Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded real estate investment trust (“REIT”).
−Removed: The Company is a fully integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa.
+Added: The Company is a fully integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa.
Our Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HIW.”
−Removed: At December 31, 2021, the Company owned all of the Preferred Units and 104.5 million, or 97.7%, of the Common Units in the Operating Partnership.
+Added: As of December 31, 2022, the Company owned all of the Preferred Units and 104.8 million, or 97.8%, of the Common Units in the Operating Partnership.
Limited partners owned the remaining 2.4 million Common Units.
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The Operating Partnership was formed in North Carolina in 1994.
−Removed: Our executive offices are located at 3100 Smoketree Court, Suite 600, Raleigh, NC 27604, and our telephone number is (919) 872-4924.
+Added: Our executive offices are located at 150 Fayetteville Street, Suite 1400, Raleigh, NC 27601, and our telephone number is (919) 872-4924.
Our primary business is the operation, acquisition and development of office properties.
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We believe that in creating environments and experiences where the best and brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in turn, our stockholders.
−Removed: Our simple strategy is to own and manage high-quality workplaces in the BBDs within our footprint, maintain a strong balance sheet to be opportunistic throughout economic cycles, employ a talented and dedicated team and communicate transparently with all stakeholders.
+Added: Our simple strategy is to own and operate high-quality workplaces in the BBDs within our footprint, maintain a strong balance sheet to be opportunistic throughout economic cycles, employ a talented and dedicated team and communicate transparently with all stakeholders.
We focus on owning and managing buildings in the most dynamic and vibrant BBDs.
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A core component of this strategy is to continuously strengthen the financial and operational performance, resiliency and long-term growth prospects of our existing in-service portfolio and recycle out of those properties that no longer meet our criteria.
−Removed: Since the beginning of 2019, we have acquired 3.1 million square feet of trophy office assets for a total investment of $1.3 billion, placed in service 1.8 million square feet of highly pre-leased new office development for a total investment of $691 million and sold 6.7 million square feet of non-core office and industrial assets for $992 million.
−Removed: This series of transactions included our exit from Greensboro and Memphis and entry into Charlotte, a higher-growth market with greater future upside opportunities.
+Added: Since the beginning of 2019, we have acquired (on a wholly-owned or joint venture basis) 4.0 million square feet of trophy office assets for a total gross investment of $1.9 billion, placed in service 2.1 million square feet of highly pre-leased new office development for a total gross investment of $762.0 million and sold 7.1 million square feet of non-core assets for $1.1 billion.
+Added: As of December 31, 2022, our wholly-owned and joint venture development pipeline consisted of in-process developments with a total anticipated gross investment of $928.6 million.
+Added: During this timeframe, we have completed our exit from Greensboro and Memphis, announced our plan to exit Pittsburgh and entered Charlotte and Dallas, two higher-growth markets.
Geographic Diversification .
−Removed: Our core portfolio consists primarily of office properties in Atlanta, Charlotte, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa.
+Added: Our core portfolio consists primarily of office properties in Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa.
We do not believe that our operations are significantly dependent upon any particular geographic market.
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We also compete with other domestic and foreign REITs, financial institutions, pension funds, partnerships, individual investors and others when attempting to acquire, develop and operate properties.
−Removed: Environmental
+Added: Environmental Resiliency
We are firmly committed to our intrinsic and societal responsibility to routinely minimize all environmental impacts resulting from the development and operation of our properties.
Our plan is to continue minimizing our energy intensity, carbon emissions and water consumption and strive to mitigate pollution, ensure environmental compliance and create healthy and productive workspaces for our customers and communities.
−Removed: To support and advance the environmental component of our ESG initiatives, we have formed a management-level corporate responsibility team that is overseen by the investment committee of the Company’s board of directors.
−Removed: The corporate responsibility team, comprised of a diverse group of disciplines including executive leadership, is charged with refining our ESG strategy, driving performance improvements across our portfolio and establishing and tracking progress towards goals.
−Removed: More information regarding our sustainability strategy and progress towards reaching our target goals is available in the Company’s Proxy Statement filed in connection with our annual meeting of stockholders and in our annual corporate responsibility report that can be found under the “Service Not Space/Sustainability” section of our website.
+Added: To support and advance the environmental component of our long-term resiliency initiatives, we have formed a management-level corporate resiliency team that is overseen by the investment committee of the Company’s Board of Directors.
+Added: The corporate resiliency team, comprised of a diverse group of disciplines including executive leadership, is charged with refining our long-term resiliency strategy, driving performance improvements across our portfolio and establishing and tracking progress towards goals.
+Added: More information regarding our sustainability strategy and progress towards reaching our target goals is available in the Company’s Proxy Statement filed in connection with our annual meeting of stockholders and in our annual corporate resiliency report that can be found under the “Service Not Space/Sustainability” section of our website.
Information on our website is not considered part of this Annual Report.
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We face risks associated with security breaches through cyber attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology networks and related systems.
−Removed: The audit committee of the Company’s Board of Directors is responsible for overseeing management’s risk assessment and risk management processes designed to monitor and control information security risk.
+Added: The audit committee of the Company’s Board of Directors is responsible for overseeing management’s risk assessment and risk management processes designed to
+Added: monitor and control information security risk.
Management, including the Company’s chief information officer, regularly briefs the audit committee on information security matters.
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We focus our real estate activities in markets where we have extensive local knowledge and own a significant amount of assets.
−Removed: As a result, we operate division offices in Atlanta, Nashville, Orlando, Pittsburgh, Raleigh, Richmond and Tampa, which are led by seasoned real estate professionals with significant commercial real estate experience managing across multiple economic cycles.
+Added: As a result, we operate division offices in Atlanta, Nashville, Orlando, Raleigh, Richmond and Tampa, which are led by seasoned real estate professionals with significant commercial real estate experience managing across multiple economic cycles.
+Added: Over the long-term, we plan to open division offices in Charlotte and Dallas.
Shared corporate services, such as accounting, technology, development, asset management, marketing, human resources, legal and tax, are primarily based in Raleigh.
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Fully-Integrated.
−Removed: Unlike some other REITs, which outsource the leasing, management, maintenance and/or customer service of their properties to third parties, we are a fully-integrated REIT that generally staffs the leasing, management, maintenance and customer service of our own portfolio.
+Added: Unlike some other REITs, which outsource the leasing, management, maintenance and/or customer service of their properties entirely to third parties, we are a fully-integrated REIT that generally staffs the leasing, management, maintenance and customer service of our own portfolio.
We believe being a fully-integrated REIT is in the best long-term interests of our stockholders for a number of reasons:
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Above all, being a fully-integrated REIT across these diverse functional areas gives us the benefit of engaging and responding to our customers’ needs as an owner versus a vendor.
−Removed: We believe this distinction, a core component of our Company’s value proposition, translates into improved customer service and higher customer retention.
−Removed: We had 348 full-time employees as of December 31, 2021, 11 fewer than we had as of December 31, 2020.
+Added: We believe this distinction, a core component of our value proposition, translates into improved customer service and higher customer retention.
+Added: We had 345 full-time employees as of December 31, 2022, three fewer than we had as of December 31, 2021.
Over the past three years, our average annual turnover rate was 14%, substantially lower than the average national industry turnover rate of 24.3% as reported by the Bureau of Labor Statistics.
−Removed: Our turnover rate was 16% for 2021 largely due to the volatility in the job markets created by the ongoing COVID-19 pandemic.
+Added: Our turnover rate was 21% for 2022 largely due to the continued volatility in the job markets in the aftermath of the COVID-19 pandemic.
However, this was lower than the average national industry turnover rate of 25.8% and we have generally backfilled most of these positions.
−Removed: Moreover, through our efforts in providing internship and cooperative education opportunities for future real estate professionals, we have identified a pool of talented professionals capable of filling future hiring needs.
+Added: Moreover, through our efforts in
+Added: providing internship and cooperative education opportunities for future real estate professionals, we have identified a pool of talented professionals capable of filling future hiring needs.
As of December 31, 2022, the average tenure of our employees was 10 years and the average age was 49 years.
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Approximately 33% of our employees are highly specialized and skilled trade professionals, such as maintenance engineers and technicians and HVAC technicians.
−Removed: The average age of our trade professionals is 52 years, which is approximately three years older than the average age of the remainder of our employee base.
+Added: The average age of our trade professionals is 51 years, which is approximately four years older than the average age of the remainder of our employee base.
To proactively combat the potential future shortage of skilled trade professionals, we have partnered with local trade schools in some of our markets to implement an apprenticeship program to encourage and incentivize younger workers to obtain the technical skills necessary to become a trade professional.
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For example, the development cash incentive program does not create an inappropriate risk because all development projects (inclusive of any such incentive compensation) must be approved in advance by our executive officers and, in most cases, the full board or the investment committee of our board, none of whom are eligible to receive such incentives.
−Removed: Likewise, the payment of leasing commissions does not create an inappropriate risk because amounts payable are derived from net effective cash rents (which deducts leasing capital expenditures and operating expenses) and leases must be executed by an officer of our Company, none of whom is eligible to receive such commissions.
+Added: Likewise, the payment of leasing commissions does not create an inappropriate risk because amounts payable are derived from net effective cash rents (which deducts leasing capital expenditures and operating expenses) and leases must be executed by an officer of our company, none of whom are eligible to receive such commissions.
Generally, lease transactions of a particular size or that contain terms or conditions that exceed certain guidelines also must be approved in advance by our senior leadership team.
Additionally, we have an internal guideline whereby customers that account for more than 3% of our annualized revenues are periodically reviewed with the board.
−Removed: As of December 31, 2021, only the Federal Government (4.0%) and Bank of America (3.7%) accounted for more than 3% of our annualized cash revenues.
+Added: As of December 31, 2022, only Bank of America (3.8%) and Asurion (3.6%) accounted for more than 3% of our annualized GAAP revenues.
Health and Safety.
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For example, nearly one-third of our current employees have had significant career advancement during their tenure with us.
−Removed: Through periodic career conversations that are held at least once a year with our employees, we create an environment that fosters and encourages an “ownership” mentality throughout our Company and empowers our employees to continuously seek new and better ways of doing business, particularly in light of the disruptions created by the COVID-19 pandemic.
+Added: Through periodic career conversations that are held at least once a year with our employees, we create an environment that fosters and encourages an “ownership” mentality throughout our company and empowers our employees to continuously seek new and better ways of doing business.
In addition to supporting the career growth of our employees, we also seek to grow as an employer.
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During 2021, we surveyed all of our employees with respect to diversity and inclusion and many of our employees with respect to work environment satisfaction.
−Removed: During 2022, we plan to conduct an engagement survey.
+Added: During 2022, we conducted an engagement survey.
Diversity and Inclusion.
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Day, a national day of service.
−Removed: Third, in response to listening sessions held with our employees, we formed a diversity and inclusion group, called the “DIG.” The DIG is made up of employees selected through an application process who advocate for diversity and inclusion throughout our Company.
−Removed: In 2021, the DIG focused on creating relationships with local schools that support disadvantaged and minority students, anonymously surveying our employees on diversity and inclusion topics, and creating clear Company-wide communication.
+Added: Third, we have a diversity and inclusion group, called the “DIG,” made up of employees who advocate for diversity and inclusion throughout our company.
+Added: In 2022, the DIG focused on creating relationships with local schools that support disadvantaged and minority students, creating clear Company-wide communication, encouraging personal career growth and continuing to expand and diversify our vendor base.
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.