

See accompanying notes to consolidated financial statements.

Table on Contents

HIGHWOODS PROPERTIES, INC.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental and other revenues $ 736,900 $ 735,979 $ 720,035

9 unchanged sentences

Equity in earnings of unconsolidated affiliates 4,005 3,276 2,238

Net income 357,914 141,683 177,630

Net (income) attributable to noncontrolling interests in the Operating Partnership ( 9,338 ) ( 3,551 ) ( 4,588 )

9 unchanged sentences

See accompanying notes to consolidated financial statements.

Table on Contents

HIGHWOODS PROPERTIES, INC.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Comprehensive income:

Net income $ 357,914 $ 141,683 $ 177,630

Other comprehensive income/(loss):

9 unchanged sentences

(in thousands, except share amounts)

Number of Common Shares

Series A Cumulative Redeemable Preferred Shares

Additional Paid-In Capital

Accumulated Other Compre-hensive Income/(Loss)

Non-controlling Interests in Consolidated Affiliates

Distributions in Excess of Net Income Available for Common Stockholders

Number of Common Shares Common Stock Series A Cumulative Redeemable Preferred Shares Additional Paid-In Capital Accumulated Other Compre-hensive Income/(Loss) Non-controlling Interests in Consolidated Affiliates Distributions in Excess of Net Income Available for Common Stockholders Total

Balance at December 31, 2017 103,266,875 $ 1,033 $ 28,892 $ 2,929,399 $ 7,838 $ 17,416 $ ( 747,344 ) $ 2,237,234

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Dividends on Common Stock ($ 1.85 per share)

— — — — — ( 191,302 ) ( 191,302 )

Dividends on Preferred Stock ($ 86.25 per share)

— — — — — ( 2,492 ) ( 2,492 )

Adjustment of noncontrolling interests in the Operating Partnership to fair value — — 33,427 — — — 33,427

6 unchanged sentences

Comprehensive income:

Net income — — — — — 177,630 177,630

Other comprehensive income — — — 2,075 — — 2,075

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Dividends on Common Stock ($ 1.90 per share)

— — — — — ( 196,935 ) ( 196,935 )

Dividends on Preferred Stock ($ 86.25 per share)

— — — — — ( 2,488 ) ( 2,488 )

Adjustment of noncontrolling interests in the Operating Partnership to fair value — — ( 29,557 ) — — — ( 29,557 )

Distributions to noncontrolling interests in consolidated affiliates — — — — ( 1,767 ) — ( 1,767 )

Contributions from noncontrolling interests in consolidated affiliates — — — — 4,987 — 4,987

Issuances of restricted stock 190,934 — — — — — — —

Redemptions/repurchases of Preferred Stock

— ( 18 ) — — — — ( 18 )

Share-based compensation expense, net of forfeitures

( 6,810 ) 2 — 7,178 — — — 7,180

Net (income) attributable to noncontrolling interests in the Operating Partnership

— — — — — ( 3,551 ) ( 3,551 )

Net (income) attributable to noncontrolling interests in consolidated affiliates

— — — — 1,214 ( 1,214 ) —

Comprehensive income:

Other comprehensive income

Net income — — — — — 141,683 141,683

Other comprehensive loss — — — ( 10,384 ) — — ( 10,384 )

Total comprehensive income 131,299

3 unchanged sentences

(in thousands, except share amounts)

Number of Common Shares

Series A Cumulative Redeemable Preferred Shares

Additional Paid-In Capital

Accumulated Other Compre-hensive Income/(Loss)

Non-controlling Interests in Consolidated Affiliates

Distributions in Excess of Net Income Available for Common Stockholders

Balance at December 31, 2019 103,756,046 $ 1,038 $ 28,859 $ 2,954,779 $ ( 471 ) $ 22,010 $ ( 831,808 ) $ 2,174,407

Issuances of Common Stock, net of issuance costs and tax withholdings

19,377 — — 2,196 — — — 2,196

Conversions of Common Units to Common Stock

3,570 — — 145 — — — 145

Dividends on Common Stock ($ 1.92 per share)

— — — — — ( 199,331 ) ( 199,331 )

Dividends on Preferred Stock ($ 86.25 per share)

— — — — — ( 2,488 ) ( 2,488 )

Adjustment of noncontrolling interests in the Operating Partnership to fair value

— — 30,617 — — — 30,617

Distributions to noncontrolling interests in consolidated affiliates

Contributions from noncontrolling interests in consolidated affiliates

— — — — ( 1,138 ) — ( 1,138 )

Issuances of restricted stock

149,304 — — — — — — —

Redemptions/repurchases of Preferred Stock

— ( 33 ) — — — — ( 33 )

Share-based compensation expense, net of forfeitures

( 6,751 ) 1 — 6,209 — — — 6,210

Net (income) attributable to noncontrolling interests in the Operating Partnership

— — — — — ( 9,338 ) ( 9,338 )

Net (income) attributable to noncontrolling interests in consolidated affiliates

— — — — 1,174 ( 1,174 ) —

Comprehensive income:

Net income — — — — — 357,914 357,914

Other comprehensive loss — — — ( 991 ) — — ( 991 )

2 unchanged sentences

See accompanying notes to consolidated financial statements.

Table on Contents

HIGHWOODS PROPERTIES, INC.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Operating activities:

Net income $ 357,914 $ 141,683 $ 177,630

Adjustments to reconcile net income to net cash provided by operating activities:

1 unchanged sentence

Amortization of lease incentives and acquisition-related intangible assets and liabilities

( 2,537 ) ( 505 ) ( 1,943 )

Share-based compensation expense 6,210 7,180 7,466

24 unchanged sentences

Distributions of capital from unconsolidated affiliates 72 7,833 105

Investments in mortgages and notes receivable ( 32 ) — —

Repayments of mortgages and notes receivable 310 295 1,312

1 unchanged sentence

Changes in other investing activities ( 10,853 ) ( 5,971 ) ( 6,230 )

Net cash used in investing activities

Net cash provided by/(used in) investing activities $ 110,682 $ ( 607,407 ) $ ( 306,749 )

Table on Contents

HIGHWOODS PROPERTIES, INC.

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Financing activities:

Dividends on Common Stock $ ( 199,331 ) $ ( 196,935 ) $ ( 191,302 )

Special dividend on Common Stock

Redemptions/repurchases of Preferred Stock ( 33 ) ( 18 ) ( 15 )

1 unchanged sentence

Distributions to noncontrolling interests in the Operating Partnership ( 5,456 ) ( 5,189 ) ( 5,167 )

Special distribution to noncontrolling interests in the Operating Partnership

Distributions to noncontrolling interests in consolidated affiliates ( 1,138 ) ( 1,767 ) ( 1,047 )

14 unchanged sentences

Year Ended December 31,

2020 2019 2018

Cash and cash equivalents at end of the period $ 109,322 $ 9,505 $ 3,769

3 unchanged sentences

Year Ended December 31,

2020 2019 2018

Cash paid for interest, net of amounts capitalized $ 72,350 $ 72,014 $ 67,235

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

Unrealized gains/(losses) on cash flow hedges $ ( 1,238 ) $ ( 9,134 ) $ 4,161

1 unchanged sentence

Changes in accrued capital expenditures (1)

( 1,913 ) 5,625 ( 165 )

Write-off of fully depreciated real estate assets 46,656 85,727 76,558

2 unchanged sentences

Adjustment of noncontrolling interests in the Operating Partnership to fair value ( 30,617 ) 29,557 ( 33,427 )

Issuances of Common Units to acquire real estate assets 6,163 — —

Contingent consideration in connection with the acquisition of land

1 unchanged sentence

Initial recognition of lease liabilities related to right of use assets

(1) Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities at December 31, 2020, 2019 and 2018 were $ 66.0 million, $ 67.9 million and $ 62.2 million, respectively.

See accompanying notes to consolidated financial statements.

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Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Highwoods Realty Limited Partnership and subsidiaries (the “Operating Partnership”) as of December 31, 2019 and 2018 , and the related consolidated statements of income, comprehensive income, capital, and cash flows for each of the three years in the period ended December 31, 2019 , and the related notes and the schedules listed in the Index at Item 15 (collectively referred to as the “financial statements”).

We have audited the accompanying consolidated balance sheets of Highwoods Realty Limited Partnership and subsidiaries (the “Operating Partnership”) as of December 31, 2020 and 2019, the related consolidated statements of income, comprehensive income, capital, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Operating Partnership as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.

13 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Real Estate Assets - Refer to Notes 1 and 3 to the financial statements

Critical Audit Matter Description

The Operating Partnership performs an impairment analysis of properties which begins with an evaluation of events or changes in circumstances that may indicate that the carrying value may not be recoverable, such as a significant decline in occupancy, identification of materially adverse legal or environmental factors, a change in the designation of an asset from core to non-core, which may impact the anticipated holding period, or a decline in market value to an amount less than cost.

The Operating Partnership makes judgments that determine whether specific real estate assets possess indicators of impairment.

Changes in those judgments could have a material impact on the real estate assets that are identified for further analysis.

Given the Operating Partnership’s evaluation of possible indications of impairment of real estate assets requires management to make judgments, performing audit procedures to evaluate whether management appropriately identified events or changes in

circumstances indicating that the carrying amounts of real estate assets may not be recoverable required a high degree of auditor judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the evaluation of real estate assets for possible indications of impairment included the following, among others:

• We tested the effectiveness of controls over management’s identification of possible circumstances that may indicate that the carrying amounts of real estate assets are no longer recoverable, including controls over management’s designation of an asset as core or non-core, occupancy and management’s estimates of fair values.

• We evaluated management’s identification of impairment indicators by developing an independent determination if properties exhibit an indicator of impairment by:

◦ Inquiring of management and reading investment committee and board minutes to identify properties that should be evaluated as non-core and therefore may impact the anticipated holding period.

◦ With the assistance of our fair value specialists, developing an independent expectation of impairment indicators and comparing such expectation to management’s analysis.

/s/ Deloitte & Touche LLP

6 unchanged sentences

Real estate assets, at cost:

Land $ 466,872 $ 515,095

Buildings and tenant improvements 4,981,637 5,128,150

1 unchanged sentence

Land held for development 131,474 99,163

5,839,664 5,915,114

Less-accumulated depreciation ( 1,418,379 ) ( 1,388,566 )

4 unchanged sentences

Accounts receivable 27,488 23,370

Mortgages and notes receivable, net of allowance of $0 and $44, respectively

Mortgages and notes receivable 1,341 1,501

Accrued straight-line rents receivable 259,381 234,652

1 unchanged sentence

Deferred leasing costs, net of accumulated amortization of $ 151,698 and $ 146,125 , respectively

Prepaid expenses and other assets, net of accumulated depreciation of $20,017 and $18,074,

209,329 231,347

Prepaid expenses and other assets, net of accumulated depreciation of $ 21,154 and $ 20,017 , respectively

62,885 58,996

Total Assets $ 5,209,417 $ 5,138,244

Liabilities, Redeemable Operating Partnership Units and Capital:

5 unchanged sentences

Common Units, 2,838,725 and 2,723,703 outstanding, respectively

Series A Preferred Units (liquidation preference $1,000 per unit), 28,859 and 28,877 units

issued and outstanding, respectively

112,499 133,216

Series A Preferred Units (liquidation preference $ 1,000 per unit), 28,826 and 28,859 units issued and outstanding, respectively

28,826 28,859

Total Redeemable Operating Partnership Units 141,325 162,075

1 unchanged sentence

General partner Common Units, 1,063,515 and 1,060,709 outstanding, respectively

23,087 21,240

Limited partner Common Units, 102,449,222 and 102,286,528 outstanding, respectively

Accumulated other comprehensive income/(loss)

2,285,673 2,102,769

Accumulated other comprehensive loss ( 1,462 ) ( 471 )

Noncontrolling interests in consolidated affiliates 22,046 22,010

6 unchanged sentences

Year Ended December 31,

2020 2019 2018

Rental and other revenues $ 736,900 $ 735,979 $ 720,035

9 unchanged sentences

Equity in earnings of unconsolidated affiliates 4,005 3,276 2,238

Net income 357,914 141,683 177,630

Net (income) attributable to noncontrolling interests in consolidated affiliates ( 1,174 ) ( 1,214 ) ( 1,207 )

12 unchanged sentences

Year Ended December 31,

2020 2019 2018

Comprehensive income:

Net income $ 357,914 $ 141,683 $ 177,630

Other comprehensive income/(loss):

9 unchanged sentences

(in thousands)

Comprehensive Income/(Loss)

Noncontrolling

Common Units Accumulated

Comprehensive Income/(Loss) Noncontrolling

Affiliates Total

Capital Limited

Balance at December 31, 2017 $ 21,830 $ 2,161,258 $ 7,838 $ 17,416 $ 2,208,342

Issuances of Common Units, net of issuance costs and tax withholdings

19 1,846 — — 1,865

Distributions on Common Units ($ 1.85 per unit)

( 1,957 ) ( 193,755 ) — — ( 195,712 )

Distributions on Preferred Units ($ 86.25 per unit)

( 25 ) ( 2,467 ) — — ( 2,492 )

Share-based compensation expense, net of forfeitures 75 7,391 — — 7,466

Distributions to noncontrolling interests in consolidated affiliates

— — — ( 1,047 ) ( 1,047 )

Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner

372 36,920 — — 37,292

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 12 ) ( 1,195 ) — 1,207 —

Comprehensive income:

Net income 1,776 175,854 — — 177,630

Other comprehensive income — — 2,075 — 2,075

2 unchanged sentences

Issuances of Common Units, net of issuance costs and tax withholdings

3 295 — — 298

Distributions on Common Units ($ 1.90 per unit)

( 2,013 ) ( 199,334 ) — — ( 201,347 )

Distributions on Preferred Units ($ 86.25 per unit)

( 25 ) ( 2,463 ) — — ( 2,488 )

Share-based compensation expense, net of forfeitures 72 7,108 — — 7,180

Distributions to noncontrolling interests in consolidated affiliates

— — — ( 1,767 ) ( 1,767 )

Contributions from noncontrolling interests in consolidated affiliates

— — — 4,987 4,987

Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner

( 280 ) ( 27,753 ) — — ( 28,033 )

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 12 ) ( 1,202 ) — 1,214 —

Comprehensive income:

Other comprehensive income

Net income 1,417 140,266 — — 141,683

Other comprehensive loss — — ( 10,384 ) — ( 10,384 )

Total comprehensive income 131,299

1 unchanged sentence

Issuances of Common Units, net of issuance costs and tax withholdings

84 8,275 — — 8,359

Distributions on Common Units ($ 1.92 per unit)

( 2,040 ) ( 201,962 ) — — ( 204,002 )

Distributions on Preferred Units ($ 86.25 per unit)

( 25 ) ( 2,463 ) — — ( 2,488 )

Share-based compensation expense, net of forfeitures 62 6,148 — — 6,210

Distributions to noncontrolling interests in consolidated affiliates

Contributions from noncontrolling interests in consolidated affiliates

— — — ( 1,138 ) ( 1,138 )

Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner

199 19,733 — — 19,932

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 12 ) ( 1,162 ) — 1,174 —

Comprehensive income:

Net income 3,579 354,335 — — 357,914

Other comprehensive loss — — ( 991 ) — ( 991 )

6 unchanged sentences

Year Ended December 31,

2020 2019 2018

Operating activities:

Net income $ 357,914 $ 141,683 $ 177,630

Adjustments to reconcile net income to net cash provided by operating activities:

1 unchanged sentence

Amortization of lease incentives and acquisition-related intangible assets and liabilities

( 2,537 ) ( 505 ) ( 1,943 )

Share-based compensation expense 6,210 7,180 7,466

24 unchanged sentences

Distributions of capital from unconsolidated affiliates 72 7,833 105

Investments in mortgages and notes receivable ( 32 ) — —

Repayments of mortgages and notes receivable 310 295 1,312

1 unchanged sentence

Changes in other investing activities ( 10,853 ) ( 5,971 ) ( 6,230 )

Net cash used in investing activities

Net cash provided by/(used in) investing activities $ 110,682 $ ( 607,407 ) $ ( 306,749 )

HIGHWOODS REALTY LIMITED PARTNERSHIP

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Financing activities:

Distributions on Common Units $ ( 204,002 ) $ ( 201,347 ) $ ( 195,712 )

Special distribution on Common Units

Redemptions/repurchases of Preferred Units ( 33 ) ( 18 ) ( 15 )

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Year Ended December 31,

2020 2019 2018

Cash and cash equivalents at end of the period $ 109,322 $ 9,505 $ 3,769

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Year Ended December 31,

2020 2019 2018

Cash paid for interest, net of amounts capitalized $ 72,350 $ 72,014 $ 67,235

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

Unrealized gains/(losses) on cash flow hedges $ ( 1,238 ) $ ( 9,134 ) $ 4,161

Changes in accrued capital expenditures (1)

( 1,913 ) 5,625 ( 165 )

Write-off of fully depreciated real estate assets 46,656 85,727 76,558

2 unchanged sentences

Adjustment of Redeemable Common Units to fair value ( 26,880 ) 27,256 ( 38,049 )

Issuances of Common Units to acquire real estate assets 6,163 — —

Contingent consideration in connection with the acquisition of land

1 unchanged sentence

Initial recognition of lease liabilities related to right of use assets

See accompanying notes to consolidated financial statements.

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The Common Units owned by the Company are not redeemable.

During 2019 , the Company redeemed 15,000 Common Units for a like number of shares of Common Stock.

During 2020, the Company redeemed 3,570 Common Units for a like number of shares of Common Stock and the Operating Partnership issued 118,592 Common Units to acquire real estate assets.

Basis of Presentation

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In addition, during 2019, we acquired a building using a special purpose entity owned by a qualified intermediary to facilitate a potential Section 1031 reverse exchange under the Internal Revenue Code.

To realize the tax deferral available under the Section 1031 exchange, we must complete the Section 1031 exchange, and take title to the to-be-exchanged building within 180 days of the acquisition date.

We have determined that this entity is a variable interest entity of which we are the primary beneficiary and therefore, we consolidate this entity.

As of December 31, 2019 , this variable interest entity had total assets, liabilities and cash flows of $ 425.0 million , $ 24.0 million and $ 2.5 million , respectively.

We determined that this entity was a variable interest entity of which we were the primary beneficiary and therefore, we consolidated this entity as of December 31, 2019.

During 2020, we completed the exchange by acquiring 100 % of the special purpose entity.

All intercompany transactions and accounts have been eliminated.

Certain amounts within the Consolidated Statements of Income for the years ended December 31, 2018 and 2017 were removed and/or combined to conform to the current year presentation.

Certain amounts within the Consolidated Statements of Income for the year ended December 31, 2018 were removed and/or combined to conform to the current year presentation.

Use of Estimates

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At December 31, 2020, a reserve of $ 0.5 million was recorded to cover estimated reported and unreported claims.

During the third quarter of 2019, we announced a series of planned investment activities.

First, during the fourth quarter of 2019, we acquired Bank of America Tower at Legacy Union in Charlotte’s uptown CBD submarket for a total investment of $ 436 million .

Bank of America Tower at Legacy Union is a trophy, LEED gold-registered office building encompassing 841,000 square feet with structured parking that delivered in 2019.

Second, we have a two -phased plan to exit the Greensboro and Memphis markets.

The first phase consists of selling a select portfolio of assets in Greensboro and Memphis by mid-2020 with a total sales price that approximates the $ 436 million total investment for Bank of America Tower at Legacy Union (with the intent of executing a reverse 1031 exchange) and closing the division offices.

In 2020 , we sold 35 buildings and land in Greensboro for an aggregate sale price of $ 193.4 million .

We can provide no assurances, however, that we will dispose of the remainder of these assets on favorable terms, or at all.

The second phase is the planned sale of the remaining assets in both markets.

There is no pre-determined timetable for the second phase.

As a result of the announced plan to exit the Greensboro and Memphis markets and close our division offices, we recorded $ 1.8 million of severance costs in 2019.

During the first quarter of 2019, Laser Spine Institute, which leased a 176,000 square foot building with structured parking in Tampa’s Westshore submarket, suddenly ceased operations.

As a result of this sudden closure, we incurred $ 5.6 million of credit losses on operating lease receivables and $ 2.3 million of write-offs of lease incentives (in rental and other revenues), $ 4.1 million of write-offs of notes receivable (in other income/(loss)) and $ 11.6 million of write-offs of tenant improvements and deferred leasing costs (in depreciation and amortization).

Real Estate and Related Assets

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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.

Tenant improvements are amortized using the straight-line method over the initial fixed terms of the respective leases, which generally are from three to 10 years.

Depreciation expense for real estate assets was $ 204.6 million, $ 214.7 million and $ 191.0 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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We record liabilities for the performance of asset retirement activities when the obligation to perform such activities is probable even when uncertainty exists about the timing and/or method of settlement.

Upon the acquisition of real estate assets accounted for as asset acquisitions, we assess the fair value of acquired tangible assets such as land, buildings and tenant improvements, intangible assets and liabilities such as above and below market leases,

acquired in-place leases and other identifiable intangible assets and assumed liabilities.

We allocate fair value on a relative basis based on estimated cash flow projections that utilize discount and/or capitalization rates as well as available market information.

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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 initial term of the lease for above-market leases and the remaining initial term plus the term of any renewal option that the customer would be economically compelled to exercise for below-market leases.

In-place leases acquired are recorded at fair value in deferred leasing costs and are amortized to depreciation and amortization expense over the remaining term of the respective lease.

In-place leases acquired are recorded at fair value in deferred leasing costs and 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.

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We account for our joint venture investments 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 investment.

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.

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.

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To maintain qualification as a REIT, the Company is required to pay dividends to its stockholders equal to at least 90.0 % of its annual REIT taxable income, excluding net capital gains.

The partnership agreement requires the Operating Partnership to pay

economically equivalent distributions on outstanding Common Units at the same time that the Company pays dividends on its outstanding Common Stock.

The partnership agreement requires the Operating Partnership to pay economically equivalent distributions on outstanding Common Units at the same time that the Company pays dividends on its outstanding Common Stock.

Other than income taxes related to its taxable REIT subsidiary, the Operating Partnership does not reflect any federal income taxes in its financial statements, since as a partnership the taxable effects of its operations are attributed to its partners.

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Basic earnings per share of the Company 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 (inclusive of 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.

Diluted earnings per share is computed by dividing net income available for common stockholders (inclusive of 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 where dividends received on such restricted stock are non-forfeitable.

Basic earnings per unit of the Operating Partnership is computed by dividing net income available for common unitholders by the weighted Common Units outstanding - basic.

Diluted earnings per unit is computed by dividing net income available to common unitholders by the weighted Common Units outstanding - basic plus the dilutive effect of options and warrants, using the treasury stock method.

Diluted earnings per unit is computed by dividing net income available for common unitholders by the weighted Common Units outstanding - basic plus the dilutive effect of options and warrants, using the treasury stock method.

Weighted Common Units outstanding - basic includes all of the Company’s unvested restricted stock where distributions received on such restricted stock are non-forfeitable.

Recently Issued Accounting Standards

The Financial Accounting Standards Board ("FASB") issued an accounting standards update ("ASU") that eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item when the hedged item affects earnings.

We adopted the ASU as of January 1, 2019 with no material effect on our Consolidated Financial Statements.

The FASB issued an ASU that changes certain disclosure requirements for fair value measurements.

The ASU is required to be adopted in 2020 and applied prospectively.

We do not expect such adoption to have a material effect on our Notes to Consolidated Financial Statements.

The Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) that changes certain disclosure requirements for fair value measurements.

We adopted the ASU as of January 1, 2020 with no material effect on our Notes to Consolidated Financial Statements.

The FASB issued an ASU that provides temporary optional expedients and exceptions to the guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as the Secured Overnight Financing Rate (“SOFR”).

Entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met.

An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination.

Entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met.

The guidance in this ASU is optional and may be elected over the period March 12, 2020 through December 31, 2022 as reference rate reform activities occur.

We will continue to evaluate the impact of this ASU;

however, we currently expect to avail ourselves of such optional expedients and exceptions should our modified contracts meet the required criteria.

Due to the business disruptions and challenges severely affecting the global economy caused by the COVID-19 pandemic, lessors may provide rent deferrals and other lease concessions to lessees.

In April 2020, the FASB staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic.

Under existing lease guidance, we would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework).

The Lease Modification

Q&A allows us, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

We have elected the practical expedient and will not apply lease modification accounting on a lease by lease basis where applicable.

As a result, $ 3.7 million of deferred rent is included in accounts receivable on our Consolidated Balance Sheets at December 31, 2020.

On January 1, 2019, we adopted Accounting Standards Codification Topic 842 “Leases” (“ASC 842”), which supersedes Accounting Standards Codification Topic 840 “Leases” (“ASC 840”).

Information in this Note 2 with respect to our leases and lease related costs as both lessee and lessor and lease related receivables as lessor is presented under ASC 842 as of and for the year ended December 31, 2019 and under ASC 840 as of and for the year ended December 31, 2018 .

Information in this Note 2 with respect to our leases and lease related costs as both lessee and lessor and lease related receivables as lessor is presented under ASC 842 as of and for the years ended December 31, 2020 and 2019 and under ASC 840 for the year ended December 31, 2018.

We adopted ASC 842 using the modified retrospective approach whereby the cumulative effect of adoption was recognized on the adoption date and prior periods were not restated.

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Information as Lessor Under ASC 842

To generate positive cash flow, as a lessor, we generally lease our office properties to lessees in exchange for fixed monthly payments that cover rent, property taxes, insurance and certain cost recoveries, primarily common area maintenance (“CAM”).

We generally lease our office properties to lessees in exchange for fixed monthly payments that cover rent, property taxes, insurance and certain cost recoveries, primarily common area maintenance (“CAM”).

Office properties owned by us that are under lease are primarily located in Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa and are leased to a wide variety of lessees across many industries.

Our leases were determined to be operating leases and mostly range from three to 10 years.

Our leases are operating leases and mostly range from three to 10 years.

Payments from customers for CAM are considered nonlease components that are separated from lease components and are generally accounted for in accordance with the revenue recognition standard.

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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

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.

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We regularly evaluate the collectability of our lease related receivables.

Our evaluation of collectability 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 reduce the related receivable balance for amounts deemed uncollectible.

Our evaluation of collectability primarily consists of reviewing the credit quality of our customer, historical trends of the customer and changes in customer payment terms.

We do not maintain a general reserve to estimate amounts that may not be collectible.

If our assumptions regarding the collectability of lease related receivables prove incorrect, we could experience credit losses in excess of what was recognized in rental and other revenues.

We recognized rental and other revenues related to operating lease payments of $ 723.1 million during the year ended December 31, 2019 , of which variable lease payments were $ 65.4 million .

We recognized rental and other revenues related to operating lease payments of $ 726.0 million and $ 723.1 million, of which variable lease payments were $ 56.0 million and $ 65.4 million, during the years ended December 31, 2020 and 2019, respectively.

The following table sets forth the undiscounted cash flows for future minimum base rents to be received from customers for leases in effect at December 31, 2020 for the properties that we wholly own:

2021 $ 623,888

Thereafter 2,049,545

Information as Lessor Under ASC 840

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Cost recovery income is determined on a calendar year and a lease-by-lease basis.

The most common types of cost recovery income in our leases are CAM and real estate taxes, for which a customer typically pays its pro-rata share of operating and

administrative expenses and real estate taxes in excess of the costs incurred during a contractually specified base year.

The computation of cost recovery income is complex and involves numerous judgments, including the interpretation of lease provisions.

The most common types of cost recovery income in our leases are CAM and real estate taxes, for which a customer typically pays its pro-rata share of operating and administrative expenses and real estate taxes in excess of the costs incurred during a contractually specified base year.

computation of cost recovery income is complex and involves numerous judgments, including the interpretation of lease provisions.

Leases are not uniform in dealing with such cost recovery income and there are many variations in the computation.

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

Balance at December 31, 2017

Balance at December 31, 2018

Allowance for Doubtful Accounts - Straight-Line Rent

Allowance for Doubtful Accounts - Accounts Receivable

Allowance for Doubtful Accounts - Notes Receivable

Balance at December 31, 2016

Balance at December 31, 2017

Balance at December 31, 2017 Additions Deductions Balance at December 31, 2018

Allowance for Doubtful Accounts - Straight-Line Rent $ 819 $ 599 $ ( 777 ) $ 641

1 unchanged sentence

Allowance for Doubtful Accounts - Notes Receivable 72 — ( 28 ) 44

Totals $ 1,644 $ 1,568 $ ( 1,361 ) $ 1,851

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

2 unchanged sentences

Generally, the leases also provide that we receive cost recovery income from customers for increases in certain costs above the costs incurred during a contractually specified base year.

The following table sets forth our scheduled future minimum base rents to be received from customers for leases in effect at December 31, 2018 for the properties that we wholly own:

Information as Lessee Under ASC 842

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however, these did not impact our calculation of the right of use asset and liability as they extend beyond the useful life of the properties subject to the operating ground leases.

We recognized $ 2.5 million of ground lease expense, of which $ 2.2 million was paid in cash, during the year ended December 31, 2019 .

We recognized $ 2.6 million and $ 2.5 million of ground lease expense during the years ended December 31, 2020 and 2019, respectively, and paid $ 2.2 million in cash during both years.

The following table sets forth the undiscounted cash flows of our scheduled obligations for future minimum payments on operating ground leases at December 31, 2020 and a reconciliation of those cash flows to the operating lease liability at December 31, 2020:

Thereafter 81,527

Discount ( 57,892 )

Lease liability $ 34,391

2 unchanged sentences

Rental payments on these leases are adjusted periodically based on either the CPI or on a pre-determined schedule.

Total rental property expense recorded for operating ground leases was $ 2.5 million for each the years ended December 31, 2018 and 2017 .

The following table sets forth our scheduled obligations for future minimum payments on operating ground leases at December 31, 2018 :

Total rental property expense recorded for operating ground leases was $ 2.5 million for the year ended December 31, 2018.

Real Estate Assets

During 2020, we acquired two development parcels totaling less than one acre in Raleigh and Nashville for an aggregate purchase price of $ 8.5 million, including the issuance of 118,592 Common Units and capitalized acquisition costs.

During 2019, we acquired a building in the central business district of Charlotte, which delivered in 2019 and encompasses 841,000 rentable square feet, for a net purchase price of $ 399.1 million.

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During 2018, we acquired two development parcels totaling approximately nine acres in Nashville for an aggregate purchase price, including capitalized acquisition costs, of $ 50.6 million.

During 2017, we acquired fee simple title to land in Raleigh that was previously subject to a ground lease for a purchase price, including capitalized acquisition costs and contingent consideration, of $ 2.6 million .

During 2020, we sold a total of 52 buildings, encompassing 4,489,000 rentable square feet, in Greensboro and Memphis and various land parcels for an aggregate sale price of $ 494.2 million (before closing credits to buyer of $ 5.7 million) and recorded aggregate gains on disposition of property of $ 215.5 million.

During 2020, we also recognized $ 0.4 million of gain related to the satisfaction of a performance obligation as part of a 2016 land sale.

During 2019, we sold a total of six buildings and various land parcels for an aggregate sale price of $ 136.4 million and recorded aggregate gains on disposition of property of $ 39.5 million.

During 2018, we sold a total of three buildings and various land parcels for an aggregate sale price of $ 90.6 million and recorded aggregate gains on disposition of property of $ 37.6 million.

During 2017, we sold a total of 15 buildings and land for an aggregate sale price of $ 135.6 million (before closing credits to buyer of $ 3.7 million ) and recorded aggregate gains on disposition of property of $ 54.2 million .

During 2020, we recorded an impairment of real estate assets of $ 1.8 million, which resulted from a change in market-based inputs and our assumptions about the use of the assets.

During 2019, we recorded aggregate impairments of real estate assets of $ 5.8 million as a result of shortened hold periods from classifying all of our assets in Greensboro and Memphis as non-core and changes in market-based inputs and our assumptions about the use of the assets.

During 2018 and 2017, we recorded aggregate impairments of real estate assets of $ 0.4 million and $ 1.4 million , respectively.

These impairments resulted from changes in market-based inputs and our assumptions about the use of the assets.

During 2018, we recorded an impairment of real estate assets of $ 0.4 million, which resulted from a change in market-based inputs and our assumptions about the use of the assets.

Investments in and Advances to Affiliates

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The following table sets forth our ownership in unconsolidated affiliates at December 31, 2020:

Joint Venture

Plaza Colonnade, Tenant-in-Common

Kessinger/Hunter & Company, LC

Joint Venture Location Ownership

Plaza Colonnade, Tenant-in-Common Kansas City 50.0 %

Kessinger/Hunter & Company, LC Kansas City 26.5 %

Highwoods DLF Forum, LLC (1)

Raleigh 25.0 %

(1) We acquired our joint venture partner’s 75.0 % interest in our Highwoods DLF Forum, LLC joint venture (the “Forum”) in the first quarter of 2021.

We receive development, management and leasing fees for services provided to certain of our joint ventures.

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During the years ended December 31, 2020, 2019 and 2018, we recognized $ 1.0 million, $ 0.5 million and $ 0.4 million, respectively, of development/construction, management and leasing fees from our unconsolidated joint ventures.

At both December 31, 2019 and 2018 , we had receivables of $ 0.1 million related to these fees in accounts receivable.

At December 31, 2020 and 2019, we had receivables of $ 0.2 million and $ 0.1 million, respectively, related to these fees in accounts receivable.

Consolidated Variable Interest Entity

During the second quarter of 2019, we and The Bromley Companies formed a joint venture (the "Midtown One joint venture”) to construct Midtown One, a 150,000 square foot, multi-customer office building located in the mixed-use Midtown Tampa project in Tampa’s Westshore submarket.

Midtown One has an anticipated total investment of $ 71.3 million .

Construction of Midtown One began in the third quarter of 2019 with a scheduled completion date in the second quarter of 2021.

At closing, we agreed to

contribute cash of $ 20.0 million ( $ 15.9 million of which was funded and/or placed in escrow as of December 31, 2019 ) in exchange for an 80.0 % interest in the Midtown One joint venture and The Bromley Companies contributed land valued at $ 5.0 million in exchange for the remaining 20.0 % interest.

In 2019, we and The Bromley Companies formed a joint venture (the “Midtown One joint venture”) to construct Midtown West, a 150,000 square foot, multi-customer office building located in the mixed-use Midtown Tampa project in Tampa’s Westshore submarket.

Midtown West has an anticipated total investment of $ 71.3 million.

Construction of Midtown West began in the third quarter of 2019 with a scheduled completion date in the second quarter of 2021.

At closing, we agreed to contribute cash of $ 20.0 million, which has been fully funded, in exchange for an 80.0 % interest in the Midtown One joint venture and The Bromley Companies contributed land valued at $ 5.0 million in exchange for the remaining 20.0 % interest.

We also committed to provide a $ 46.3 million interest-only secured construction loan to the Midtown One joint venture that is scheduled to mature on the second anniversary of completion.

The loan bears interest at LIBOR plus 250 basis points.

As of December 31, 2019 , no amounts under the loan have been funded.

As of December 31, 2020, $ 18.5 million under the loan has been funded.

We determined that we have a variable interest in the Midtown One joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us as both a debt and an equity holder and The Bromley Companies as an equity holder.

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We, as majority owner and managing member and through our control rights as set forth in the joint venture’s governance documents, were determined to be the primary beneficiary as we have both the power to direct the activities that most significantly affect the entity (primarily lease rates, property operations and capital expenditures) and significant economic exposure through our equity investment and loan commitment.

As such, the Midtown One joint venture was consolidated as of December 31, 2019 and for the period May 29, 2019 through December 31, 2019 and all intercompany transactions and accounts were eliminated.

As such, the Midtown One joint venture is consolidated and all intercompany transactions and accounts are eliminated.

The following table sets forth the assets and liabilities of the Midtown One joint venture included on our Consolidated Balance Sheets:

Development in-process $ 46,873

Deferred leasing costs $ 196

Prepaid expenses and other assets $ 75

Accounts payable, accrued expenses and other liabilities $ 2,693

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

$ 361,027 $ 377,472

Less accumulated amortization ( 151,698 ) ( 146,125 )

$ 209,329 $ 231,347

Liabilities (in accounts payable, accrued expenses and other liabilities):

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Less accumulated amortization ( 37,838 ) ( 34,014 )

$ 25,910 $ 31,957

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

Year Ended December 31,

2020 2019 2018

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

$ 34,401 $ 37,386 $ 36,486

Amortization of lease incentives (in rental and other revenues) $ 1,847 $ 4,281 $ 1,908

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

$ 1,137 $ 1,290 $ 1,677

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

$ 510 $ 557 $ 557

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

$ ( 6,031 ) $ ( 6,633 ) $ ( 6,085 )

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

Years Ending December 31,

of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)

of Lease Incentives (in Rental and Other Revenues)

of Acquisition-Related Intangible Assets (in Rental and Other Revenues)

Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses)

Years Ending December 31, Amortization

of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization) Amortization

of Lease Incentives (in Rental and Other Revenues) Amortization

of Acquisition-Related Intangible Assets (in Rental and Other Revenues) Amortization

of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)

Weighted average remaining amortization periods as of December 31, 2019 (in years)

The following table sets forth the intangible assets acquired and below market lease liabilities assumed as a result of 2019 acquisition activity:

Acquisition-Related Intangible Assets (amortized in Rental and Other Revenues)

Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)

Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)

Amount recorded at acquisition

2021 $ 34,063 $ 1,563 $ 711 $ ( 4,958 )

2022 30,011 1,353 601 ( 3,977 )

2023 26,496 1,279 447 ( 3,600 )

2024 23,348 1,133 373 ( 2,932 )

2025 19,224 1,064 342 ( 1,673 )

Thereafter 60,979 4,523 1,819 ( 8,770 )

$ 194,121 $ 10,915 $ 4,293 $ ( 25,910 )

Weighted average remaining amortization periods as of December 31, 2020 (in years) 8.3 9.5 9.7 8.6

Mortgages and Notes Payable

Our mortgages and notes payable consist of the following:

Our mortgages and notes payable consisted of the following:

Secured indebtedness:

4.00% mortgage loan due 2029 (1)

$ 93,350 $ 95,303

93,350 95,303

Unsecured indebtedness:

3.20% (3.363% effective rate) notes due 2021 (2)

149,901 299,369

3.625% (3.752% effective rate) notes due 2023 (3)

249,464 249,201

3.875% (4.038% effective rate) notes due 2027 (4)

297,534 297,134

4.125% (4.271% effective rate) notes due 2028 (5)

347,035 346,621

4.20% (4.234% effective rate) notes due 2029 (6)

349,189 349,091

3.050% (3.079% effective rate) notes due 2030 (7)

Variable rate term loan due 2020 (8)

399,106 399,009

2.600% (2.645% effective rate) notes due 2031 (8)

Variable rate term loan due 2022 (9)

Variable rate term loan due 2022 (10)

200,000 200,000

Revolving credit facility due 2022 — 221,000

2,390,652 2,461,425

Less-unamortized debt issuance costs ( 13,981 ) ( 13,018 )

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(5) Net of unamortized original issuance discount of $ 3.0 million and $ 3.4 million as of December 31, 2020 and 2019, respectively.

Net of unamortized original issuance discount of $ 0.9 million as of December 31, 2019 .

(6) Net of unamortized original issuance discount of $ 0.8 million and $ 0.9 million as of December 31, 2020 and 2019, respectively.

(7) Net of unamortized original issuance discount of $ 0.9 million and $ 1.0 million as of December 31, 2020 and 2019, respectively.

(8) Net of unamortized original issuance discount of $ 1.6 million as of December 31, 2020.

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The interest rate on the remaining $150.0 million was 1.25 % at December 31, 2020.

The interest rate was 2.90 % at December 31, 2019 .

The interest rate was 2.73 % at December 31, 2019 .

The following table sets forth scheduled future principal payments, including amortization, due on our mortgages and notes payable at December 31, 2020:

Years Ending December 31,

Principal Amount

Years Ending December 31, Principal Amount

2021 $ 150,504

Thereafter 1,880,849

Less-unamortized debt issuance costs ( 13,981 )

During 2017, we entered into a $ 600.0 million unsecured revolving credit facility, which replaced our previously existing $ 475.0 million revolving credit facility, and includes an accordion feature that allows for an additional $ 400.0 million of borrowing capacity subject to additional lender commitments.

Our revolving credit facility is scheduled to mature in January 2022.

(1) Represents amortization of discounts in excess of principal payments due.

Our $ 600.0 million unsecured revolving credit facility is scheduled to mature in January 2022 and includes an accordion feature that allows for an additional $ 400.0 million of borrowing capacity subject to additional lender commitments.

Assuming no defaults have occurred, we have an option to extend the maturity for two additional six -month periods.

The interest rate at our current credit ratings is LIBOR plus 100 basis points and the annual facility fee is 20 basis points.

The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor’s Ratings Services.

We incurred $ 3.5 million of debt issuance costs, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility.

We recorded $ 0.1 million of loss on debt extinguishment.

There was $ 221.0 million and $ 225.0 million outstanding under our revolving credit facility at December 31, 2019 and January 24, 2020 , respectively.

There were no amounts outstanding under our revolving credit facility at both December 31, 2020 and January 29, 2021.

At both December 31, 2020 and January 29, 2021, we had $ 0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility.

As a result, the unused capacity of our revolving credit facility at December 31, 2019 and January 24, 2020 was $ 378.9 million and $ 374.9 million , respectively.

As a result, the unused capacity of our revolving credit facility at both December 31, 2020 and January 29, 2021 was $ 599.9 million.

During 2020, the Operating Partnership issued $ 400.0 million aggregate principal amount of 2.600 % notes due February 2031, less original issuance discount of $ 1.6 million.

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these costs were deferred and will be amortized over the term of the notes.

During 2019, the Operating Partnership issued $ 350.0 million aggregate principal amount of 4.20 % notes due April 2029, less original issuance discount of $ 1.0 million .

The net proceeds from the issuance were used:

(1) to finance the Operating Partnership’s cash tender offer to purchase $ 150.0 million principal amount of its 3.20 % notes due June 15, 2021 at a purchase price of 101.908 % of the face amount of the notes, plus accrued and unpaid interest;

(2) to prepay without penalty our $ 100.0 million unsecured bank term loan that was scheduled to mature in January 2022 and which bore interest at LIBOR plus 110 basis points;

and (3) for general corporate purposes.

We recorded $ 3.7 million of aggregate losses on debt extinguishment related to the repurchase of the 3.20% notes and the term loan prepayment.

During 2019, the Operating Partnership issued $ 400.0 million aggregate principal amount of 3.050 % notes due February 2030, less original issuance discount of $ 1.0 million.

These notes were priced to yield 3.079 %.

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these costs were deferred and will be amortized over the term of the notes.

During 2018, we paid off at maturity $ 200.0 million principal amount of 7.5 % unsecured notes.

During 2018, the Operating Partnership issued $ 350.0 million aggregate principal amount of 4.125 % notes due March 2028, less original issuance discount of $ 4.1 million .

During 2019, the Operating Partnership issued $ 350.0 million aggregate principal amount of 4.20 % notes due April 2029, less original issuance discount of $ 1.0 million.

These notes were priced to yield 4.234 %.

1 unchanged sentence

these costs were deferred and will be amortized over the term of the notes.

During 2017, we prepaid without penalty a secured mortgage loan with a fair market value of $ 108.2 million with an effective interest rate of 4.22 % .

We recorded $ 0.4 million of gain on debt extinguishment related to this prepayment.

During 2017, we modified our $ 200.0 million , five-year unsecured bank term loan, which was originally scheduled to mature in January 2019.

The modified term loan is scheduled to mature in November 2022 and the interest rate, based on current credit ratings, was reduced from LIBOR plus 120 basis points to LIBOR plus 110 basis points .

We incurred $ 1.1 million of debt issuance costs, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of the modified loan.

We recorded $ 0.4 million of loss on debt extinguishment.

During 2017, we obtained a $ 100.0 million secured mortgage loan from a third party lender with an effective interest rate of 4.0 % .

This loan is scheduled to mature in May 2029.

We incurred $ 0.8 million of debt issuance costs in connection with this loan, which will be amortized over the term of the loan.

During 2019, we prepaid without penalty the remaining $ 225.0 million on our seven -year unsecured bank term loan, which was scheduled to mature in June 2020.

The term loan bore interest at LIBOR plus 110 basis points.

We recorded $ 0.4 million of loss on debt extinguishment related to this prepayment.

During 2019, we prepaid without penalty $ 100.0 million on our $ 200.0 million unsecured bank term loan and recorded $ 0.3 million of loss on debt extinguishment related to this prepayment.

During 2020, we prepaid without penalty the remaining $ 100.0 million upon issuance of the $ 400.0 million aggregate principal amount of 2.600 % notes due February 2031.

The term loan was scheduled to mature in January 2022 and bore interest at LIBOR plus 110 basis points.

During 2018, we paid off at maturity $ 200.0 million principal amount of 7.5 % unsecured notes.

During 2018, the Operating Partnership issued $ 350.0 million aggregate principal amount of 4.125 % notes due March 2028, less original issuance discount of $ 4.1 million.

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these costs were deferred and will be amortized over the term of the notes.

During 2017, we paid off at maturity $ 379.7 million principal amount of 5.85 % unsecured notes.

We previously amended our $ 225.0 million , seven-year unsecured bank term loan, which was scheduled to mature in January 2019.

We increased the borrowed amount to $ 350.0 million .

The amended term loan was scheduled to mature in June 2020 and the interest rate, based on our current credit ratings, was reduced from LIBOR plus 175 basis points to LIBOR plus 110 basis points .

We incurred $ 1.3 million of debt issuance costs in connection with this amendment, which was amortized along with existing unamortized debt issuance costs over the remaining term of the new loan.

During 2017, we prepaid without penalty $ 125.0 million on this $350.0 million unsecured bank term loan and recorded $ 0.4 million of loss on debt extinguishment related to this prepayment.

During 2019, we prepaid without penalty the remaining $ 225.0 million and recorded $ 0.4 million of loss on debt extinguishment related to this prepayment.

We previously acquired our joint venture partner’s 77.2 % interest in a building in Orlando.

Simultaneously with this acquisition, the joint venture's previously existing mortgage note was restructured into a new $ 18.0 million first mortgage note and a $ 10.2 million subordinated note, both of which were scheduled to mature in July 2017.

The first mortgage and subordinated notes had effective interest rates of 5.36 % and 8.6 % , respectively.

The subordinated note and accrued interest thereon was satisfied upon payment of a "waterfall payment." During 2017, both notes were retired upon payment of the $ 18.0 million principal balance on the first mortgage note and a $ 0.5 million waterfall payment relating to the subordinated note, which resulted in $ 0.4 million of gain on debt extinguishment.

We previously borrowed an aggregate of $ 150.0 million under an unsecured bank term loan that is originally scheduled to mature in January 2022.

The interest rate on the term loan at our current credit ratings is LIBOR plus 110 basis points .

During 2017, we amended our $ 150.0 million unsecured bank term loan by increasing the borrowed amount to $ 200.0 million .

We incurred $ 0.3 million of debt issuance costs in connection with this amendment, which will be amortized along with existing unamortized debt issuance costs over the remaining term.

During 2019, we prepaid without penalty $ 100.0 million on this $200.0 million unsecured bank term loan.

We recorded $ 0.3 million of loss on debt extinguishment related to this prepayment.

Our revolving credit facility and bank term loans require us to comply with customary operating covenants and various financial requirements.

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We are currently in compliance with financial covenants with respect to our consolidated debt.

The Operating Partnership has $ 299.4 million carrying amount of 2021 notes outstanding, $ 249.2 million carrying amount of 2023 notes outstanding, $ 297.1 million carrying amount of 2027 notes outstanding, $ 346.6 million carrying amount of 2028 notes outstanding, $ 349.1 million carrying amount of 2029 notes outstanding and $ 399.0 million carrying amount of 2030 notes outstanding.

The Operating Partnership has $ 149.9 million carrying amount of 2021 notes outstanding, $ 249.5 million carrying amount of 2023 notes outstanding, $ 297.5 million carrying amount of 2027 notes outstanding, $ 347.0 million carrying amount of 2028 notes outstanding, $ 349.2 million carrying amount of 2029 notes outstanding, $ 399.1 million carrying amount of 2030 notes outstanding and $ 398.4 million carrying amount of 2031 notes 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 25.0 % in principal amount of any series of notes can accelerate the principal amount of such series upon written notice of a default that remains uncured after 60 days.

We have considered our short-term liquidity needs and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs.

We intend to meet these short-term liquidity requirements through a combination of the following:

We have considered our short-term liquidity needs within one year from February 9, 2021 (the date of issuance of the annual financial statements) and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs.

In particular, we have considered our scheduled debt maturities during such one-year period, including the remaining $ 150.0 million principal amount of unsecured notes that are scheduled to mature on June 15, 2021.

We intend to exercise our right to redeem the remaining 3.20 % notes at par on April 15, 2021.

We have concluded it is probable we will meet these short-term liquidity requirements through a combination of the following:

• available cash and cash equivalents;

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The unrealized loss of $ 5.1 million in accumulated other comprehensive income/(loss) will be reclassified to interest expense as interest payments are made on the debt.

During 2017, we entered into $ 150.0 million notional amount of forward-starting swaps that effectively locked the underlying 10 -year treasury rate at 2.44 % with respect to a planned issuance of debt securities by the Operating Partnership.

We previously entered into $ 150.0 million notional amount of forward-starting swaps that effectively locked the underlying 10 -year treasury rate at 2.44 % with respect to a planned issuance of debt securities by the Operating Partnership.

Upon issuance of the $ 350.0 million aggregate principal amount of 4.125 % notes due March 2028 during 2018, we terminated the forward-starting swaps and received cash upon settlement.

The unrealized gain of $ 7.0 million in accumulated other comprehensive income/(loss) will be reclassified to interest expense as interest payments are made on the debt and a gain of $ 0.2 million of hedge ineffectiveness was recognized in interest expense.

During 2017, we also entered into floating-to-fixed interest rate swaps through January 2022 with respect to an aggregate of $ 50.0 million LIBOR-based borrowings.

We previously entered into floating-to-fixed interest rate swaps through January 2022 with respect to an aggregate of $ 50.0 million LIBOR-based borrowings.

These swaps effectively fix the underlying one -month LIBOR rate at a weighted average rate of 1.693 %.

We previously entered into $ 150.0 million notional amount of forward-starting swaps that effectively locked the underlying 10 -year treasury rate at 1.90 % with respect to a planned issuance of debt securities by the Operating Partnership.

Upon issuance of the $ 300.0 million aggregate principal amount of 3.875 % notes due March 2027 during 2017, we terminated the forward-starting swaps and received cash upon settlement.

The unrealized gain of $ 7.3 million in accumulated other comprehensive income/(loss) will be reclassified to interest expense as interest payments are made on the debt.

We also had floating-to-fixed interest rate swaps with respect to an aggregate of $ 225.0 million LIBOR-based borrowings.

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Amounts reported in accumulated other comprehensive income/(loss) related to derivatives will be reclassified to interest expense as interest payments are made on our debt.

During 2020 , we estimate that $ 0.3 million will be reclassified as a net decrease to interest expense.

The following table sets forth the gross fair value of our derivatives:

Derivatives designated as cash flow hedges in prepaid expenses and other assets:

Interest rate swaps

During 2021, we estimate that $ 0.5 million will be reclassified as a net increase to interest expense.

The following table sets forth the fair value of our derivatives:

Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:

2 unchanged sentences

Year Ended December 31,

2020 2019 2018

Derivatives Designated as Cash Flow Hedges:

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Based on the current expected outcome of such matters, none of these proceedings, claims or assessments is expected to have a material effect on our business, financial condition, results of operations or cash flows.

Since early March 2020, efforts to slow the spread of the COVID-19 virus have had a significant impact on the U.S.

We continue to follow the policies described in Notes 1 and 2, including those related to impairments of real estate assets and investments in unconsolidated affiliates, leases and estimates of credit losses on operating lease receivables.

While the results of our current analyses did not result in any material adjustments to amounts as of and for the year ended December 31, 2020, circumstances related to the COVID-19 pandemic may result in recording impairments, lease modifications and credit losses in future periods.

Noncontrolling Interests

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Adjustment of noncontrolling interests in the Operating Partnership to fair value ( 30,617 ) 29,557

Issuances of Common Units 6,163 —

Conversions of Common Units to Common Stock ( 145 ) ( 663 )

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Year Ended December 31,

2020 2019 2018

Net income available for common stockholders $ 344,914 $ 134,430 $ 169,343

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

145 663 4,043

Issuances of Common Units

( 6,163 ) — —

Change from net income available for common stockholders and transfers from noncontrolling interests $ 338,896 $ 135,093 $ 173,386

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

Our Level 2 assets include the fair value of our mortgages and notes receivable and certain interest rate swaps.

Our Level 2 liabilities include the fair value of our mortgages and notes payable and remaining interest rate swaps.

Our Level 2 assets include the fair value of our mortgages and notes receivable.

Our Level 2 liabilities include the fair value of our mortgages and notes payable and interest rate swaps.

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants.

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The following table sets forth our assets and liabilities and the Company’s noncontrolling interests in the Operating Partnership that are measured or disclosed at fair value within the fair value hierarchy:

Quoted Prices

Markets for Identical Assets or Liabilities

Significant Observable Inputs

Significant Unobservable Inputs

Level 1 Level 2

Total Quoted Prices

Markets for Identical Assets or Liabilities Significant Observable Inputs

Fair Value at December 31, 2020:

Mortgages and notes receivable, at fair value (1)

$ 1,341 $ — $ 1,341

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

2,573 2,573 —

Total Assets $ 3,914 $ 2,573 $ 1,341

Noncontrolling Interests in the Operating Partnership $ 112,499 $ 112,499 $ —

Mortgages and notes payable, net, at fair value (1)

$ 2,639,163 $ — $ 2,639,163

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

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

2,573 2,573 —

Total Liabilities $ 2,642,582 $ 2,573 $ 2,640,009

1 unchanged sentence

Mortgages and notes receivable, at fair value (1)

Interest rate swaps (in prepaid expenses and other assets)

$ 1,501 $ — $ 1,501

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

Impaired real estate assets

2,345 2,345 —

Total Assets $ 3,846 $ 2,345 $ 1,501

Noncontrolling Interests in the Operating Partnership $ 133,216 $ 133,216 $ —

Mortgages and notes payable, net, at fair value (1)

$ 2,615,776 $ — $ 2,615,776

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

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

2,345 2,345 —

Total Liabilities $ 2,618,275 $ 2,345 $ 2,615,930

(1) Amounts recorded at historical cost on our Consolidated Balance Sheets at December 31, 2019 and 2018 .

The Level 3 impaired real estate assets measured at a fair value of $ 7.6 million in the third quarter of 2019 include an office building and land held for development.

(1) Amounts are not recorded at fair value on our Consolidated Balance Sheets at December 31, 2020 and 2019.

The Level 3 impaired real estate assets measured at a fair value of $ 2.1 million in the second quarter of 2020 included a non-core office building.

The impairment resulted from a change in our assumptions about the use of the assets and was calculated using brokers’ opinions of value, letters of intent and comparable sales as observable inputs were not available.

The Level 3 impaired real estate assets measured at a fair value of $ 7.6 million in the third quarter of 2019 included an office building and land held for development.

The aggregate impairments resulted from a change in our assumptions about the use of the assets and were calculated using brokers’ opinions of value and comparable sales as observable inputs were not available.

The Level 3 impaired real estate assets measured at fair values of $ 0.7 million and $ 10.3 million in the second quarter of 2019 and fourth quarter of 2018, respectively, include land held for development.

The impairments resulted from a change in our assumptions about the use of the assets and were calculated using the terms of definitive sales contracts as observable inputs were not available.

The Level 3 impaired real estate assets measured at a fair value of $ 0.7 million in the second quarter of 2019 included land held for development.

The impairment resulted from a change in our assumptions about the use of the assets and was calculated using the terms of definitive sales contracts as observable inputs were not available.

Common Stock Issuances

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Year Ended December 31,

2020 2019 2018

Ordinary dividend $ 1.65 $ 1.64 $ 1.48

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Return of capital 0.02 0.13 0.06

Total $ 1.92 $ 1.90 $ 1.85

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

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The following table sets forth the Company’s Preferred Stock:

Number of Shares Outstanding

Carrying Value

Liquidation Preference Per Share

Optional Redemption Date

Annual Dividends Payable Per Share

Issue Date Number of Shares Outstanding Carrying Value Liquidation Preference Per Share Optional Redemption Date Annual Dividends Payable Per Share

(in thousands)

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Year Ended December 31,

2020 2019 2018

8.625% Series A Cumulative Redeemable:

1 unchanged sentence

Capital gains 11.29 6.35 15.03

Total $ 86.25 $ 86.25 $ 86.25

The Company’s tax returns have not been examined by the IRS and, therefore, the taxability of dividends is subject to change.

At December 31, 2019 and 2018 , we had 15,000 warrants outstanding with an exercise price of $ 32.50 per share.

At both December 31, 2020 and 2019, we had 15,000 warrants outstanding with an exercise price of $ 32.50 per share.

Upon exercise of a warrant, the Company will contribute the exercise price to the Operating Partnership in exchange for Common Units.

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The following table sets forth the Operating Partnership’s Preferred Units:

Liquidation Preference

Optional Redemption

Issue Date Number of

Outstanding Carrying

Value Liquidation Preference

Per Unit Optional Redemption

Distributions

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Possible future issuance under equity incentive plans 1,926,324 2,016,659

Of the possible future issuance under the Company' long-term equity incentive plans at December 31, 2019 , no more than an additional 0.4 million shares can be in the form of restricted stock.

2,478,697 2,616,561

Of the possible future issuance under the Company’s long-term equity incentive plans at December 31, 2020, no more than an additional 0.3 million shares can be in the form of restricted stock.

During the years ended December 31, 2020, 2019 and 2018, we recognized $ 6.2 million, $ 7.2 million and $ 7.5 million, respectively, of share-based compensation expense.

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Stock options issued from 2014 through 2017 vest ratably on an annual basis over four years and expire after 10 years.

Stock options issued in 2013 vest ratably on an annual basis over four years and expire after seven years .

All stock options have an exercise price equal to the last reported stock price of our Common Stock on the New York Stock Exchange (“NYSE”) on the last trading day prior to grant.

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 period or the service period, if shorter, for employees who are or will become eligible under the Company’s retirement plan.

The weighted average fair value of options granted during 2017 was $ 6.72 per option.

The fair value of the options granted was determined at the grant date using the following assumptions:

Risk free interest rate (1)

Common stock dividend yield (2)

Expected volatility (3)

Average expected option life (years) (4)

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.

The dividend yield is calculated utilizing the then current regular dividend rate for a one-year period and the per share price of Common Stock on the date of grant.

Based on the historical volatility of Common Stock over a period relevant to the related stock option grant.

The average expected option life is based on an analysis of the Company's historical data.

The following table sets forth stock option activity:

Options Outstanding

Number of Options

Weighted Average Exercise Price

Number of Options Weighted Average Exercise Price

Stock options outstanding at December 31, 2017 640,822 $ 45.29

Exercised ( 44,304 ) 40.15

Stock options outstanding at December 31, 2018 596,518 45.67

Exercised ( 9,026 ) 39.53

Forfeited ( 2,590 ) 48.79

Stock options outstanding at December 31, 2019 584,902 45.75

Exercised ( 42,163 ) 41.10

Forfeited ( 5,366 ) 50.82

Stock options outstanding at December 31, 2020 (1) (2)

537,373 $ 46.07

(1) The outstanding options at December 31, 2020 had a weighted average remaining life of 5.0 years.

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

Number of Shares

Weighted Average Grant Date Fair Value

Number of Shares Weighted Average Grant Date Fair Value

Restricted shares outstanding at December 31, 2017 172,246 $ 46.46

Awarded and issued (1)

( 73,307 ) 44.19

Forfeited ( 2,684 ) 45.89

Restricted shares outstanding at December 31, 2018 191,239 45.62

Awarded and issued (1)

103,590 45.98

( 73,036 ) 45.79

Forfeited ( 3,642 ) 46.07

Restricted shares outstanding at December 31, 2019 218,151 45.73

Awarded and issued (1)

( 88,326 ) 45.86

Forfeited ( 3,751 ) 45.78

Restricted shares outstanding at December 31, 2020 209,190 $ 45.34

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The amount subject to vesting ranges from zero to 150 %.

Notwithstanding the Company’s absolute total return, if the Company’s total return exceeds 100 % of the average peer group total return index, at least 75 % of total return-based restricted stock issued will vest at the end of the applicable period.

For total return-based restricted stock issued prior to 2020, notwithstanding the Company’s absolute total return, if the Company’s total return exceeds 100 % of the average peer group total return index, at least 75 % of total return-based restricted stock issued will vest at the end of the applicable period.

This amount was increased from 75% to 100 % for total return-based restricted stock issued in 2020.

The weighted average grant date fair value of such shares of total return-based restricted stock issued in 2020, 2019 and 2018 was determined to be $ 38.31 , $ 39.42 and $ 40.81 , respectively, and is amortized over the respective three-year period or the service period, if shorter, for employees who are or will become eligible under the Company’s retirement plan.

The fair values of the total return-based restricted stock granted were determined at the grant dates using a Monte Carlo simulation model and the following assumptions:

2020 2019 2018

Risk free interest rate (1)

0.9 % 2.4 % 2.3 %

Common stock dividend yield (2)

3.9 % 4.4 % 3.9 %

Expected volatility (3)

20.4 % 27.3 % 41.1 %

(1) Represents the interest rate as of the grant date on US treasury bonds having the same life as the estimated life of the total return-based restricted stock grants.

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The following table sets forth total return-based restricted stock activity:

Number of Shares

Weighted Average Grant Date Fair Value

Number of Shares Weighted Average Grant Date Fair Value

Restricted shares outstanding at December 31, 2017 160,724 $ 44.72

Awarded and issued (1)

Vested (2) (3)

( 41,160 ) 45.61

Forfeited (3)

( 16,926 ) 45.24

Restricted shares outstanding at December 31, 2018 180,094 43.34

Awarded and issued (1)

( 45,901 ) 43.68

Forfeited (3)

( 12,689 ) 43.58

Restricted shares outstanding at December 31, 2019 208,848 42.22

1 unchanged sentence

Forfeited (3)

( 49,852 ) 51.93

Restricted shares outstanding at December 31, 2020 225,184 $ 39.53

(1) The fair value at grant date of total return-based restricted stock issued during the years ended December 31, 2020, 2019 and 2018 was $ 2.5 million, $ 3.4 million and $ 3.2 million, respectively, at target.

The vesting date fair value of total return-based restricted stock that vested during the years ended December 31, 2019 , 2018 and 2017 was $ 2.1 million , $ 1.8 million and $ 5.6 million , respectively, based on the performance of the specific plans.

(2) The vesting date fair value of total return-based restricted stock that vested during the years ended December 31, 2019 and 2018 was $ 2.1 million and $ 1.8 million, respectively, based on the performance of the specific plans.

Vested shares include those shares surrendered by employees to satisfy tax withholding obligations in connection with such vesting.

The 2017 amount includes 34,669 additional shares that were issued at the end of the applicable measurement period because actual performance exceeded certain levels of performance.

The 2019 and 2018 amounts include 9,521 and 13,707 shares, respectively, that were forfeited at the end of the applicable measurement period because the applicable total return did not meet the target level.

There were no vested shares of total return-based restricted stock during the year ended December 31, 2020.

(3) The 2020, 2019 and 2018 amounts include 46,852 , 9,521 and 13,707 shares, respectively, that were forfeited at the end of the applicable measurement period because the applicable total return did not meet targeted levels.

401(k) Retirement Savings Plan

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Deferred amounts ultimately payable to the participants are based on the value of the related mutual fund investments.

Accordingly, changes in the value of the unrelated mutual funds are recorded in interest and other income and the corresponding offsetting changes in

the deferred compensation liability are recorded in general and administrative expense.

Accordingly, changes in the value of the unrelated mutual funds are recorded in interest and other income and the corresponding offsetting changes in the deferred compensation liability are recorded in general and administrative expense.

As a result, there is no effect on our net income.

1 unchanged sentence

Year Ended December 31,

2020 2019 2018

Beginning deferred compensation liability $ 2,345 $ 1,849 $ 2,388

Mark-to-market adjustment to deferred compensation (in general and administrative expenses)

228 496 ( 182 )

Distributions from deferred compensation plans — — ( 357 )

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In the years ended December 31, 2020, 2019 and 2018, the Company issued 47,208 , 38,618 and 38,951 shares, respectively, of Common Stock under the ESPP.

The 15 % discount on newly issued shares, which is taxable income to the participants and is recorded by us as additional compensation expense, aggregated $ 0.3 million , $ 0.3 million and $ 0.2 million in the years ended December 31, 2019 , 2018 and 2017 , respectively.

The 15 % discount on newly issued shares, which is taxable income to the participants and is recorded by us as additional compensation expense, aggregated $ 0.3 million in each of the years ended December 31, 2020, 2019 and 2018.

Generally, shares purchased under the ESPP must be held at least one year.

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Beginning balance $ ( 471 ) $ 9,913

Unrealized gains/(losses) on cash flow hedges

Unrealized losses on cash flow hedges ( 1,238 ) ( 9,134 )

Amortization of cash flow hedges (1)

Total accumulated other comprehensive income/(loss)

247 ( 1,250 )

Total accumulated other comprehensive loss $ ( 1,462 ) $ ( 471 )

(1) Amounts reclassified out of accumulated other comprehensive income/(loss) into interest expense.

1 unchanged sentence

The following table sets forth the assets held for sale at December 31, 2020 and 2019, which are considered non-core:

Land $ 2,612 $ 4,815

Buildings and tenant improvements 12,238 29,581

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Year Ended December 31,

2020 2019 2018

Earnings per Common Share - basic:

Net income $ 357,914 $ 141,683 $ 177,630

Net (income) attributable to noncontrolling interests in the Operating Partnership ( 9,338 ) ( 3,551 ) ( 4,588 )

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Denominator for basic earnings per Common Share – weighted average shares (1)

103,876 103,692 103,439

Net income available for common stockholders $ 3.32 $ 1.30 $ 1.64

Earnings per Common Share - diluted:

Net income $ 357,914 $ 141,683 $ 177,630

Net (income) attributable to noncontrolling interests in consolidated affiliates ( 1,174 ) ( 1,214 ) ( 1,207 )

2 unchanged sentences

Denominator for basic earnings per Common Share – weighted average shares (1)

103,876 103,692 103,439

Stock options using the treasury method 8 22 33

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Year Ended December 31,

2020 2019 2018

Earnings per Common Unit - basic:

Net income $ 357,914 $ 141,683 $ 177,630

Net (income) attributable to noncontrolling interests in consolidated affiliates ( 1,174 ) ( 1,214 ) ( 1,207 )

2 unchanged sentences

Denominator for basic earnings per Common Unit – weighted average units (1)

106,297 106,014 105,826

Net income available for common unitholders $ 3.33 $ 1.30 $ 1.64

Earnings per Common Unit - diluted:

Net income $ 357,914 $ 141,683 $ 177,630

Net (income) attributable to noncontrolling interests in consolidated affiliates ( 1,174 ) ( 1,214 ) ( 1,207 )

2 unchanged sentences

Denominator for basic earnings per Common Unit – weighted average units (1)

106,297 106,014 105,826

Stock options using the treasury method 8 22 33

9 unchanged sentences

accordingly, the only federal income taxes included in the accompanying Consolidated Financial Statements relate to activities of the Company’s taxable REIT subsidiary.

Due to the passage of federal legislation commonly known as the "Tax Cuts and Jobs Act," which was signed into law on December 22, 2017, the taxable REIT subsidiary was required to decrease the deferred tax asset balance, which resulted in an increase to tax expense of $ 0.1 million in 2017.

The following table sets forth the Company's income tax expense/(benefit):

The following table sets forth the Company’s income tax expense:

Year Ended December 31,

Current tax expense/(benefit):

2020 2019 2018

Current tax expense:

Federal $ 110 $ 202 $ 133

State 240 148 112

Deferred tax expense/(benefit):

Federal ( 9 ) 14 ( 95 )

State ( 4 ) ( 120 ) ( 68 )

( 13 ) ( 106 ) ( 163 )

Total income tax expense $ 337 $ 244 $ 82

The Company's net deferred tax liability was $ 0.1 million and $ 0.2 million as of December 31, 2019 and 2018 , respectively.

The Company’s net deferred tax liability was $ 0.1 million at both December 31, 2020 and 2019.

The net deferred tax liability is comprised primarily of tax versus book differences related to property (depreciation, amortization and basis differences).

10 unchanged sentences

The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker and which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments.

Our segment information as of December 31, 2019 and for the years ended December 31, 2019 and 2018 have been retrospectively revised from previously reported amounts to reflect a change in our reportable segments as a result of recent dispositions.

Year Ended December 31,

2020 2019 2018

Rental and Other Revenues:

Atlanta $ 146,704 $ 151,279 $ 141,337

Charlotte 35,733 4,650 —

Nashville 138,089 133,867 121,836

Orlando 49,459 52,679 53,771

Pittsburgh 58,518 60,755 61,177

Raleigh 128,189 122,173 118,352

Richmond 48,079 49,428 45,729

Tampa 99,520 86,431 102,404

Total Office Segment 704,291 661,262 644,606

Other 32,609 74,717 75,429

Total Rental and Other Revenues $ 736,900 $ 735,979 $ 720,035

Year Ended December 31,

Net Operating Income:

Atlanta $ 95,448 $ 97,019 $ 87,503

Charlotte 28,431 3,791 —

Nashville 99,901 97,386 88,554

Orlando 29,546 32,062 32,841

Pittsburgh 35,631 36,249 36,233

Raleigh 95,926 88,402 86,053

Richmond 33,667 33,756 31,276

Tampa 67,059 50,339 65,819

Total Office Segment 485,609 439,004 428,279

Other 19,466 48,464 49,341

Total Net Operating Income 505,075 487,468 477,620

7 unchanged sentences

Equity in earnings of unconsolidated affiliates 4,005 3,276 2,238

Net income $ 357,914 $ 141,683 $ 177,630

Total Assets:

Atlanta $ 1,011,807 $ 1,040,869

Charlotte 443,051 425,045

Nashville 1,191,219 1,045,125

Orlando 289,129 289,743

Pittsburgh 313,783 323,792

Raleigh 839,831 830,128

Richmond 240,976 246,546

Tampa 556,951 521,620

Total Office Segment 4,886,747 4,722,868

Other 322,670 415,376

Total Assets $ 5,209,417 $ 5,138,244

Quarterly Financial Data (Unaudited)

1 unchanged sentence

Year Ended December 31, 2020

Quarter Second

Quarter Third

Quarter Fourth

Quarter Total

Rental and other revenues $ 192,800 $ 183,153 $ 181,043 $ 179,904 $ 736,900

Net income 191,340 38,956 42,331 85,287 357,914

Net (income) attributable to noncontrolling interests in the Operating Partnership

( 4,960 ) ( 1,017 ) ( 1,107 ) ( 2,254 ) ( 9,338 )

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 285 ) ( 289 ) ( 298 ) ( 302 ) ( 1,174 )

Dividends on Preferred Stock ( 622 ) ( 622 ) ( 622 ) ( 622 ) ( 2,488 )

5 unchanged sentences

Year Ended December 31, 2019

Quarter Second

Quarter Third

Quarter Fourth

Quarter Total

Rental and other revenues $ 172,363 $ 184,070 $ 187,475 $ 192,071 $ 735,979

Net income 8,386 41,394 29,557 62,346 141,683

Net (income) attributable to noncontrolling interests in the Operating Partnership

( 193 ) ( 1,044 ) ( 737 ) ( 1,577 ) ( 3,551 )

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 316 ) ( 306 ) ( 297 ) ( 295 ) ( 1,214 )

Dividends on Preferred Stock ( 622 ) ( 622 ) ( 622 ) ( 622 ) ( 2,488 )

6 unchanged sentences

Year Ended December 31, 2020

Quarter Second

Quarter Third

Quarter Fourth

Quarter Total

Rental and other revenues $ 192,800 $ 183,153 $ 181,043 $ 179,904 $ 736,900

Net income 191,340 38,956 42,331 85,287 357,914

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 285 ) ( 289 ) ( 298 ) ( 302 ) ( 1,174 )

Distributions on Preferred Units ( 622 ) ( 622 ) ( 622 ) ( 622 ) ( 2,488 )

5 unchanged sentences

Year Ended December 31, 2019

Quarter Second

Quarter Third

Quarter Fourth

Quarter Total

Rental and other revenues $ 172,363 $ 184,070 $ 187,475 $ 192,071 $ 735,979

Net income 8,386 41,394 29,557 62,346 141,683

Net (income) attributable to noncontrolling interests in consolidated affiliates

( 316 ) ( 306 ) ( 297 ) ( 295 ) ( 1,214 )

Distributions on Preferred Units ( 622 ) ( 622 ) ( 622 ) ( 622 ) ( 2,488 )

5 unchanged sentences

Subsequent Events

In 2020 , we sold 35 buildings and land in Greensboro for an aggregate sale price of $ 193.4 million and expect to record aggregate gains on disposition of property of $ 105.0 million .

On January 15, 2021, we sold a building in Atlanta for a sale price of $ 30.7 million and expect to record a gain on disposition of property of $ 18.9 million.

On January 21, 2021, we acquired our joint venture partner’s 75.0 % interest in the Forum, which owned five buildings in Raleigh encompassing 636,000 rentable square feet, for a purchase price of $ 131.3 million.

We previously accounted for our 25.0 % interest in this joint venture using the equity method of accounting.

The assets and liabilities of the joint venture are now wholly owned and we have determined the acquisition constitutes an asset purchase.

As such, because the Forum is not a variable interest entity, we expect to allocate our previously held equity interest at historical cost along with the consideration paid and acquisition costs to the assets acquired and liabilities assumed.

On February 2, 2021, the Company declared a cash dividend of $ 0.48 per share of Common Stock, which is payable on March 9, 2021 to stockholders of record as of February 16, 2021.

See also Note 8 for information regarding the potential impact of the COVID-19 pandemic in future periods.

The severity and duration of the COVID-19 pandemic and the resulting economic recession and the future demand for office space over the long-term are difficult to predict and could materially and adversely impact or disrupt our financial condition, results of operations, cash flows and performance.

HIGHWOODS PROPERTIES, INC.

3 unchanged sentences

The following table sets forth the activity of real estate assets and accumulated depreciation:

2020 2019 2018

Real estate assets:

8 unchanged sentences

Ending balance (b) $ 1,421,956 $ 1,405,341 $ 1,296,562

Reconciliation of total real estate assets to balance sheet caption:

(a) Reconciliation of total real estate assets to balance sheet caption:

2020 2019 2018

Total per Schedule III $ 5,594,833 $ 5,776,804 $ 5,296,551

2 unchanged sentences

Total real estate assets $ 5,839,664 $ 5,915,114 $ 5,462,088

Reconciliation of total accumulated depreciation to balance sheet caption:

(b) Reconciliation of total accumulated depreciation to balance sheet caption:

2020 2019 2018

Total per Schedule III $ 1,421,956 $ 1,405,341 $ 1,296,562

6 unchanged sentences

December 31, 2020

Initial Costs

Costs Capitalized

Subsequent to

Gross Value at Close of Period

1700 Century Circle

1800 Century Boulevard

1825 Century Boulevard

1875 Century Boulevard

1900 Century Boulevard

2200 Century Parkway

2400 Century Parkway

2500 Century Parkway

2500/2635 Parking Garage

2600 Century Parkway

2635 Century Parkway

2800 Century Parkway

Century Plaza I

Century Plaza II

Grant Parkway

Henry County - Land

5405 Windward Parkway

Riverpoint - Land

Riverwood 100

Tradeport - Land

Two Alliance Center

One Alliance Center

10 Glenlake North

10 Glenlake South

Riverwood 200

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

Riverwood 300 - Land

Monarch Tower

Monarch Plaza

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

1700 Century Circle Office $ — $ 2,482 $ 2 $ 1,478 $ 2 $ 3,960 $ 3,962 $ 1,925 1983 5-40 yrs.

1800 Century Boulevard Office 1,444 29,081 — 11,265 1,444 40,346 41,790 24,040 1975 5-40 yrs.

1825 Century Boulevard Office 864 — 303 15,166 1,167 15,166 16,333 6,729 2002 5-40 yrs.

1875 Century Boulevard Office — 8,924 — 8,329 — 17,253 17,253 8,706 1976 5-40 yrs.

1900 Century Boulevard Office — 4,744 — 710 — 5,454 5,454 5,341 1971 5-40 yrs.

2200 Century Parkway Office — 14,432 — 9,059 — 23,491 23,491 11,732 1971 5-40 yrs.

2400 Century Parkway Office — — 406 14,776 406 14,776 15,182 7,686 1998 5-40 yrs.

2500 Century Parkway Office — — 328 12,684 328 12,684 13,012 4,589 2005 5-40 yrs.

2500/2635 Parking Garage Office — — — 6,447 — 6,447 6,447 2,424 2005 5-40 yrs.

2600 Century Parkway Office — 10,679 — 4,244 — 14,923 14,923 7,898 1973 5-40 yrs.

2635 Century Parkway Office — 21,643 — 20,514 — 42,157 42,157 18,043 1980 5-40 yrs.

2800 Century Parkway Office — 20,449 — 10,653 — 31,102 31,102 17,782 1983 5-40 yrs.

50 Glenlake Office 2,500 20,006 — 4,308 2,500 24,314 26,814 13,172 1997 5-40 yrs.

Century Plaza I Office 1,290 8,567 — 5,022 1,290 13,589 14,879 6,872 1981 5-40 yrs.

Century Plaza II Office 1,380 7,733 — 3,108 1,380 10,841 12,221 5,559 1984 5-40 yrs.

5405 Windward Parkway Office 3,342 32,111 — 19,729 3,342 51,840 55,182 26,543 1998 5-40 yrs.

Riverpoint - Land Industrial 7,250 — ( 4,439 ) 718 2,811 718 3,529 185 N/A 5-40 yrs.

Riverwood 100 Office 5,785 64,913 ( 29 ) 26,071 5,756 90,984 96,740 23,842 1989 5-40 yrs.

Tradeport - Land Industrial 5,243 — ( 4,819 ) — 424 — 424 — N/A N/A

Two Alliance Center Office 9,579 125,549 — 906 9,579 126,455 136,034 33,618 2009 5-40 yrs.

One Alliance Center Office 14,775 123,071 — 17,587 14,775 140,658 155,433 32,298 2001 5-40 yrs.

10 Glenlake North Office 5,349 26,334 — 11,303 5,349 37,637 42,986 10,897 2000 5-40 yrs.

10 Glenlake South Office 5,103 22,811 — 3,523 5,103 26,334 31,437 7,056 1999 5-40 yrs.

Riverwood 200 Office 4,777 89,708 450 2,905 5,227 92,613 97,840 11,172 2017 5-40 yrs.

Riverwood 300 - Land Office 400 — — 710 400 710 1,110 70 N/A 5-40 yrs.

Monarch Tower Office 22,717 143,068 — 17,074 22,717 160,142 182,859 25,234 1997 5-40 yrs.

Monarch Plaza Office 27,678 88,962 — 11,147 27,678 100,109 127,787 15,755 1983 5-40 yrs.

Charlotte, NC

Bank of America Tower

Triad Centre I

Triad Centre II

International Place II

PennMarc Centre

Crescent Center

Triad Centre III

Capital Grille

Nashville, TN

3322 West End

3401 West End

5310 Maryland Way

Cool Springs I & II Deck

Cool Springs III & IV Deck

Cool Springs I

Cool Springs II

Cool Springs III

Cool Springs IV

Cool Springs V (Healthways)

Harpeth On The Green II

Harpeth On The Green III

Harpeth On The Green IV

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Subsequent to

Gross Value at Close of Period

Harpeth On The Green V

Hickory Trace

Highwoods Plaza I

Highwoods Plaza II

Seven Springs I

Westwood South

100 Winners Circle

The Pinnacle at Symphony Place

Seven Springs East (LifePoint)

The Shops at Seven Springs

Seven Springs West

Seven Springs II

Bridgestone Tower

5501 Virginia Way

Ovation - Land

Capital Plaza Three - Land

Eola Park - Land

The 1800 Eller Drive Building

Seaside Plaza

Capital Plaza Two

Capital Plaza One

Landmark Center Two

Landmark Center One

300 South Orange

Greensboro, NC

6348 Burnt Poplar Road

Bank of America Tower Office 29,273 354,749 — 20,087 29,273 374,836 404,109 12,090 2019 5-40 yrs.

HIGHWOODS PROPERTIES, INC.

1 unchanged sentence

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

6350 Burnt Poplar Road

420 Gallimore Dairy Road

418 Gallimore Dairy Road

416 Gallimore Dairy Road

7031 Albert Pick Road

7029 Albert Pick Road

7025 Albert Pick Road

7027 Albert Pick Road

7009 Albert Pick Road

426 Gallimore Dairy Road

422 Gallimore Dairy Road

406 Gallimore Dairy Road

7021 Albert Pick Road

7019 Albert Pick Road

7015 Albert Pick Road

7017 Albert Pick Road

7011 Albert Pick Road

424 Gallimore Dairy Road

410 Gallimore Dairy Road

412 Gallimore Dairy Road

408 Gallimore Dairy Road

414 Gallimore Dairy Road

237 Burgess Road

235 Burgess Road

241 Burgess Road

243 Burgess Road

496 Gallimore Dairy Road

494 Gallimore Dairy Road

486 Gallimore Dairy Road

488 Gallimore Dairy Road

490 Gallimore Dairy Road

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

Nashville, TN

3322 West End Office 3,025 27,490 — 11,806 3,025 39,296 42,321 18,539 1986 5-40 yrs.

3401 West End Office 5,862 22,917 — 6,566 5,862 29,483 35,345 16,114 1982 5-40 yrs.

5310 Maryland Way Office 1,863 7,201 — 3,809 1,863 11,010 12,873 6,540 1994 5-40 yrs.

Cool Springs I & II Deck Office — — — 3,990 — 3,990 3,990 1,314 2007 5-40 yrs.

Cool Springs III & IV Deck Office — — — 4,463 — 4,463 4,463 1,535 2007 5-40 yrs.

Cool Springs I Office 1,583 — 15 15,891 1,598 15,891 17,489 7,396 1999 5-40 yrs.

Cool Springs II Office 1,824 — 346 24,705 2,170 24,705 26,875 10,089 1999 5-40 yrs.

Cool Springs III Office 1,631 — 804 16,241 2,435 16,241 18,676 5,698 2006 5-40 yrs.

Cool Springs IV Office 1,715 — — 19,221 1,715 19,221 20,936 6,131 2008 5-40 yrs.

Cool Springs V (Healthways) Office 3,688 — 295 53,100 3,983 53,100 57,083 23,044 2007 5-40 yrs.

Harpeth On The Green II Office 1,419 5,677 — 3,216 1,419 8,893 10,312 4,607 1984 5-40 yrs.

Harpeth On The Green III Office 1,660 6,649 — 2,263 1,660 8,912 10,572 5,015 1987 5-40 yrs.

Harpeth On The Green IV Office 1,713 6,842 — 3,171 1,713 10,013 11,726 5,598 1989 5-40 yrs.

Harpeth On The Green V Office 662 — 197 5,795 859 5,795 6,654 2,686 1998 5-40 yrs.

Hickory Trace Office 1,164 — 164 6,111 1,328 6,111 7,439 2,474 2001 5-40 yrs.

Highwoods Plaza I Office 1,552 — 307 9,951 1,859 9,951 11,810 5,020 1996 5-40 yrs.

Highwoods Plaza II Office 1,448 — 307 9,600 1,755 9,600 11,355 4,988 1997 5-40 yrs.

Seven Springs I Office 2,076 — 592 13,216 2,668 13,216 15,884 5,916 2002 5-40 yrs.

SouthPointe Office 1,655 — 310 9,430 1,965 9,430 11,395 4,107 1998 5-40 yrs.

Ramparts Office 2,394 12,806 — 10,313 2,394 23,119 25,513 9,057 1986 5-40 yrs.

Westwood South Office 2,106 — 382 12,317 2,488 12,317 14,805 6,168 1999 5-40 yrs.

100 Winners Circle Office 1,497 7,258 — 2,760 1,497 10,018 11,515 5,121 1987 5-40 yrs.

The Pinnacle at Symphony Place Office 93,350 — 141,469 — 6,406 — 147,875 147,875 36,904 2010 5-40 yrs.

Seven Springs East (LifePoint) Office 2,525 37,587 — 192 2,525 37,779 40,304 8,512 2013 5-40 yrs.

The Shops at Seven Springs Office 803 8,223 — 581 803 8,804 9,607 2,604 2013 5-40 yrs.

Seven Springs West Office 2,439 51,306 — 1,995 2,439 53,301 55,740 7,947 2016 5-40 yrs.

Seven Springs II Office 2,356 30,048 — 3,011 2,356 33,059 35,415 4,058 2017 5-40 yrs.

Bridgestone Tower Office 19,223 169,582 — 110 19,223 169,692 188,915 16,369 2017 5-40 yrs.

Virginia Springs II Office — — 4,821 21,578 4,821 21,578 26,399 70 2020 5-40 yrs.

MARS Campus Office 7,010 87,474 — 32 7,010 87,506 94,516 5,505 2019 5-40 yrs.

5501 Virginia Way Office 4,534 25,632 — 274 4,534 25,906 30,440 1,775 2018 5-40 yrs.

1100 Broadway - Land Office 29,845 — — — 29,845 — 29,845 — N/A N/A

Ovation - Land Office 31,063 — 104 — 31,167 — 31,167 — N/A N/A

HIGHWOODS PROPERTIES, INC.

1 unchanged sentence

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

Brigham Road - Land

651 Brigham Road

657 Brigham Road

653 Brigham Road

1501 Highwoods Boulevard

Jefferson Pilot - Land

4200 Tudor Lane

4224 Tudor Lane

7023 Albert Pick Road

1126 North Church Street

1130 North Church Street

1132 North Church Street

628 Green Valley Road

701 Green Valley Road

661 Brigham Road

655 Brigham Road

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

Broadway Stem - Land Office — — 6,218 — 6,218 — 6,218 — N/A N/A

Capital Plaza Three - Land Office 2,994 — 18 — 3,012 — 3,012 — N/A N/A

Eola Park - Land Office 2,027 — — — 2,027 — 2,027 — N/A N/A

The 1800 Eller Drive Building Office — 9,851 — 3,526 — 13,377 13,377 9,158 1983 5-40 yrs.

Seaside Plaza Office 3,893 29,541 — 10,104 3,893 39,645 43,538 8,963 1982 5-40 yrs.

Capital Plaza Two Office 4,346 43,394 — 8,433 4,346 51,827 56,173 12,253 1999 5-40 yrs.

Capital Plaza One Office 3,482 27,321 — 7,668 3,482 34,989 38,471 7,387 1975 5-40 yrs.

Landmark Center Two Office 4,743 22,031 — 9,352 4,743 31,383 36,126 7,595 1985 5-40 yrs.

Landmark Center One Office 6,207 22,655 — 10,026 6,207 32,681 38,888 7,556 1983 5-40 yrs.

300 South Orange Office 3,490 56,079 — 10,243 3,490 66,322 69,812 12,867 2000 5-40 yrs.

Eola Centre Office 3,758 11,160 — 12,739 3,758 23,899 27,657 3,710 1969 5-40 yrs.

Pittsburgh, PA

One PPG Place

Two PPG Place

Three PPG Place

Four PPG Place

Five PPG Place

Six PPG Place

East Liberty - Land

3600 Glenwood Avenue

3737 Glenwood Avenue

4800 North Park

5000 North Park

801 Raleigh Corporate Center

One PPG Place Office 9,819 107,643 — 51,500 9,819 159,143 168,962 51,382 1983-1985 5-40 yrs.

Two PPG Place Office 2,302 10,978 — 10,655 2,302 21,633 23,935 5,670 1983-1985 5-40 yrs.

Three PPG Place Office 501 2,923 — 4,680 501 7,603 8,104 2,737 1983-1985 5-40 yrs.

Four PPG Place Office 620 3,239 — 3,675 620 6,914 7,534 2,220 1983-1985 5-40 yrs.

Five PPG Place Office 803 4,924 — 3,168 803 8,092 8,895 2,828 1983-1985 5-40 yrs.

Six PPG Place Office 3,353 25,602 — 15,502 3,353 41,104 44,457 11,416 1983-1985 5-40 yrs.

EQT Plaza Office 16,457 83,812 — 15,175 16,457 98,987 115,444 25,863 1987 5-40 yrs.

East Liberty - Land Office 2,478 — — — 2,478 — 2,478 — N/A N/A

3600 Glenwood Avenue Office — 10,994 — 4,948 — 15,942 15,942 8,885 1986 5-40 yrs.

3737 Glenwood Avenue Office — — 318 17,281 318 17,281 17,599 8,596 1999 5-40 yrs.

4800 North Park Office 2,678 17,630 — 10,224 2,678 27,854 30,532 16,546 1985 5-40 yrs.

5000 North Park Office 1,010 4,612 ( 49 ) 2,674 961 7,286 8,247 4,078 1980 5-40 yrs.

801 Raleigh Corporate Center Office 828 — 272 11,233 1,100 11,233 12,333 4,604 2002 5-40 yrs.

2500 Blue Ridge Road Office 722 4,606 — 1,497 722 6,103 6,825 3,844 1982 5-40 yrs.

2418 Blue Ridge Road Office 462 1,410 — 2,718 462 4,128 4,590 1,623 1988 5-40 yrs.

Cape Fear Office 131 1,630 ( 2 ) ( 1,004 ) 129 626 755 382 1979 5-40 yrs.

Catawba - Land Office 125 1,635 ( 2 ) ( 1,635 ) 123 — 123 — N/A N/A

2000 CentreGreen Office 1,529 — ( 391 ) 12,445 1,138 12,445 13,583 4,544 2000 5-40 yrs.

4000 CentreGreen Office 1,653 — ( 389 ) 11,339 1,264 11,339 12,603 5,202 2001 5-40 yrs.

5000 CentreGreen Office 1,291 34,572 — 2,875 1,291 37,447 38,738 4,997 2017 5-40 yrs.

HIGHWOODS PROPERTIES, INC.

1 unchanged sentence

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

2500 Blue Ridge Road

2418 Blue Ridge Road

2000 CentreGreen

4000 CentreGreen

5000 CentreGreen

3000 CentreGreen

1000 CentreGreen

GlenLake - Land

GlenLake Four

701 Raleigh Corporate Center

Highwoods Centre

Inveresk Parcel 2 - Land

4201 Lake Boone Trail

4620 Creekstone Drive

4825 Creekstone Drive

Progress Center Renovation

751 Corporate Center

4301 Lake Boone Trail

4207 Lake Boone Trail

2301 Rexwoods Drive

4325 Lake Boone Trail

2300 Rexwoods Drive

4709 Creekstone Drive

4700 Six Forks Road

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

3000 CentreGreen Office 1,779 — ( 397 ) 14,505 1,382 14,505 15,887 4,860 2002 5-40 yrs.

1000 CentreGreen Office 1,280 — 55 12,888 1,335 12,888 14,223 3,736 2008 5-40 yrs.

Cottonwood Office 609 3,244 — 437 609 3,681 4,290 2,435 1983 5-40 yrs.

GlenLake - Land Office 13,003 — ( 9,924 ) 114 3,079 114 3,193 56 N/A 5-40 yrs.

GlenLake One Office 924 — 1,324 22,714 2,248 22,714 24,962 10,176 2002 5-40 yrs.

GlenLake Four Office 1,659 — 493 20,311 2,152 20,311 22,463 7,243 2006 5-40 yrs.

GlenLake Six Office 941 — ( 365 ) 20,118 576 20,118 20,694 6,532 2008 5-40 yrs.

701 Raleigh Corporate Center Office 1,304 — 540 17,337 1,844 17,337 19,181 8,802 1996 5-40 yrs.

Highwoods Centre Office 531 — ( 267 ) 7,981 264 7,981 8,245 4,290 1998 5-40 yrs.

Inveresk Parcel 2 - Land Office 657 — 38 103 695 103 798 14 N/A 5-40 yrs.

4201 Lake Boone Trail Office 1,450 6,311 — 684 1,450 6,995 8,445 1,998 1998 5-40 yrs.

4620 Creekstone Drive Office 149 — 107 3,380 256 3,380 3,636 1,511 2001 5-40 yrs.

4825 Creekstone Drive Office 398 — 293 10,478 691 10,478 11,169 5,269 1999 5-40 yrs.

Pamlico Office 289 — — 9,188 289 9,188 9,477 7,209 1980 5-40 yrs.

751 Corporate Center Office 2,665 16,939 — — 2,665 16,939 19,604 1,817 2018 5-40 yrs.

PNC Plaza Office 1,206 — — 70,389 1,206 70,389 71,595 24,643 2008 5-40 yrs.

4301 Lake Boone Trail Office 878 3,730 — 2,405 878 6,135 7,013 3,896 1990 5-40 yrs.

4207 Lake Boone Trail Office 362 1,818 — 1,407 362 3,225 3,587 2,130 1993 5-40 yrs.

2301 Rexwoods Drive Office 919 2,816 — 1,650 919 4,466 5,385 2,769 1992 5-40 yrs.

4325 Lake Boone Trail Office 586 — — 4,872 586 4,872 5,458 2,764 1995 5-40 yrs.

2300 Rexwoods Drive Office 1,301 — 184 8,129 1,485 8,129 9,614 2,938 1998 5-40 yrs.

4709 Creekstone Drive Office 469 4,038 23 5,383 492 9,421 9,913 3,081 1987 5-40 yrs.

4700 Six Forks Road Office 666 2,665 — 1,180 666 3,845 4,511 2,356 1982 5-40 yrs.

4700 Homewood Court Office 1,086 4,533 — 2,078 1,086 6,611 7,697 3,925 1983 5-40 yrs.

4800 Six Forks Road Office 862 4,411 — 3,433 862 7,844 8,706 4,401 1987 5-40 yrs.

Smoketree Tower Office 2,353 11,743 — 6,818 2,353 18,561 20,914 10,951 1984 5-40 yrs.

4601 Creekstone Drive Office 255 — 217 6,221 472 6,221 6,693 3,545 1997 5-40 yrs.

Weston - Land Office 22,771 — ( 19,894 ) — 2,877 — 2,877 — N/A N/A

4625 Creekstone Drive Office 458 — 268 6,122 726 6,122 6,848 3,621 1995 5-40 yrs.

11000 Weston Parkway Office 2,651 18,850 — 15,357 2,651 34,207 36,858 6,014 1998 5-40 yrs.

GlenLake Five Office 2,263 30,264 — 3,693 2,263 33,957 36,220 8,605 2014 5-40 yrs.

11800 Weston Parkway Office 826 13,188 — 13 826 13,201 14,027 2,836 2014 5-40 yrs.

CentreGreen Café Office 41 3,509 — ( 2 ) 41 3,507 3,548 533 2014 5-40 yrs.

CentreGreen Fitness Center Office 27 2,322 — ( 1 ) 27 2,321 2,348 353 2014 5-40 yrs.

HIGHWOODS PROPERTIES, INC.

1 unchanged sentence

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

4700 Homewood Court

4800 Six Forks Road

Smoketree Tower

4601 Creekstone Drive

Weston - Land

4625 Creekstone Drive

11000 Weston Parkway

GlenLake Five

11800 Weston Parkway

CentreGreen Café

CentreGreen Fitness Center

One City Plaza

Edison - Land

Charter Square

MetLife Global Technology Campus

Hargett - Land

Other Property

4900 Cox Road

Colonnade Building

Dominion Place - Pitts Parcel - Land

Hamilton Beach

Highwoods Commons

Highwoods One

Highwoods Two

Highwoods Five

Highwoods Plaza

Innslake Center

Highwoods Centre

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

One City Plaza Office 11,288 68,375 — 26,766 11,288 95,141 106,429 20,423 1986 5-40 yrs.

Edison - Land Office 5,984 — 2,196 — 8,180 — 8,180 — N/A N/A

Charter Square Office 7,267 65,881 — 4,913 7,267 70,794 78,061 10,208 2015 5-40 yrs.

MetLife Global Technology Campus Office 21,580 149,889 — ( 153 ) 21,580 149,736 171,316 19,477 2015 5-40 yrs.

GlenLake Seven Office — — 1,662 34,077 1,662 34,077 35,739 435 2020 5-40 yrs.

Hargett - Land Office 6,582 — 2,816 — 9,398 — 9,398 — N/A N/A

Other Property Other 27,260 20,868 ( 6,084 ) 96,118 21,176 116,986 138,162 50,227 N/A 5-40 yrs.

4900 Cox Road Office 1,324 5,311 15 3,731 1,339 9,042 10,381 5,460 1991 5-40 yrs.

Colonnade Building Office 1,364 6,105 — 2,462 1,364 8,567 9,931 3,885 2003 5-40 yrs.

Dominion Place - Pitts Parcel - Land Office 1,101 — ( 404 ) — 697 — 697 — N/A N/A

Markel 4521 Office 1,581 13,299 168 ( 396 ) 1,749 12,903 14,652 6,260 1999 5-40 yrs.

Hamilton Beach Office 1,086 4,345 10 2,997 1,096 7,342 8,438 3,849 1986 5-40 yrs.

Highwoods Commons Office 521 — 458 4,651 979 4,651 5,630 2,261 1999 5-40 yrs.

Highwoods One Office 1,688 — 22 14,116 1,710 14,116 15,826 7,416 1996 5-40 yrs.

Highwoods Two Office 786 — 226 10,292 1,012 10,292 11,304 3,936 1997 5-40 yrs.

Highwoods Five Office 783 — 11 8,000 794 8,000 8,794 3,744 1998 5-40 yrs.

Highwoods Plaza Office 909 — 187 5,897 1,096 5,897 6,993 2,865 2000 5-40 yrs.

Innslake Center Office 845 — 195 8,023 1,040 8,023 9,063 3,527 2001 5-40 yrs.

Highwoods Centre Office 1,205 4,825 — 1,967 1,205 6,792 7,997 3,505 1990 5-40 yrs.

Markel 4501 Office 1,300 13,259 213 ( 3,367 ) 1,513 9,892 11,405 4,039 1998 5-40 yrs.

4600 Cox Road Office 1,700 17,081 169 ( 3,450 ) 1,869 13,631 15,500 5,576 1989 5-40 yrs.

North Park Office 2,163 8,659 6 3,666 2,169 12,325 14,494 6,976 1989 5-40 yrs.

North Shore Commons I Office 951 — 137 12,624 1,088 12,624 13,712 6,525 2002 5-40 yrs.

North Shore Commons II Office 2,067 — ( 89 ) 10,848 1,978 10,848 12,826 3,873 2007 5-40 yrs.

North Shore Commons C - Land Office 1,497 — 55 10 1,552 10 1,562 1 N/A 5-40 yrs.

North Shore Commons D - Land Office 1,261 — — — 1,261 — 1,261 — N/A N/A

Nuckols Corner - Land Office 1,259 — 231 — 1,490 — 1,490 — N/A N/A

One Shockoe Plaza Office — — 356 21,530 356 21,530 21,886 10,372 1996 5-40 yrs.

Pavilion - Land Office 181 46 ( 181 ) ( 46 ) — — — — N/A N/A

Lake Brook Commons Office 1,600 8,864 21 2,877 1,621 11,741 13,362 5,503 1996 5-40 yrs.

Sadler & Cox - Land Office 1,535 — 343 — 1,878 — 1,878 — N/A N/A

Highwoods Three Office 1,918 — 358 12,128 2,276 12,128 14,404 4,345 2005 5-40 yrs.

Stony Point VI (Virginia Urology) Office 1,925 25,868 — ( 2 ) 1,925 25,866 27,791 2,059 2018 5-40 yrs.

HIGHWOODS PROPERTIES, INC.

1 unchanged sentence

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

4600 Cox Road

North Shore Commons I

North Shore Commons II

North Shore Commons C - Land

North Shore Commons D - Land

Nuckols Corner - Land

One Shockoe Plaza

Pavilion - Land

Lake Brook Commons

Sadler & Cox - Land

Highwoods Three

Stony Point VI (Virginia Urology)

Stony Point I

Stony Point II

Stony Point III

Stony Point IV

Virginia Mutual

Waterfront Plaza

Innsbrook Centre

Elks Pass - Land

Meridian Three

Bayshore Place

5525 Gray Street

Highwoods Preserve Building V

Highwoods Bay Center I

HIW Bay Center II - Land

Highwoods Preserve Building VII

HIW Preserve VII Garage

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

Stony Point I Office 1,384 11,630 ( 267 ) 4,115 1,117 15,745 16,862 8,432 1990 5-40 yrs.

Stony Point II Office 1,240 — 103 13,296 1,343 13,296 14,639 6,534 1999 5-40 yrs.

Stony Point III Office 995 — — 10,762 995 10,762 11,757 5,361 2002 5-40 yrs.

Stony Point IV Office 955 — — 12,057 955 12,057 13,012 4,467 2006 5-40 yrs.

Virginia Mutual Office 1,301 6,036 15 1,201 1,316 7,237 8,553 3,639 1996 5-40 yrs.

Waterfront Plaza Office 585 2,347 8 2,291 593 4,638 5,231 2,157 1988 5-40 yrs.

Innsbrook Centre Office 914 8,249 — 1,126 914 9,375 10,289 4,093 1987 5-40 yrs.

Elks Pass - Land Office 3,326 — — — 3,326 — 3,326 — N/A N/A

Meridian Three Office 2,673 16,470 — 5,930 2,673 22,400 25,073 7,048 1989 5-40 yrs.

Bayshore Place Office 2,276 11,817 — 3,632 2,276 15,449 17,725 7,269 1990 5-40 yrs.

5525 Gray Street Office 4,054 — 406 23,977 4,460 23,977 28,437 8,606 2005 5-40 yrs.

Highwoods Preserve Building V Office 881 — — 25,368 881 25,368 26,249 11,031 2001 5-40 yrs.

Highwoods Bay Center I Office 3,565 — ( 64 ) 38,263 3,501 38,263 41,764 12,745 2007 5-40 yrs.

HIW Bay Center II - Land Office 3,482 — — — 3,482 — 3,482 — N/A N/A

Highwoods Preserve Building VII Office 790 — — 16,996 790 16,996 17,786 4,481 2007 5-40 yrs.

HIW Preserve VII Garage Office — — — 6,932 — 6,932 6,932 2,367 2007 5-40 yrs.

Horizon Office — 6,257 — 4,443 — 10,700 10,700 5,546 1980 5-40 yrs.

LakePointe One Office 2,106 89 — 41,475 2,106 41,564 43,670 23,659 1986 5-40 yrs.

LakePointe Two Office 2,000 15,848 672 15,211 2,672 31,059 33,731 15,976 1999 5-40 yrs.

Lakeside Office — 7,369 — 7,726 — 15,095 15,095 7,504 1978 5-40 yrs.

Lakeside/Parkside Garage Office — — — 5,732 — 5,732 5,732 2,455 2004 5-40 yrs.

One Harbour Place Office 2,016 25,252 — 16,693 2,016 41,945 43,961 18,333 1985 5-40 yrs.

Parkside Office — 9,407 — 3,231 — 12,638 12,638 6,111 1979 5-40 yrs.

Pavilion Office — 16,394 — 6,071 — 22,465 22,465 12,081 1982 5-40 yrs.

Pavilion Parking Garage Office — — — 5,801 — 5,801 5,801 3,038 1999 5-40 yrs.

Spectrum Office 1,454 14,502 — 4,751 1,454 19,253 20,707 10,099 1984 5-40 yrs.

Tower Place Office 3,218 19,898 — 6,948 3,218 26,846 30,064 14,011 1988 5-40 yrs.

Westshore Square Office 1,126 5,186 — 1,706 1,126 6,892 8,018 3,687 1976 5-40 yrs.

Independence Park - Land Office 4,943 — 5,058 2,227 10,001 2,227 12,228 214 N/A 5-40 yrs.

Independence One Office 2,531 4,526 — 5,741 2,531 10,267 12,798 5,104 1983 5-40 yrs.

Meridian One Office 1,849 22,363 — 3,187 1,849 25,550 27,399 6,028 1984 5-40 yrs.

Meridian Two Office 1,302 19,588 — 5,425 1,302 25,013 26,315 6,064 1986 5-40 yrs.

5332 Avion Drive Office — — 6,310 39,358 6,310 39,358 45,668 3,937 2016 5-40 yrs.

HIGHWOODS PROPERTIES, INC.

1 unchanged sentence

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION (Continued)

Initial Costs

Costs Capitalized

Initial Costs Costs Capitalized

Subsequent to

Gross Value at Close of Period

LakePointe One

LakePointe Two

Lakeside/Parkside Garage

One Harbour Place

Pavilion Parking Garage

Westshore Square

Independence Park - Land

Independence One

5332 Avion Park

Suntrust Financial Centre

Suntrust Financial - Land

Acquisition Gross Value at Close of Period

Description Property

Encumbrance Land Bldg &

Improv Land Bldg &

Assets (1) Accumulated

Depreciation Date of

Construction Life on

Suntrust Financial Centre Office 1,980 102,138 — 25,020 1,980 127,158 129,138 20,758 1992 5-40 yrs.

Suntrust Financial - Land Office 2,225 — — — 2,225 — 2,225 — N/A N/A

$ 606,086 $ 3,274,841 $ ( 5,128 ) $ 1,719,034 $ 600,958 $ 4,993,875 $ 5,594,833 $ 1,421,956

(1) The cost basis for income tax purposes of aggregate land and buildings and tenant improvements as of December 31, 2020 is $ 5.5 billion.

This amount excludes approximately $ 370.8 million of cost basis attributable to a property held in a variable interest entity at December 31, 2019 to facilitate a potential 1031 exchange.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Raleigh, State of North Carolina, on February 9, 2021.

3 unchanged sentences

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacity and on the dates indicated.

Signature Title Date

/s/ Carlos E.

Chairman of the Board of Directors

February 4, 2020

Evans Chairman of the Board of Directors February 9, 2021

/s/ Theodore J.

President, Chief Executive Officer and Director

February 4, 2020

Klinck President, Chief Executive Officer and Director February 9, 2021

/s/ Charles A.

February 4, 2020

Anderson Director February 9, 2021

/s/ Thomas P.

February 4, 2020

Anderson Director February 9, 2021

Gadis Director February 9, 2021

Hartzell Director February 9, 2021

/s/ Sherry A.

February 4, 2020

Executive Vice President and Chief Financial Officer

February 4, 2020

Kellett Director February 9, 2021

Lloyd Director February 9, 2021

Mulhern Executive Vice President and Chief Financial Officer February 9, 2021

/s/ Daniel L.

Vice President and Chief Accounting Officer

February 4, 2020

Clemmens Vice President and Chief Accounting Officer February 9, 2021

4 unchanged sentences

Signature Title Date

/s/ Carlos E.

Chairman of the Board of Directors of the General Partner

February 4, 2020

Evans Chairman of the Board of Directors of the General Partner February 9, 2021

/s/ Theodore J.

President, Chief Executive Officer and Director of the General Partner

February 4, 2020

Klinck President, Chief Executive Officer and Director of the General Partner February 9, 2021

/s/ Charles A.

Director of the General Partner

February 4, 2020

Director of the General Partner

February 4, 2020

Anderson Director of the General Partner February 9, 2021

/s/ Thomas P.

Director of the General Partner

February 4, 2020

Director of the General Partner

February 4, 2020

Anderson Director of the General Partner February 9, 2021

Gadis Director of the General Partner February 9, 2021

Hartzell Director of the General Partner February 9, 2021

/s/ Sherry A.

Director of the General Partner

February 4, 2020

Director of the General Partner

February 4, 2020

Executive Vice President and Chief Financial Officer of the General Partner

February 4, 2020

Kellett Director of the General Partner February 9, 2021

Lloyd Director of the General Partner February 9, 2021

Mulhern Executive Vice President and Chief Financial Officer of the General Partner February 9, 2021

/s/ Daniel L.

Vice President and Chief Accounting Officer of the General Partner

February 4, 2020

Clemmens Vice President and Chief Accounting Officer of the General Partner February 9, 2021

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures