What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-11 compared with 2024-02-06 · 29 added, 24 removed, 139 unchanged (28% of the section changed)

11 unchanged sentences

There are no material inter-segment transactions.

See Note 14 to our Consolidated Financial Statements for a summary of the rental and other revenues, net operating income and assets for each reportable segment.

See Note 15 to our Consolidated Financial Statements for a summary of the rental and other revenues, rental property and other expenses, net operating income and assets for each reportable segment.

Our website is www.highwoods.com.

3 unchanged sentences

The Company and the Operating Partnership have also filed the CEO and CFO certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits to this Annual Report.

We are in the work-placemaking business.

We believe that by 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 stakeholders.

Our Vision, Mission and Strategy

Our vision is to be a leader in the evolution of commercial real estate for the benefit of our customers, our communities and those who invest with us.

Our mission is to create environments and experiences that inspire our teammates and our customers to achieve more together.

We are in the work-placemaking business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates and, in turn, our shareholders.

By creating and operating commute-worthy places, we support the growth and success of our customers and contribute to the vitality of our communities.

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.

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Providing the most talent-supportive workplace options in these environments is core to our work-placemaking strategy.

Our investment strategy is to generate attractive and sustainable returns over the long term for our stockholders by developing, acquiring and owning a portfolio of high-quality, differentiated office buildings in the BBDs of our core markets.

Our investment thesis is to generate attractive and sustainable returns over the long term for our stockholders by developing, acquiring and owning a portfolio of high-quality, differentiated office buildings in the BBDs of our core markets.

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.

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 7.5 million square feet of non-core assets for $1.2 billion.

As of December 31, 2023, our wholly-owned and joint venture development pipeline consisted of in-process and recently completed but not yet stabilized developments with a total anticipated gross investment of $928.6 million.

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 .

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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.

More information regarding our sustainability strategy and progress towards reaching our target goals is available in our annual corporate resiliency report that can be found under the “Service Not Space/Resiliency” section of our website.

Information on our website is not considered part of this Annual Report.

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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.

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

Over the long-term, we plan to open division offices in Charlotte and Dallas.

Shared corporate services, such as accounting, technology, development, portfolio operations, marketing, human resources, legal and tax, are primarily based in Raleigh.

Shared corporate services, such as

accounting, technology, development, engineering, customer experience, marketing, human resources, legal and tax, are primarily based in Raleigh.

Our senior leadership team, led by our CEO, is based in Raleigh and oversees all of the Company’s operations.

Fully-Integrated.

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.

Unlike REITs that 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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We believe this distinction, a core component of our value proposition, translates into improved customer experience and higher customer retention.

We had 349 full-time employees as of December 31, 2023, four more than we had as of December 31, 2022.

As of both December 31, 2024 and December 31, 2023, we had approximately 350 full-time employees.

Over the past three years, our average annual turnover rate was 16%, substantially lower than the average national industry turnover rate of 25% as reported by the Bureau of Labor Statistics.

Our turnover rate was 13% for 2023, significantly lower than the turnover rate we experienced in 2021 and 2022 largely due to the volatility in the job markets in the aftermath of the COVID-19 pandemic.

Our turnover rate was 14% for 2024.

Through our efforts in providing internship and cooperative education opportunities for future real estate professionals, we have also identified a pool of talented professionals capable of filling future hiring needs.

As of December 31, 2023, the average tenure of our employees was 10 years and the average age was 49 years.

As of December 31, 2024, the average tenure of our employees was ten years and the average age was 49 years.

Approximately 71% of our employees work in one of our division offices, most of which are directly involved in the management and maintenance of our portfolio.

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In 2024, the total cost of our workforce, including salaries, commissions, bonuses, equity and non-equity incentive compensation and employee benefits, was approximately $61 million.

We continually conduct risk assessments of our human capital needs.

We regularly conduct risk assessments of our human capital needs.

Additionally, we prioritize succession planning across various levels of our company to ensure seamless transitions as employees are promoted, retire or otherwise depart from their current positions.

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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.

age of our trade professionals is 53 years, which is approximately five years older than the average age of the remainder of our employee base.

The average age of our trade professionals is 52 years, which is approximately five years older than the average age of the remainder of our employee

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.

2 unchanged sentences

We strive to provide career opportunities in an energized, inclusive and collaborative environment tailored to retain, attract and reward highly performing employees.

We do so in a culture built on the foundations of collegiality, teamwork, hard work, humility, creativity, humor, respect, acceptance, expertise and dedication to each other, our stockholders and our customers.

Our total rewards program, which includes compensation and comprehensive benefits, is crafted to provide fair and competitive pay, insurance plans and other programs to facilitate an overall work-life balance.

10 unchanged sentences

• Comprehensive health insurance coverage;

• Attractive paid time off, including up to 25 vacation days (depending on tenure), two personal holidays, nine company-wide holidays, one volunteer day, sick leave and parental leave for all new caregivers;

• Attractive paid time off, including up to 25 vacation days (depending on tenure), two personal holidays, nine company-wide holidays, one volunteer day, six days of sick leave and parental leave for all new caregivers;

• Competitive match on contributions to our 401(k) retirement savings plan, in which over 94% of our employees participate;

14 unchanged sentences

We believe such commissions, which are paid in cash, are comparable to what we would pay in commission fees to outside brokers.

We do not believe that we have compensation policies or practices that create risks that are reasonably likely to have a material adverse effect on our company.

We do not believe our compensation policies or practices create risks that are reasonably likely to have a material adverse effect on our company.

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.

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.

16 unchanged sentences

While we own and operate a collection of high-quality office assets, we believe our team of dedicated real estate professionals is also critically important to our success.

Since the beginning of 2018, by simplifying and streamlining our operations, we have reduced our overall headcount by nearly 100.

This right-sizing of our employee base has created, and will continue to create, opportunities for individual career growth.

The Company has long demonstrated a commitment to individual career growth.

For example, nearly half of our current employees have had significant career advancement during their tenure with us.

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.

Through periodic career conversations and goal-setting exercises 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.

1 unchanged sentence

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.

We conducted an engagement survey in each of the last two years.

We conducted an engagement survey in two of the last three years.

Diversity and Inclusion.

10 unchanged sentences

In 2024, the DIG focused its efforts on fostering Company-wide communication and inclusion, supporting our partnerships with local schools and programs that support students with limited economic resources and continuing to expand and diversify our vendor base.

Our core values serve as our foundation.

We believe our culture makes the difference in this highly competitive, ever-changing commercial real estate industry.

Owning and shaping our culture is the job of each teammate.

Culture is not defined by words on a page.

Rather, it is the collection of our behaviors, attitudes and actions.

Our employees bring their personal values, skills, experiences and knowledge to life through the lens of our core values.

Together, we use our mission and values to create a thriving workplace to support success for everyone and drive our culture and business forward.

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 1. Business