10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

HIGHWOODS PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-13100	56-1871668
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

HIGHWOODS REALTY LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

North Carolina	000-21731	56-1869557
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

3100 Smoketree Court, Suite 600

Raleigh, NC 27604

(Address of principal executive offices) (Zip Code)

919-872-4924

(Registrants’ telephone number, including area code)

______________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Highwoods Properties, Inc.  Yes  S    No £Highwoods Realty Limited Partnership  Yes  S    No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Highwoods Properties, Inc.  Yes  S    No £Highwoods Realty Limited Partnership  Yes  S    No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of 'large accelerated filer,' 'accelerated filer' and 'smaller reporting company' in Rule 12b-2 of the Securities Exchange Act.

Highwoods Properties, Inc.

Large accelerated filer S    Accelerated filer £      Non-accelerated filer £      Smaller reporting company £

Highwoods Realty Limited Partnership

Large accelerated filer £    Accelerated filer £      Non-accelerated filer S      Smaller reporting company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).

Highwoods Properties, Inc.  Yes  £    No SHighwoods Realty Limited Partnership  Yes  £    No S

The Company had 76,070,588 shares of Common Stock outstanding as of July 19, 2012.

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

QUARTERLY REPORT FOR THE PERIOD ENDED JUNE 30, 2012

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)	3
HIGHWOODS PROPERTIES, INC.:
Consolidated Balance Sheets at June 30, 2012 and December 31, 2011	4
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2012 and 2011	5
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2012 and 2011	6
Consolidated Statements of Equity for the Six Months Ended June 30, 2012 and 2011	7
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011	8
Notes to Consolidated Financial Statements	10
HIGHWOODS REALTY LIMITED PARTNERSHIP:
Consolidated Balance Sheets at June 30, 2012 and December 31, 2011	26
Consolidated Statements of Income for the Three and Six Months Ended June 30, 2012 and 2011	27
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended June 30, 2012 and 2011	28
Consolidated Statements of Capital for the Six Months Ended June 30, 2012 and 2011	29
Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2012 and 2011	30
Notes to Consolidated Financial Statements	32
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	47
Disclosure Regarding Forward-Looking Statements	47
Executive Summary	48
Results of Operations	49
Liquidity and Capital Resources	52
Critical Accounting Estimates	55
Non-GAAP Information	55
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	58
ITEM 4. CONTROLS AND PROCEDURES	58
PART II - OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	59
ITEM 5.  OTHER EVENTS	59
ITEM 6. EXHIBITS	59

2

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

We refer to Highwoods Properties, Inc. as the “Company,” Highwoods Realty Limited Partnership as the “Operating Partnership,” the Company’s common stock as “Common Stock” or “Common Shares,” the Company’s preferred stock as “Preferred Stock” or “Preferred Shares,” the Operating Partnership’s common partnership interests as “Common Units,” the Operating Partnership’s preferred partnership interests as “Preferred Units” and in-service properties (excluding for-sale residential condominiums) to which the Company and/or the Operating Partnership have title and 100.0% ownership rights as the “Wholly Owned Properties.” References to “we” and “our” mean the Company and the Operating Partnership, collectively, unless the context indicates otherwise.

The partnership agreement provides that the Operating Partnership will assume and pay when due, or reimburse the Company for payment of, all costs and expenses relating to the ownership and operations of, or for the benefit of, the Operating Partnership. The partnership agreement further provides that all expenses of the Company are deemed to be incurred for the benefit of the Operating Partnership.

Certain information contained herein is presented as of July 19, 2012, the latest practicable date for financial information prior to the filing of this Quarterly Report.

3

HIGHWOODS PROPERTIES, INC.

Consolidated Balance Sheets

(Unaudited and in thousands, except share and per share data)

	June 30, 2012			December 31, 2011
Assets:
Real estate assets, at cost:
Land	$	366,925		$	364,022
Buildings and tenant improvements	3,117,730			3,078,308
Development in process	6,094			—
Land held for development	102,482			105,206
	3,593,231			3,547,536
Less-accumulated depreciation	(913,016		)	(877,383		)
Net real estate assets	2,680,215			2,670,153
For-sale residential condominiums	2,434			4,751
Real estate and other assets, net, held for sale	36,751			50,335
Cash and cash equivalents	6,527			11,188
Restricted cash	20,757			26,666
Accounts receivable, net of allowance of $3,262 and $3,548, respectively	21,882			30,093
Mortgages and notes receivable, net of allowance of $118 and $61, respectively	17,056			18,600
Accrued straight-line rents receivable, net of allowance of $866 and $1,294, respectively	113,695			104,284
Investments in and advances to unconsolidated affiliates	77,089			100,367
Deferred financing and leasing costs, net of accumulated amortization of $70,572 and $62,319, respectively	126,680			127,774
Prepaid expenses and other assets	41,907			36,781
Total Assets	$	3,144,993		$	3,180,992
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
Mortgages and notes payable	$	1,823,128		$	1,903,213
Accounts payable, accrued expenses and other liabilities	137,108			148,821
Financing obligations	30,822			31,444
Total Liabilities	1,991,058			2,083,478
Commitments and contingencies
Noncontrolling interests in the Operating Partnership	124,880			110,655
Equity:
Preferred Stock, $.01 par value, 50,000,000 authorized shares;
8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 29,077 shares issued and outstanding	29,077			29,077
Common Stock, $.01 par value, 200,000,000 authorized shares;
75,619,288 and 72,647,697 shares issued and outstanding, respectively	756			726
Additional paid-in capital	1,884,392			1,803,997
Distributions in excess of net income available for common stockholders	(878,984		)	(845,853		)
Accumulated other comprehensive loss	(10,779		)	(5,734		)
Total Stockholders’ Equity	1,024,462			982,213
Noncontrolling interests in consolidated affiliates	4,593			4,646
Total Equity	1,029,055			986,859
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity	$	3,144,993		$	3,180,992

See accompanying notes to consolidated financial statements.

4

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Income

(Unaudited and in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Rental and other revenues	$	130,735		$	114,651		$	258,768		$	226,981
Operating expenses:
Rental property and other expenses	47,089			39,931			92,288			79,838
Depreciation and amortization	40,276			32,684			78,105			65,621
General and administrative	8,900			7,978			18,573			15,771
Total operating expenses	96,265			80,593			188,966			161,230
Interest expense:
Contractual	23,643			22,940			47,591			45,371
Amortization of deferred financing costs	900			821			1,802			1,642
Financing obligations	(48		)	146			(96		)	437
	24,495			23,907			49,297			47,450
Other income:
Interest and other income	1,737			1,899			3,967			3,772
Losses on debt extinguishment	(973		)	(24		)	(973		)	(24		)
	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	10,739			12,026			23,499			22,049
Gains on disposition of property	—			200			—			200
Gains on for-sale residential condominiums	110			116			175			154
Equity in earnings of unconsolidated affiliates	1,508			1,353			1,346			2,820
Income from continuing operations	12,357			13,695			25,020			25,223
Discontinued operations:
Income from discontinued operations	756			739			1,291			1,654
Net gains on disposition of discontinued operations	1,385			—			6,519			—
	2,141			739			7,810			1,654
Net income	14,498			14,434			32,830			26,877
Net (income) attributable to noncontrolling interests in the Operating Partnership	(686		)	(623		)	(1,513		)	(1,130		)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Net income available for common stockholders	$	12,962		$	10,112		$	29,656		$	20,248
Earnings per Common Share – basic:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28
Weighted average Common Shares outstanding – basic	74,662			72,211			73,749			72,015
Earnings per Common Share – diluted:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28
Weighted average Common Shares outstanding – diluted	78,521			76,197			77,601			75,987
Dividends declared per Common Share	$	0.425		$	0.425		$	0.850		$	0.850
Net income available for common stockholders:
Income from continuing operations available for common stockholders	$	10,923		$	9,410		$	22,226		$	18,677
Income from discontinued operations available for common stockholders	2,039			702			7,430			1,571
Net income available for common stockholders	$	12,962		$	10,112		$	29,656		$	20,248

See accompanying notes to consolidated financial statements.

5

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Comprehensive income/(loss):
Net income	$	14,498		$	14,434		$	32,830		$	26,877
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	296			(336		)	583			(471		)
Unrealized losses on cash flow hedges	(7,481		)	—			(7,087		)	—
Amortization of cash flow hedges	782			(29		)	1,459			(58		)
Total other comprehensive loss	(6,403		)	(365		)	(5,045		)	(529		)
Total comprehensive income	8,095			14,069			27,785			26,348
Less-comprehensive (income) attributable to noncontrolling interests	(909		)	(805		)	(1,920		)	(1,435		)
Comprehensive income attributable to the Company	$	7,186		$	13,264		$	25,865		$	24,913

See accompanying notes to consolidated financial statements.

6

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Equity

(Unaudited and in thousands, except share amounts)

	Number of Common Shares	Common Stock		Series A Cumulative Redeemable Preferred Shares		Additional Paid-In Capital			Accumulated Other Compre-hensive Loss			Non-Controlling Interests in Consolidated Affiliates			Distributions in Excess of Net Income Available for Common Stockholders			Total
Balance at December 31, 2011	72,647,697	$	726	$	29,077	$	1,803,997		$	(5,734	)	$	4,646		$	(845,853	)	$	986,859
Issuances of Common Stock, net	2,794,340	28		—		91,808			—			—			—			91,836
Conversions of Common Units to Common Stock	18,366	—		—		631			—			—			—			631
Dividends on Common Stock		—		—		—			—			—			(62,787		)	(62,787		)
Dividends on Preferred Stock		—		—		—			—			—			(1,254		)	(1,254		)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—		(16,501		)	—			—			—			(16,501		)
Distributions to noncontrolling interests in consolidated affiliates		—		—		—			—			(460		)	—			(460		)
Issuances of restricted stock	158,885	—		—		—			—			—			—			—
Share-based compensation expense		2		—		4,457			—			—			—			4,459
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—			—			—			(1,513		)	(1,513		)
Net (income) attributable to noncontrolling interests in consolidated affiliates		—		—		—			—			407			(407		)	—
Comprehensive income:
Net income		—		—		—			—			—			32,830			32,830
Other comprehensive loss		—		—		—			(5,045		)	—			—			(5,045		)
Total comprehensive income																		27,785
Balance at June 30, 2012	75,619,288	$	756	$	29,077	$	1,884,392		$	(10,779	)	$	4,593		$	(878,984	)	$	1,029,055

	Number of Common Shares	Common Stock		Series A Cumulative Redeemable Preferred Shares			Series B Cumulative Redeemable Preferred Shares			Additional Paid-In Capital			Accumulated Other Compre-hensive Loss			Non-Controlling Interests in Consolidated Affiliates			Distributions in Excess of Net Income Available for Common Stockholders			Total
Balance at December 31, 2010	71,690,487	$	717	$	29,092		$	52,500		$	1,766,886		$	(3,648	)	$	4,460		$	(761,785	)	$	1,088,222
Issuances of Common Stock, net	556,652	6		—			—			16,978			—			—			—			16,984
Conversions of Common Units to Common Stock	18,737	—		—			—			635			—			—			—			635
Dividends on Common Stock		—		—			—			—			—			—			(61,069		)	(61,069		)
Dividends on Preferred Stock		—		—			—			—			—			—			(3,299		)	(3,299		)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—			—			(6,957		)	—			—			—			(6,957		)
Distributions to noncontrolling interests in consolidated affiliates		—		—			—			—			—			(319		)	—			(319		)
Issuances of restricted stock	133,552	—		—			—			—			—			—			—			—
Redemptions/repurchases of Preferred Stock		—		(5		)	(52,500		)	1,895			—			—			(1,895		)	(52,505		)
Share-based compensation expense		1		—			—			3,452			—			—			—			3,453
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—			—			—			—			—			(1,130		)	(1,130		)
Net (income) attributable to noncontrolling interests in consolidated affiliates		—		—			—			—			—			305			(305		)	—
Comprehensive income:
Net income		—		—			—			—			—			—			26,877			26,877
Other comprehensive loss		—		—			—			—			(529		)	—			—			(529		)
Total comprehensive income																						26,348
Balance at June 30, 2011	72,399,428	$	724	$	29,087		$	—		$	1,782,889		$	(4,177	)	$	4,446		$	(802,606	)	$	1,010,363

See accompanying notes to consolidated financial statements.

7

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Six Months Ended June 30,
	2012			2011
Operating activities:
Net income	$	32,830		$	26,877
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	79,113			67,274
Amortization of lease incentives and acquisition-related intangible assets and liabilities	180			968
Share-based compensation expense	4,459			3,453
Allowance for losses on accounts and accrued straight-line rents receivable	538			1,029
Amortization of deferred financing costs	1,802			1,642
Amortization of cash flow hedges	1,459			(58		)
Losses on debt extinguishment	973			24
Net gains on disposition of property	(6,519		)	(200		)
Gains on for-sale residential condominiums	(175		)	(154		)
Equity in earnings of unconsolidated affiliates	(1,346		)	(2,820		)
Changes in financing obligations	(584		)	(245		)
Distributions of earnings from unconsolidated affiliates	2,225			2,162
Changes in operating assets and liabilities:
Accounts receivable	7,298			(1,821		)
Prepaid expenses and other assets	(3,158		)	(644		)
Accrued straight-line rents receivable	(9,415		)	(6,098		)
Accounts payable, accrued expenses and other liabilities	(16,352		)	(3,794		)
Net cash provided by operating activities	93,328			87,595
Investing activities:
Investment in acquired real estate and related intangible assets, net of cash acquired	—			(7,761		)
Investment in development in process	(1,531		)	(2,598		)
Investment in tenant improvements and deferred leasing costs	(43,851		)	(28,456		)
Investment in building improvements	(19,758		)	(5,632		)
Net proceeds from disposition of real estate assets	19,898			2,063
Net proceeds from disposition of for-sale residential condominiums	2,492			2,401
Distributions of capital from unconsolidated affiliates	901			632
Repayments of mortgages and notes receivable	1,544			235
Investments in and advances to unconsolidated affiliates	(2,750		)	(39,402		)
Changes in restricted cash and other investing activities	4,031			(395		)
Net cash used in investing activities	(39,024		)	(78,913		)
Financing activities:
Dividends on Common Stock	(62,787		)	(61,069		)
Redemptions/repurchases of Preferred Stock	—			(52,505		)
Dividends on Preferred Stock	(1,254		)	(3,299		)
Distributions to noncontrolling interests in the Operating Partnership	(3,158		)	(3,215		)
Distributions to noncontrolling interests in consolidated affiliates	(460		)	(319		)
Proceeds from the issuance of Common Stock	95,289			16,984
Costs paid for the issuance of Common Stock	(1,316		)	—
Repurchase of shares related to tax withholdings	(2,137		)	—
Borrowings on revolving credit facility	106,300			124,700
Repayments of revolving credit facility	(392,800		)	(79,300		)
Borrowings on mortgages and notes payable	225,000			200,000
Repayments of mortgages and notes payable	(19,359		)	(153,522		)
Payments on financing obligations	(38		)	—
Additions to deferred financing costs and other financing activities	(2,245		)	(2,104		)
Net cash used in financing activities	(58,965		)	(13,649		)
Net decrease in cash and cash equivalents	(4,661		)	(4,967		)
Cash and cash equivalents at beginning of the period	11,188			14,206
Cash and cash equivalents at end of the period	$	6,527		$	9,239

See accompanying notes to consolidated financial statements.

8

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Cash Flows – Continued

(Unaudited and in thousands)

Supplemental disclosure of cash flow information:

	Six Months Ended June 30,
	2012		2011
Cash paid for interest, net of amounts capitalized	$	48,063	$	44,948

Supplemental disclosure of non-cash investing and financing activities:

	Six Months Ended June 30,
	2012			2011
Unrealized losses on cash flow hedges	$	(7,087	)	$	—
Conversion of Common Units to Common Stock	631			635
Changes in accrued capital expenditures	(2,448		)	1,525
Write-off of fully depreciated real estate assets	28,629			23,352
Write-off of fully amortized deferred financing and leasing costs	8,765			8,247
Unrealized gains on marketable securities of non-qualified deferred compensation plan	216			210
Adjustment of noncontrolling interests in the Operating Partnership to fair value	16,501			6,957
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Reduction of advances to unconsolidated affiliates related to acquisition activities	26,000			—

See accompanying notes to consolidated financial statements.

9

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2012

(tabular dollar amounts in thousands, except per share data)

(Unaudited)

1.    Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2012, the Company and/or the Operating Partnership wholly owned: 304 in-service office, industrial and retail properties, comprising 29.5 million square feet; nine for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At June 30, 2012, the Company owned all of the Preferred Units and 75.2 million, or 95.3%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months endedJune 30, 2012, the Company redeemed 18,366 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.3% at June 30, 2012.

Common Stock Offerings

The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and six months endedJune 30, 2012, the Company issued 1,836,976 and 2,622,476 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.72 and $33.45 per share, respectively, raising net proceeds, after sales commissions and expenses, of $61.0 million and $86.4 million, respectively.

Basis of Presentation

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

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

10

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

1.    Description of Business and Significant Accounting Policies – Continued

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

Use of Estimates

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

Recently Issued Accounting Standards

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

2.    Real Estate Assets

Acquisitions

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

Dispositions

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

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.

3.    Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

	June 30, 2012			December 31, 2011
Seller financing (first mortgages)	$	15,853		$	17,180
Less allowance	—			—
	15,853			17,180
Promissory notes	1,321			1,481
Less allowance	(118		)	(61		)
	1,203			1,420
Mortgages and notes receivable, net	$	17,056		$	18,600

11

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

3.    Mortgages and Notes Receivable - Continued

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Beginning notes receivable allowance	$	122		$	497		$	61	$	868
Bad debt expense	—			162			—		184
Recoveries/write-offs/other	(4		)	(42		)	57		(435		)
Total notes receivable allowance	$	118		$	617		$	118	$	617

4.    Investments in and Advances to Affiliates

Unconsolidated Affiliates

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Income Statements:
Rental and other revenues	$	26,049	$	24,779	$	50,869		$	49,996
Expenses:
Rental property and other expenses	12,666		10,774		24,082			22,771
Depreciation and amortization	5,919		6,295		12,484			12,911
Impairment of real estate assets	—		—		7,180			—
Interest expense	5,267		5,858		11,097			11,865
Total expenses	23,852		22,927		54,843			47,547
Income/(loss) before disposition of properties	2,197		1,852		(3,974		)	2,449
Gains on disposition of properties	6,275		—		6,275			—
Net income	$	8,472	$	1,852	$	2,301		$	2,449
Our share of:
Depreciation and amortization of real estate assets	$	1,675	$	2,033	$	3,773		$	4,126
Impairment of real estate assets	$	—	$	—	$	1,002		$	—
Interest expense	$	1,843	$	2,033	$	3,823		$	4,194
Net income	$	1,133	$	749	$	338		$	1,670
Our share of net income	$	1,133	$	749	$	338		$	1,670
Management and other fees adjustments	375		604		1,008			1,150
Equity in earnings of unconsolidated affiliates	$	1,508	$	1,353	$	1,346		$	2,820

12

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

4.    Investments in and Advances to Affiliates - Continued

In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months endedJune 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months endedJune 30, 2012 and 2011, respectively.

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

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

5.    Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	June 30, 2012			December 31, 2011
Assets:
Deferred financing costs	$	20,112		$	18,044
Less accumulated amortization	(7,488		)	(5,797		)
	12,624			12,247
Deferred leasing costs (including lease incentives and acquisition-related intangible assets)	177,140			172,049
Less accumulated amortization	(63,084		)	(56,522		)
	114,056			115,527
Deferred financing and leasing costs, net	$	126,680		$	127,774
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	16,346		$	16,441
Less accumulated amortization	(1,966		)	(971		)
	$	14,380		$	15,470

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Amortization of deferred financing costs	$	900		$	821		$	1,802		$	1,642
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	7,266		$	4,401		$	13,706		$	8,757
Amortization of lease incentives (in rental and other revenues)	$	340		$	303		$	683		$	641
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	324		$	191		$	594		$	377
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(553	)	$	(25	)	$	(1,097	)	$	(50	)

13

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

5.    Intangible Assets and Below Market Lease Liabilities - Continued

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

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012	$	2,234	$	14,242	$	772	$	579	$	(1,229	)
2013	3,262		21,834		1,167		765		(2,081		)
2014	2,987		17,877		1,013		504		(2,005		)
2015	2,264		13,879		779		328		(1,768		)
2016	957		10,880		608		280		(1,498		)
Thereafter	920		25,453		2,379		717		(5,799		)
	$	12,624	$	104,165	$	6,718	$	3,173	$	(14,380	)

The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 3.8 years, 6.2 years, 7.8 years, 5.7 years and 8.9 years, respectively, as of June 30, 2012.

In connection with the acquisition of an office property in Cary, NC in the second quarter of 2012, we recorded $2.7 million of in-place lease intangible assets with a weighted average amortization period of 6.3 years at the date of the acquisition. The contractual rents of the in-place lease acquired were determined to be at market.

6.    Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	June 30, 2012		December 31, 2011
Secured indebtedness	$	743,492	$	750,049
Unsecured indebtedness	1,079,636		1,153,164
Total mortgages and notes payable	$	1,823,128	$	1,903,213

At June 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at June 30, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

14

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

6.    Mortgages and Notes Payable - Continued

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

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

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

7. Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the six months endedJune 30, 2012. As of June 30, 2012, we have not posted any collateral related to our interest rate swap liability.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from July 1, 2012 through June 30, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.

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

	June 30, 2012		December 31, 2011
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	7,763	$	2,202

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(7,481	)	$	—		$	(7,087	)	$	—
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	782		$	(29	)	$	1,459		$	(58	)

15

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

8. Noncontrolling Interests

Noncontrolling Interests in the Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. Net income attributable to noncontrolling interests in the Operating Partnership is computed by applying the weighted average percentage of Common Units not owned by the Company during the period, as a percent of the total number of outstanding Common Units, to the Operating Partnership’s net income for the period after deducting distributions on Preferred Units.

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

	Six Months Ended June 30,
	2012			2011
Beginning noncontrolling interests in the Operating Partnership	$	110,655		$	120,838
Adjustments of noncontrolling interests in the Operating Partnership to fair value	16,501			6,957
Conversion of Common Units to Common Stock	(631		)	(635		)
Net income attributable to noncontrolling interests in the Operating Partnership	1,513			1,130
Distributions to noncontrolling interests in the Operating Partnership	(3,158		)	(3,215		)
Total noncontrolling interests in the Operating Partnership	$	124,880		$	125,075

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net income available for common stockholders	$	12,962	$	10,112	$	29,656	$	20,248
Increase in additional paid in capital from conversion of Common Units to Common Stock	568		449		631		635
Change from net income available for common stockholders and transfers from noncontrolling interests	$	13,530	$	10,561	$	30,287	$	20,883

Noncontrolling Interests in Consolidated Affiliates

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

9. Disclosure About Fair Value of Financial Instruments

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

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

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

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

16

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

9. Disclosure About Fair Value of Financial Instruments - Continued

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

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants and (2) interest rate swaps whose fair value is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

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

Our Level 3 assets include our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

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

			Level 1		Level 2		Level 3
	June 30, 2012		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	17,330	$	—	$	17,330	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,099		—		—
Tax increment financing bond (in prepaid expenses and other assets)	15,371		—		—		15,371
Total Assets	$	35,800	$	3,099	$	17,330	$	15,371
Noncontrolling Interests in the Operating Partnership	$	124,880	$	124,880	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,918,241	$	—	$	1,918,241	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		—		7,763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,099		—		—
Financing obligations, at fair value (1)	21,141		—		—		21,141
Total Liabilities	$	1,950,244	$	3,099	$	1,926,004	$	21,141

17

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

9. Disclosure About Fair Value of Financial Instruments - Continued

			Level 1		Level 2		Level 3
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	18,990	$	—	$	18,990	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,149		3,149		—		—
Tax increment financing bond (in prepaid expenses and other assets)	14,788		—		—		14,788
Impaired real estate assets and for-sale residential condominiums	12,767		—		—		12,767
Total Assets	$	49,694	$	3,149	$	18,990	$	27,555
Noncontrolling Interests in the Operating Partnership	$	110,655	$	110,655	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,992,937	$	—	$	1,992,937	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	2,202		—		2,202		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,149		3,149		—		—
Financing obligations, at fair value (1)	18,866		—		—		18,866
Total Liabilities	$	2,017,154	$	3,149	$	1,995,139	$	18,866

__________

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

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Asset:
Tax Increment Financing Bond:
Beginning balance	$	15,075	$	15,564		$	14,788	$	15,699
Unrealized gains/(losses) (in AOCL)	296		(336		)	583		(471		)
Ending balance	$	15,371	$	15,228		$	15,371	$	15,228

In 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at June 30, 2012 was $1.7 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.6 million lower or $0.6 million higher, respectively, as of June 30, 2012. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three and six months endedJune 30, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

18

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

9. Disclosure About Fair Value of Financial Instruments - Continued

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

	Fair Value at June 30, 2012		Valuation Technique	Unobservable Input	Discount Rate
Tax increment financing bond	$	15,371	Income approach	Discount rate	9.85	%

10. Share-based Payments

During the six months endedJune 30, 2012, we granted 190,886 stock options with an exercise price equal to the closing market price of a share of our Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $5.47. During the six months endedJune 30, 2012, we also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.4 million during the three months endedJune 30, 2012 and 2011, respectively, and $4.5 million and $3.5 million during the six months endedJune 30, 2012 and 2011, respectively. At June 30, 2012, there was $7.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.6 years.

11. Accumulated Other Comprehensive Loss

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

	Six Months Ended June 30,
	2012			2011
Tax increment financing bond:
Beginning balance	$	(2,309	)	$	(2,543	)
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Ending balance	(1,726		)	(3,014		)
Cash flow hedges:
Beginning balance	(3,425		)	(1,105		)
Unrealized losses on cash flow hedges	(7,087		)	—
Amortization of cash flow hedges	1,459			(58		)
Ending balance	(9,053		)	(1,163		)
Total accumulated other comprehensive loss	$	(10,779	)	$	(4,177	)

19

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

12. Discontinued Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and other revenues	$	2,044	$	2,907	$	4,383	$	6,169
Operating expenses:
Rental property and other expenses	966		1,390		2,084		2,862
Depreciation and amortization	322		778		1,008		1,653
Total operating expenses	1,288		2,168		3,092		4,515
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		—		6,519		—
Total discontinued operations	$	2,141	$	739	$	7,810	$	1,654

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

	June 30, 2012			December 31, 2011
Assets:
Land	$	3,849		$	5,749
Buildings and tenant improvements	49,460			65,860
Accumulated depreciation	(18,743		)	(23,917		)
Net real estate assets	34,566			47,692
Accrued straight line rents receivable	1,490			1,726
Deferred leasing costs, net	678			811
Prepaid expenses and other assets	17			106
Real estate and other assets, net, held for sale	$	36,751		$	50,335
Tenant security deposits, deferred rents and accrued costs (1)	$	595		$	238

__________

(1) Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.  

20

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

13. Earnings Per Share

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Earnings per Common Share - basic:
Numerator:
Income from continuing operations	$	12,357		$	13,695		$	25,020		$	25,223
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(584		)	(586		)	(1,133		)	(1,047		)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common stockholders	10,923			9,410			22,226			18,677
Income from discontinued operations	2,141			739			7,810			1,654
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(102		)	(37		)	(380		)	(83		)
Income from discontinued operations available for common stockholders	2,039			702			7,430			1,571
Net income available for common stockholders	$	12,962		$	10,112		$	29,656		$	20,248
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1) (2)	74,662			72,211			73,749			72,015
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28
Earnings per Common Share - diluted:
Numerator:
Income from continuing operations	$	12,357		$	13,695		$	25,020		$	25,223
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	11,507			9,996			23,359			19,724
Income from discontinued operations available for common stockholders	2,141			739			7,810			1,654
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	$	13,648		$	10,735		$	31,169		$	21,378
Denominator:
Denominator for basic earnings per Common Share –weighted average shares (1) (2)	74,662			72,211			73,749			72,015
Add:
Stock options using the treasury method	141			202			129			185
Noncontrolling interests Common Units	3,718			3,784			3,723			3,787
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)	78,521			76,197			77,601			75,987
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28

__________

21

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

13. Earnings Per Share - Continued

(1) There were 0.5 million and 0.3 million options outstanding during the three months endedJune 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months endedJune 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

14. Segment Information

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	16,209	$	12,341	$	31,993	$	24,242
Greenville, SC	3,489		3,437		6,993		6,942
Kansas City, MO	3,560		3,441		7,163		6,960
Memphis, TN	10,130		10,077		20,268		20,179
Nashville, TN	14,321		13,572		28,186		26,315
Orlando, FL	2,756		2,619		5,443		4,936
Piedmont Triad, NC	5,072		5,273		10,152		10,637
Pittsburgh, PA	9,113		—		18,199		—
Raleigh, NC	20,400		20,103		40,179		39,421
Richmond, VA	12,095		11,668		23,605		23,046
Tampa, FL	17,579		17,064		34,715		33,436
Total Office Segment	114,724		99,595		226,896		196,114
Industrial:
Atlanta, GA	3,849		4,028		7,623		7,962
Piedmont Triad, NC	3,087		2,825		6,251		5,802
Total Industrial Segment	6,936		6,853		13,874		13,764
Retail:
Kansas City, MO	9,075		8,203		17,998		17,103
Total Retail Segment	9,075		8,203		17,998		17,103
Total Rental and Other Revenues	$	130,735	$	114,651	$	258,768	$	226,981

22

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

14. Segment Information - Continued

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Operating Income: (1)
Office:
Atlanta, GA	$	10,426		$	7,973		$	20,821		$	15,464
Greenville, SC	2,051			2,067			4,183			4,142
Kansas City, MO	2,186			2,112			4,518			4,256
Memphis, TN	5,841			5,462			11,942			11,222
Nashville, TN	9,835			9,369			19,490			18,001
Orlando, FL	1,431			1,284			2,847			2,450
Piedmont Triad, NC	3,219			3,452			6,452			7,053
Pittsburgh, PA	4,627			—			8,910			—
Raleigh, NC	14,291			14,273			28,146			27,489
Richmond, VA	8,536			8,231			16,419			16,090
Tampa, FL	10,811			10,557			21,650			20,684
Total Office Segment	73,254			64,780			145,378			126,851
Industrial:
Atlanta, GA	2,761			3,001			5,649			5,840
Piedmont Triad, NC	2,308			2,107			4,596			4,331
Total Industrial Segment	5,069			5,108			10,245			10,171
Retail:
Kansas City, MO	5,323			4,832			10,857			10,121
Total Retail Segment	5,323			4,832			10,857			10,121
Total Net Operating Income	83,646			74,720			166,480			147,143
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276		)	(32,684		)	(78,105		)	(65,621		)
General and administrative expense	(8,900		)	(7,978		)	(18,573		)	(15,771		)
Interest expense	(24,495		)	(23,907		)	(49,297		)	(47,450		)
Other income	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049

__________

(1) Net of discontinued operations.

23

HIGHWOODS PROPERTIES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share data)

15. Subsequent Events

In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the second quarter of 2012 under our equity sales agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million.

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.

24

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25

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Balance Sheets

(Unaudited and in thousands, except unit and per unit data)

	June 30, 2012			December 31, 2011
Assets:
Real estate assets, at cost:
Land	$	366,925		$	364,022
Buildings and tenant improvements	3,117,730			3,078,308
Development in process	6,094			—
Land held for development	102,482			105,206
	3,593,231			3,547,536
Less-accumulated depreciation	(913,016		)	(877,383		)
Net real estate assets	2,680,215			2,670,153
For-sale residential condominiums	2,434			4,751
Real estate and other assets, net, held for sale	36,751			50,335
Cash and cash equivalents	6,631			11,151
Restricted cash	20,757			26,666
Accounts receivable, net of allowance of $3,262 and $3,548, respectively	21,882			30,093
Mortgages and notes receivable, net of allowance of $118 and $61, respectively	17,056			18,600
Accrued straight-line rents receivable, net of allowance of $866 and $1,294, respectively	113,695			104,284
Investments in and advances to unconsolidated affiliates	76,037			99,296
Deferred financing and leasing costs, net of accumulated amortization of $70,572 and $62,319, respectively	126,680			127,774
Prepaid expenses and other assets	41,826			36,781
Total Assets	$	3,143,964		$	3,179,884
Liabilities, Redeemable Operating Partnership Units and Equity:
Mortgages and notes payable	$	1,823,128		$	1,903,213
Accounts payable, accrued expenses and other liabilities	137,047			148,821
Financing obligations	30,822			31,444
Total Liabilities	1,990,997			2,083,478
Commitments and contingencies
Redeemable Operating Partnership Units:
Common Units, 3,711,152 and 3,729,518 outstanding, respectively	124,880			110,655
Series A Preferred Units (liquidation preference $1,000 per unit), 29,077 units issued and outstanding	29,077			29,077
Total Redeemable Operating Partnership Units	153,957			139,732
Equity:
Common Units:
General partner Common Units, 789,216 and 759,684 outstanding, respectively	10,049			9,575
Limited partner Common Units, 74,421,263 and 71,479,204 outstanding, respectively	995,147			948,187
Accumulated other comprehensive loss	(10,779		)	(5,734		)
Noncontrolling interests in consolidated affiliates	4,593			4,646
Total Equity	999,010			956,674
Total Liabilities, Redeemable Operating Partnership Units and Equity	$	3,143,964		$	3,179,884

See accompanying notes to consolidated financial statements.

26

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Income

(Unaudited and in thousands, except per unit amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Rental and other revenues	$	130,735		$	114,651		$	258,768		$	226,981
Operating expenses:
Rental property and other expenses	47,030			39,868			92,167			79,924
Depreciation and amortization	40,276			32,684			78,105			65,621
General and administrative	8,959			8,041			18,694			15,685
Total operating expenses	96,265			80,593			188,966			161,230
Interest expense:
Contractual	23,643			22,940			47,591			45,371
Amortization of deferred financing costs	900			821			1,802			1,642
Financing obligations	(48		)	146			(96		)	437
	24,495			23,907			49,297			47,450
Other income:
Interest and other income	1,737			1,899			3,967			3,772
Losses on debt extinguishment	(973		)	(24		)	(973		)	(24		)
	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	10,739			12,026			23,499			22,049
Gains on disposition of property	—			200			—			200
Gains on for-sale residential condominiums	110			116			175			154
Equity in earnings of unconsolidated affiliates	1,511			1,357			1,351			2,832
Income from continuing operations	12,360			13,699			25,025			25,235
Discontinued operations:
Income from discontinued operations	756			739			1,291			1,654
Net gains on disposition of discontinued operations	1,385			—			6,519			—
	2,141			739			7,810			1,654
Net income	14,501			14,438			32,835			26,889
Net (income) attributable to noncontrolling interests in consolidated affiliates	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Earnings per Common Unit – basic:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.03			0.01			0.10			0.02
Net income available for common unitholders	$	0.18		$	0.14		$	0.40		$	0.28
Weighted average Common Units outstanding – basic	77,971			75,586			77,063			75,393
Earnings per Common Unit – diluted:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.02			0.01			0.10			0.02
Net income available for common unitholders	$	0.17		$	0.14		$	0.40		$	0.28
Weighted average Common Units outstanding – diluted	78,112			75,788			77,192			75,578
Distributions declared per Common Unit	$	0.425		$	0.425		$	0.850		$	0.850
Net income available for common unitholders:
Income from continuing operations available for common unitholders	$	11,510		$	10,000		$	23,364		$	19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390

See accompanying notes to consolidated financial statements.

27

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Other comprehensive income/(loss):
Net income	$	14,501		$	14,438		$	32,835		$	26,889
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	296			(336		)	583			(471		)
Unrealized losses on cash flow hedges	(7,481		)	—			(7,087		)	—
Amortization of cash flow hedges	782			(29		)	1,459			(58		)
Total other comprehensive loss	(6,403		)	(365		)	(5,045		)	(529		)
Total comprehensive income	$	8,098		$	14,073		$	27,790		$	26,360
Less-comprehensive (income) attributable to noncontrolling interests	(223		)	(182		)	(407		)	(305		)
Comprehensive income attributable to the Operating Partnership	$	7,875		$	13,891		$	27,383		$	26,055

See accompanying notes to consolidated financial statements.

28

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Capital

(Unaudited and in thousands, except unit amounts)

	Common Units						Accumulated Other Comprehensive Loss			Noncontrolling Interests in Consolidated Affiliates			Total Partners’ Capital
	General Partners’ Capital			Limited Partners’ Capital
Balance at December 31, 2011	$	9,575		$	948,187		$	(5,734	)	$	4,646		$	956,674
Issuances of Common Units, net	918			90,918			—			—			91,836
Distributions paid on Common Units	(656		)	(64,941		)	—			—			(65,597		)
Distributions paid on Preferred Units	(13		)	(1,241		)	—			—			(1,254		)
Share-based compensation expense	45			4,414			—			—			4,459
Distribution to noncontrolling interests in consolidated affiliates	—			—			—			(460		)	(460		)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(144		)	(14,294		)	—			—			(14,438		)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(4		)	(403		)				407			—
Comprehensive income:
Net income	328			32,507			—			—			32,835
Other comprehensive loss	—			—			(5,045		)	—			(5,045		)
Total comprehensive income													27,790
Balance at June 30, 2012	$	10,049		$	995,147		$	(10,779	)	$	4,593		$	999,010

	Common Units						Accumulated Other Comprehensive Loss			Noncontrolling Interests in Consolidated Affiliates			Total Partners’ Capital
	General Partners’ Capital			Limited Partners’ Capital
Balance at December 31, 2010	$	10,044		$	994,610		$	(3,648	)	$	4,460		$	1,005,466
Issuances of Common Units, net	170			16,814			—			—			16,984
Distributions paid on Common Units	(640		)	(63,296		)	—			—			(63,936		)
Distributions paid on Preferred Units	(33		)	(3,266		)	—			—			(3,299		)
Share-based compensation expense	35			3,418			—			—			3,453
Distribution to noncontrolling interests in consolidated affiliates	—			—			—			(319		)	(319		)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(48		)	(4,769		)	—			—			(4,817		)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(3		)	(302		)	—			305			—
Comprehensive income/(loss):
Net income	269			26,620			—			—			26,889
Other comprehensive loss	—			—			(529		)	—			(529		)
Total comprehensive income													26,360
Balance at June 30, 2011	$	9,794		$	969,829		$	(4,177	)	$	4,446		$	979,892

See accompanying notes to consolidated financial statements.

29

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Six Months Ended June 30,
	2012			2011
Operating activities:
Net income	$	32,835		$	26,889
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	79,113			67,274
Amortization of lease incentives and acquisition-related intangible assets and liabilities	180			968
Share-based compensation expense	4,459			3,453
Allowance for losses on accounts and accrued straight-line rents receivable	538			1,029
Amortization of deferred financing costs	1,802			1,642
Amortization of cash flow hedges	1,459			(58		)
Losses on debt extinguishment	973			24
Net gains on disposition of property	(6,519		)	(200		)
Gains on for-sale residential condominiums	(175		)	(154		)
Equity in earnings of unconsolidated affiliates	(1,351		)	(2,832		)
Changes in financing obligations	(584		)	(245		)
Distributions of earnings from unconsolidated affiliates	2,211			2,150
Changes in operating assets and liabilities:
Accounts receivable	7,298			(1,821		)
Prepaid expenses and other assets	(3,077		)	(544		)
Accrued straight-line rents receivable	(9,415		)	(6,098		)
Accounts payable, accrued expenses and other liabilities	(16,413		)	(3,794		)
Net cash provided by operating activities	93,334			87,683
Investing activities:
Investment in acquired real estate and related intangible assets, net of cash acquired	—			(7,761		)
Investment in development in process	(1,531		)	(2,598		)
Investment in tenant improvements and deferred leasing costs	(43,851		)	(28,456		)
Investment in building improvements	(19,758		)	(5,632		)
Net proceeds from disposition of real estate assets	19,898			2,063
Net proceeds from disposition of for-sale residential condominiums	2,492			2,401
Distributions of capital from unconsolidated affiliates	901			632
Repayments of mortgages and notes receivable	1,544			235
Investments in and advances to unconsolidated affiliates	(2,750		)	(39,402		)
Changes in restricted cash and other investing activities	4,031			(395		)
Net cash used in investing activities	(39,024		)	(78,913		)
Financing activities:
Distributions on Common Units	(65,597		)	(63,936		)
Redemptions/repurchases of Preferred Units	—			(52,505		)
Distributions on Preferred Units	(1,254		)	(3,299		)
Distributions to noncontrolling interests in consolidated affiliates	(460		)	(319		)
Proceeds from the issuance of Common Units	95,289			16,984
Costs paid for the issuance of Common Units	(1,316		)	—
Repurchase of units related to tax withholdings	(2,137		)	—
Borrowings on revolving credit facility	106,300			124,700
Repayments of revolving credit facility	(392,800		)	(79,300		)
Borrowings on mortgages and notes payable	225,000			200,000
Repayments of mortgages and notes payable	(19,359		)	(153,522		)
Payments on financing obligations	(38		)	—
Additions to deferred financing costs and other financing activities	(2,458		)	(2,684		)
Net cash used in financing activities	(58,830		)	(13,881		)
Net decrease in cash and cash equivalents	(4,520		)	(5,111		)
Cash and cash equivalents at beginning of the period	11,151			14,198
Cash and cash equivalents at end of the period	$	6,631		$	9,087

See accompanying notes to consolidated financial statements.

30

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows - Continued

(Unaudited and in thousands)

Supplemental disclosure of cash flow information:

	Six Months Ended June 30,
	2012		2011
Cash paid for interest, net of amounts capitalized	$	48,063	$	44,948

Supplemental disclosure of non-cash investing and financing activities:

	Six Months Ended June 30,
	2012			2011
Unrealized losses on cash flow hedges	$	(7,087	)	$	—
Changes in accrued capital expenditures	(2,448		)	1,525
Write-off of fully depreciated real estate assets	28,629			23,352
Write-off of fully amortized deferred financing and leasing costs	8,765			8,247
Unrealized gains on marketable securities of non-qualified deferred compensation plan	216			210
Adjustment of Redeemable Common Units to fair value	14,225			4,237
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Reduction of advances to unconsolidated affiliates related to acquisition activities	26,000			—

See accompanying notes to consolidated financial statements.

31

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2012

(tabular dollar amounts in thousands, except per unit data)

(Unaudited)

1.    Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2012, the Company and/or the Operating Partnership wholly owned: 304 in-service office, industrial and retail properties, comprising 29.5 million square feet; nine for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At June 30, 2012, the Company owned all of the Preferred Units and 75.2 million, or 95.3%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months endedJune 30, 2012, the Company redeemed 18,366 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.3% at June 30, 2012.

Common Stock Offerings

The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and six months endedJune 30, 2012, the Company issued 1,836,976 and 2,622,476 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.72 and $33.45 per share, respectively, raising net proceeds, after sales commissions and expenses, of $61.0 million and $86.4 million, respectively.

Basis of Presentation

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

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

32

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

1.    Description of Business and Significant Accounting Policies – Continued

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

Use of Estimates

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

Recently Issued Accounting Standards

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

2.    Real Estate Assets

Acquisitions

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

Dispositions

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

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.

3.    Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

	June 30, 2012			December 31, 2011
Seller financing (first mortgages)	$	15,853		$	17,180
Less allowance	—			—
	15,853			17,180
Promissory notes	1,321			1,481
Less allowance	(118		)	(61		)
	1,203			1,420
Mortgages and notes receivable, net	$	17,056		$	18,600

33

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

3.    Mortgages and Notes Receivable - Continued

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Beginning notes receivable allowance	$	122		$	497		$	61	$	868
Bad debt expense	—			162			—		184
Recoveries/write-offs/other	(4		)	(42		)	57		(435		)
Total notes receivable allowance	$	118		$	617		$	118	$	617

4.    Investments in and Advances to Affiliates

Unconsolidated Affiliates

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Income Statements:
Rental and other revenues	$	25,057	$	23,756	$	48,854		$	47,958
Expenses:
Rental property and other expenses	12,076		10,155		22,877			21,526
Depreciation and amortization	5,607		6,053		11,861			12,299
Impairment of real estate assets	—		—		7,180			—
Interest expense	5,103		5,683		10,766			11,508
Total expenses	22,786		21,891		52,684			45,333
Income/(loss) before disposition of properties	2,271		1,865		(3,830		)	2,625
Gains on disposition of properties	6,275		—		6,275			—
Net income	$	8,546	$	1,865	$	2,445		$	2,625
Our share of:
Depreciation and amortization of real estate assets	$	1,636	$	1,995	$	3,695		$	4,050
Impairment of real estate assets	$	—	$	—	$	1,002		$	—
Interest expense	$	1,823	$	2,012	$	3,782		$	4,149
Net income	$	1,142	$	759	$	356		$	1,694
Our share of net income	$	1,142	$	759	$	356		$	1,694
Management and other fees adjustments	369		598		995			1,138
Equity in earnings of unconsolidated affiliates	$	1,511	$	1,357	$	1,351		$	2,832

34

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

4.    Investments in and Advances to Affiliates - Continued

In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months endedJune 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months endedJune 30, 2012 and 2011, respectively.

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

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

5.    Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	June 30, 2012			December 31, 2011
Assets:
Deferred financing costs	$	20,112		$	18,044
Less accumulated amortization	(7,488		)	(5,797		)
	12,624			12,247
Deferred leasing costs (including lease incentives and acquisition-related intangible assets)	177,140			172,049
Less accumulated amortization	(63,084		)	(56,522		)
	114,056			115,527
Deferred financing and leasing costs, net	$	126,680		$	127,774
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	16,346		$	16,441
Less accumulated amortization	(1,966		)	(971		)
	$	14,380		$	15,470

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Amortization of deferred financing costs	$	900		$	821		$	1,802		$	1,642
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	7,266		$	4,401		$	13,706		$	8,757
Amortization of lease incentives (in rental and other revenues)	$	340		$	303		$	683		$	641
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	324		$	191		$	594		$	377
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(553	)	$	(25	)	$	(1,097	)	$	(50	)

35

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

5.    Intangible Assets and Below Market Lease Liabilities - Continued

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

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012	$	2,234	$	14,242	$	772	$	579	$	(1,229	)
2013	3,262		21,834		1,167		765		(2,081		)
2014	2,987		17,877		1,013		504		(2,005		)
2015	2,264		13,879		779		328		(1,768		)
2016	957		10,880		608		280		(1,498		)
Thereafter	920		25,453		2,379		717		(5,799		)
	$	12,624	$	104,165	$	6,718	$	3,173	$	(14,380	)

The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 3.8 years, 6.2 years, 7.8 years, 5.7 years and 8.9 years, respectively, as of June 30, 2012.

In connection with the acquisition of an office property in Cary, NC in the second quarter of 2012, we recorded $2.7 million of in-place lease intangible assets with a weighted average amortization period of 6.3 years at the date of the acquisition. The contractual rents of the in-place lease acquired were determined to be at market.

6.    Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	June 30, 2012		December 31, 2011
Secured indebtedness	$	743,492	$	750,049
Unsecured indebtedness	1,079,636		1,153,164
Total mortgages and notes payable	$	1,823,128	$	1,903,213

At June 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at June 30, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

36

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

6.    Mortgages and Notes Payable - Continued

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

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

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

7. Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the six months endedJune 30, 2012. As of June 30, 2012, we have not posted any collateral related to our interest rate swap liability.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from July 1, 2012 through June 30, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.

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

	June 30, 2012		December 31, 2011
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	7,763	$	2,202

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(7,481	)	$	—		$	(7,087	)	$	—
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	782		$	(29	)	$	1,459		$	(58	)

8. Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates

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

37

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

9. Disclosure About Fair Value of Financial Instruments

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

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

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

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

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

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants and (2) interest rate swaps whose fair value is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

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

Our Level 3 assets include our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

38

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

9. Disclosure About Fair Value of Financial Instruments - Continued

The following tables set forth the assets and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

			Level 1		Level 2		Level 3
	June 30, 2012		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	17,330	$	—	$	17,330	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,099		—		—
Tax increment financing bond (in prepaid expenses and other assets)	15,371		—		—		15,371
Total Assets	$	35,800	$	3,099	$	17,330	$	15,371
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,918,241	$	—	$	1,918,241	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		—		7,763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,099		—		—
Financing obligations, at fair value (1)	21,141		—		—		21,141
Total Liabilities	$	1,950,244	$	3,099	$	1,926,004	$	21,141

			Level 1		Level 2		Level 3
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	18,990	$	—	$	18,990	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,149		3,149		—		—
Tax increment financing bond (in prepaid expenses and other assets)	14,788		—		—		14,788
Impaired real estate assets and for-sale residential condominiums	12,767		—		—		12,767
Total Assets	$	49,694	$	3,149	$	18,990	$	27,555
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,992,937	$	—	$	1,992,937	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	2,202		—		2,202		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,149		3,149		—		—
Financing obligations, at fair value (1)	18,866		—		—		18,866
Total Liabilities	$	2,017,154	$	3,149	$	1,995,139	$	18,866

__________

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

39

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

9. Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Asset:
Tax Increment Financing Bond:
Beginning balance	$	15,075	$	15,564		$	14,788	$	15,699
Unrealized gains/(losses) (in AOCL)	296		(336		)	583		(471		)
Ending balance	$	15,371	$	15,228		$	15,371	$	15,228

In 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at June 30, 2012 was $1.7 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.6 million lower or $0.6 million higher, respectively, as of June 30, 2012. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three and six months endedJune 30, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

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

	Fair Value at June 30, 2012		Valuation Technique	Unobservable Input	Discount Rate
Tax increment financing bond	$	15,371	Income approach	Discount rate	9.85	%

40

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

10. Share-based Payments

During the six months endedJune 30, 2012, the Company granted 190,886 stock options with an exercise price equal to the closing market price of a share of its Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $5.47. During the six months endedJune 30, 2012, the Company also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.4 million during the three months endedJune 30, 2012 and 2011, respectively, and $4.5 million and $3.5 million during the six months endedJune 30, 2012 and 2011, respectively. At June 30, 2012, there was $7.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.6 years.

11. Accumulated Other Comprehensive Loss

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

	Six Months Ended June 30,
	2012			2011
Tax increment financing bond:
Beginning balance	$	(2,309	)	$	(2,543	)
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Ending balance	(1,726		)	(3,014		)
Cash flow hedges:
Beginning balance	(3,425		)	(1,105		)
Unrealized losses on cash flow hedges	(7,087		)	—
Amortization of cash flow hedges	1,459			(58		)
Ending balance	(9,053		)	(1,163		)
Total accumulated other comprehensive loss	$	(10,779	)	$	(4,177	)

41

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

12. Discontinued Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and other revenues	$	2,044	$	2,907	$	4,383	$	6,169
Operating expenses:
Rental property and other expenses	966		1,390		2,084		2,862
Depreciation and amortization	322		778		1,008		1,653
Total operating expenses	1,288		2,168		3,092		4,515
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		—		6,519		—
Total discontinued operations	$	2,141	$	739	$	7,810	$	1,654

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

	June 30, 2012			December 31, 2011
Assets:
Land	$	3,849		$	5,749
Buildings and tenant improvements	49,460			65,860
Accumulated depreciation	(18,743		)	(23,917		)
Net real estate assets	34,566			47,692
Accrued straight line rents receivable	1,490			1,726
Deferred leasing costs, net	678			811
Prepaid expenses and other assets	17			106
Real estate and other assets, net, held for sale	$	36,751		$	50,335
Tenant security deposits, deferred rents and accrued costs (1)	$	595		$	238

__________

(1) Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.  

42

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

13. Earnings Per Unit

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Earnings per Common Unit - basic:
Numerator:
Income from continuing operations	$	12,360		$	13,699		$	25,025		$	25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common unitholders	11,510			10,000			23,364			19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1) (2)	77,971			75,586			77,063			75,393
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.03			0.01			0.10			0.02
Net income available for common unitholders	$	0.18		$	0.14		$	0.40		$	0.28
Earnings per Common Unit - diluted:
Numerator:
Income from continuing operations	$	12,360		$	13,699		$	25,025		$	25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common unitholders	11,510			10,000			23,364			19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Denominator:
Denominator for basic earnings per Common Unit –weighted average units (1) (2)	77,971			75,586			77,063			75,393
Add:
Stock options using the treasury method	141			202			129			185
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)	78,112			75,788			77,192			75,578
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.02			0.01			0.10			0.02
Net income available for common unitholders	$	0.17		$	0.14		$	0.40		$	0.28

__________

(1) There were 0.5 million and 0.3 million options outstanding during the three months endedJune 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months endedJune 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

43

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

14. Segment Information

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	16,209	$	12,341	$	31,993	$	24,242
Greenville, SC	3,489		3,437		6,993		6,942
Kansas City, MO	3,560		3,441		7,163		6,960
Memphis, TN	10,130		10,077		20,268		20,179
Nashville, TN	14,321		13,572		28,186		26,315
Orlando, FL	2,756		2,619		5,443		4,936
Piedmont Triad, NC	5,072		5,273		10,152		10,637
Pittsburgh, PA	9,113		—		18,199		—
Raleigh, NC	20,400		20,103		40,179		39,421
Richmond, VA	12,095		11,668		23,605		23,046
Tampa, FL	17,579		17,064		34,715		33,436
Total Office Segment	114,724		99,595		226,896		196,114
Industrial:
Atlanta, GA	3,849		4,028		7,623		7,962
Piedmont Triad, NC	3,087		2,825		6,251		5,802
Total Industrial Segment	6,936		6,853		13,874		13,764
Retail:
Kansas City, MO	9,075		8,203		17,998		17,103
Total Retail Segment	9,075		8,203		17,998		17,103
Total Rental and Other Revenues	$	130,735	$	114,651	$	258,768	$	226,981

44

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

14. Segment Information - Continued

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Operating Income: (1)
Office:
Atlanta, GA	$	10,435		$	7,980		$	20,837		$	15,456
Greenville, SC	2,052			2,069			4,186			4,140
Kansas City, MO	2,188			2,114			4,521			4,254
Memphis, TN	5,845			5,467			11,951			11,215
Nashville, TN	9,842			9,376			19,504			17,989
Orlando, FL	1,432			1,285			2,849			2,449
Piedmont Triad, NC	3,221			3,455			6,457			7,049
Pittsburgh, PA	4,630			—			8,911			—
Raleigh, NC	14,301			14,285			28,169			27,473
Richmond, VA	8,541			8,238			16,431			16,080
Tampa, FL	10,818			10,565			21,668			20,672
Total Office Segment	73,305			64,834			145,484			126,777
Industrial:
Atlanta, GA	2,763			3,004			5,653			5,837
Piedmont Triad, NC	2,310			2,109			4,599			4,328
Total Industrial Segment	5,073			5,113			10,252			10,165
Retail:
Kansas City, MO	5,327			4,836			10,865			10,115
Total Retail Segment	5,327			4,836			10,865			10,115
Total Net Operating Income	83,705			74,783			166,601			147,057
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276		)	(32,684		)	(78,105		)	(65,621		)
General and administrative expense	(8,959		)	(8,041		)	(18,694		)	(15,685		)
Interest expense	(24,495		)	(23,907		)	(49,297		)	(47,450		)
Other income	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049

__________

(1) Net of discontinued operations.

45

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per unit data)

15. Subsequent Events

In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the second quarter of 2012 under our equity sales agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million.

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.

46

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is a fully integrated, self-administered and self-managed equity REIT that provides leasing, management, development, construction and other customer-related services for our properties and for third parties. The Company conducts virtually all of its activities through the Operating Partnership. The Operating Partnership is managed by the Company, its sole general partner. At June 30, 2012, we owned or had an interest in 338 in-service office, industrial and retail properties, encompassing approximately 34.6 million square feet, which includes one office property under development encompassing 203,000 square feet and a 12.5% interest in a 261,000 square foot office property directly owned by the Company (not included in the Operating Partnership's Consolidated Financial Statements); nine for-sale residential condominiums and a 215-unit rental residential property under development. We are based in Raleigh, North Carolina, and our properties and development land are located in Florida, Georgia, Mississippi, Missouri, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia. Additional information about us can be found on our website at www.highwoods.com. Information on our website is not part of this Quarterly Report.

You should read the following discussion and analysis in conjunction with the accompanying Consolidated Financial Statements and related notes contained elsewhere in this Quarterly Report.

Disclosure Regarding Forward-Looking Statements

Some of the information in this Quarterly Report may contain forward-looking statements. Such statements include, in particular, statements about our plans, strategies and prospects under this section. You can identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that our plans, intentions or expectations will be achieved. When considering such forward-looking statements, you should keep in mind the following important factors that could cause our actual results to differ materially from those contained in any forward-looking statement:

• the financial condition of our customers could deteriorate;

• we may not be able to lease or release second generation space, defined as previously occupied space that becomes available for lease, quickly or on as favorable terms as old leases;

• we may not be able to lease our newly constructed buildings as quickly or on as favorable terms as originally anticipated;

• we may not be able to complete development, acquisition, reinvestment, disposition or joint venture projects as quickly or on as favorable terms as anticipated;

• development activity by our competitors in our existing markets could result in an excessive supply of office, industrial and retail properties relative to customer demand;

• our markets may suffer declines in economic growth;

• unanticipated increases in interest rates could increase our debt service costs;

• unanticipated increases in operating expenses could negatively impact our operating results;

• we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or to repay or refinance outstanding debt upon maturity; and

• the Company could lose key executive officers.

This list of risks and uncertainties, however, is not intended to be exhaustive. You should also review the other cautionary statements we make in “Item 1A. Business – Risk Factors” set forth in our 2011 Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on forward-looking statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements to reflect any future events or circumstances or to reflect the occurrence of unanticipated events.

47

Executive Summary

Our Strategic Plan focuses on:

• owning high-quality, differentiated real estate assets in the better submarkets in our core markets;

• improving the operating results of our existing properties through concentrated leasing, asset management, cost control and customer service efforts;

• developing and acquiring office properties in key infill submarkets that improve the overall quality of our portfolio and generate attractive returns over the long-term for our stockholders;

• selectively disposing of properties no longer considered to be core assets primarily due to location, age, quality and overall strategic fit; and

• maintaining a conservative, flexible balance sheet with ample liquidity to meet our funding needs and growth prospects.

While we own and operate a limited number of industrial, retail and residential properties, our operating results depend heavily on successfully leasing and operating our office properties. Economic growth and employment levels in our core markets are and will continue to be important determinative factors in predicting our future operating results.

The key components affecting our rental and other revenues are average occupancy, rental rates, new developments placed in service, acquisitions and dispositions. Average occupancy generally increases during times of improving economic growth, as our ability to lease space outpaces vacancies that occur upon the expirations of existing leases. Average occupancy generally declines during times of slower economic growth, when new vacancies tend to outpace our ability to lease space. Asset acquisitions, dispositions and new developments placed in service directly impact our rental revenues and could impact our average occupancy, depending upon the occupancy rate of the properties that are acquired, sold or placed in service. A further indicator of the predictability of future revenues is the expected lease expiration schedule of our portfolio. As a result, in addition to seeking to increase our average occupancy by leasing current vacant space, we also must concentrate our leasing efforts on renewing leases on expiring space.

Whether or not our rental revenue tracks average occupancy proportionally depends upon whether rents under new leases signed are higher or lower than the rents under the previous leases. Annualized rental revenues from second generation leases signed during any particular year are generally less than 15% of our total annual rental revenues. During the second quarter of 2012, we leased 0.6 million square feet of second generation office space, defined as space previously occupied under our ownership that becomes available for lease or acquired vacant space, with a weighted average term of 4.4 years. On average, tenant improvements for such leases were $10.29 per square foot, lease commissions were $2.65 per square foot and rent concessions were $2.65 per square foot. Annualized GAAP rents under such office leases were $21.71 per square foot, or 2.6% higher than under previous leases.

We strive to maintain a diverse, stable and creditworthy customer base. We have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with the Company's Board of Directors. Currently, no customer accounts for more than 3% of our revenues other than the Federal Government, which accounts for 9.0% of our revenues, as of June 30, 2012. After the disposition of three GSA-leased buildings on July 25, 2012, the Federal Government accounts for 7.0% of our revenues.

Our expenses primarily consist of rental property expenses, depreciation and amortization, general and administrative expenses and interest expense. From time to time, expenses also include impairments of assets held for use. Rental property expenses are expenses associated with our ownership and operation of rental properties and include expenses that vary somewhat proportionately to occupancy levels, such as common area maintenance and utilities, and expenses that do not vary based on occupancy, such as property taxes and insurance. Depreciation and amortization is a non-cash expense associated with the ownership of real property and generally remains relatively consistent each year, unless we buy, place in service or sell assets, since we depreciate our properties and related building and tenant improvement assets on a straight-line basis over a fixed life. General and administrative expenses, net of amounts capitalized, consist primarily of management and employee salaries and other personnel costs, corporate overhead and long-term incentive compensation.

48

We intend to maintain a conservative and flexible balance sheet that allows us to capitalize on favorable development and acquisition opportunities as they arise. As of June 30, 2012, our mortgages and notes payable represented 44.9% of the undepreciated book value of our assets. We expect this ratio to remain under 50% during the remainder of 2012.

Results of Operations

Three Months Ended June 30,2012 and 2011

Rental and Other Revenues

Rental and other revenues from continuing operations were $16.1 million, or 14.0%, higher in the second quarter of 2012 as compared to 2011 primarily due to the acquisitions of office properties in Pittsburgh, PA and Atlanta, GA in the third quarter of 2011 and an office property in Raleigh, NC in the second quarter of 2012, which collectively accounted for $12.5 million of the increase. In addition, same property revenues were $3.5 millionhigher in the second quarter of 2012 as compared to 2011 primarily due to an increase in same property average occupancy and annualized GAAP rents per square foot from 89.9% and $18.54 in the second quarter of 2011 to 91.4% and $18.82 in the second quarter of 2012, respectively, higher operating expense recoveries due to higher operating expenses, higher net termination fees due to an early termination at an office property in Atlanta, GA and lower bad debts. We expect rental and other revenues for the remainder of 2012, adjusted for any discontinued operations and additional acquisition activity, to be higher compared to the same period in 2011 primarily due to the contribution of acquisitions made in the third quarter of 2011, partly offset by slightly lower average occupancy in our same property portfolio as a result of the early termination discussed above.

Operating Expenses

Rental property and other expenses were $7.2 million, or 17.9%, higher in the second quarter of 2012 as compared to 2011 primarily due to recent acquisitions, which accounted for $5.5 million of the increase. In addition, same property operating expenses were $1.6 millionhigher in the second quarter of 2012 as compared to 2011 primarily due to higher repairs and maintenance, utilities and insurance costs, partly offset by lower real estate taxes. We expect rental property and other expenses for the remainder of 2012, adjusted for any discontinued operations and additional acquisition activity, to be higher compared to the same period in 2011 primarily due to the contribution of acquisitions made in the third quarter of 2011.

Operating margin, defined as rental and other revenues less rental property and other expenses expressed as a percentage of rental and other revenues, was lower at 64.0% in the second quarter of 2012, as compared to 65.2% in the second quarter of 2011. Operating margin is expected to be similar for the remainder of 2012 as compared to the same period in 2011.

Depreciation and amortization was $7.6 million, or 23.2%, higher in the second quarter of 2012 as compared to 2011 primarily due to recent acquisitions, which accounted for $5.4 million of the increase. In addition, same property depreciation and amortization was $1.9 millionhigher in the second quarter of 2012 as compared to 2011 primarily due to an early termination. We expect depreciation expense for the remainder of 2012, adjusted for any discontinued operations and additional acquisition activity, to be higher compared to the same period in 2011 primarily due to the contribution of acquisitions made in the third quarter of 2011.

General and administrative expenses were $0.9 million, or 11.6%, higher in the second quarter of 2012 as compared to 2011 primarily due to higher salaries and incentive compensation. We expect general and administrative expenses for the remainder of 2012, adjusted for additional acquisition activity, to decrease over the same period in 2011 due to lower dead deal and acquisition costs.

Other Income

Other income was $1.1 millionlower in the second quarter of 2012 as compared to 2011 primarily due to a loss on debt extinguishment of outstanding bonds in 2012.

Interest Expense

Interest expense was $0.6 million, or 2.5%, higher in the second quarter of 2012 as compared to 2011 primarily due to higher average debt balances from recent acquisitions, offset by lower average interest rates and financing obligation interest expense. We anticipate interest expense will increase for the remainder of 2012 as compared to the same period in 2011 due to the full year impact of higher average debt balances from acquisitions, partly offset by lower average interest rates on our outstanding borrowings and lower financing obligation interest expense in 2012.

49

Net Gains on Disposition of Discontinued Operations

Net gains on disposition of discontinued operations were $1.4 millionhigher in the second quarter of 2012 as compared to 2011 due to the disposition of an office property in Pinellas County, FL in the second quarter of 2012.

Dividends on Preferred Stock and Excess of Preferred Stock Redemption/Repurchase Cost Over Carrying Value

Dividends on Preferred Stock were $1.0 millionlower in the second quarter of 2012 as compared to 2011 and excess of Preferred Stock redemption/repurchase cost over carrying value was $1.9 millionlower in the second quarter of 2012 as compared to 2011 due to the redemption of all remaining Series B Preferred Shares in the second quarter of 2011. 

Six Months Ended June 30,2012 and 2011

Rental and Other Revenues

Rental and other revenues from continuing operations were $31.8 million, or 14.0%, higher in the first six months of 2012 as compared to the same period in 2011 primarily due to the acquisitions of office properties in Pittsburgh, PA and Atlanta, GA in the third quarter of 2011 and an office property in Raleigh, NC in the second quarter of 2012, which accounted for $24.6 million of the increase. Same property revenues were $6.7 millionhigher in the first six months of 2012 as compared to the same period in 2011 primarily due to an increase in same property average occupancy and annualized GAAP rents per square foot from 90.1% and $18.38 in the first six months of 2011 to 91.1% and $18.73 in the first six months of 2012, higher operating expense recoveries and higher net termination fees.

Operating Expenses

Rental property and other expenses were $12.5 million, or 15.6%, higher in the first six months of 2012 as compared to the same period in 2011 primarily due to recent acquisitions, which accounted for $11.5 million of the increase. Same property operating expenses were $0.7 millionhigher in the first six months of 2012 as compared to the same period in 2011 primarily due to higher repairs and maintenance costs, offset by lower utilities from the mild winter in 2012 and lower real estate taxes.

Operating margin, defined as rental and other revenues less rental property and other expenses expressed as a percentage of rental and other revenues, was lower at 64.3% in the first six months of 2012, as compared to 64.8% in the first six months of 2011.

Depreciation and amortization was $12.5 million, or 19.0%, higher in the first six months of 2012 as compared to the same period in 2011 primarily due to recent acquisitions, which accounted for $10.1 million of the increase. In addition, same property depreciation and amortization was $2.2 millionhigher in the first six months of 2012 as compared to the same period in 2011 primarily due to an early termination.

General and administrative expenses were $2.8 million, or 17.8%, higher in the first six months of 2012 as compared to the same period in 2011 primarily due to higher salaries and incentive compensation.

Interest Expense

Interest expense was $1.8 million, or 3.9%, higher in the first six months of 2012 as compared to the same period in 2011 primarily due to higher average debt balances from recent acquisitions, offset by lower average interest rates and financing obligation interest expense.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $1.5 millionlower in the first six months of 2012 as compared to the same period in 2011 primarily due to our share of impairment of real estate assets on two office properties in our DLF I joint venture.

Net Gains on Disposition of Discontinued Operations

Net gains on disposition of discontinued operations were $6.5 millionhigher in the first six months of 2012 as compared to the same period in 2011 due to the disposition of 96 rental residential units in Kansas City, MO in the first quarter of 2012 and an office property in Pinellas County, FL in the second quarter of 2012.

50

Dividends on Preferred Stock and Excess of Preferred Stock Redemption/Repurchase Cost Over Carrying Value

Dividends on Preferred Stock were $2.0 millionlower in the first six months of 2012 as compared to the same period in 2011 and excess of Preferred Stock redemption/repurchase cost over carrying value was $1.9 millionlower in the first six months of 2012 as compared to the same period in 2011 due to the redemption of all remaining Series B Preferred Shares in the second quarter of 2011. 

51

Liquidity and Capital Resources

Overview

Our goal is to maintain a conservative and flexible balance sheet with access to multiple sources of debt and equity capital and sufficient availability under our revolving credit facility. We generally use rents received from customers to fund our operating expenses, capital expenditures and distributions. To fund property acquisitions, development activity or building renovations and repay debt upon maturity, we may use current cash balances, sell assets, obtain new debt and/or issue equity. Our debt generally consists of mortgage debt, unsecured debt securities and borrowings under our revolving credit facility.

Statements of Cash Flows

We report and analyze our cash flows based on operating activities, investing activities and financing activities. The following table sets forth the changes in the Company’s cash flows ($ in thousands):

	Six Months Ended June 30,
	2012			2011			Change
Net Cash Provided By Operating Activities	$	93,328		$	87,595		$	5,733
Net Cash Used In Investing Activities	(39,024		)	(78,913		)	39,889
Net Cash Used In Financing Activities	(58,965		)	(13,649		)	(45,316		)
Total Cash Flows	$	(4,661	)	$	(4,967	)	$	306

In calculating net cash related to operating activities, depreciation and amortization, which are non-cash expenses, are added back to net income. As a result, we have historically generated a positive amount of cash from operating activities. From period to period, cash flow from operations depends primarily upon changes in our net income, as discussed more fully above under “Results of Operations,” changes in receivables and payables, and net additions or decreases in our overall portfolio, which affect the amount of depreciation and amortization expense.

Net cash related to investing activities generally relates to capitalized costs incurred for leasing and major building improvements and our acquisition, development, disposition and joint venture capital activity. During periods of significant net acquisition and/or development activity, our cash used in such investing activities will generally exceed cash provided by investing activities, which typically consists of cash received upon the sale of properties and distributions of capital from our joint ventures.

Net cash related to financing activities generally relates to distributions, incurrence and repayment of debt, and issuances, repurchases or redemptions of Common Stock, Common Units and Preferred Stock. As discussed previously, we use a significant amount of our cash to fund distributions. Whether or not we have increases in the outstanding balances of debt during a period depends generally upon the net effect of our acquisition, disposition, development and joint venture activity. We generally use our revolving credit facility for working capital purposes, which means that during any given period, in order to minimize interest expense, we may record significant repayments and borrowings under our revolving credit facility.

The change in net cash related to operating activities in the first six months of 2012 as compared to the same period in 2011 was primarily due to net operating income from acquisitions made in the third quarter of 2011, partly offset by the timing of real estate tax payments.

The change in net cash related to investing activities in the first six months of 2012 as compared to the same period in 2011 was primarily due to a loan to an unconsolidated affiliate in the second quarter of 2011 and higher net proceeds from the disposition of real estate assets in the first six months of 2012, partly offset by higher capital expenditures in the first six months of 2012 related to recent acquisitions.

The change in net cash related to financing activities in the first six months of 2012 as compared to the same period in 2011 was primarily due to higher net repayments of borrowings in the first six months of 2012, partly offset by higher proceeds from the issuance of Common Stock in the first six months of 2012 and the repurchase of Preferred Stock in the second quarter of 2011.

52

Capitalization

The following table sets forth the Company’s capitalization (in thousands, except per share amounts):

	June 30, 2012		December 31, 2011
Mortgages and notes payable, at recorded book value	$	1,823,128	$	1,903,213
Financing obligations	$	30,822	$	31,444
Preferred Stock, at liquidation value	$	29,077	$	29,077
Common Stock outstanding	75,619		72,648
Common Units outstanding (not owned by the Company)	3,711		3,730
Per share stock price at period end	$	33.65	$	29.67
Market value of Common Stock and Common Units	$	2,669,455	$	2,266,135
Total market capitalization	$	4,552,482	$	4,229,869

At June 30, 2012, our mortgages and notes payable represented 40.0% of our total market capitalization and consisted of $743.5 million of secured indebtedness with a weighted average interest rate of 5.50% and $1,079.6 million of unsecured indebtedness with a weighted average interest rate of 4.77%. The secured indebtedness was collateralized by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Current and Future Cash Needs

Rental and other revenues are our principal source of funds to meet our short-term liquidity requirements. Other sources of funds for short-term liquidity needs include available working capital and borrowings under our existing revolving credit facility, which had $446.8 million of availability at July 19, 2012. Our short-term liquidity requirements primarily consist of operating expenses, interest and principal amortization on our debt, dividends and distributions and capital expenditures, including building improvement costs, tenant improvement costs and lease commissions. Building improvements are capital costs to maintain existing buildings not typically related to a specific customer. Tenant improvements are the costs required to customize space for the specific needs of customers. We anticipate that our available cash and cash equivalents and cash provided by operating activities, together with cash available from borrowings under our revolving credit facility, will be adequate to meet our short-term liquidity requirements.

Our long-term liquidity uses generally consist of the retirement or refinancing of debt upon maturity (including mortgage debt, our revolving and construction credit facilities, term loans and other unsecured debt), funding of existing and new building development or land infrastructure projects and funding acquisitions of buildings and development land. Additionally, we may, from time to time, retire some or all of our remaining outstanding Preferred Stock and/or unsecured debt securities through redemptions, open market repurchases, privately negotiated acquisitions or otherwise.

We expect to meet our long-term liquidity needs through a combination of:

• cash flow from operating activities;

• borrowings under our revolving credit facility;

• the issuance of unsecured debt;

• the issuance of secured debt;

• the issuance of equity securities by the Company or the Operating Partnership; and

• the disposition of non-core assets.

Recent Acquisition and Disposition Activity

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

53

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

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition. In addition, we expect to acquire a third related medical office property in Greensboro, NC for an additional $13.4 million in the third quarter of 2012. This purchase price will include the assumption of secured debt recorded at fair value of $7.9 million, with an estimated effective interest rate of 3.5%, including amortization of deferred financing costs. This assumed debt is scheduled to mature in August 2014.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.

Recent Financing Activity

We have entered into separate ATM Equity Offering_SM Sales Agreements (the “Sales Agreements”) with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Mitsubishi UFJ Securities (USA), Inc., Morgan Keegan & Company, Inc. and RBC Capital Markets, LLC (each, an “Agent” and, together, the “Agents”). Under the terms of the Sales Agreements, the Company may offer and sell shares of its Common Stock from time to time through the Agents, acting as agents of the Company or as principals. Sales of the shares, if any, may be made by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the Agents. Subject to the terms and conditions of each Sales Agreement, each Agent will use its commercially reasonable efforts to sell on the Company's behalf any shares to be offered by the Company under that Sales Agreement. During the second quarter of 2012, the Company issued 1,836,976 shares of Common Stock under these agreements at an average gross sales price of $33.72 per share raising net proceeds, after sales commissions and expenses, of $61.0 million. We paid an aggregate of $0.9 million in sales commissions to Merrill Lynch, Pierce, Fenner & Smith Incorporated and Mitsubishi UFJ Securities (USA), Inc. during the second quarter of 2012. In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the first quarter of 2012 under these agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million. We paid $0.2 million in sales commissions to Mitsubishi UFJ Securities (USA), Inc. during July 2012.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at June 30, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

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

We regularly evaluate the financial condition of the lenders that participate in our credit facilities using publicly available information. Based on this review, we currently expect our lenders, which are major financial institutions, to perform their obligations under our existing facilities.

Covenant Compliance

We are currently in compliance with the covenants and other requirements with respect to our outstanding debt. Although we expect to remain in compliance with these covenants and ratios for at least the next year, depending upon our future operating

54

performance, property and financing transactions and general economic conditions, we cannot assure you that we will continue to be in compliance.

Our revolving credit facility and bank term loans require us to comply with customary operating covenants and various financial requirements. Upon an event of default on the revolving credit facility, the lenders having at least 66.7% of the total commitments under the revolving credit facility can accelerate all borrowings then outstanding, and we could be prohibited from borrowing any further amounts under our revolving credit facility, which would adversely affect our ability to fund our operations.

The Operating Partnership has $379.1 millioncarrying amount of 2017 bonds outstanding and $200.0 million carrying amount of 2018 bonds outstanding. The indenture that governs these outstanding notes requires us to comply with customary operating covenants and various financial ratios. The trustee or the holders of at least 25.0% in principal amount of either series of bonds can accelerate the principal amount of such series upon written notice of a default that remains uncured after 60 days.

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

Off Balance Sheet Arrangements

In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months endedJune 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months endedJune 30, 2012 and 2011, respectively.

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

There were no other significant changes to our off balance sheet arrangements in the three months endedJune 30, 2012. For information regarding our off balance sheet arrangements at December 31, 2011, see Note 9 to the Consolidated Financial Statements in our 2011 Annual Report on Form 10-K.

Critical Accounting Estimates

There were no changes made by management to the critical accounting policies in the six months endedJune 30, 2012. For a description of our critical accounting estimates, see “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” in our 2011 Annual Report on Form 10-K.

Non-GAAP Measures - FFO and NOI

The Company believes that Funds from Operations (“FFO”) and FFO per share are beneficial to management and investors and are important indicators of the performance of any equity REIT. Because FFO and FFO per share calculations exclude such factors as depreciation, amortization and impairment of real estate assets and gains or losses from sales of operating real estate assets, which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful life estimates, they facilitate comparisons of operating performance between periods and between other REITs. Management believes that historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient on a stand-alone basis. As a result, management believes that the use of FFO and FFO per share, together with the required GAAP presentations, provides a more complete understanding of the Company's performance relative to its competitors and a more informed and appropriate basis on which to make decisions involving operating, financing and investing activities.

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FFO and FFO per share are non-GAAP financial measures and therefore do not represent net income or net income per share as defined by GAAP. Net income and net income per share as defined by GAAP are the most relevant measures in determining the Company's operating performance because FFO and FFO per share include adjustments that investors may deem subjective, such as adding back expenses such as depreciation, amortization and impairment. Furthermore, FFO per share does not depict the amount that accrues directly to the stockholders' benefit. Accordingly, FFO and FFO per share should never be considered as alternatives to net income or net income per share as indicators of the Company's operating performance.

The Company's presentation of FFO is consistent with FFO as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), which is calculated as follows:

• Net income/(loss) computed in accordance with GAAP;

• Less net income attributable to noncontrolling interests in consolidated affiliates;

• Plus depreciation and amortization of depreciable operating properties;

• Less gains, or plus losses, from sales of depreciable operating properties, plus impairments on depreciable operating properties and excluding items that are classified as extraordinary items under GAAP;

• Plus or minus our proportionate share of adjustments, including depreciation and amortization of depreciable operating properties, for unconsolidated partnerships and joint ventures (to reflect funds from operations on the same basis); and

• Plus or minus adjustments for depreciation and amortization and gains/(losses) on sales of depreciable operating properties, plus impairments on depreciable operating properties, and noncontrolling interests in consolidated affiliates related to discontinued operations.

In calculating FFO, the Company excludes net income attributable to noncontrolling interests in the Operating Partnership, which the Company believes is consistent with standard industry practice for REITs that operate through an UPREIT structure. The Company believes that it is important to present FFO on an as-converted basis since all of the Common Units not owned by the Company are redeemable on a one-for-one basis for shares of its Common Stock.

The following table sets forth the Company's FFO and FFO per share ($ in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Funds from operations:
Net income	$	14,498		$	14,434		$	32,830		$	26,877
Net (income) attributable to noncontrolling interests in consolidated affiliates	(223		)	(182		)	(407		)	(305		)
Depreciation and amortization of real estate assets	39,854			32,225			77,141			64,728
Unconsolidated affiliates:
Depreciation and amortization of real estate assets	1,675			2,033			3,773			4,126
Impairment of depreciable properties	—			—			1,002			—
Discontinued operations:
Depreciation and amortization of real estate assets	322			778			1,008			1,653
(Gains) on disposition of depreciable properties	(1,385		)	—			(6,519		)	—
Funds from operations	54,741			49,288			108,828			97,079
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Funds from operations available for common stockholders	$	54,114		$	45,771		$	107,574		$	91,885
Funds from operations available for common stockholders per share	$	0.69		$	0.60		$	1.39		$	1.21
Weighted average shares outstanding (1)	78,521			76,197			77,601			75,987

__________

(1) Includes assumed conversion of all potentially dilutive Common Stock equivalents.

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In addition, the Company believes net operating income from continuing operations (“NOI”) and same property NOI are useful supplemental measures of the Company’s property operating performance because such metrics provide a performance measure of the revenues and expenses directly involved in owning real estate assets and provides a perspective not immediately apparent from net income or FFO. The Company defines NOI as rental and other revenues from continuing operations, less rental property and other expenses from continuing operations. The Company defines cash NOI as NOI less straight line rent and lease termination fees. Other REITs may use different methodologies to calculate NOI and same property NOI.

Our same property portfolio currently consists of 287 in-service office, industrial and retail properties encompassing 26.4 million square feet that were wholly owned during the entirety of the periods presented (from January 1, 2011 to June 30, 2012). In our most recent prior periodic report, our 2011 Annual Report, our same property portfolio consisted of 289 in-service office, industrial and retail properties encompassing 26.2 million square feet that were wholly owned during the entirety of the periods presented therein (from January 1, 2010 to December 31, 2011). The change in our same property portfolio was due to the addition of one office property encompassing 0.3 million square feet acquired during 2010 and three newly developed office properties encompassing 0.5 million square feet placed in service during 2010, offset by the removal of six office properties encompassing 0.6 million square feet qualifying for discontinued operations during 2012.

Rental and other revenues related to properties not in our same property portfolio were $17.3 million and $4.8 million for the three months endedJune 30, 2012 and 2011, respectively, and $33.8 million and $8.7 million for the six months endedJune 30, 2012 and 2011, respectively. Rental property and other expenses related to properties not in our same property portfolio were $8.3 million and $2.6 million for the three months endedJune 30, 2012 and 2011, respectively, and $16.8 million and $5.0 million for the six months endedJune 30, 2012 and 2011, respectively.

The following table sets forth the Company’s NOI and same property NOI:

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049
Other (income)	(764		)	(1,875		)	(2,994		)	(3,748		)
Interest expense	24,495			23,907			49,297			47,450
General and administrative expense	8,900			7,978			18,573			15,771
Depreciation and amortization expense	40,276			32,684			78,105			65,621
Net operating income from continuing operations	83,646			74,720			166,480			147,143
Less – non same property and other net operating income	9,080			2,075			17,003			3,649
Total same property net operating income from continuing operations	$	74,566		$	72,645		$	149,477		$	143,494
Rental and other revenues	$	130,735		$	114,651		$	258,768		$	226,981
Rental property and other expenses	47,089			39,931			92,288			79,838
Total net operating income from continuing operations	83,646			74,720			166,480			147,143
Less – non same property and other net operating income	9,080			2,075			17,003			3,649
Total same property net operating income from continuing operations	$	74,566		$	72,645		$	149,477		$	143,494
Total same property net operating income from continuing operations	$	74,566		$	72,645		$	149,477		$	143,494
Less – straight line rent and lease termination fees	3,535			2,851			7,458			6,364
Same property cash net operating income from continuing operations	$	71,031		$	69,794		$	142,019		$	137,130

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information regarding our market risk as of March 31, 2012, see "Quantitative and Qualitative Disclosures About Market Risk" in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2012.

ITEM 4. CONTROLS AND PROCEDURES

SEC rules require us to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our annual and periodic reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's CEO and CFO have concluded that the disclosure controls and procedures of the Company and the Operating Partnership were each effective at the end of the period covered by this Quarterly Report.

SEC rules also require us to establish and maintain internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepting accounting principles. There were no changes in internal control over financial reporting during the three months endedJune 30, 2012 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. There were also no changes in internal control over financial reporting during the three months endedJune 30, 2012 that materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

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PART II

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITES AND USE OF PROCEEDS

During the second quarter of 2012, the Company issued an aggregate of 16,366 shares of Common Stock to holders of Common Units in the Operating Partnership upon the redemption of a like number of Common Units in private offerings exempt from the registration requirements pursuant to Section 4(2) of the Securities Act. Each of the holders of Common Units was an accredited investor under Rule 501 of the Securities Act. The resale of such shares was registered by the Company under the Securities Act.

ITEM 5. OTHER EVENTS

As a result of adopting a new accounting pronouncement in the first quarter of 2012, we have presented comprehensive income in a separate financial statement entitled Consolidated Statements of Comprehensive Income. The table below reflects the retrospective application of this new accounting pronouncement, which did not have a material impact on our financial condition or results of operations.

	Year Ended December 31,
	2011			2010			2009
Comprehensive income/(loss):
Net income	$	47,971		$	72,303		$	61,694
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	234			(177		)	293
Unrealized gains/(losses) on cash flow hedges	(2,202		)	—			937
Amortization of cash flow hedges	(118		)	237			(249		)
Sale of cash flow hedge related to disposition of investment in unconsolidated affiliate	—			103			—
Total other comprehensive income/(loss)	(2,086		)	163			981
Total comprehensive income	45,885			72,466			62,675
Less-comprehensive (income) attributable to noncontrolling interests	(2,846		)	(3,805		)	(3,208		)
Comprehensive income attributable to the Company	$	43,039		$	68,661		$	59,467

ITEM 6. EXHIBITS

Exhibit Number	Description
12.1	Statement re: Computation of Ratios of the Company
12.2	Statement re: Computation of Ratios of the Operating Partnership
31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company
31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company
31.3	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Operating Partnership
31.4	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Operating Partnership
32.1	Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Company
32.2	Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Company
32.3	Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership
32.4	Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Extension Labels Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Highwoods Properties, Inc.
By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Senior Vice President and Chief Financial Officer

Highwoods Realty Limited Partnership
By:	Highwoods Properties, Inc., its sole general partner
By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Senior Vice President and Chief Financial Officer

Date: July 26, 2012

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EX-12.1

Exhibit 12.1

HIGHWOODS PROPERTIES, INC.

RATIO OF EARNINGS TO FIXED CHARGES AND

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND

PREFERRED STOCK DIVIDENDS

	Six Months Ended June 30, 2012
Earnings:
Income from continuing operations before equity in earnings of unconsolidated affiliates	$	23,674
Fixed charges	50,364
Capitalized interest	(327		)
Distributions of earnings from unconsolidated affiliates	2,225
Total earnings	$	75,936
Fixed charges and Preferred Stock dividends:
Contractual interest expense	$	47,591
Amortization of deferred financing costs	1,802
Financing obligations interest expense	(96		)
Capitalized interest	327
Interest component of rental expense	740
Total fixed charges	50,364
Preferred Stock dividends	1,254
Total fixed charges and Preferred Stock dividends	$	51,618
Ratio of earnings to fixed charges	1.51
Ratio of earnings to combined fixed charges and Preferred Stock dividends	1.47

EX-12.2

Exhibit 12.2

HIGHWOODS REALTY LIMITED PARTNERSHIP

RATIO OF EARNINGS TO FIXED CHARGES AND

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND

PREFERRED UNIT DISTRIBUTIONS

	Six Months Ended  June 30, 2012
Earnings:
Income from continuing operations before equity in earnings of unconsolidated affiliates	$	23,674
Fixed charges	50,364
Capitalized interest	(327		)
Distributions of earnings from unconsolidated affiliates	2,211
Total earnings	$	75,922
Fixed charges and Preferred Unit distributions:
Contractual interest expense	$	47,591
Amortization of deferred financing costs	1,802
Financing obligations interest expense	(96		)
Capitalized interest	327
Interest component of rental expense	740
Total fixed charges	50,364
Preferred Unit distributions	1,254
Total fixed charges and Preferred Unit distributions	$	51,618
Ratio of earnings to fixed charges	1.51
Ratio of earnings to combined fixed charges and Preferred Unit distributions	1.47

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Edward J. Fritsch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: July 26, 2012

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Terry L. Stevens, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: July 26, 2012

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Edward J. Fritsch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Realty Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: July 26, 2012

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer of the General Partner

EX-31.4

Exhibit 31.4

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Terry L. Stevens, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Realty Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: July 26, 2012

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer of the General Partner

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Properties, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward J. Fritsch, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer

July 26, 2012

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Properties, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terry L. Stevens, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer

July 26, 2012

EX-32.3

Exhibit 32.3

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Realty Limited Partnership (the “Operating Partnership”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward J. Fritsch, President and Chief Executive Officer of Highwoods Properties, Inc., general partner of the Operating Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer of the General Partner

July 26, 2012

EX-32.4

Exhibit 32.4

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Realty Limited Partnership (the “Operating Partnership”) on Form 10-Q for the period ended June 30, 2012 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terry L. Stevens, Senior Vice President and Chief Financial Officer of Highwoods Properties, Inc., general partner of the Operating Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer of the General Partner

July 26, 2012

XML

Intangible Assets and Below Market Lease Liabilities (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, accumulated amortization	$ (70,572,000)		$ (70,572,000)		$ (62,319,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	126,680,000		126,680,000		127,774,000
Acquired in-place lease intangible assets	2,700,000		2,700,000
Deferred Financing Costs [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, gross	20,112,000		20,112,000		18,044,000
Deferred financing and leasing costs, accumulated amortization	(7,488,000)		(7,488,000)		(5,797,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	12,624,000		12,624,000		12,247,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	900,000	821,000	1,802,000	1,642,000
Deferred Leasing Costs [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, gross	177,140,000		177,140,000		172,049,000
Deferred financing and leasing costs, accumulated amortization	(63,084,000)		(63,084,000)		(56,522,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	114,056,000		114,056,000		115,527,000
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	104,165,000		104,165,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	7,266,000	4,401,000	13,706,000	8,757,000
Lease Incentives [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	6,718,000		6,718,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	340,000	303,000	683,000	641,000
Acquisition-Related Intangible Assets [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	3,173,000		3,173,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	324,000	191,000	594,000	377,000
Acquisition-Related Below Market Lease Liabilities [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Acquisition-related below market lease liabilities, gross	16,346,000		16,346,000		16,441,000
Acquisition-related below market lease liabilities, accumulated amortization	(1,966,000)		(1,966,000)		(971,000)
Acquisition-related below market lease liabilities, net	14,380,000		14,380,000		15,470,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of acquisition-related below market lease liabilities	(553,000)	(25,000)	(1,097,000)	(50,000)
Highwoods Realty Limited Partnership [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, accumulated amortization	(70,572,000)		(70,572,000)		(62,319,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	126,680,000		126,680,000		127,774,000
Acquired in-place lease intangible assets	2,700,000		2,700,000
Highwoods Realty Limited Partnership [Member] | Deferred Financing Costs [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, gross	20,112,000		20,112,000		18,044,000
Deferred financing and leasing costs, accumulated amortization	(7,488,000)		(7,488,000)		(5,797,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	12,624,000		12,624,000		12,247,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	900,000	821,000	1,802,000	1,642,000
Highwoods Realty Limited Partnership [Member] | Deferred Leasing Costs [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, gross	177,140,000		177,140,000		172,049,000
Deferred financing and leasing costs, accumulated amortization	(63,084,000)		(63,084,000)		(56,522,000)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	114,056,000		114,056,000		115,527,000
Highwoods Realty Limited Partnership [Member] | Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	104,165,000		104,165,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	7,266,000	4,401,000	13,706,000	8,757,000
Highwoods Realty Limited Partnership [Member] | Lease Incentives [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	6,718,000		6,718,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	340,000	303,000	683,000	641,000
Highwoods Realty Limited Partnership [Member] | Acquisition-Related Intangible Assets [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	3,173,000		3,173,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	324,000	191,000	594,000	377,000
Highwoods Realty Limited Partnership [Member] | Acquisition-Related Below Market Lease Liabilities [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Acquisition-related below market lease liabilities, gross	16,346,000		16,346,000		16,441,000
Acquisition-related below market lease liabilities, accumulated amortization	(1,966,000)		(1,966,000)		(971,000)
Acquisition-related below market lease liabilities, net	14,380,000		14,380,000		15,470,000
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of acquisition-related below market lease liabilities	$ (553,000)	$ (25,000)	$ (1,097,000)	$ (50,000)

XML

Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011	Jun. 30, 2012		Jun. 30, 2011	Dec. 31, 2011
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Rental and other revenues	$ 2,044		$ 2,907	$ 4,383		$ 6,169
Operating expenses:
Rental property and other expenses	966		1,390	2,084		2,862
Depreciation and amortization	322		778	1,008		1,653
Total operating expenses	1,288		2,168	3,092		4,515
Income from discontinued operations	756		739	1,291		1,654
Net gains on disposition of discontinued operations	1,385		0	6,519		0
Total discontinued operations	2,141		739	7,810		1,654
Assets:
Land	3,849			3,849			5,749
Buildings and tenant improvements	49,460			49,460			65,860
Less accumulated depreciation	(18,743)			(18,743)			(23,917)
Net real estate assets	34,566			34,566			47,692
Accrued straight line rents receivable	1,490			1,490			1,726
Deferred leasing costs, net	678			678			811
Prepaid expenses and other assets	17			17			106
Real estate and other assets, net, held for sale	36,751			36,751			50,335
Tenant security deposits, deferred rents and accrued costs	595	[1]		595	[1]		238	[1]
Pinellas County, FL Office Property Disposition [Member]
Assets:
Number of office properties included in real estate and other assets held for sale, net							1
Kansas City, MO Rental Residential Disposition [Member]
Assets:
Number of residential properties included in real estate and other assets held for sale, net							96
Nashville, TN Office Properties Disposition [Member]
Assets:
Number of office properties included in real estate and other assets held for sale, net	5			5			5
Kansas City, MO Office Property Held For Sale [Member]
Assets:
Number of office properties included in real estate and other assets held for sale, net	1			1			1
Highwoods Realty Limited Partnership [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Rental and other revenues	2,044		2,907	4,383		6,169
Operating expenses:
Rental property and other expenses	966		1,390	2,084		2,862
Depreciation and amortization	322		778	1,008		1,653
Total operating expenses	1,288		2,168	3,092		4,515
Income from discontinued operations	756		739	1,291		1,654
Net gains on disposition of discontinued operations	1,385		0	6,519		0
Total discontinued operations	2,141		739	7,810		1,654
Assets:
Land	3,849			3,849			5,749
Buildings and tenant improvements	49,460			49,460			65,860
Less accumulated depreciation	(18,743)			(18,743)			(23,917)
Net real estate assets	34,566			34,566			47,692
Accrued straight line rents receivable	1,490			1,490			1,726
Deferred leasing costs, net	678			678			811
Prepaid expenses and other assets	17			17			106
Real estate and other assets, net, held for sale	36,751			36,751			50,335
Tenant security deposits, deferred rents and accrued costs	$ 595	[1]		$ 595	[1]		$ 238	[1]
Highwoods Realty Limited Partnership [Member] | Pinellas County, FL Office Property Disposition [Member]
Assets:
Number of office properties included in real estate and other assets held for sale, net							1
Highwoods Realty Limited Partnership [Member] | Kansas City, MO Rental Residential Disposition [Member]
Assets:
Number of residential properties included in real estate and other assets held for sale, net							96
Highwoods Realty Limited Partnership [Member] | Nashville, TN Office Properties Disposition [Member]
Assets:
Number of office properties included in real estate and other assets held for sale, net							5
Highwoods Realty Limited Partnership [Member] | Kansas City, MO Office Property Held For Sale [Member]
Assets:
Number of office properties included in real estate and other assets held for sale, net							1

[1] Included in accounts payable, accrued expenses and other liabilities.

XML

Share-Based Payments (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 2,000,000	$ 1,400,000	$ 4,459,000	$ 3,453,000
Total unrecognized stock-based compensation costs	7,600,000		7,600,000
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)			2 years 7 months 12 days
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted			190,886
Weighted average grant date fair value of each stock option granted (in dollars per option)			$ 5.47
Time-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted			90,983
Weighted average grant date fair value of each restricted stock granted (in dollars per share)			$ 32.27
Total Return-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted			67,902
Weighted average grant date fair value of each restricted stock granted (in dollars per share)			$ 38.71
Highwoods Realty Limited Partnership [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	2,000,000	1,400,000	4,459,000	3,453,000
Total unrecognized stock-based compensation costs	$ 7,600,000		$ 7,600,000
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)			2 years 7 months 12 days
Highwoods Realty Limited Partnership [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted			190,886
Weighted average grant date fair value of each stock option granted (in dollars per option)			$ 5.47
Highwoods Realty Limited Partnership [Member] | Time-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted			90,983
Weighted average grant date fair value of each restricted stock granted (in dollars per share)			$ 32.27
Highwoods Realty Limited Partnership [Member] | Total Return-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted			67,902
Weighted average grant date fair value of each restricted stock granted (in dollars per share)			$ 38.71

XML

Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2012

Earnings Per Share/Unit Basic and Diluted [Line Items]

Earnings Per Share [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Earnings per Common Share - basic:
Numerator:
Income from continuing operations	$	12,357		$	13,695		$	25,020		$	25,223
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(584		)	(586		)	(1,133		)	(1,047		)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common stockholders	10,923			9,410			22,226			18,677
Income from discontinued operations	2,141			739			7,810			1,654
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(102		)	(37		)	(380		)	(83		)
Income from discontinued operations available for common stockholders	2,039			702			7,430			1,571
Net income available for common stockholders	$	12,962		$	10,112		$	29,656		$	20,248
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1) (2)	74,662			72,211			73,749			72,015
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28
Earnings per Common Share - diluted:
Numerator:
Income from continuing operations	$	12,357		$	13,695		$	25,020		$	25,223
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	11,507			9,996			23,359			19,724
Income from discontinued operations available for common stockholders	2,141			739			7,810			1,654
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	$	13,648		$	10,735		$	31,169		$	21,378
Denominator:
Denominator for basic earnings per Common Share –weighted average shares (1) (2)	74,662			72,211			73,749			72,015
Add:
Stock options using the treasury method	141			202			129			185
Noncontrolling interests Common Units	3,718			3,784			3,723			3,787
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)	78,521			76,197			77,601			75,987
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28

__________

13. Earnings Per Share - Continued

(1) There were 0.5 million and 0.3 million options outstanding during the three months endedJune 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months endedJune 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

Highwoods Realty Limited Partnership [Member]

Earnings Per Share/Unit Basic and Diluted [Line Items]

Earnings Per Unit [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Earnings per Common Unit - basic:
Numerator:
Income from continuing operations	$	12,360		$	13,699		$	25,025		$	25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common unitholders	11,510			10,000			23,364			19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1) (2)	77,971			75,586			77,063			75,393
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.03			0.01			0.10			0.02
Net income available for common unitholders	$	0.18		$	0.14		$	0.40		$	0.28
Earnings per Common Unit - diluted:
Numerator:
Income from continuing operations	$	12,360		$	13,699		$	25,025		$	25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common unitholders	11,510			10,000			23,364			19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Denominator:
Denominator for basic earnings per Common Unit –weighted average units (1) (2)	77,971			75,586			77,063			75,393
Add:
Stock options using the treasury method	141			202			129			185
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)	78,112			75,788			77,192			75,578
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.02			0.01			0.10			0.02
Net income available for common unitholders	$	0.17		$	0.14		$	0.40		$	0.28

__________

(1) There were 0.5 million and 0.3 million options outstanding during the three months endedJune 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months endedJune 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

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Investments In and Advances To Affiliates (Tables)

6 Months Ended

Jun. 30, 2012

Schedule of Equity Method Investments [Line Items]

Schedule of Equity Method Investments Summarized Income Statement Information [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Income Statements:
Rental and other revenues	$	26,049	$	24,779	$	50,869		$	49,996
Expenses:
Rental property and other expenses	12,666		10,774		24,082			22,771
Depreciation and amortization	5,919		6,295		12,484			12,911
Impairment of real estate assets	—		—		7,180			—
Interest expense	5,267		5,858		11,097			11,865
Total expenses	23,852		22,927		54,843			47,547
Income/(loss) before disposition of properties	2,197		1,852		(3,974		)	2,449
Gains on disposition of properties	6,275		—		6,275			—
Net income	$	8,472	$	1,852	$	2,301		$	2,449
Our share of:
Depreciation and amortization of real estate assets	$	1,675	$	2,033	$	3,773		$	4,126
Impairment of real estate assets	$	—	$	—	$	1,002		$	—
Interest expense	$	1,843	$	2,033	$	3,823		$	4,194
Net income	$	1,133	$	749	$	338		$	1,670
Our share of net income	$	1,133	$	749	$	338		$	1,670
Management and other fees adjustments	375		604		1,008			1,150
Equity in earnings of unconsolidated affiliates	$	1,508	$	1,353	$	1,346		$	2,820

Highwoods Realty Limited Partnership [Member]

Schedule of Equity Method Investments [Line Items]

Schedule of Equity Method Investments Summarized Income Statement Information [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Income Statements:
Rental and other revenues	$	25,057	$	23,756	$	48,854		$	47,958
Expenses:
Rental property and other expenses	12,076		10,155		22,877			21,526
Depreciation and amortization	5,607		6,053		11,861			12,299
Impairment of real estate assets	—		—		7,180			—
Interest expense	5,103		5,683		10,766			11,508
Total expenses	22,786		21,891		52,684			45,333
Income/(loss) before disposition of properties	2,271		1,865		(3,830		)	2,625
Gains on disposition of properties	6,275		—		6,275			—
Net income	$	8,546	$	1,865	$	2,445		$	2,625
Our share of:
Depreciation and amortization of real estate assets	$	1,636	$	1,995	$	3,695		$	4,050
Impairment of real estate assets	$	—	$	—	$	1,002		$	—
Interest expense	$	1,823	$	2,012	$	3,782		$	4,149
Net income	$	1,142	$	759	$	356		$	1,694
Our share of net income	$	1,142	$	759	$	356		$	1,694
Management and other fees adjustments	369		598		995			1,138
Equity in earnings of unconsolidated affiliates	$	1,511	$	1,357	$	1,351		$	2,832

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Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	$ 130,735		$ 114,651		$ 258,768		$ 226,981
Total Net Operating Income	83,646		74,720		166,480		147,143
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276)		(32,684)		(78,105)		(65,621)
General and administrative expense	(8,900)		(7,978)		(18,573)		(15,771)
Interest expense	(24,495)		(23,907)		(49,297)		(47,450)
Interest and other income	764		1,875		2,994		3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	10,739		12,026		23,499		22,049
Total Office Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	114,724	[1]	99,595	[1]	226,896	[1]	196,114	[1]
Total Net Operating Income	73,254	[1]	64,780	[1]	145,378	[1]	126,851	[1]
Office Atlanta, GA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	16,209		12,341		31,993		24,242
Total Net Operating Income	10,426		7,973		20,821		15,464
Office Greenville, SC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,489		3,437		6,993		6,942
Total Net Operating Income	2,051		2,067		4,183		4,142
Office Kansas City, MO [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,560		3,441		7,163		6,960
Total Net Operating Income	2,186		2,112		4,518		4,256
Office Memphis, TN [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	10,130		10,077		20,268		20,179
Total Net Operating Income	5,841		5,462		11,942		11,222
Office Nashville, TN [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	14,321		13,572		28,186		26,315
Total Net Operating Income	9,835		9,369		19,490		18,001
Office Orlando, FL [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	2,756		2,619		5,443		4,936
Total Net Operating Income	1,431		1,284		2,847		2,450
Office Piedmont Triad, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	5,072		5,273		10,152		10,637
Total Net Operating Income	3,219		3,452		6,452		7,053
Office Pittsburgh, PA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,113		0		18,199		0
Total Net Operating Income	4,627		0		8,910		0
Office Raleigh, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	20,400		20,103		40,179		39,421
Total Net Operating Income	14,291		14,273		28,146		27,489
Office Richmond, VA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	12,095		11,668		23,605		23,046
Total Net Operating Income	8,536		8,231		16,419		16,090
Office Tampa, FL [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	17,579		17,064		34,715		33,436
Total Net Operating Income	10,811		10,557		21,650		20,684
Total Industrial Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	6,936	[1]	6,853	[1]	13,874	[1]	13,764	[1]
Total Net Operating Income	5,069	[1]	5,108	[1]	10,245	[1]	10,171	[1]
Industrial Atlanta, GA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,849		4,028		7,623		7,962
Total Net Operating Income	2,761		3,001		5,649		5,840
Industrial Piedmont Triad, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,087		2,825		6,251		5,802
Total Net Operating Income	2,308		2,107		4,596		4,331
Total Retail Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,075	[1]	8,203	[1]	17,998	[1]	17,103	[1]
Total Net Operating Income	5,323	[1]	4,832	[1]	10,857	[1]	10,121	[1]
Retail Kansas City, MO [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,075		8,203		17,998		17,103
Total Net Operating Income	5,323		4,832		10,857		10,121
Highwoods Realty Limited Partnership [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	130,735		114,651		258,768		226,981
Total Net Operating Income	83,705		74,783		166,601		147,057
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276)		(32,684)		(78,105)		(65,621)
General and administrative expense	(8,959)		(8,041)		(18,694)		(15,685)
Interest expense	(24,495)		(23,907)		(49,297)		(47,450)
Interest and other income	764		1,875		2,994		3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	10,739		12,026		23,499		22,049
Highwoods Realty Limited Partnership [Member] | Total Office Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	114,724	[1]	99,595	[1]	226,896	[1]	196,114	[1]
Total Net Operating Income	73,305	[1]	64,834	[1]	145,484	[1]	126,777	[1]
Highwoods Realty Limited Partnership [Member] | Office Atlanta, GA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	16,209		12,341		31,993		24,242
Total Net Operating Income	10,435		7,980		20,837		15,456
Highwoods Realty Limited Partnership [Member] | Office Greenville, SC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,489		3,437		6,993		6,942
Total Net Operating Income	2,052		2,069		4,186		4,140
Highwoods Realty Limited Partnership [Member] | Office Kansas City, MO [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,560		3,441		7,163		6,960
Total Net Operating Income	2,188		2,114		4,521		4,254
Highwoods Realty Limited Partnership [Member] | Office Memphis, TN [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	10,130		10,077		20,268		20,179
Total Net Operating Income	5,845		5,467		11,951		11,215
Highwoods Realty Limited Partnership [Member] | Office Nashville, TN [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	14,321		13,572		28,186		26,315
Total Net Operating Income	9,842		9,376		19,504		17,989
Highwoods Realty Limited Partnership [Member] | Office Orlando, FL [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	2,756		2,619		5,443		4,936
Total Net Operating Income	1,432		1,285		2,849		2,449
Highwoods Realty Limited Partnership [Member] | Office Piedmont Triad, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	5,072		5,273		10,152		10,637
Total Net Operating Income	3,221		3,455		6,457		7,049
Highwoods Realty Limited Partnership [Member] | Office Pittsburgh, PA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,113		0		18,199		0
Total Net Operating Income	4,630		0		8,911		0
Highwoods Realty Limited Partnership [Member] | Office Raleigh, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	20,400		20,103		40,179		39,421
Total Net Operating Income	14,301		14,285		28,169		27,473
Highwoods Realty Limited Partnership [Member] | Office Richmond, VA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	12,095		11,668		23,605		23,046
Total Net Operating Income	8,541		8,238		16,431		16,080
Highwoods Realty Limited Partnership [Member] | Office Tampa, FL [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	17,579		17,064		34,715		33,436
Total Net Operating Income	10,818		10,565		21,668		20,672
Highwoods Realty Limited Partnership [Member] | Total Industrial Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	6,936	[1]	6,853	[1]	13,874	[1]	13,764	[1]
Total Net Operating Income	5,073	[1]	5,113	[1]	10,252	[1]	10,165	[1]
Highwoods Realty Limited Partnership [Member] | Industrial Atlanta, GA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,849		4,028		7,623		7,962
Total Net Operating Income	2,763		3,004		5,653		5,837
Highwoods Realty Limited Partnership [Member] | Industrial Piedmont Triad, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	3,087		2,825		6,251		5,802
Total Net Operating Income	2,310		2,109		4,599		4,328
Highwoods Realty Limited Partnership [Member] | Total Retail Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,075	[1]	8,203	[1]	17,998	[1]	17,103	[1]
Total Net Operating Income	5,327	[1]	4,836	[1]	10,865	[1]	10,115	[1]
Highwoods Realty Limited Partnership [Member] | Retail Kansas City, MO [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,075		8,203		17,998		17,103
Total Net Operating Income	$ 5,327		$ 4,836		$ 10,865		$ 10,115

[1] Net of discontinued operations.

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Derivative Financial Instruments (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012 swaps	Jun. 30, 2011	Jun. 30, 2012 swaps	Jun. 30, 2011	Dec. 31, 2011
Derivative [Line Items]
Number of derivative instruments obtained	6		6
Term of derivative instruments (in years)			7 years
Amount of borrowings outstanding	$ 225,000,000		$ 225,000,000
Interest rate under derivative instruments	1.678%		1.678%
Cross-default minimum threshold			10,000,000
Expected increase to interest expense	3,100,000		3,100,000
Derivatives designated as cash flow hedges in other liabilities [Abstract]
Interest rate swaps	7,763,000		7,763,000		2,202,000
Amount of unrealized losses recognized in AOCL on derivatives (effective portion) [Abstract]
Interest rate swaps	(7,481,000)	0	(7,087,000)	0
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
Interest rate swaps	782,000	(29,000)	1,459,000	(58,000)
Highwoods Realty Limited Partnership [Member]
Derivative [Line Items]
Number of derivative instruments obtained	6		6
Term of derivative instruments (in years)			7 years
Amount of borrowings outstanding	225,000,000		225,000,000
Interest rate under derivative instruments	1.678%		1.678%
Cross-default minimum threshold			10,000,000
Expected increase to interest expense	3,100,000		3,100,000
Derivatives designated as cash flow hedges in other liabilities [Abstract]
Interest rate swaps	7,763,000		7,763,000		2,202,000
Amount of unrealized losses recognized in AOCL on derivatives (effective portion) [Abstract]
Interest rate swaps	(7,481,000)	0	(7,087,000)	0
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
Interest rate swaps	$ 782,000	$ (29,000)	$ 1,459,000	$ (58,000)

XML

Mortgages and Notes Receivable (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, allowance	$ (118)	$ (617)	$ (118)	$ (617)
Mortgages and notes receivable, net	17,056		17,056		18,600
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance	122	497	61	868
Bad debt expense	0	162	0	184
Recoveries/write-offs/other	(4)	(42)	57	(435)
Total notes receivable allowance	118	617	118	617
Seller Financing [Member]
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, gross	15,853		15,853		17,180
Mortgages and notes receivable, allowance	0		0		0
Mortgages and notes receivable, net	15,853		15,853		17,180
Number of transactions with seller financing	2
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance					0
Total notes receivable allowance	0		0		0
Promissory Notes [Member]
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, gross	1,321		1,321		1,481
Mortgages and notes receivable, allowance	(118)		(118)		(61)
Mortgages and notes receivable, net	1,203		1,203		1,420
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance					61
Total notes receivable allowance	118		118		61
Highwoods Realty Limited Partnership [Member]
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, allowance	(118)	(617)	(118)	(617)
Mortgages and notes receivable, net	17,056		17,056		18,600
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance	122	497	61	868
Bad debt expense	0	162	0	184
Recoveries/write-offs/other	(4)	(42)	57	(435)
Total notes receivable allowance	118	617	118	617
Highwoods Realty Limited Partnership [Member] | Seller Financing [Member]
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, gross	15,853		15,853		17,180
Mortgages and notes receivable, allowance	0		0		0
Mortgages and notes receivable, net	15,853		15,853		17,180
Number of transactions with seller financing	2
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance					0
Total notes receivable allowance	0		0		0
Highwoods Realty Limited Partnership [Member] | Promissory Notes [Member]
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, gross	1,321		1,321		1,481
Mortgages and notes receivable, allowance	(118)		(118)		(61)
Mortgages and notes receivable, net	1,203		1,203		1,420
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance					61
Total notes receivable allowance	$ 118		$ 118		$ 61

XML

Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
Tax increment financing bond, beginning balance			$ (2,309)	$ (2,543)
Unrealized gains/(losses) on tax increment financing bond	296	(336)	583	(471)
Tax increment financing bond, ending balance	(1,726)	(3,014)	(1,726)	(3,014)
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
Cash flow hedges, beginning balance			(3,425)	(1,105)
Unrealized losses on cash flow hedges	(7,481)	0	(7,087)	0
Amortization of cash flow hedges	782	(29)	1,459	(58)
Cash flow hedges, ending balance	(9,053)	(1,163)	(9,053)	(1,163)
Total accumulated other comprehensive loss	(10,779)	(4,177)	(10,779)	(4,177)	(5,734)
Highwoods Realty Limited Partnership [Member]
Available For Sale Securities Gross Unrealized Gain Loss Calculation [Roll Forward]
Tax increment financing bond, beginning balance			(2,309)	(2,543)
Unrealized gains/(losses) on tax increment financing bond	296	(336)	583	(471)
Tax increment financing bond, ending balance	(1,726)	(3,014)	(1,726)	(3,014)
Cash Flow Hedges Derivative Instruments At Fair Value Net Calculation [Roll Forward]
Cash flow hedges, beginning balance			(3,425)	(1,105)
Unrealized losses on cash flow hedges	(7,481)	0	(7,087)	0
Amortization of cash flow hedges	782	(29)	1,459	(58)
Cash flow hedges, ending balance	(9,053)	(1,163)	(9,053)	(1,163)
Total accumulated other comprehensive loss	$ (10,779)	$ (4,177)	$ (10,779)	$ (4,177)	$ (5,734)

XML

Real Estate Assets

6 Months Ended

Jun. 30, 2012

Significant Acquisitions and Disposals [Line Items]

Real Estate Assets

Real Estate Assets

Acquisitions

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

Dispositions

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

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.

Highwoods Realty Limited Partnership [Member]

Significant Acquisitions and Disposals [Line Items]

Real Estate Assets

Real Estate Assets

Acquisitions

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

Dispositions

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

During the first quarter of 2012, we sold 96 vacant rental residential units in Kansas City, MO for gross proceeds of $11.0 million. We recorded gain on disposition of discontinued operations of $5.1 million related to this disposition.

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Noncontrolling Interests (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Noncontrolling Interests in the Operating Partnership [Roll Forward]
Beginning noncontrolling interests in the Operating Partnership			$ 110,655	$ 120,838
Adjustment of noncontrolling interests in the Operating Partnership to fair value			16,501	6,957
Conversion of Common Units to Common Stock			(631)	(635)
Net income attributable to noncontrolling interests in the Operating Partnership	686	623	1,513	1,130
Distributions to noncontrolling interests in the Operating Partnership			(3,158)	(3,215)
Total noncontrolling interests in the Operating Partnership	124,880	125,075	124,880	125,075
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
Net income available for common stockholders	12,962	10,112	29,656	20,248
Increase in additional paid in capital from conversion of Common Units to Common Stock	568	449	631	635
Change from net income available for common stockholders and transfers from noncontrolling interests	$ 13,530	$ 10,561	$ 30,287	$ 20,883
Noncontrolling Interests in Consolidated Affiliates [Abstract]
Consolidated joint venture, partner's interest (in hundredths)	50.00%		50.00%
Highwoods Realty Limited Partnership [Member]
Noncontrolling Interests in Consolidated Affiliates [Abstract]
Consolidated joint venture, partner's interest (in hundredths)	50.00%		50.00%

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Noncontrolling Interests (Tables)

6 Months Ended

Jun. 30, 2012

Noncontrolling Interest [Abstract]

Noncontrolling Interests in the Operating Partnership [Table Text Block]

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

	Six Months Ended June 30,
	2012			2011
Beginning noncontrolling interests in the Operating Partnership	$	110,655		$	120,838
Adjustments of noncontrolling interests in the Operating Partnership to fair value	16,501			6,957
Conversion of Common Units to Common Stock	(631		)	(635		)
Net income attributable to noncontrolling interests in the Operating Partnership	1,513			1,130
Distributions to noncontrolling interests in the Operating Partnership	(3,158		)	(3,215		)
Total noncontrolling interests in the Operating Partnership	$	124,880		$	125,075

Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net income available for common stockholders	$	12,962	$	10,112	$	29,656	$	20,248
Increase in additional paid in capital from conversion of Common Units to Common Stock	568		449		631		635
Change from net income available for common stockholders and transfers from noncontrolling interests	$	13,530	$	10,561	$	30,287	$	20,883

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Derivative [Line Items]

Schedule of Derivative Instruments, Fair Value [Table Text Block]

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

	June 30, 2012		December 31, 2011
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	7,763	$	2,202

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(7,481	)	$	—		$	(7,087	)	$	—
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	782		$	(29	)	$	1,459		$	(58	)

Highwoods Realty Limited Partnership [Member]

Derivative [Line Items]

Schedule of Derivative Instruments, Fair Value [Table Text Block]

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

	June 30, 2012		December 31, 2011
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	7,763	$	2,202

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(7,481	)	$	—		$	(7,087	)	$	—
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	782		$	(29	)	$	1,459		$	(58	)

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Disclosure About Fair Value of Financial Instruments - Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012		Dec. 31, 2011
Assets: [Abstract]
Mortgages and notes receivable, at fair value	$ 17,330	[1]	$ 18,990	[1]
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,149
Tax increment financing bond (in prepaid expenses and other assets)	15,371		14,788
Impaired real estate assets and for-sale residential condominiums			12,767
Total Assets	35,800		49,694
Noncontrolling Interests in the Operating Partnership	124,880		110,655
Liabilities[Abstract]
Mortgages and notes payable, at fair value	1,918,241	[1]	1,992,937	[1]
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		2,202
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,149
Financing obligations, at fair value	21,141	[1]	18,866	[1]
Total Liabilities	1,950,244		2,017,154
Level 1 [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	0		0
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,149
Tax increment financing bond (in prepaid expenses and other assets)	0		0
Impaired real estate assets and for-sale residential condominiums			0
Total Assets	3,099		3,149
Noncontrolling Interests in the Operating Partnership	124,880		110,655
Liabilities[Abstract]
Mortgages and notes payable, at fair value	0		0
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	0		0
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,149
Financing obligations, at fair value	0		0
Total Liabilities	3,099		3,149
Level 2 [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	17,330		18,990
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	0		0
Tax increment financing bond (in prepaid expenses and other assets)	0		0
Impaired real estate assets and for-sale residential condominiums			0
Total Assets	17,330		18,990
Noncontrolling Interests in the Operating Partnership	0		0
Liabilities[Abstract]
Mortgages and notes payable, at fair value	1,918,241		1,992,937
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		2,202
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	0		0
Financing obligations, at fair value	0		0
Total Liabilities	1,926,004		1,995,139
Level 3 [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	0		0
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	0		0
Tax increment financing bond (in prepaid expenses and other assets)	15,371		14,788
Impaired real estate assets and for-sale residential condominiums			12,767
Total Assets	15,371		27,555
Noncontrolling Interests in the Operating Partnership	0		0
Liabilities[Abstract]
Mortgages and notes payable, at fair value	0		0
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	0		0
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	0		0
Financing obligations, at fair value	21,141		18,866
Total Liabilities	21,141		18,866
Highwoods Realty Limited Partnership [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	17,330	[1]	18,990	[1]
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,149
Tax increment financing bond (in prepaid expenses and other assets)	15,371		14,788
Impaired real estate assets and for-sale residential condominiums			12,767
Total Assets	35,800		49,694
Liabilities[Abstract]
Mortgages and notes payable, at fair value	1,918,241	[1]	1,992,937	[1]
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		2,202
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,149
Financing obligations, at fair value	21,141	[1]	18,866	[1]
Total Liabilities	1,950,244		2,017,154
Highwoods Realty Limited Partnership [Member] | Level 1 [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	0		0
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,149
Tax increment financing bond (in prepaid expenses and other assets)	0		0
Impaired real estate assets and for-sale residential condominiums			0
Total Assets	3,099		3,149
Liabilities[Abstract]
Mortgages and notes payable, at fair value	0		0
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	0		0
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,149
Financing obligations, at fair value	0		0
Total Liabilities	3,099		3,149
Highwoods Realty Limited Partnership [Member] | Level 2 [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	17,330		18,990
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	0		0
Tax increment financing bond (in prepaid expenses and other assets)	0		0
Impaired real estate assets and for-sale residential condominiums			0
Total Assets	17,330		18,990
Liabilities[Abstract]
Mortgages and notes payable, at fair value	1,918,241		1,992,937
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		2,202
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	0		0
Financing obligations, at fair value	0		0
Total Liabilities	1,926,004		1,995,139
Highwoods Realty Limited Partnership [Member] | Level 3 [Member]
Assets: [Abstract]
Mortgages and notes receivable, at fair value	0		0
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	0		0
Tax increment financing bond (in prepaid expenses and other assets)	15,371		14,788
Impaired real estate assets and for-sale residential condominiums			12,767
Total Assets	15,371		27,555
Liabilities[Abstract]
Mortgages and notes payable, at fair value	0		0
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	0		0
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	0		0
Financing obligations, at fair value	21,141		18,866
Total Liabilities	$ 21,141		$ 18,866

[1] Amounts carried at historical cost on our Consolidated Balance Sheets at June 30, 2012 and December 31, 2011, respectively.

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Disclosure About Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2012

Disclosure About Fair Value of Financial Instruments [Line Items]

Fair Value Measurements of Assets, Liabilities and Noncontrolling Interests [Table Text Block]

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

			Level 1		Level 2		Level 3
	June 30, 2012		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	17,330	$	—	$	17,330	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,099		—		—
Tax increment financing bond (in prepaid expenses and other assets)	15,371		—		—		15,371
Total Assets	$	35,800	$	3,099	$	17,330	$	15,371
Noncontrolling Interests in the Operating Partnership	$	124,880	$	124,880	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,918,241	$	—	$	1,918,241	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		—		7,763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,099		—		—
Financing obligations, at fair value (1)	21,141		—		—		21,141
Total Liabilities	$	1,950,244	$	3,099	$	1,926,004	$	21,141

9. Disclosure About Fair Value of Financial Instruments - Continued

			Level 1		Level 2		Level 3
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	18,990	$	—	$	18,990	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,149		3,149		—		—
Tax increment financing bond (in prepaid expenses and other assets)	14,788		—		—		14,788
Impaired real estate assets and for-sale residential condominiums	12,767		—		—		12,767
Total Assets	$	49,694	$	3,149	$	18,990	$	27,555
Noncontrolling Interests in the Operating Partnership	$	110,655	$	110,655	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,992,937	$	—	$	1,992,937	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	2,202		—		2,202		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,149		3,149		—		—
Financing obligations, at fair value (1)	18,866		—		—		18,866
Total Liabilities	$	2,017,154	$	3,149	$	1,995,139	$	18,866

Fair Value Measurements, Unobservable Inputs Reconciliation [Table Text Block]

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Asset:
Tax Increment Financing Bond:
Beginning balance	$	15,075	$	15,564		$	14,788	$	15,699
Unrealized gains/(losses) (in AOCL)	296		(336		)	583		(471		)
Ending balance	$	15,371	$	15,228		$	15,371	$	15,228

Fair Value Measurements, Valuation Techniques [Table Text Block]

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

	Fair Value at June 30, 2012		Valuation Technique	Unobservable Input	Discount Rate
Tax increment financing bond	$	15,371	Income approach	Discount rate	9.85	%

Highwoods Realty Limited Partnership [Member]

Disclosure About Fair Value of Financial Instruments [Line Items]

Fair Value Measurements of Assets, Liabilities and Noncontrolling Interests [Table Text Block]

The following tables set forth the assets and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

			Level 1		Level 2		Level 3
	June 30, 2012		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	17,330	$	—	$	17,330	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,099		—		—
Tax increment financing bond (in prepaid expenses and other assets)	15,371		—		—		15,371
Total Assets	$	35,800	$	3,099	$	17,330	$	15,371
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,918,241	$	—	$	1,918,241	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		—		7,763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,099		—		—
Financing obligations, at fair value (1)	21,141		—		—		21,141
Total Liabilities	$	1,950,244	$	3,099	$	1,926,004	$	21,141

			Level 1		Level 2		Level 3
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	18,990	$	—	$	18,990	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,149		3,149		—		—
Tax increment financing bond (in prepaid expenses and other assets)	14,788		—		—		14,788
Impaired real estate assets and for-sale residential condominiums	12,767		—		—		12,767
Total Assets	$	49,694	$	3,149	$	18,990	$	27,555
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,992,937	$	—	$	1,992,937	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	2,202		—		2,202		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,149		3,149		—		—
Financing obligations, at fair value (1)	18,866		—		—		18,866
Total Liabilities	$	2,017,154	$	3,149	$	1,995,139	$	18,866

__________

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

Fair Value Measurements, Unobservable Inputs Reconciliation [Table Text Block]

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Asset:
Tax Increment Financing Bond:
Beginning balance	$	15,075	$	15,564		$	14,788	$	15,699
Unrealized gains/(losses) (in AOCL)	296		(336		)	583		(471		)
Ending balance	$	15,371	$	15,228		$	15,371	$	15,228

Fair Value Measurements, Valuation Techniques [Table Text Block]

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

	Fair Value at June 30, 2012		Valuation Technique	Unobservable Input	Discount Rate
Tax increment financing bond	$	15,371	Income approach	Discount rate	9.85	%

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Loss [Line Items]

Components of Accumulated Other Comprehensive Loss [Table Text Block]

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

	Six Months Ended June 30,
	2012			2011
Tax increment financing bond:
Beginning balance	$	(2,309	)	$	(2,543	)
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Ending balance	(1,726		)	(3,014		)
Cash flow hedges:
Beginning balance	(3,425		)	(1,105		)
Unrealized losses on cash flow hedges	(7,087		)	—
Amortization of cash flow hedges	1,459			(58		)
Ending balance	(9,053		)	(1,163		)
Total accumulated other comprehensive loss	$	(10,779	)	$	(4,177	)

Highwoods Realty Limited Partnership [Member]

Accumulated Other Comprehensive Loss [Line Items]

Components of Accumulated Other Comprehensive Loss [Table Text Block]

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

	Six Months Ended June 30,
	2012			2011
Tax increment financing bond:
Beginning balance	$	(2,309	)	$	(2,543	)
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Ending balance	(1,726		)	(3,014		)
Cash flow hedges:
Beginning balance	(3,425		)	(1,105		)
Unrealized losses on cash flow hedges	(7,087		)	—
Amortization of cash flow hedges	1,459			(58		)
Ending balance	(9,053		)	(1,163		)
Total accumulated other comprehensive loss	$	(10,779	)	$	(4,177	)

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Description of Business and Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Description of Business and Significant Accounting Policies [Line Items]

Description of Business and Significant Accounting Policies

Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2012, the Company and/or the Operating Partnership wholly owned: 304 in-service office, industrial and retail properties, comprising 29.5 million square feet; nine for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At June 30, 2012, the Company owned all of the Preferred Units and 75.2 million, or 95.3%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months endedJune 30, 2012, the Company redeemed 18,366 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.3% at June 30, 2012.

Common Stock Offerings

The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and six months endedJune 30, 2012, the Company issued 1,836,976 and 2,622,476 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.72 and $33.45 per share, respectively, raising net proceeds, after sales commissions and expenses, of $61.0 million and $86.4 million, respectively.

Basis of Presentation

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

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

1.    Description of Business and Significant Accounting Policies – Continued

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

Use of Estimates

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

Recently Issued Accounting Standards

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

Highwoods Realty Limited Partnership [Member]

Description of Business and Significant Accounting Policies [Line Items]

Description of Business and Significant Accounting Policies

1.    Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc., together with its consolidated subsidiaries (the “Company”), is a fully-integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts virtually all of its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At June 30, 2012, the Company and/or the Operating Partnership wholly owned: 304 in-service office, industrial and retail properties, comprising 29.5 million square feet; nine for-sale residential condominiums; 581 acres of undeveloped land suitable for future development, of which 518 acres are considered core assets; and one office property under development.

The Company is the sole general partner of the Operating Partnership. At June 30, 2012, the Company owned all of the Preferred Units and 75.2 million, or 95.3%, of the Common Units in the Operating Partnership. Limited partners, including one officer and two directors of the Company, own the remaining 3.7 million Common Units. In the event the Company issues shares of Common Stock, the net proceeds are contributed to the Operating Partnership in exchange for additional Common Units. Generally, the Operating Partnership is required to redeem each Common Unit at the request of the holder thereof for cash equal to the value of one share of the Company’s Common Stock, $0.01 par value, based on the average of the market price for the 10 trading days immediately preceding the notice date of such redemption, provided that the Company at its option may elect to acquire any such Common Units presented for redemption for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable. During the six months endedJune 30, 2012, the Company redeemed 18,366 Common Units for a like number of shares of Common Stock. The redemptions, in conjunction with the proceeds from issuances of Common Stock contributed to the Operating Partnership in exchange for additional Common Units, increased the percentage of Common Units owned by the Company from 95.1% at December 31, 2011 to 95.3% at June 30, 2012.

Common Stock Offerings

The Company has entered into equity sales agreements with various financial institutions to offer and sell, from time to time, shares of its Common Stock by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of the institutions. During the three and six months endedJune 30, 2012, the Company issued 1,836,976 and 2,622,476 shares, respectively, of Common Stock under these agreements at an average gross sales price of $33.72 and $33.45 per share, respectively, raising net proceeds, after sales commissions and expenses, of $61.0 million and $86.4 million, respectively.

Basis of Presentation

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

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

1.    Description of Business and Significant Accounting Policies – Continued

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

Use of Estimates

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

Recently Issued Accounting Standards

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

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2012

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Operations Classified As Discontinued Operations [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and other revenues	$	2,044	$	2,907	$	4,383	$	6,169
Operating expenses:
Rental property and other expenses	966		1,390		2,084		2,862
Depreciation and amortization	322		778		1,008		1,653
Total operating expenses	1,288		2,168		3,092		4,515
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		—		6,519		—
Total discontinued operations	$	2,141	$	739	$	7,810	$	1,654

Major Classes of Assets and Liabilities of the Properties Classified As Held For Sale [Table Text Block]

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

	June 30, 2012			December 31, 2011
Assets:
Land	$	3,849		$	5,749
Buildings and tenant improvements	49,460			65,860
Accumulated depreciation	(18,743		)	(23,917		)
Net real estate assets	34,566			47,692
Accrued straight line rents receivable	1,490			1,726
Deferred leasing costs, net	678			811
Prepaid expenses and other assets	17			106
Real estate and other assets, net, held for sale	$	36,751		$	50,335
Tenant security deposits, deferred rents and accrued costs (1)	$	595		$	238

__________

(1) Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.

Highwoods Realty Limited Partnership [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Operations Classified As Discontinued Operations [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and other revenues	$	2,044	$	2,907	$	4,383	$	6,169
Operating expenses:
Rental property and other expenses	966		1,390		2,084		2,862
Depreciation and amortization	322		778		1,008		1,653
Total operating expenses	1,288		2,168		3,092		4,515
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		—		6,519		—
Total discontinued operations	$	2,141	$	739	$	7,810	$	1,654

Major Classes of Assets and Liabilities of the Properties Classified As Held For Sale [Table Text Block]

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

	June 30, 2012			December 31, 2011
Assets:
Land	$	3,849		$	5,749
Buildings and tenant improvements	49,460			65,860
Accumulated depreciation	(18,743		)	(23,917		)
Net real estate assets	34,566			47,692
Accrued straight line rents receivable	1,490			1,726
Deferred leasing costs, net	678			811
Prepaid expenses and other assets	17			106
Real estate and other assets, net, held for sale	$	36,751		$	50,335
Tenant security deposits, deferred rents and accrued costs (1)	$	595		$	238

__________

(1) Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.

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Intangible Assets and Below Market Lease Liabilities Intangible Assets and Below Market Lease Liabilities - Scheduled Future Amortization (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended		6 Months Ended					3 Months Ended			6 Months Ended		6 Months Ended					3 Months Ended
	Jun. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Deferred Financing Costs [Member]	Dec. 31, 2011 Deferred Financing Costs [Member]	Jun. 30, 2012 Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]	Jun. 30, 2012 Lease Incentives [Member]	Jun. 30, 2012 Acquisition-Related Intangible Assets [Member]	Jun. 30, 2012 Acquisition-Related Below Market Lease Liabilities [Member]	Dec. 31, 2011 Acquisition-Related Below Market Lease Liabilities [Member]	Jun. 30, 2012 Leases, Acquired-in-Place [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Dec. 31, 2011 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Deferred Financing Costs [Member]	Dec. 31, 2011 Highwoods Realty Limited Partnership [Member] Deferred Financing Costs [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Lease Incentives [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Acquisition-Related Intangible Assets [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Acquisition-Related Below Market Lease Liabilities [Member]	Dec. 31, 2011 Highwoods Realty Limited Partnership [Member] Acquisition-Related Below Market Lease Liabilities [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Leases, Acquired-in-Place [Member]
Scheduled future amortization of intangible assets [Abstract]
July 1, 2012 through December 31, 2012			$ 2,234		$ 14,242	$ 772	$ 579						$ 2,234		$ 14,242	$ 772	$ 579
2013			3,262		21,834	1,167	765						3,262		21,834	1,167	765
2014			2,987		17,877	1,013	504						2,987		17,877	1,013	504
2015			2,264		13,879	779	328						2,264		13,879	779	328
2016			957		10,880	608	280						957		10,880	608	280
Thereafter			920		25,453	2,379	717						920		25,453	2,379	717
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	126,680	127,774	12,624	12,247	104,165	6,718	3,173				126,680	127,774	12,624	12,247	104,165	6,718	3,173
Scheduled future amortization of below market lease liabilities [Abstract]
July 1, 2012 through December 31, 2012								(1,229)										(1,229)
2013								(2,081)										(2,081)
2014								(2,005)										(2,005)
2015								(1,768)										(1,768)
2016								(1,498)										(1,498)
Thereafter								(5,799)										(5,799)
Total scheduled future amortization of acquisition-related below market lease liabilities								$ (14,380)	$ (15,470)									$ (14,380)	$ (15,470)
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived intangible assets, average useful life (in years)			3 years 9 months		6 years 3 months	7 years 10 months	5 years 8 months						3 years 9 months		6 years 3 months	7 years 10 months	5 years 8 months
Finite-lived below market lease liabilities, average useful life (in years)								8 years 11 months										8 years 11 months
Acquired finite-lived intangible assets, average useful life (in years)										6 years 3 months										6 years 3 months

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Real estate assets, at cost:
Land	$ 366,925	$ 364,022
Buildings and tenant improvements	3,117,730	3,078,308
Development in process	6,094	0
Land held for development	102,482	105,206
Total real estate assets	3,593,231	3,547,536
Less-accumulated depreciation	(913,016)	(877,383)
Net real estate assets	2,680,215	2,670,153
For-sale residential condominiums	2,434	4,751
Real estate and other assets, net, held for sale	36,751	50,335
Cash and cash equivalents	6,527	11,188
Restricted cash	20,757	26,666
Accounts receivable, net of allowance of $3,262 and $3,548, respectively	21,882	30,093
Mortgages and notes receivable, net of allowance of $118 and $61, respectively	17,056	18,600
Accrued straight-line rents receivable, net of allowance of $866 and $1,294, respectively	113,695	104,284
Investments in and advances to unconsolidated affiliates	77,089	100,367
Deferred financing and leasing costs, net of accumulated amortization of $70,572 and $62,319, respectively	126,680	127,774
Prepaid expenses and other assets	41,907	36,781
Total Assets	3,144,993	3,180,992
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity: [Abstract]
Mortgages and notes payable	1,823,128	1,903,213
Accounts payable, accrued expenses and other liabilities	137,108	148,821
Financing obligations	30,822	31,444
Total Liabilities	1,991,058	2,083,478
Commitments and contingencies
Noncontrolling interests in the Operating Partnership	124,880	110,655
Equity: [Abstract]
8.625% Series A Cumulative Redeemable Preferred Shares, $.01 par value, 50,000,000 authorized shares, liquidation preference $1,000 per share; 29,077 shares issued and outstanding	29,077	29,077
Common Stock, $.01 par value, 200,000,000 authorized shares; 75,619,288 and 72,647,697 shares issued and outstanding, respectively	756	726
Additional paid-in capital	1,884,392	1,803,997
Distributions in excess of net income available for common stockholders	(878,984)	(845,853)
Accumulated other comprehensive loss	(10,779)	(5,734)
Total Stockholders' Equity	1,024,462	982,213
Noncontrolling interests in consolidated affiliates	4,593	4,646
Total Equity	1,029,055	986,859
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity	3,144,993	3,180,992
Highwoods Realty Limited Partnership [Member]
Real estate assets, at cost:
Land	366,925	364,022
Buildings and tenant improvements	3,117,730	3,078,308
Development in process	6,094	0
Land held for development	102,482	105,206
Total real estate assets	3,593,231	3,547,536
Less-accumulated depreciation	(913,016)	(877,383)
Net real estate assets	2,680,215	2,670,153
For-sale residential condominiums	2,434	4,751
Real estate and other assets, net, held for sale	36,751	50,335
Cash and cash equivalents	6,631	11,151
Restricted cash	20,757	26,666
Accounts receivable, net of allowance of $3,262 and $3,548, respectively	21,882	30,093
Mortgages and notes receivable, net of allowance of $118 and $61, respectively	17,056	18,600
Accrued straight-line rents receivable, net of allowance of $866 and $1,294, respectively	113,695	104,284
Investments in and advances to unconsolidated affiliates	76,037	99,296
Deferred financing and leasing costs, net of accumulated amortization of $70,572 and $62,319, respectively	126,680	127,774
Prepaid expenses and other assets	41,826	36,781
Total Assets	3,143,964	3,179,884
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity: [Abstract]
Mortgages and notes payable	1,823,128	1,903,213
Accounts payable, accrued expenses and other liabilities	137,047	148,821
Financing obligations	30,822	31,444
Total Liabilities	1,990,997	2,083,478
Commitments and contingencies
Redeemable Operating Partnership Units: [Abstract]
Common Units, 3,711,152 and 3,729,518 outstanding, respectively	124,880	110,655
Series A Preferred Units, liquidation preference $1,000 per unit; 29,077 units issued and outstanding	29,077	29,077
Total Redeemable Operating Partnership Units	153,957	139,732
Equity: [Abstract]
General partner Common Units, 789,216 and 759,684 outstanding, respectively	10,049	9,575
Limited partner Common Units, 74,421,263 and 71,479,204 outstanding, respectively	995,147	948,187
Accumulated other comprehensive loss	(10,779)	(5,734)
Noncontrolling interests in consolidated affiliates	4,593	4,646
Total Equity	999,010	956,674
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity	$ 3,143,964	$ 3,179,884

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Disclosure About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Dec. 31, 2010
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Unrealized gains/(losses) (in AOCL)	$ 296,000	$ (336,000)	$ 583,000	$ (471,000)
Amount by which outstanding principal amount exceeds estimated fair value	1,726,000	3,014,000	1,726,000	3,014,000	2,309,000	2,543,000
Tax Increment Financing Bond [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	15,075,000	15,564,000	14,788,000	15,699,000
Unrealized gains/(losses) (in AOCL)	296,000	(336,000)	583,000	(471,000)
Ending balance	15,371,000	15,228,000	15,371,000	15,228,000
Maturity date	Dec. 20, 2020
Amount by which outstanding principal amount exceeds estimated fair value	1,700,000		1,700,000
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher	600,000		600,000
Increase in fair value of bond if yield-to-maturity was 100 basis points lower	600,000		600,000
Fair value of Level 3 asset	15,371,000	15,228,000	15,371,000	15,228,000
Discount rate (in hundredths)			9.85%
Highwoods Realty Limited Partnership [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Unrealized gains/(losses) (in AOCL)	296,000	(336,000)	583,000	(471,000)
Amount by which outstanding principal amount exceeds estimated fair value	1,726,000	3,014,000	1,726,000	3,014,000	2,309,000	2,543,000
Highwoods Realty Limited Partnership [Member] | Tax Increment Financing Bond [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	15,075,000	15,564,000	14,788,000	15,699,000
Unrealized gains/(losses) (in AOCL)	296,000	(336,000)	583,000	(471,000)
Ending balance	15,371,000	15,228,000	15,371,000	15,228,000
Maturity date	Dec. 20, 2020
Amount by which outstanding principal amount exceeds estimated fair value	1,700,000		1,700,000
Decrease in fair value of bond if yield-to-maturity was 100 basis points higher	600,000		600,000
Increase in fair value of bond if yield-to-maturity was 100 basis points lower	600,000		600,000
Fair value of Level 3 asset	$ 15,371,000	$ 15,228,000	$ 15,371,000	$ 15,228,000
Discount rate (in hundredths)			9.85%

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Consolidated Statements of Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Highwoods Realty Limited Partnership [Member]	Common Stock [Member]	Series A Cumulative Redeemable Preferred Shares [Member]	Series B Cumulative Redeemable Preferred Shares [Member]	General Partner Common Units [Member] Highwoods Realty Limited Partnership [Member]	Limited Partner Common Units [Member] Highwoods Realty Limited Partnership [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) [Member] Highwoods Realty Limited Partnership [Member]	Noncontrolling Interests in Consolidated Affiliates [Member]	Noncontrolling Interests in Consolidated Affiliates [Member] Highwoods Realty Limited Partnership [Member]	Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance at Dec. 31, 2010	$ 1,088,222	$ 1,005,466	$ 717	$ 29,092	$ 52,500	$ 10,044	$ 994,610	$ 1,766,886	$ (3,648)	$ (3,648)	$ 4,460	$ 4,460	$ (761,785)
Balance (in shares) at Dec. 31, 2010			71,690,487
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuances of Common Units, net		16,984				170	16,814			0		0
Distributions paid on Common Units		(63,936)				(640)	(63,296)			0		0
Distributions paid on Preferred Units		(3,299)				(33)	(3,266)			0		0
Issuances of Common Stock - Shares			556,652
Issuances of Common Stock, net	16,984		6	0	0			16,978	0		0		0
Conversion of Common Units to Common Stock - Shares			18,737
Conversion of Common Units to Common Stock	635		0	0	0			635	0		0		0
Dividends on Common Stock	(61,069)		0	0	0			0	0		0		(61,069)
Dividends on Preferred Stock	(3,299)		0	0	0			0	0		0		(3,299)
Adjustment of noncontrolling interests in the Operating Partnership to fair value	(6,957)		0	0	0			(6,957)	0		0		0
Distributions to noncontrolling interests in consolidated affiliates	(319)	(319)	0	0	0	0	0	0	0	0	(319)	(319)	0
Issuances of restricted stock - Shares			133,552
Issuances of restricted stock	0		0	0	0			0	0		0		0
Redemptions/repurchases of Preferred Stock	(52,505)		0	(5)	(52,500)			1,895	0		0		(1,895)
Share-based compensation expense	3,453	3,453	1	0	0	35	3,418	3,452	0	0	0	0	0
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner		(4,817)				(48)	(4,769)			0		0
Net (income) attributable to noncontrolling interests in the Operating Partnership	(1,130)		0	0	0			0	0		0		(1,130)
Net (income) attributable to noncontrolling interests in consolidated affiliates	0	0	0	0	0	(3)	(302)	0	0	0	305	305	(305)
Comprehensive income:
Net income	26,877	26,889	0	0	0	269	26,620	0	0	0	0	0	26,877
Other comprehensive loss	(529)	(529)	0	0	0	0	0	0	(529)	(529)	0	0	0
Total comprehensive income	26,348	26,360
Balance at Jun. 30, 2011	1,010,363	979,892	724	29,087	0	9,794	969,829	1,782,889	(4,177)	(4,177)	4,446	4,446	(802,606)
Balance (in shares) at Jun. 30, 2011			72,399,428
Balance at Mar. 31, 2011
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (income) attributable to noncontrolling interests in the Operating Partnership	(623)
Comprehensive income:
Net income	14,434	14,438
Other comprehensive loss	(365)	(365)
Total comprehensive income	14,069	14,073
Balance at Jun. 30, 2011	1,010,363	979,892
Balance at Dec. 31, 2011	986,859	956,674	726	29,077		9,575	948,187	1,803,997	(5,734)	(5,734)	4,646	4,646	(845,853)
Balance (in shares) at Dec. 31, 2011	72,647,697		72,647,697
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuances of Common Units, net		91,836				918	90,918			0		0
Distributions paid on Common Units		(65,597)				(656)	(64,941)			0		0
Distributions paid on Preferred Units		(1,254)				(13)	(1,241)			0		0
Issuances of Common Stock - Shares			2,794,340
Issuances of Common Stock, net	91,836		28	0				91,808	0		0		0
Conversion of Common Units to Common Stock - Shares			18,366
Conversion of Common Units to Common Stock	631		0	0				631	0		0		0
Dividends on Common Stock	(62,787)		0	0				0	0		0		(62,787)
Dividends on Preferred Stock	(1,254)		0	0				0	0		0		(1,254)
Adjustment of noncontrolling interests in the Operating Partnership to fair value	(16,501)		0	0				(16,501)	0		0		0
Distributions to noncontrolling interests in consolidated affiliates	(460)	(460)	0	0		0	0	0	0	0	(460)	(460)	0
Issuances of restricted stock - Shares			158,885
Issuances of restricted stock	0		0	0				0	0		0		0
Share-based compensation expense	4,459	4,459	2	0		45	4,414	4,457	0	0	0	0	0
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner		(14,438)				(144)	(14,294)			0		0
Net (income) attributable to noncontrolling interests in the Operating Partnership	(1,513)		0	0				0	0		0		(1,513)
Net (income) attributable to noncontrolling interests in consolidated affiliates	0	0	0	0		(4)	(403)	0	0		407	407	(407)
Comprehensive income:
Net income	32,830	32,835	0	0		328	32,507	0	0	0	0	0	32,830
Other comprehensive loss	(5,045)	(5,045)	0	0		0	0	0	(5,045)	(5,045)	0	0	0
Total comprehensive income	27,785	27,790
Balance at Jun. 30, 2012	1,029,055	999,010	756	29,077		10,049	995,147	1,884,392	(10,779)	(10,779)	4,593	4,593	(878,984)
Balance (in shares) at Jun. 30, 2012	75,619,288		75,619,288
Balance at Mar. 31, 2012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (income) attributable to noncontrolling interests in the Operating Partnership	(686)
Comprehensive income:
Net income	14,498	14,501
Other comprehensive loss	(6,403)	(6,403)
Total comprehensive income	8,095	8,098
Balance at Jun. 30, 2012	$ 1,029,055	$ 999,010
Balance (in shares) at Jun. 30, 2012	75,619,288

XML

Description of Business and Significant Accounting Policies (Details) (USD $) In Millions, except Share data, unless otherwise specified	3 Months Ended	6 Months Ended
	Jun. 30, 2012 executives acre properties sqft property	Jun. 30, 2012 executives acre properties sqft property	Dec. 31, 2011
Description of Business and Significant Accounting Policies [Line Items]
In-service office, industrial and retail properties (in units)	304	304
Square footage of commercial property (in sq feet)	29,517,000	29,517,000
Residential condominiums for sale (in units)	9	9
Undeveloped land suitable for future development (in acres)	581	581
Undeveloped land considered core holdings (in acres)	518	518
Office properties under/planned for development (in units)	1	1
Common Units of partnership owned (in shares)	75,200,000	75,200,000
Percentage of ownership of Common Units	95.30%	95.30%	95.10%
Number of officers of the Company who are also limited partners	1	1
Number of directors of the Company who are also limited partners	2	2
Common Units of partnership not owned by the Company (in shares)	3,700,000	3,700,000
Number of common units required to convert to one share of common stock (in shares)	1	1
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01	$ 0.01
Number of trading days preceding Redemption Notice Date (in days)		10 days
Common units redeemed for a like number of common shares of stock (in shares)		18,366
Number of Common Stock sold at the market during period (in shares)	1,836,976	2,622,476
Average price of Common Stock sold at the market during period (in dollars per share)	$ 33.72	$ 33.45
Net proceeds of Common Stock sold at the market during period	$ 61.0	$ 86.4
Highwoods Realty Limited Partnership [Member]
Description of Business and Significant Accounting Policies [Line Items]
In-service office, industrial and retail properties (in units)	304	304
Square footage of commercial property (in sq feet)	29,517,000	29,517,000
Residential condominiums for sale (in units)	9	9
Undeveloped land suitable for future development (in acres)	581	581
Undeveloped land considered core holdings (in acres)	518	518
Office properties under/planned for development (in units)	1	1
Common Units of partnership owned (in shares)	75,200,000	75,200,000
Percentage of ownership of Common Units	95.30%	95.30%	95.10%
Number of officers of the Company who are also limited partners	1	1
Number of directors of the Company who are also limited partners	2	2
Common Units of partnership not owned by the Company (in shares)	3,700,000	3,700,000
Number of common units required to convert to one share of common stock (in shares)	1	1
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Number of trading days preceding Redemption Notice Date (in days)		10 days
Common units redeemed for a like number of common shares of stock (in shares)		18,366
Number of Common Stock sold at the market during period (in shares)	1,836,976	2,622,476
Average price of Common Stock sold at the market during period (in dollars per share)	$ 33.72	$ 33.45
Net proceeds of Common Stock sold at the market during period	$ 61.0	$ 86.4

XML

Subsequent Events

6 Months Ended

Jun. 30, 2012

Subsequent Event [Line Items]

Subsequent Events

Subsequent Events

In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the second quarter of 2012 under our equity sales agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million.

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.

Highwoods Realty Limited Partnership [Member]

Subsequent Event [Line Items]

Subsequent Events

Subsequent Events

In early July 2012, the Company issued 451,300 shares of Common Stock from sales in the second quarter of 2012 under our equity sales agreements at an average gross sales price of $33.52 per share raising net proceeds, after sales commissions and expenses, of $14.9 million.

On July 13, 2012, we acquired two medical office properties in Greensboro, NC for $16.4 million. The transaction included the issuance of approximately 77,000 Common Units. We expect to expense approximately $0.1 million of costs related to this acquisition.

On July 13, 2012, we sold five non-core office buildings in Nashville, TN for $41.0 million. We expect to record gain on disposition of discontinued operations of $6.8 million related to this disposition.

On July 25, 2012, we sold three GSA-leased buildings in Jackson, MS and Atlanta, GA for $86.5 million. We expect to record gain on disposition of discontinued operations of $14.0 million related to this disposition.

XML

Real Estate Assets (Details) (USD $)	3 Months Ended		6 Months Ended		3 Months Ended		3 Months Ended			6 Months Ended		3 Months Ended		3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Mar. 31, 2012 Kansas City, MO Rental Residential Disposition [Member] properties	Jun. 30, 2012 Cary, NC Office Property Acquisition [Member] sqft	Jun. 30, 2012 Pinellas County, FL Office Property Disposition [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2011 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2011 Highwoods Realty Limited Partnership [Member]	Mar. 31, 2012 Highwoods Realty Limited Partnership [Member] Kansas City, MO Rental Residential Disposition [Member] properties	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Cary, NC Office Property Acquisition [Member] sqft	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Pinellas County, FL Office Property Disposition [Member]
Acquisitions [Abstract]
Rentable square feet of acquisition (in sq. ft)						178,300							178,300
Acquisition purchase price						$ 26,000,000							$ 26,000,000
Dispositions [Abstract]
Number of rental residential units					96							96
Gross proceeds from the sale of real estate					11,000,000		9,500,000					11,000,000		9,500,000
Gains on disposition of discontinued operations	$ 1,385,000	$ 0	$ 6,519,000	$ 0	$ 5,100,000		$ 1,400,000	$ 1,385,000	$ 0	$ 6,519,000	$ 0	$ 5,100,000		$ 1,400,000

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Mortgages and Notes Receivable (Tables)

6 Months Ended

Jun. 30, 2012

Financing Receivables [Line Items]

Schedule of Mortgages and Notes Receivable [Table Text Block]

The following table sets forth our mortgages and notes receivable:

	June 30, 2012			December 31, 2011
Seller financing (first mortgages)	$	15,853		$	17,180
Less allowance	—			—
	15,853			17,180
Promissory notes	1,321			1,481
Less allowance	(118		)	(61		)
	1,203			1,420
Mortgages and notes receivable, net	$	17,056		$	18,600

Schedule of Notes Receivable Allowance [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Beginning notes receivable allowance	$	122		$	497		$	61	$	868
Bad debt expense	—			162			—		184
Recoveries/write-offs/other	(4		)	(42		)	57		(435		)
Total notes receivable allowance	$	118		$	617		$	118	$	617

Highwoods Realty Limited Partnership [Member]

Financing Receivables [Line Items]

Schedule of Mortgages and Notes Receivable [Table Text Block]

The following table sets forth our mortgages and notes receivable:

	June 30, 2012			December 31, 2011
Seller financing (first mortgages)	$	15,853		$	17,180
Less allowance	—			—
	15,853			17,180
Promissory notes	1,321			1,481
Less allowance	(118		)	(61		)
	1,203			1,420
Mortgages and notes receivable, net	$	17,056		$	18,600

Schedule of Notes Receivable Allowance [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Beginning notes receivable allowance	$	122		$	497		$	61	$	868
Bad debt expense	—			162			—		184
Recoveries/write-offs/other	(4		)	(42		)	57		(435		)
Total notes receivable allowance	$	118		$	617		$	118	$	617

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Operating activities:
Net income	$ 32,830	$ 26,877
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	79,113	67,274
Amortization of lease incentives and acquisition-related intangible assets and liabilities	180	968
Share-based compensation expense	4,459	3,453
Allowance for losses on accounts and accrued straight-line rents receivable	538	1,029
Amortization of deferred financing costs	1,802	1,642
Amortization of cash flow hedges	1,459	(58)
Losses on debt extinguishment	973	24
Net gains on disposition of property	(6,519)	(200)
Gains on for-sale residential condominiums	(175)	(154)
Equity in earnings of unconsolidated affiliates	(1,346)	(2,820)
Changes in financing obligations	(584)	(245)
Distributions of earnings from unconsolidated affiliates	2,225	2,162
Changes in operating assets and liabilities:
Accounts receivable	7,298	(1,821)
Prepaid expenses and other assets	(3,158)	(644)
Accrued straight-line rents receivable	(9,415)	(6,098)
Accounts payable, accrued expenses and other liabilities	(16,352)	(3,794)
Net cash provided by operating activities	93,328	87,595
Investing activities:
Investment in acquired real estate and related intangible assets, net of cash acquired	0	(7,761)
Investment in development in process	(1,531)	(2,598)
Investment in tenant improvements and deferred leasing costs	(43,851)	(28,456)
Investment in building improvements	(19,758)	(5,632)
Net proceeds from disposition of real estate assets	19,898	2,063
Net proceeds from disposition of for-sale residential condominiums	2,492	2,401
Distributions of capital from unconsolidated affiliates	901	632
Repayments of mortgages and notes receivable	1,544	235
Investments in and advances to unconsolidated affiliates	(2,750)	(39,402)
Changes in restricted cash and other investing activities	4,031	(395)
Net cash used in investing activities	(39,024)	(78,913)
Financing activities:
Dividends on Common Stock	(62,787)	(61,069)
Redemptions/repurchases of Preferred Stock	0	(52,505)
Dividends on Preferred Stock	(1,254)	(3,299)
Distributions to noncontrolling interests in the Operating Partnership	(3,158)	(3,215)
Distributions to noncontrolling interests in consolidated affiliates	(460)	(319)
Proceeds from the issuance of Common Stock	95,289	16,984
Costs paid for the issuance of Common Stock	(1,316)	0
Repurchase of shares related to tax withholdings	(2,137)	0
Borrowings on revolving credit facility	106,300	124,700
Repayments of revolving credit facility	(392,800)	(79,300)
Borrowings on mortgages and notes payable	225,000	200,000
Repayments of mortgages and notes payable	(19,359)	(153,522)
Payments on financing obligations	(38)	0
Additions to deferred financing costs and other financing activities	(2,245)	(2,104)
Net cash used in financing activities	(58,965)	(13,649)
Net decrease in cash and cash equivalents	(4,661)	(4,967)
Cash and cash equivalents at beginning of the period	11,188	14,206
Cash and cash equivalents at end of the period	6,527	9,239
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	48,063	44,948
Supplemental disclosure of non-cash investing and financing activities:
Unrealized losses on cash flow hedges	(7,087)	0
Conversion of Common Units to Common Stock	631	635
Changes in accrued capital expenditures	(2,448)	1,525
Write-off of fully depreciated real estate assets	28,629	23,352
Write-off of fully amortized deferred financing and leasing costs	8,765	8,247
Unrealized gains on marketable securities of non-qualified deferred compensation plan	216	210
Adjustment of noncontrolling interests in the Operating Partnership to fair value	16,501	6,957
Unrealized gains/(losses) on tax increment financing bond	583	(471)
Reduction of advances to unconsolidated affiliates related to acquisition activities	26,000	0
Highwoods Realty Limited Partnership [Member]
Operating activities:
Net income	32,835	26,889
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	79,113	67,274
Amortization of lease incentives and acquisition-related intangible assets and liabilities	180	968
Share-based compensation expense	4,459	3,453
Allowance for losses on accounts and accrued straight-line rents receivable	538	1,029
Amortization of deferred financing costs	1,802	1,642
Amortization of cash flow hedges	1,459	(58)
Losses on debt extinguishment	973	24
Net gains on disposition of property	(6,519)	(200)
Gains on for-sale residential condominiums	(175)	(154)
Equity in earnings of unconsolidated affiliates	(1,351)	(2,832)
Changes in financing obligations	(584)	(245)
Distributions of earnings from unconsolidated affiliates	2,211	2,150
Changes in operating assets and liabilities:
Accounts receivable	7,298	(1,821)
Prepaid expenses and other assets	(3,077)	(544)
Accrued straight-line rents receivable	(9,415)	(6,098)
Accounts payable, accrued expenses and other liabilities	(16,413)	(3,794)
Net cash provided by operating activities	93,334	87,683
Investing activities:
Investment in acquired real estate and related intangible assets, net of cash acquired	0	(7,761)
Investment in development in process	(1,531)	(2,598)
Investment in tenant improvements and deferred leasing costs	(43,851)	(28,456)
Investment in building improvements	(19,758)	(5,632)
Net proceeds from disposition of real estate assets	19,898	2,063
Net proceeds from disposition of for-sale residential condominiums	2,492	2,401
Distributions of capital from unconsolidated affiliates	901	632
Repayments of mortgages and notes receivable	1,544	235
Investments in and advances to unconsolidated affiliates	(2,750)	(39,402)
Changes in restricted cash and other investing activities	4,031	(395)
Net cash used in investing activities	(39,024)	(78,913)
Financing activities:
Distributions on Common Units	(65,597)	(63,936)
Redemptions/repurchases of Preferred Units	0	(52,505)
Distributions on Preferred Units	(1,254)	(3,299)
Distributions to noncontrolling interests in consolidated affiliates	(460)	(319)
Proceeds from the issuance of Common Units	95,289	16,984
Costs paid for the issuance of Common Units	(1,316)	0
Repurchase of units related to tax withholdings	(2,137)	0
Borrowings on revolving credit facility	106,300	124,700
Repayments of revolving credit facility	(392,800)	(79,300)
Borrowings on mortgages and notes payable	225,000	200,000
Repayments of mortgages and notes payable	(19,359)	(153,522)
Payments on financing obligations	(38)	0
Additions to deferred financing costs and other financing activities	(2,458)	(2,684)
Net cash used in financing activities	(58,830)	(13,881)
Net decrease in cash and cash equivalents	(4,520)	(5,111)
Cash and cash equivalents at beginning of the period	11,151	14,198
Cash and cash equivalents at end of the period	6,631	9,087
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	48,063	44,948
Supplemental disclosure of non-cash investing and financing activities:
Unrealized losses on cash flow hedges	(7,087)	0
Changes in accrued capital expenditures	(2,448)	1,525
Write-off of fully depreciated real estate assets	28,629	23,352
Write-off of fully amortized deferred financing and leasing costs	8,765	8,247
Unrealized gains on marketable securities of non-qualified deferred compensation plan	216	210
Adjustment of Redeemable Common Units to fair value	14,225	4,237
Unrealized gains/(losses) on tax increment financing bond	583	(471)
Reduction of advances to unconsolidated affiliates related to acquisition activities	$ 26,000	$ 0

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Assets: [Abstract]
Accounts receivable allowance	$ 3,262	$ 3,548
Mortgages and notes receivable allowance	118	61
Accrued straight-line rents receivable allowance	866	1,294
Deferred financing and leasing costs, accumulated amortization	70,572	62,319
Equity: [Abstract]
Series A Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series A Preferred Stock, authorized shares (in shares)	50,000,000	50,000,000
Series A Preferred Stock, liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Series A Preferred Stock, shares issued (in shares)	29,077	29,077
Series A Preferred Stock, shares outstanding (in shares)	29,077	29,077
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, authorized shares (in shares)	200,000,000	200,000,000
Common Stock, shares issued (in shares)	75,619,288	72,647,697
Common Stock, shares outstanding (in shares)	75,619,288	72,647,697
Highwoods Realty Limited Partnership [Member]
Assets: [Abstract]
Accounts receivable allowance	3,262	3,548
Mortgages and notes receivable allowance	118	61
Accrued straight-line rents receivable allowance	866	1,294
Deferred financing and leasing costs, accumulated amortization	$ 70,572	$ 62,319
Equity: [Abstract]
Common Stock, par value (in dollars per share)	$ 0.01
Redeemable Operating Partnership Units: [Abstract]
Redeemable Common Units outstanding (in shares)	3,711,152	3,729,518
Series A Preferred Units, liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Series A Preferred Units, issued (in shares)	29,077	29,077
Series A Preferred Units, outstanding (in shares)	29,077	29,077
Common Units: [Abstract]
General partners' capital account, units outstanding (in shares)	789,216	759,684
Limited partners' capital account, units outstanding (in shares)	74,421,263	71,479,204

XML

Share-Based Payments

6 Months Ended

Jun. 30, 2012

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-Based Payments

Share-based Payments

During the six months endedJune 30, 2012, we granted 190,886 stock options with an exercise price equal to the closing market price of a share of our Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $5.47. During the six months endedJune 30, 2012, we also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.4 million during the three months endedJune 30, 2012 and 2011, respectively, and $4.5 million and $3.5 million during the six months endedJune 30, 2012 and 2011, respectively. At June 30, 2012, there was $7.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.6 years.

Highwoods Realty Limited Partnership [Member]

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Share-Based Payments

Share-based Payments

During the six months endedJune 30, 2012, the Company granted 190,886 stock options with an exercise price equal to the closing market price of a share of its Common Stock on the date of grant. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $5.47. During the six months endedJune 30, 2012, the Company also granted 90,983 shares of time-based restricted stock and 67,902 shares of total return-based restricted stock with weighted average grant date fair values per share of $32.27 and $38.71, respectively. We recorded stock-based compensation expense of $2.0 million and $1.4 million during the three months endedJune 30, 2012 and 2011, respectively, and $4.5 million and $3.5 million during the six months endedJune 30, 2012 and 2011, respectively. At June 30, 2012, there was $7.6 million of total unrecognized stock-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.6 years.

XML

Document and Entity Information Document	6 Months Ended
	Jun. 30, 2012	Jul. 19, 2012
Entity Information [Line Items]
Entity Registrant Name	HIGHWOODS PROPERTIES INC.
Entity Central Index Key	0000921082
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		76,070,588
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Highwoods Realty Limited Partnership [Member]
Entity Information [Line Items]
Entity Registrant Name	HIGHWOODS REALTY LIMITED PARTNERSHIP
Entity Central Index Key	0000941713

XML

Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2012

Accumulated Other Comprehensive Loss [Line Items]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

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

	Six Months Ended June 30,
	2012			2011
Tax increment financing bond:
Beginning balance	$	(2,309	)	$	(2,543	)
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Ending balance	(1,726		)	(3,014		)
Cash flow hedges:
Beginning balance	(3,425		)	(1,105		)
Unrealized losses on cash flow hedges	(7,087		)	—
Amortization of cash flow hedges	1,459			(58		)
Ending balance	(9,053		)	(1,163		)
Total accumulated other comprehensive loss	$	(10,779	)	$	(4,177	)

Highwoods Realty Limited Partnership [Member]

Accumulated Other Comprehensive Loss [Line Items]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

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

	Six Months Ended June 30,
	2012			2011
Tax increment financing bond:
Beginning balance	$	(2,309	)	$	(2,543	)
Unrealized gains/(losses) on tax increment financing bond	583			(471		)
Ending balance	(1,726		)	(3,014		)
Cash flow hedges:
Beginning balance	(3,425		)	(1,105		)
Unrealized losses on cash flow hedges	(7,087		)	—
Amortization of cash flow hedges	1,459			(58		)
Ending balance	(9,053		)	(1,163		)
Total accumulated other comprehensive loss	$	(10,779	)	$	(4,177	)

XML

Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Rental and other revenues	$ 130,735		$ 114,651		$ 258,768		$ 226,981
Operating expenses:
Rental property and other expenses	47,089		39,931		92,288		79,838
Depreciation and amortization	40,276		32,684		78,105		65,621
General and administrative	8,900		7,978		18,573		15,771
Total operating expenses	96,265		80,593		188,966		161,230
Interest expense:
Contractual	23,643		22,940		47,591		45,371
Amortization of deferred financing costs	900		821		1,802		1,642
Financing obligations	(48)		146		(96)		437
Total interest expense	24,495		23,907		49,297		47,450
Other income:
Interest and other income	1,737		1,899		3,967		3,772
Losses on debt extinguishment	(973)		(24)		(973)		(24)
Total other income	764		1,875		2,994		3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	10,739		12,026		23,499		22,049
Gains on disposition of property	0		200		0		200
Gains on for-sale residential condominiums	110		116		175		154
Equity in earnings of unconsolidated affiliates	1,508		1,353		1,346		2,820
Income from continuing operations	12,357		13,695		25,020		25,223
Discontinued operations:
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		0		6,519		0
Total discontinued operations	2,141		739		7,810		1,654
Net income	14,498		14,434		32,830		26,877
Net (income) attributable to noncontrolling interests in the Operating Partnership	(686)		(623)		(1,513)		(1,130)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(223)		(182)		(407)		(305)
Dividends on Preferred Stock	(627)		(1,622)		(1,254)		(3,299)
Excess of Preferred Stock redemption/repurchase cost over carrying value	0		(1,895)		0		(1,895)
Net income available for common stockholders	12,962		10,112		29,656		20,248
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.15		$ 0.13		$ 0.30		$ 0.26
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.02		$ 0.01		$ 0.10		$ 0.02
Net income available for common stockholders (in dollars per share)	$ 0.17		$ 0.14		$ 0.40		$ 0.28
Weighted average Common Shares outstanding - basic (in shares)	74,662	[1],[2]	72,211	[1],[2]	73,749	[1],[2]	72,015	[1],[2]
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.15		$ 0.13		$ 0.30		$ 0.26
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.02		$ 0.01		$ 0.10		$ 0.02
Net income available for common stockholders (in dollars per share)	$ 0.17		$ 0.14		$ 0.40		$ 0.28
Weighted average Common Shares outstanding - diluted (in shares)	78,521	[1]	76,197	[1]	77,601	[1]	75,987	[1]
Dividends declared per Common Share (in dollars per share)	$ 0.425		$ 0.425		$ 0.850		$ 0.850
Net income available for common stockholders:
Income from continuing operations available for common stockholders	10,923		9,410		22,226		18,677
Income from discontinued operations available for common stockholders	2,039		702		7,430		1,571
Net income available for common stockholders	12,962		10,112		29,656		20,248
Highwoods Realty Limited Partnership [Member]
Rental and other revenues	130,735		114,651		258,768		226,981
Operating expenses:
Rental property and other expenses	47,030		39,868		92,167		79,924
Depreciation and amortization	40,276		32,684		78,105		65,621
General and administrative	8,959		8,041		18,694		15,685
Total operating expenses	96,265		80,593		188,966		161,230
Interest expense:
Contractual	23,643		22,940		47,591		45,371
Amortization of deferred financing costs	900		821		1,802		1,642
Financing obligations	(48)		146		(96)		437
Total interest expense	24,495		23,907		49,297		47,450
Other income:
Interest and other income	1,737		1,899		3,967		3,772
Losses on debt extinguishment	(973)		(24)		(973)		(24)
Total other income	764		1,875		2,994		3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	10,739		12,026		23,499		22,049
Gains on disposition of property	0		200		0		200
Gains on for-sale residential condominiums	110		116		175		154
Equity in earnings of unconsolidated affiliates	1,511		1,357		1,351		2,832
Income from continuing operations	12,360		13,699		25,025		25,235
Discontinued operations:
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		0		6,519		0
Total discontinued operations	2,141		739		7,810		1,654
Net income	14,501		14,438		32,835		26,889
Net (income) attributable to noncontrolling interests in consolidated affiliates	(223)		(182)		(407)		(305)
Distributions on Preferred Units	(627)		(1,622)		(1,254)		(3,299)
Excess of Preferred Unit redemption/repurchase cost over carrying value	0		(1,895)		0		(1,895)
Net income available for common unitholders	13,651		10,739		31,174		21,390
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders (in dollars per share)	$ 0.15		$ 0.13		$ 0.30		$ 0.26
Income from discontinued operations available for common unitholders (in dollars per share)	$ 0.03		$ 0.01		$ 0.10		$ 0.02
Net income available for common unitholders (in dollars per share)	$ 0.18		$ 0.14		$ 0.40		$ 0.28
Weighted average Common Units outstanding - basic (in shares)	77,971	[1],[2]	75,586	[1],[2]	77,063	[1],[2]	75,393	[1],[2]
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders (in dollars per share)	0.15		0.13		0.30		0.26
Income from discontinued operations available for common unitholders (in dollars per share)	0.02		0.01		0.10		0.02
Net income available for common unitholders (in dollars per share)	0.17		0.14		0.40		0.28
Weighted average Common Units outstanding - diluted (in shares)	78,112	[1]	75,788	[1]	77,192	[1]	75,578	[1]
Distributions declared per Common Unit (in dollars per unit)	$ 0.425		$ 0.425		$ 0.850		$ 0.850
Net income available for common unitholders:
Income from continuing operations available for common unitholders	11,510		10,000		23,364		19,736
Income from discontinued operations available for common unitholders	2,141		739		7,810		1,654
Net income available for common unitholders	$ 13,651		$ 10,739		$ 31,174		$ 21,390

[1] There were 0.5 million and 0.3 million options outstanding during the three months ended June 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months ended June 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

[2] Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

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Intangible Assets and Below Market Lease Liabilities

6 Months Ended

Jun. 30, 2012

Finite-Lived Intangible Assets [Line Items]

Intangible Assets and Below Market Lease Liabilities

Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	June 30, 2012			December 31, 2011
Assets:
Deferred financing costs	$	20,112		$	18,044
Less accumulated amortization	(7,488		)	(5,797		)
	12,624			12,247
Deferred leasing costs (including lease incentives and acquisition-related intangible assets)	177,140			172,049
Less accumulated amortization	(63,084		)	(56,522		)
	114,056			115,527
Deferred financing and leasing costs, net	$	126,680		$	127,774
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	16,346		$	16,441
Less accumulated amortization	(1,966		)	(971		)
	$	14,380		$	15,470

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Amortization of deferred financing costs	$	900		$	821		$	1,802		$	1,642
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	7,266		$	4,401		$	13,706		$	8,757
Amortization of lease incentives (in rental and other revenues)	$	340		$	303		$	683		$	641
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	324		$	191		$	594		$	377
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(553	)	$	(25	)	$	(1,097	)	$	(50	)

5.    Intangible Assets and Below Market Lease Liabilities - Continued

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

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012	$	2,234	$	14,242	$	772	$	579	$	(1,229	)
2013	3,262		21,834		1,167		765		(2,081		)
2014	2,987		17,877		1,013		504		(2,005		)
2015	2,264		13,879		779		328		(1,768		)
2016	957		10,880		608		280		(1,498		)
Thereafter	920		25,453		2,379		717		(5,799		)
	$	12,624	$	104,165	$	6,718	$	3,173	$	(14,380	)

The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 3.8 years, 6.2 years, 7.8 years, 5.7 years and 8.9 years, respectively, as of June 30, 2012.

In connection with the acquisition of an office property in Cary, NC in the second quarter of 2012, we recorded $2.7 million of in-place lease intangible assets with a weighted average amortization period of 6.3 years at the date of the acquisition. The contractual rents of the in-place lease acquired were determined to be at market.

Highwoods Realty Limited Partnership [Member]

Finite-Lived Intangible Assets [Line Items]

Intangible Assets and Below Market Lease Liabilities

Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	June 30, 2012			December 31, 2011
Assets:
Deferred financing costs	$	20,112		$	18,044
Less accumulated amortization	(7,488		)	(5,797		)
	12,624			12,247
Deferred leasing costs (including lease incentives and acquisition-related intangible assets)	177,140			172,049
Less accumulated amortization	(63,084		)	(56,522		)
	114,056			115,527
Deferred financing and leasing costs, net	$	126,680		$	127,774
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	16,346		$	16,441
Less accumulated amortization	(1,966		)	(971		)
	$	14,380		$	15,470

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Amortization of deferred financing costs	$	900		$	821		$	1,802		$	1,642
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	7,266		$	4,401		$	13,706		$	8,757
Amortization of lease incentives (in rental and other revenues)	$	340		$	303		$	683		$	641
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	324		$	191		$	594		$	377
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(553	)	$	(25	)	$	(1,097	)	$	(50	)

5.    Intangible Assets and Below Market Lease Liabilities - Continued

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

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012	$	2,234	$	14,242	$	772	$	579	$	(1,229	)
2013	3,262		21,834		1,167		765		(2,081		)
2014	2,987		17,877		1,013		504		(2,005		)
2015	2,264		13,879		779		328		(1,768		)
2016	957		10,880		608		280		(1,498		)
Thereafter	920		25,453		2,379		717		(5,799		)
	$	12,624	$	104,165	$	6,718	$	3,173	$	(14,380	)

The weighted average remaining amortization periods for deferred financing costs, deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization), lease incentives (in rental and other revenues), acquisition-related intangible assets (in rental and other revenues) and acquisition-related below market lease liabilities (in rental and other revenues) were 3.8 years, 6.2 years, 7.8 years, 5.7 years and 8.9 years, respectively, as of June 30, 2012.

In connection with the acquisition of an office property in Cary, NC in the second quarter of 2012, we recorded $2.7 million of in-place lease intangible assets with a weighted average amortization period of 6.3 years at the date of the acquisition. The contractual rents of the in-place lease acquired were determined to be at market.

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Investments In and Advances To Affiliates

6 Months Ended

Jun. 30, 2012

Schedule of Equity Method Investments [Line Items]

Investments In and Advances To Affiliates

Investments in and Advances to Affiliates

Unconsolidated Affiliates

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Income Statements:
Rental and other revenues	$	26,049	$	24,779	$	50,869		$	49,996
Expenses:
Rental property and other expenses	12,666		10,774		24,082			22,771
Depreciation and amortization	5,919		6,295		12,484			12,911
Impairment of real estate assets	—		—		7,180			—
Interest expense	5,267		5,858		11,097			11,865
Total expenses	23,852		22,927		54,843			47,547
Income/(loss) before disposition of properties	2,197		1,852		(3,974		)	2,449
Gains on disposition of properties	6,275		—		6,275			—
Net income	$	8,472	$	1,852	$	2,301		$	2,449
Our share of:
Depreciation and amortization of real estate assets	$	1,675	$	2,033	$	3,773		$	4,126
Impairment of real estate assets	$	—	$	—	$	1,002		$	—
Interest expense	$	1,843	$	2,033	$	3,823		$	4,194
Net income	$	1,133	$	749	$	338		$	1,670
Our share of net income	$	1,133	$	749	$	338		$	1,670
Management and other fees adjustments	375		604		1,008			1,150
Equity in earnings of unconsolidated affiliates	$	1,508	$	1,353	$	1,346		$	2,820

4.    Investments in and Advances to Affiliates - Continued

In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months endedJune 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months endedJune 30, 2012 and 2011, respectively.

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

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

Highwoods Realty Limited Partnership [Member]

Schedule of Equity Method Investments [Line Items]

Investments In and Advances To Affiliates

Investments in and Advances to Affiliates

Unconsolidated Affiliates

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012			2011
Income Statements:
Rental and other revenues	$	25,057	$	23,756	$	48,854		$	47,958
Expenses:
Rental property and other expenses	12,076		10,155		22,877			21,526
Depreciation and amortization	5,607		6,053		11,861			12,299
Impairment of real estate assets	—		—		7,180			—
Interest expense	5,103		5,683		10,766			11,508
Total expenses	22,786		21,891		52,684			45,333
Income/(loss) before disposition of properties	2,271		1,865		(3,830		)	2,625
Gains on disposition of properties	6,275		—		6,275			—
Net income	$	8,546	$	1,865	$	2,445		$	2,625
Our share of:
Depreciation and amortization of real estate assets	$	1,636	$	1,995	$	3,695		$	4,050
Impairment of real estate assets	$	—	$	—	$	1,002		$	—
Interest expense	$	1,823	$	2,012	$	3,782		$	4,149
Net income	$	1,142	$	759	$	356		$	1,694
Our share of net income	$	1,142	$	759	$	356		$	1,694
Management and other fees adjustments	369		598		995			1,138
Equity in earnings of unconsolidated affiliates	$	1,511	$	1,357	$	1,351		$	2,832

4.    Investments in and Advances to Affiliates - Continued

In 2011, we provided a $38.3 million interest-only secured loan to our DLF I joint venture that originally was scheduled to mature in March 2012. The loan bears interest at LIBOR plus 500 basis points. The maturity date of the loan has been extended to September 30, 2012. In the second quarter of 2012, we acquired an office property from the joint venture by reducing the balance of the advance due to us from the joint venture. We deferred our share of the gain recorded by the joint venture related to this transaction. We recorded interest income from this loan in interest and other income of $0.2 million and $0.3 million during the three months endedJune 30, 2012 and 2011, respectively, and $0.7 million and $0.3 million during the six months endedJune 30, 2012 and 2011, respectively.

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

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

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Description of Business and Significant Accounting Policies Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Description of Business and Significant Accounting Policies [Line Items]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

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

Highwoods Realty Limited Partnership [Member]

Description of Business and Significant Accounting Policies [Line Items]

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

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

XML

Discontinued Operations

6 Months Ended

Jun. 30, 2012

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Discontinued Operations

Discontinued Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and other revenues	$	2,044	$	2,907	$	4,383	$	6,169
Operating expenses:
Rental property and other expenses	966		1,390		2,084		2,862
Depreciation and amortization	322		778		1,008		1,653
Total operating expenses	1,288		2,168		3,092		4,515
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		—		6,519		—
Total discontinued operations	$	2,141	$	739	$	7,810	$	1,654

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

	June 30, 2012			December 31, 2011
Assets:
Land	$	3,849		$	5,749
Buildings and tenant improvements	49,460			65,860
Accumulated depreciation	(18,743		)	(23,917		)
Net real estate assets	34,566			47,692
Accrued straight line rents receivable	1,490			1,726
Deferred leasing costs, net	678			811
Prepaid expenses and other assets	17			106
Real estate and other assets, net, held for sale	$	36,751		$	50,335
Tenant security deposits, deferred rents and accrued costs (1)	$	595		$	238

__________

(1) Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.

Highwoods Realty Limited Partnership [Member]

Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]

Discontinued Operations

Discontinued Operations

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and other revenues	$	2,044	$	2,907	$	4,383	$	6,169
Operating expenses:
Rental property and other expenses	966		1,390		2,084		2,862
Depreciation and amortization	322		778		1,008		1,653
Total operating expenses	1,288		2,168		3,092		4,515
Income from discontinued operations	756		739		1,291		1,654
Net gains on disposition of discontinued operations	1,385		—		6,519		—
Total discontinued operations	$	2,141	$	739	$	7,810	$	1,654

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

	June 30, 2012			December 31, 2011
Assets:
Land	$	3,849		$	5,749
Buildings and tenant improvements	49,460			65,860
Accumulated depreciation	(18,743		)	(23,917		)
Net real estate assets	34,566			47,692
Accrued straight line rents receivable	1,490			1,726
Deferred leasing costs, net	678			811
Prepaid expenses and other assets	17			106
Real estate and other assets, net, held for sale	$	36,751		$	50,335
Tenant security deposits, deferred rents and accrued costs (1)	$	595		$	238

__________

(1) Included in accounts payable, accrued expenses and other liabilities.

As of June 30, 2012, real estate and other assets held for sale, net, included five office properties in Nashville, TN and one office property in Kansas City, MO. As of December 31, 2011, real estate and other assets held for sale, net, included five office properties in Nashville, TN, one office property in Pinellas County, FL and one office property and 96 residential units in Kansas City, MO. All of these properties qualified for discontinued operations.

XML

Noncontrolling Interests

6 Months Ended

Jun. 30, 2012

Noncontrolling Interests [Line Items]

Noncontrolling Interests

Noncontrolling Interests

Noncontrolling Interests in the Operating Partnership

Noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company. Net income attributable to noncontrolling interests in the Operating Partnership is computed by applying the weighted average percentage of Common Units not owned by the Company during the period, as a percent of the total number of outstanding Common Units, to the Operating Partnership’s net income for the period after deducting distributions on Preferred Units.

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

	Six Months Ended June 30,
	2012			2011
Beginning noncontrolling interests in the Operating Partnership	$	110,655		$	120,838
Adjustments of noncontrolling interests in the Operating Partnership to fair value	16,501			6,957
Conversion of Common Units to Common Stock	(631		)	(635		)
Net income attributable to noncontrolling interests in the Operating Partnership	1,513			1,130
Distributions to noncontrolling interests in the Operating Partnership	(3,158		)	(3,215		)
Total noncontrolling interests in the Operating Partnership	$	124,880		$	125,075

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Net income available for common stockholders	$	12,962	$	10,112	$	29,656	$	20,248
Increase in additional paid in capital from conversion of Common Units to Common Stock	568		449		631		635
Change from net income available for common stockholders and transfers from noncontrolling interests	$	13,530	$	10,561	$	30,287	$	20,883

Noncontrolling Interests in Consolidated Affiliates

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

Highwoods Realty Limited Partnership [Member]

Noncontrolling Interests [Line Items]

Noncontrolling Interests

Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates

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

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Mortgages and Notes Payable

6 Months Ended

Jun. 30, 2012

Debt Instrument [Line Items]

Mortgages and Notes Payable

Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	June 30, 2012		December 31, 2011
Secured indebtedness	$	743,492	$	750,049
Unsecured indebtedness	1,079,636		1,153,164
Total mortgages and notes payable	$	1,823,128	$	1,903,213

At June 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at June 30, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

6.    Mortgages and Notes Payable - Continued

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

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

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

Highwoods Realty Limited Partnership [Member]

Debt Instrument [Line Items]

Mortgages and Notes Payable

Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	June 30, 2012		December 31, 2011
Secured indebtedness	$	743,492	$	750,049
Unsecured indebtedness	1,079,636		1,153,164
Total mortgages and notes payable	$	1,823,128	$	1,903,213

At June 30, 2012, our secured mortgage loans were secured by real estate assets with an aggregate undepreciated book value of $1,237.7 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature on July 27, 2015 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for an additional year. The interest rate at our current credit ratings is LIBOR plus 150 basis points and the annual facility fee is 35 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. Continuing ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $75.5 million and $28.1 million outstanding under our revolving credit facility at June 30, 2012 and July 19, 2012, respectively. At both June 30, 2012 and July 19, 2012, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at June 30, 2012 and July 19, 2012 was $399.4 million and $446.8 million, respectively.

6.    Mortgages and Notes Payable - Continued

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

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

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

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2012

Derivative [Line Items]

Derivative Financial Instruments

Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the six months endedJune 30, 2012. As of June 30, 2012, we have not posted any collateral related to our interest rate swap liability.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from July 1, 2012 through June 30, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.

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

	June 30, 2012		December 31, 2011
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	7,763	$	2,202

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(7,481	)	$	—		$	(7,087	)	$	—
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	782		$	(29	)	$	1,459		$	(58	)

Highwoods Realty Limited Partnership [Member]

Derivative [Line Items]

Derivative Financial Instruments

Derivative Financial Instruments

We have six floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. The swap agreements contain a provision whereby if we default on any of our indebtedness, if greater than $10.0 million and that results in repayment of such indebtedness being, or becoming capable of being accelerated by the lender, then we could also be declared in default on our derivative obligations. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the six months endedJune 30, 2012. As of June 30, 2012, we have not posted any collateral related to our interest rate swap liability.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from July 1, 2012 through June 30, 2013, we estimate that $3.1 million will be reclassified as an increase to interest expense.

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

	June 30, 2012		December 31, 2011
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	7,763	$	2,202

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized losses recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(7,481	)	$	—		$	(7,087	)	$	—
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	782		$	(29	)	$	1,459		$	(58	)

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Disclosure About Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2012

Disclosure About Fair Value of Financial Instruments [Line Items]

Disclosure About Fair Value of Financial Instruments

Disclosure About Fair Value of Financial Instruments

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

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

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

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

9. Disclosure About Fair Value of Financial Instruments - Continued

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

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants and (2) interest rate swaps whose fair value is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

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

Our Level 3 assets include our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

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

			Level 1		Level 2		Level 3
	June 30, 2012		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	17,330	$	—	$	17,330	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,099		—		—
Tax increment financing bond (in prepaid expenses and other assets)	15,371		—		—		15,371
Total Assets	$	35,800	$	3,099	$	17,330	$	15,371
Noncontrolling Interests in the Operating Partnership	$	124,880	$	124,880	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,918,241	$	—	$	1,918,241	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		—		7,763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,099		—		—
Financing obligations, at fair value (1)	21,141		—		—		21,141
Total Liabilities	$	1,950,244	$	3,099	$	1,926,004	$	21,141

9. Disclosure About Fair Value of Financial Instruments - Continued

			Level 1		Level 2		Level 3
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	18,990	$	—	$	18,990	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,149		3,149		—		—
Tax increment financing bond (in prepaid expenses and other assets)	14,788		—		—		14,788
Impaired real estate assets and for-sale residential condominiums	12,767		—		—		12,767
Total Assets	$	49,694	$	3,149	$	18,990	$	27,555
Noncontrolling Interests in the Operating Partnership	$	110,655	$	110,655	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,992,937	$	—	$	1,992,937	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	2,202		—		2,202		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,149		3,149		—		—
Financing obligations, at fair value (1)	18,866		—		—		18,866
Total Liabilities	$	2,017,154	$	3,149	$	1,995,139	$	18,866

__________

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

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Asset:
Tax Increment Financing Bond:
Beginning balance	$	15,075	$	15,564		$	14,788	$	15,699
Unrealized gains/(losses) (in AOCL)	296		(336		)	583		(471		)
Ending balance	$	15,371	$	15,228		$	15,371	$	15,228

In 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at June 30, 2012 was $1.7 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.6 million lower or $0.6 million higher, respectively, as of June 30, 2012. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three and six months endedJune 30, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

9. Disclosure About Fair Value of Financial Instruments - Continued

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

	Fair Value at June 30, 2012		Valuation Technique	Unobservable Input	Discount Rate
Tax increment financing bond	$	15,371	Income approach	Discount rate	9.85	%

Highwoods Realty Limited Partnership [Member]

Disclosure About Fair Value of Financial Instruments [Line Items]

Disclosure About Fair Value of Financial Instruments

Disclosure About Fair Value of Financial Instruments

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

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

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

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

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

Our Level 2 liabilities include (1) the fair value of our mortgages and notes payable, which was estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants and (2) interest rate swaps whose fair value is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of our interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

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

Our Level 3 assets include our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds and, if any, real estate assets and for-sale residential condominiums recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using broker opinion of value and substantiated by internal cash flow projections.

Our Level 3 liability is the fair value of our financing obligations, which was estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

9. Disclosure About Fair Value of Financial Instruments - Continued

The following tables set forth the assets and liabilities that we measure at fair value by level within the fair value hierarchy. We determine the level based on the lowest level of substantive input used to determine fair value.

			Level 1		Level 2		Level 3
	June 30, 2012		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	17,330	$	—	$	17,330	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,099		3,099		—		—
Tax increment financing bond (in prepaid expenses and other assets)	15,371		—		—		15,371
Total Assets	$	35,800	$	3,099	$	17,330	$	15,371
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,918,241	$	—	$	1,918,241	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	7,763		—		7,763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,099		3,099		—		—
Financing obligations, at fair value (1)	21,141		—		—		21,141
Total Liabilities	$	1,950,244	$	3,099	$	1,926,004	$	21,141

			Level 1		Level 2		Level 3
	December 31, 2011		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Assets:
Mortgages and notes receivable, at fair value (1)	$	18,990	$	—	$	18,990	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,149		3,149		—		—
Tax increment financing bond (in prepaid expenses and other assets)	14,788		—		—		14,788
Impaired real estate assets and for-sale residential condominiums	12,767		—		—		12,767
Total Assets	$	49,694	$	3,149	$	18,990	$	27,555
Liabilities:
Mortgages and notes payable, at fair value (1)	$	1,992,937	$	—	$	1,992,937	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	2,202		—		2,202		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,149		3,149		—		—
Financing obligations, at fair value (1)	18,866		—		—		18,866
Total Liabilities	$	2,017,154	$	3,149	$	1,995,139	$	18,866

__________

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

9. Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth the changes in our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets on a recurring basis:

	Three Months Ended June 30,					Six Months Ended June 30,
	2012		2011			2012		2011
Asset:
Tax Increment Financing Bond:
Beginning balance	$	15,075	$	15,564		$	14,788	$	15,699
Unrealized gains/(losses) (in AOCL)	296		(336		)	583		(471		)
Ending balance	$	15,371	$	15,228		$	15,371	$	15,228

In 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at June 30, 2012 was $1.7 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.6 million lower or $0.6 million higher, respectively, as of June 30, 2012. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three and six months endedJune 30, 2012 and 2011. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

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

	Fair Value at June 30, 2012		Valuation Technique	Unobservable Input	Discount Rate
Tax increment financing bond	$	15,371	Income approach	Discount rate	9.85	%

XML

Segment Information (Tables)

6 Months Ended

Jun. 30, 2012

Segment Reporting Information [Line Items]

Segment Information [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	16,209	$	12,341	$	31,993	$	24,242
Greenville, SC	3,489		3,437		6,993		6,942
Kansas City, MO	3,560		3,441		7,163		6,960
Memphis, TN	10,130		10,077		20,268		20,179
Nashville, TN	14,321		13,572		28,186		26,315
Orlando, FL	2,756		2,619		5,443		4,936
Piedmont Triad, NC	5,072		5,273		10,152		10,637
Pittsburgh, PA	9,113		—		18,199		—
Raleigh, NC	20,400		20,103		40,179		39,421
Richmond, VA	12,095		11,668		23,605		23,046
Tampa, FL	17,579		17,064		34,715		33,436
Total Office Segment	114,724		99,595		226,896		196,114
Industrial:
Atlanta, GA	3,849		4,028		7,623		7,962
Piedmont Triad, NC	3,087		2,825		6,251		5,802
Total Industrial Segment	6,936		6,853		13,874		13,764
Retail:
Kansas City, MO	9,075		8,203		17,998		17,103
Total Retail Segment	9,075		8,203		17,998		17,103
Total Rental and Other Revenues	$	130,735	$	114,651	$	258,768	$	226,981

14. Segment Information - Continued

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Operating Income: (1)
Office:
Atlanta, GA	$	10,426		$	7,973		$	20,821		$	15,464
Greenville, SC	2,051			2,067			4,183			4,142
Kansas City, MO	2,186			2,112			4,518			4,256
Memphis, TN	5,841			5,462			11,942			11,222
Nashville, TN	9,835			9,369			19,490			18,001
Orlando, FL	1,431			1,284			2,847			2,450
Piedmont Triad, NC	3,219			3,452			6,452			7,053
Pittsburgh, PA	4,627			—			8,910			—
Raleigh, NC	14,291			14,273			28,146			27,489
Richmond, VA	8,536			8,231			16,419			16,090
Tampa, FL	10,811			10,557			21,650			20,684
Total Office Segment	73,254			64,780			145,378			126,851
Industrial:
Atlanta, GA	2,761			3,001			5,649			5,840
Piedmont Triad, NC	2,308			2,107			4,596			4,331
Total Industrial Segment	5,069			5,108			10,245			10,171
Retail:
Kansas City, MO	5,323			4,832			10,857			10,121
Total Retail Segment	5,323			4,832			10,857			10,121
Total Net Operating Income	83,646			74,720			166,480			147,143
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276		)	(32,684		)	(78,105		)	(65,621		)
General and administrative expense	(8,900		)	(7,978		)	(18,573		)	(15,771		)
Interest expense	(24,495		)	(23,907		)	(49,297		)	(47,450		)
Other income	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049

__________

(1) Net of discontinued operations.

Highwoods Realty Limited Partnership [Member]

Segment Reporting Information [Line Items]

Segment Information [Table Text Block]

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	16,209	$	12,341	$	31,993	$	24,242
Greenville, SC	3,489		3,437		6,993		6,942
Kansas City, MO	3,560		3,441		7,163		6,960
Memphis, TN	10,130		10,077		20,268		20,179
Nashville, TN	14,321		13,572		28,186		26,315
Orlando, FL	2,756		2,619		5,443		4,936
Piedmont Triad, NC	5,072		5,273		10,152		10,637
Pittsburgh, PA	9,113		—		18,199		—
Raleigh, NC	20,400		20,103		40,179		39,421
Richmond, VA	12,095		11,668		23,605		23,046
Tampa, FL	17,579		17,064		34,715		33,436
Total Office Segment	114,724		99,595		226,896		196,114
Industrial:
Atlanta, GA	3,849		4,028		7,623		7,962
Piedmont Triad, NC	3,087		2,825		6,251		5,802
Total Industrial Segment	6,936		6,853		13,874		13,764
Retail:
Kansas City, MO	9,075		8,203		17,998		17,103
Total Retail Segment	9,075		8,203		17,998		17,103
Total Rental and Other Revenues	$	130,735	$	114,651	$	258,768	$	226,981

14. Segment Information - Continued

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Operating Income: (1)
Office:
Atlanta, GA	$	10,435		$	7,980		$	20,837		$	15,456
Greenville, SC	2,052			2,069			4,186			4,140
Kansas City, MO	2,188			2,114			4,521			4,254
Memphis, TN	5,845			5,467			11,951			11,215
Nashville, TN	9,842			9,376			19,504			17,989
Orlando, FL	1,432			1,285			2,849			2,449
Piedmont Triad, NC	3,221			3,455			6,457			7,049
Pittsburgh, PA	4,630			—			8,911			—
Raleigh, NC	14,301			14,285			28,169			27,473
Richmond, VA	8,541			8,238			16,431			16,080
Tampa, FL	10,818			10,565			21,668			20,672
Total Office Segment	73,305			64,834			145,484			126,777
Industrial:
Atlanta, GA	2,763			3,004			5,653			5,837
Piedmont Triad, NC	2,310			2,109			4,599			4,328
Total Industrial Segment	5,073			5,113			10,252			10,165
Retail:
Kansas City, MO	5,327			4,836			10,865			10,115
Total Retail Segment	5,327			4,836			10,865			10,115
Total Net Operating Income	83,705			74,783			166,601			147,057
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276		)	(32,684		)	(78,105		)	(65,621		)
General and administrative expense	(8,959		)	(8,041		)	(18,694		)	(15,685		)
Interest expense	(24,495		)	(23,907		)	(49,297		)	(47,450		)
Other income	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049

__________

(1) Net of discontinued operations.

XML

Subsequent Events (Details) (USD $)	3 Months Ended		6 Months Ended		0 Months Ended			1 Months Ended	3 Months Ended		6 Months Ended		0 Months Ended			1 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jul. 05, 2012 ATM Equity Offering Sales [Member]	Jul. 13, 2012 Greensboro, NC Medical Office Properties Acquisition [Member] property	Jul. 13, 2012 Nashville, TN Office Properties Disposition [Member] property	Jul. 25, 2012 General Services Administration Buildings Disposition [Member] property	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2011 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2011 Highwoods Realty Limited Partnership [Member]	Jul. 05, 2012 Highwoods Realty Limited Partnership [Member] ATM Equity Offering Sales [Member]	Jul. 13, 2012 Highwoods Realty Limited Partnership [Member] Greensboro, NC Medical Office Properties Acquisition [Member] property	Jul. 13, 2012 Highwoods Realty Limited Partnership [Member] Nashville, TN Office Properties Disposition [Member] property	Jul. 25, 2012 Highwoods Realty Limited Partnership [Member] General Services Administration Buildings Disposition [Member] property
Subsequent Event [Line Items]
Number of Common Stock sold at the market during period (in shares)	1,836,976		2,622,476		451,300				1,836,976		2,622,476		451,300
Average price of Common Stock sold at the market during period (in dollars per share)	$ 33.72		$ 33.45		$ 33.52				$ 33.72		$ 33.45		$ 33.52
Net proceeds of Common Stock sold at the market during period	$ 61,000,000		$ 86,400,000		$ 14,900,000				$ 61,000,000		$ 86,400,000		$ 14,900,000
Number of office properties acquired						2								2
Acquisition purchase price						16,400,000								16,400,000
Common Units Of Partnership Issued						77,000								77,000
Acquisition-related costs						100,000								100,000
Number of office properties sold							5	3							5	3
Gross proceeds from the sale of real estate							41,000,000	86,500,000							41,000,000	86,500,000
Gains on disposition of discontinued operations	$ 1,385,000	$ 0	$ 6,519,000	$ 0			$ 6,800,000	$ 14,000,000	$ 1,385,000	$ 0	$ 6,519,000	$ 0			$ 6,800,000	$ 14,000,000

XML

Segment Information

6 Months Ended

Jun. 30, 2012

Segment Reporting Information [Line Items]

Segment Information

Segment Information

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	16,209	$	12,341	$	31,993	$	24,242
Greenville, SC	3,489		3,437		6,993		6,942
Kansas City, MO	3,560		3,441		7,163		6,960
Memphis, TN	10,130		10,077		20,268		20,179
Nashville, TN	14,321		13,572		28,186		26,315
Orlando, FL	2,756		2,619		5,443		4,936
Piedmont Triad, NC	5,072		5,273		10,152		10,637
Pittsburgh, PA	9,113		—		18,199		—
Raleigh, NC	20,400		20,103		40,179		39,421
Richmond, VA	12,095		11,668		23,605		23,046
Tampa, FL	17,579		17,064		34,715		33,436
Total Office Segment	114,724		99,595		226,896		196,114
Industrial:
Atlanta, GA	3,849		4,028		7,623		7,962
Piedmont Triad, NC	3,087		2,825		6,251		5,802
Total Industrial Segment	6,936		6,853		13,874		13,764
Retail:
Kansas City, MO	9,075		8,203		17,998		17,103
Total Retail Segment	9,075		8,203		17,998		17,103
Total Rental and Other Revenues	$	130,735	$	114,651	$	258,768	$	226,981

14. Segment Information - Continued

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Operating Income: (1)
Office:
Atlanta, GA	$	10,426		$	7,973		$	20,821		$	15,464
Greenville, SC	2,051			2,067			4,183			4,142
Kansas City, MO	2,186			2,112			4,518			4,256
Memphis, TN	5,841			5,462			11,942			11,222
Nashville, TN	9,835			9,369			19,490			18,001
Orlando, FL	1,431			1,284			2,847			2,450
Piedmont Triad, NC	3,219			3,452			6,452			7,053
Pittsburgh, PA	4,627			—			8,910			—
Raleigh, NC	14,291			14,273			28,146			27,489
Richmond, VA	8,536			8,231			16,419			16,090
Tampa, FL	10,811			10,557			21,650			20,684
Total Office Segment	73,254			64,780			145,378			126,851
Industrial:
Atlanta, GA	2,761			3,001			5,649			5,840
Piedmont Triad, NC	2,308			2,107			4,596			4,331
Total Industrial Segment	5,069			5,108			10,245			10,171
Retail:
Kansas City, MO	5,323			4,832			10,857			10,121
Total Retail Segment	5,323			4,832			10,857			10,121
Total Net Operating Income	83,646			74,720			166,480			147,143
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276		)	(32,684		)	(78,105		)	(65,621		)
General and administrative expense	(8,900		)	(7,978		)	(18,573		)	(15,771		)
Interest expense	(24,495		)	(23,907		)	(49,297		)	(47,450		)
Other income	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049

__________

(1) Net of discontinued operations.

Highwoods Realty Limited Partnership [Member]

Segment Reporting Information [Line Items]

Segment Information

Segment Information

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2012		2011		2012		2011
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	16,209	$	12,341	$	31,993	$	24,242
Greenville, SC	3,489		3,437		6,993		6,942
Kansas City, MO	3,560		3,441		7,163		6,960
Memphis, TN	10,130		10,077		20,268		20,179
Nashville, TN	14,321		13,572		28,186		26,315
Orlando, FL	2,756		2,619		5,443		4,936
Piedmont Triad, NC	5,072		5,273		10,152		10,637
Pittsburgh, PA	9,113		—		18,199		—
Raleigh, NC	20,400		20,103		40,179		39,421
Richmond, VA	12,095		11,668		23,605		23,046
Tampa, FL	17,579		17,064		34,715		33,436
Total Office Segment	114,724		99,595		226,896		196,114
Industrial:
Atlanta, GA	3,849		4,028		7,623		7,962
Piedmont Triad, NC	3,087		2,825		6,251		5,802
Total Industrial Segment	6,936		6,853		13,874		13,764
Retail:
Kansas City, MO	9,075		8,203		17,998		17,103
Total Retail Segment	9,075		8,203		17,998		17,103
Total Rental and Other Revenues	$	130,735	$	114,651	$	258,768	$	226,981

14. Segment Information - Continued

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Net Operating Income: (1)
Office:
Atlanta, GA	$	10,435		$	7,980		$	20,837		$	15,456
Greenville, SC	2,052			2,069			4,186			4,140
Kansas City, MO	2,188			2,114			4,521			4,254
Memphis, TN	5,845			5,467			11,951			11,215
Nashville, TN	9,842			9,376			19,504			17,989
Orlando, FL	1,432			1,285			2,849			2,449
Piedmont Triad, NC	3,221			3,455			6,457			7,049
Pittsburgh, PA	4,630			—			8,911			—
Raleigh, NC	14,301			14,285			28,169			27,473
Richmond, VA	8,541			8,238			16,431			16,080
Tampa, FL	10,818			10,565			21,668			20,672
Total Office Segment	73,305			64,834			145,484			126,777
Industrial:
Atlanta, GA	2,763			3,004			5,653			5,837
Piedmont Triad, NC	2,310			2,109			4,599			4,328
Total Industrial Segment	5,073			5,113			10,252			10,165
Retail:
Kansas City, MO	5,327			4,836			10,865			10,115
Total Retail Segment	5,327			4,836			10,865			10,115
Total Net Operating Income	83,705			74,783			166,601			147,057
Reconciliation to income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(40,276		)	(32,684		)	(78,105		)	(65,621		)
General and administrative expense	(8,959		)	(8,041		)	(18,694		)	(15,685		)
Interest expense	(24,495		)	(23,907		)	(49,297		)	(47,450		)
Other income	764			1,875			2,994			3,748
Income from continuing operations before disposition of property and condominiums and equity in earnings of unconsolidated affiliates	$	10,739		$	12,026		$	23,499		$	22,049

__________

(1) Net of discontinued operations.

XML

Intangible Assets and Below Market Lease Liabilities (Tables)

6 Months Ended

Jun. 30, 2012

Finite-Lived Intangible Assets [Line Items]

Total Intangible Assets and Below Market Lease Liabilities [Table Text Block]

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	June 30, 2012			December 31, 2011
Assets:
Deferred financing costs	$	20,112		$	18,044
Less accumulated amortization	(7,488		)	(5,797		)
	12,624			12,247
Deferred leasing costs (including lease incentives and acquisition-related intangible assets)	177,140			172,049
Less accumulated amortization	(63,084		)	(56,522		)
	114,056			115,527
Deferred financing and leasing costs, net	$	126,680		$	127,774
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	16,346		$	16,441
Less accumulated amortization	(1,966		)	(971		)
	$	14,380		$	15,470

Amortization of Intangible Assets and Below Market Lease Liabilities [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Amortization of deferred financing costs	$	900		$	821		$	1,802		$	1,642
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	7,266		$	4,401		$	13,706		$	8,757
Amortization of lease incentives (in rental and other revenues)	$	340		$	303		$	683		$	641
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	324		$	191		$	594		$	377
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(553	)	$	(25	)	$	(1,097	)	$	(50	)

Scheduled Future Amortization of Intangible Assets and Below Market Lease Liabilities [Table Text Block]

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

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012	$	2,234	$	14,242	$	772	$	579	$	(1,229	)
2013	3,262		21,834		1,167		765		(2,081		)
2014	2,987		17,877		1,013		504		(2,005		)
2015	2,264		13,879		779		328		(1,768		)
2016	957		10,880		608		280		(1,498		)
Thereafter	920		25,453		2,379		717		(5,799		)
	$	12,624	$	104,165	$	6,718	$	3,173	$	(14,380	)

Highwoods Realty Limited Partnership [Member]

Finite-Lived Intangible Assets [Line Items]

Total Intangible Assets and Below Market Lease Liabilities [Table Text Block]

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	June 30, 2012			December 31, 2011
Assets:
Deferred financing costs	$	20,112		$	18,044
Less accumulated amortization	(7,488		)	(5,797		)
	12,624			12,247
Deferred leasing costs (including lease incentives and acquisition-related intangible assets)	177,140			172,049
Less accumulated amortization	(63,084		)	(56,522		)
	114,056			115,527
Deferred financing and leasing costs, net	$	126,680		$	127,774
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	16,346		$	16,441
Less accumulated amortization	(1,966		)	(971		)
	$	14,380		$	15,470

Amortization of Intangible Assets and Below Market Lease Liabilities [Table Text Block]

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Amortization of deferred financing costs	$	900		$	821		$	1,802		$	1,642
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	7,266		$	4,401		$	13,706		$	8,757
Amortization of lease incentives (in rental and other revenues)	$	340		$	303		$	683		$	641
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	324		$	191		$	594		$	377
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(553	)	$	(25	)	$	(1,097	)	$	(50	)

Scheduled Future Amortization of Intangible Assets and Below Market Lease Liabilities [Table Text Block]

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

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1, 2012 through December 31, 2012	$	2,234	$	14,242	$	772	$	579	$	(1,229	)
2013	3,262		21,834		1,167		765		(2,081		)
2014	2,987		17,877		1,013		504		(2,005		)
2015	2,264		13,879		779		328		(1,768		)
2016	957		10,880		608		280		(1,498		)
Thereafter	920		25,453		2,379		717		(5,799		)
	$	12,624	$	104,165	$	6,718	$	3,173	$	(14,380	)

XML

Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Jun. 30, 2012		Jun. 30, 2011		Jun. 30, 2012		Jun. 30, 2011
Numerator:
Income from continuing operations	$ 12,357		$ 13,695		$ 25,020		$ 25,223
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(584)		(586)		(1,133)		(1,047)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223)		(182)		(407)		(305)
Dividends on Preferred Stock	(627)		(1,622)		(1,254)		(3,299)
Excess of Preferred Stock redemption/repurchase cost over carrying value	0		(1,895)		0		(1,895)
Income from continuing operations available for common stockholders	10,923		9,410		22,226		18,677
Income from discontinued operations	2,141		739		7,810		1,654
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(102)		(37)		(380)		(83)
Income from discontinued operations available for common stockholders	2,039		702		7,430		1,571
Net income available for common stockholders	12,962		10,112		29,656		20,248
Denominator:
Denominator for basic earnings per Common Share - weighted average shares (in shares)	74,662,000	[1],[2]	72,211,000	[1],[2]	73,749,000	[1],[2]	72,015,000	[1],[2]
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.15		$ 0.13		$ 0.30		$ 0.26
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.02		$ 0.01		$ 0.10		$ 0.02
Net income available for common stockholders (in dollars per share)	$ 0.17		$ 0.14		$ 0.40		$ 0.28
Numerator:
Income from continuing operations	12,357		13,695		25,020		25,223
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223)		(182)		(407)		(305)
Dividends on Preferred Stock	(627)		(1,622)		(1,254)		(3,299)
Excess of Preferred Stock redemption/repurchase cost over carrying value	0		(1,895)		0		(1,895)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	11,507		9,996		23,359		19,724
Income from discontinued operations available for common stockholders	2,141		739		7,810		1,654
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	13,648		10,735		31,169		21,378
Denominator:
Denominator for basic earnings per Common Share - weighted average shares (in shares)	74,662,000	[1],[2]	72,211,000	[1],[2]	73,749,000	[1],[2]	72,015,000	[1],[2]
Stock options using the treasury method	141,000		202,000		129,000		185,000
Noncontrolling interests Common Units	3,718,000		3,784,000		3,723,000		3,787,000
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares) (1)	78,521,000	[1]	76,197,000	[1]	77,601,000	[1]	75,987,000	[1]
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.15		$ 0.13		$ 0.30		$ 0.26
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.02		$ 0.01		$ 0.10		$ 0.02
Net income available for common stockholders (in dollars per share)	$ 0.17		$ 0.14		$ 0.40		$ 0.28
Earnings per Common Unit - diluted:
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)	500,000		300,000		500,000		600,000
Highwoods Realty Limited Partnership [Member]
Numerator:
Income from continuing operations	12,360		13,699		25,025		25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223)		(182)		(407)		(305)
Distributions on Preferred Units	(627)		(1,622)		(1,254)		(3,299)
Excess of Preferred Unit redemption/repurchase cost over carrying value	0		(1,895)		0		(1,895)
Income from continuing operations available for common unitholders	11,510		10,000		23,364		19,736
Income from discontinued operations available for common unitholders	2,141		739		7,810		1,654
Net income available for common unitholders	13,651		10,739		31,174		21,390
Denominator:
Denominator for basic earnings per Common Unit - weighted average units (in shares)	77,971,000	[1],[2]	75,586,000	[1],[2]	77,063,000	[1],[2]	75,393,000	[1],[2]
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders (in dollars per share)	$ 0.15		$ 0.13		$ 0.30		$ 0.26
Income from discontinued operations available for common unitholders (in dollars per share)	$ 0.03		$ 0.01		$ 0.10		$ 0.02
Net income available for common unitholders (in dollars per share)	$ 0.18		$ 0.14		$ 0.40		$ 0.28
Numerator:
Income from continuing operations	12,360		13,699		25,025		25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223)		(182)		(407)		(305)
Distributions on Preferred Units	(627)		(1,622)		(1,254)		(3,299)
Excess of Preferred Unit redemption/repurchase cost over carrying value	0		(1,895)		0		(1,895)
Income from continuing operations available for common unitholders	11,510		10,000		23,364		19,736
Income from discontinued operations available for common unitholders	2,141		739		7,810		1,654
Net income available for common unitholders	$ 13,651		$ 10,739		$ 31,174		$ 21,390
Denominator:
Denominator for basic earnings per Common Unit - weighted average units (in shares)	77,971,000	[1],[2]	75,586,000	[1],[2]	77,063,000	[1],[2]	75,393,000	[1],[2]
Stock options using the treasury method	141,000		202,000		129,000		185,000
Denominator for diluted earnings per Common Unit - adjusted weighted average units and assumed conversions (in shares)	78,112,000	[1]	75,788,000	[1]	77,192,000	[1]	75,578,000	[1]
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders (in dollars per share)	0.15		0.13		0.30		0.26
Income from discontinued operations available for common unitholders (in dollars per share)	0.02		0.01		0.10		0.02
Net income available for common unitholders (in dollars per share)	0.17		0.14		0.40		0.28
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)	500,000		300,000		500,000		600,000

[1] There were 0.5 million and 0.3 million options outstanding during the three months ended June 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months ended June 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

[2] Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

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Mortgages and Notes Payable (Details) (USD $)	3 Months Ended		6 Months Ended			3 Months Ended		3 Months Ended						3 Months Ended		6 Months Ended			3 Months Ended		3 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011	Jun. 30, 2012 Revolving Credit Facility due 2015 [Member]	Jul. 19, 2012 Revolving Credit Facility due 2015 [Member]	Jun. 30, 2012 5.85% (5.88% effective rate) Notes due 2017 [Member]	Mar. 31, 2012 Variable Rate Term Loan due 2016 [Member]	Jun. 30, 2012 Secured indebtedness [Member]	Dec. 31, 2011 Secured indebtedness [Member]	Jun. 30, 2012 Unsecured indebtedness [Member]	Dec. 31, 2011 Unsecured indebtedness [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2011 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2011 Highwoods Realty Limited Partnership [Member]	Dec. 31, 2011 Highwoods Realty Limited Partnership [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Revolving Credit Facility due 2015 [Member]	Jul. 19, 2012 Highwoods Realty Limited Partnership [Member] Revolving Credit Facility due 2015 [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] 5.85% (5.88% effective rate) Notes due 2017 [Member]	Mar. 31, 2012 Highwoods Realty Limited Partnership [Member] Variable Rate Term Loan due 2016 [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Variable Rate Term Loan due 2016 [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Secured indebtedness [Member]	Dec. 31, 2011 Highwoods Realty Limited Partnership [Member] Secured indebtedness [Member]	Jun. 30, 2012 Highwoods Realty Limited Partnership [Member] Unsecured indebtedness [Member]	Dec. 31, 2011 Highwoods Realty Limited Partnership [Member] Unsecured indebtedness [Member]
Debt Instrument [Line Items]
Mortgages and notes payable	$ 1,823,128,000		$ 1,823,128,000		$ 1,903,213,000					$ 743,492,000	$ 750,049,000	$ 1,079,636,000	$ 1,153,164,000	$ 1,823,128,000		$ 1,823,128,000		$ 1,903,213,000						$ 743,492,000	$ 750,049,000	$ 1,079,636,000	$ 1,153,164,000
Aggregate undepreciated book value of secured real estate assets										1,237,700,000														1,237,700,000
Maximum borrowing capacity on revolving credit facility						475,000,000													475,000,000
Maturity date on revolving credit facility						Jul. 27, 2015													Jul. 27, 2015
Additional borrowing capacity on revolving credit facility						75,000,000													75,000,000
Credit facility, interest rate basis						LIBOR plus 150 basis points													LIBOR plus 150 basis points
Credit facility, current interest rate (in hundredths)						1.50%													1.50%
Annual facility fee (in hundredths)						0.35%													0.35%
Amount outstanding on revolving credit facility						75,500,000	28,100,000												75,500,000	28,100,000
Outstanding letters of credit on revolving credit facility						100,000	100,000												100,000	100,000
Unused borrowing capacity on revolving credit facility						399,400,000	446,800,000												399,400,000	446,800,000
Principal amount of repurchased debt								12,100,000													12,100,000
Debt instrument maturity date								Mar. 15, 2017													Mar. 15, 2017
Debt instrument, interest rate basis									LIBOR plus 190 basis points													LIBOR plus 190 basis points
Debt instrument, interest rate basis spread (in hundredths)									1.90%														1.90%
Debt instrument, current interest rate (in hundredths)								5.85%													5.85%
Purchase price of debt, percentage of par value (in hundredths)								107.50%													107.50%
Loss on extinguishment of debt	(973,000)	(24,000)	(973,000)	(24,000)				1,000,000						(973,000)	(24,000)	(973,000)	(24,000)				1,000,000
Principal amount of debt									$ 225,000,000													$ 225,000,000
Term of debt instrument (in years)									7 years													7 years

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Comprehensive income/(loss):
Net income	$ 14,498	$ 14,434	$ 32,830	$ 26,877
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	296	(336)	583	(471)
Unrealized losses on cash flow hedges	(7,481)	0	(7,087)	0
Amortization of cash flow hedges	782	(29)	1,459	(58)
Total other comprehensive loss	(6,403)	(365)	(5,045)	(529)
Total comprehensive income	8,095	14,069	27,785	26,348
Less-comprehensive (income) attributable to noncontrolling interests	(909)	(805)	(1,920)	(1,435)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership	7,186	13,264	25,865	24,913
Highwoods Realty Limited Partnership [Member]
Comprehensive income/(loss):
Net income	14,501	14,438	32,835	26,889
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	296	(336)	583	(471)
Unrealized losses on cash flow hedges	(7,481)	0	(7,087)	0
Amortization of cash flow hedges	782	(29)	1,459	(58)
Total other comprehensive loss	(6,403)	(365)	(5,045)	(529)
Total comprehensive income	8,098	14,073	27,790	26,360
Less-comprehensive (income) attributable to noncontrolling interests	(223)	(182)	(407)	(305)
Comprehensive income attributable to the Company/Comprehensive income attributable to the Operating Partnership	$ 7,875	$ 13,891	$ 27,383	$ 26,055

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Mortgages and Notes Receivable

6 Months Ended

Jun. 30, 2012

Financing Receivables [Line Items]

Mortgages and Notes Receivable

Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

	June 30, 2012			December 31, 2011
Seller financing (first mortgages)	$	15,853		$	17,180
Less allowance	—			—
	15,853			17,180
Promissory notes	1,321			1,481
Less allowance	(118		)	(61		)
	1,203			1,420
Mortgages and notes receivable, net	$	17,056		$	18,600

3.    Mortgages and Notes Receivable - Continued

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Beginning notes receivable allowance	$	122		$	497		$	61	$	868
Bad debt expense	—			162			—		184
Recoveries/write-offs/other	(4		)	(42		)	57		(435		)
Total notes receivable allowance	$	118		$	617		$	118	$	617

Highwoods Realty Limited Partnership [Member]

Financing Receivables [Line Items]

Mortgages and Notes Receivable

Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

	June 30, 2012			December 31, 2011
Seller financing (first mortgages)	$	15,853		$	17,180
Less allowance	—			—
	15,853			17,180
Promissory notes	1,321			1,481
Less allowance	(118		)	(61		)
	1,203			1,420
Mortgages and notes receivable, net	$	17,056		$	18,600

3.    Mortgages and Notes Receivable - Continued

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

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012		2011
Beginning notes receivable allowance	$	122		$	497		$	61	$	868
Bad debt expense	—			162			—		184
Recoveries/write-offs/other	(4		)	(42		)	57		(435		)
Total notes receivable allowance	$	118		$	617		$	118	$	617

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Mortgages and Notes Payable (Tables)

6 Months Ended

Jun. 30, 2012

Debt Instrument [Line Items]

Schedule of Consolidated Mortgages and Notes Payable [Table Text Block]

The following table sets forth our mortgages and notes payable:

	June 30, 2012		December 31, 2011
Secured indebtedness	$	743,492	$	750,049
Unsecured indebtedness	1,079,636		1,153,164
Total mortgages and notes payable	$	1,823,128	$	1,903,213

Highwoods Realty Limited Partnership [Member]

Debt Instrument [Line Items]

Schedule of Consolidated Mortgages and Notes Payable [Table Text Block]

The following table sets forth our mortgages and notes payable:

	June 30, 2012		December 31, 2011
Secured indebtedness	$	743,492	$	750,049
Unsecured indebtedness	1,079,636		1,153,164
Total mortgages and notes payable	$	1,823,128	$	1,903,213

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Investments In and Advances To Affiliates (Details) (USD $)	3 Months Ended			6 Months Ended
	Jun. 30, 2012	Mar. 31, 2012 property	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Income Statements:
Rental and other revenues	$ 26,049,000		$ 24,779,000	$ 50,869,000	$ 49,996,000
Expenses:
Rental property and other expenses	12,666,000		10,774,000	24,082,000	22,771,000
Depreciation and amortization	5,919,000		6,295,000	12,484,000	12,911,000
Impairment of real estate assets	0		0	7,180,000	0
Interest expense	5,267,000		5,858,000	11,097,000	11,865,000
Total expenses	23,852,000		22,927,000	54,843,000	47,547,000
Income/(loss) before disposition of properties	2,197,000		1,852,000	(3,974,000)	2,449,000
Gains on disposition of properties	6,275,000		0	6,275,000	0
Net income/(loss)	8,472,000		1,852,000	2,301,000	2,449,000
Our share of:
Depreciation and amortization of real estate assets	1,675,000		2,033,000	3,773,000	4,126,000
Our share of impairment of real estate assets	0		0	1,002,000	0
Interest expense	1,843,000		2,033,000	3,823,000	4,194,000
Net income/(loss)	1,133,000		749,000	338,000	1,670,000
Our share of net income/(loss)	1,133,000		749,000	338,000	1,670,000
Management and other fees adjustments	375,000		604,000	1,008,000	1,150,000
Equity in earnings of unconsolidated affiliates	1,508,000		1,353,000	1,346,000	2,820,000
Percentage of equity interest in joint ventures, maximum	50.00%			50.00%
Our share of impairment of real estate assets	0		0	1,002,000	0
Highwoods DLF 98/29, LLC Joint Venture [Member]
Our share of:
Our share of impairment of real estate assets		1,000,000
Advances to Affiliates loan amount	38,300,000
Loan maturity date	Mar. 31, 2012
Advances to affiliates, interest rate basis	LIBOR plus 500 basis points
Current interest rate (in hundredths)	5.00%			5.00%
Extended loan maturity date	Sep. 30, 2012
Interest income from loan to affiliate	200,000		300,000	700,000	300,000
Our share of impairment of real estate assets		1,000,000
Number of impaired office properties		2
Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
Our share of:
Joint venture principal amount of debt	50,000,000			50,000,000
Term of debt instrument (in years)	3 years			3 years
Fixed interest rate (in hundredths)	3.50%			3.50%
Amount of loan related to fixed interest rate	39,100,000			39,100,000
Floating interest rate, interest rate basis	LIBOR plus 250 basis points
Current floating interest rate (in hundredths)	2.50%			2.50%
Amount of loan related to floating interest rate	10,900,000			10,900,000
Highwoods Realty Limited Partnership [Member]
Income Statements:
Rental and other revenues	25,057,000		23,756,000	48,854,000	47,958,000
Expenses:
Rental property and other expenses	12,076,000		10,155,000	22,877,000	21,526,000
Depreciation and amortization	5,607,000		6,053,000	11,861,000	12,299,000
Impairment of real estate assets	0		0	7,180,000	0
Interest expense	5,103,000		5,683,000	10,766,000	11,508,000
Total expenses	22,786,000		21,891,000	52,684,000	45,333,000
Income/(loss) before disposition of properties	2,271,000		1,865,000	(3,830,000)	2,625,000
Gains on disposition of properties	6,275,000		0	6,275,000	0
Net income/(loss)	8,546,000		1,865,000	2,445,000	2,625,000
Our share of:
Depreciation and amortization of real estate assets	1,636,000		1,995,000	3,695,000	4,050,000
Our share of impairment of real estate assets	0		0	1,002,000	0
Interest expense	1,823,000		2,012,000	3,782,000	4,149,000
Net income/(loss)	1,142,000		759,000	356,000	1,694,000
Our share of net income/(loss)	1,142,000		759,000	356,000	1,694,000
Management and other fees adjustments	369,000		598,000	995,000	1,138,000
Equity in earnings of unconsolidated affiliates	1,511,000		1,357,000	1,351,000	2,832,000
Percentage of equity interest in joint ventures, maximum	50.00%			50.00%
Our share of impairment of real estate assets	0		0	1,002,000	0
Highwoods Realty Limited Partnership [Member] | Highwoods DLF 98/29, LLC Joint Venture [Member]
Our share of:
Our share of impairment of real estate assets		1,000,000
Advances to Affiliates loan amount	38,300,000
Loan maturity date	Mar. 31, 2012
Advances to affiliates, interest rate basis	LIBOR plus 500 basis points
Current interest rate (in hundredths)	5.00%			5.00%
Extended loan maturity date	Sep. 30, 2012
Interest income from loan to affiliate	200,000		300,000	700,000	300,000
Our share of impairment of real estate assets		1,000,000
Number of impaired office properties		2
Highwoods Realty Limited Partnership [Member] | Highwoods DLF 97/26 DLF 99/32, LP Joint Venture [Member]
Our share of:
Joint venture principal amount of debt	50,000,000			50,000,000
Term of debt instrument (in years)	3 years			3 years
Fixed interest rate (in hundredths)	3.50%			3.50%
Amount of loan related to fixed interest rate	39,100,000			39,100,000
Floating interest rate, interest rate basis	LIBOR plus 250 basis points
Current floating interest rate (in hundredths)	2.50%			2.50%
Amount of loan related to floating interest rate	$ 10,900,000			$ 10,900,000

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Earnings Per Share

6 Months Ended

Jun. 30, 2012

Earnings Per Share Basic and Diluted [Line Items]

Earnings Per Share

Earnings Per Share

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Earnings per Common Share - basic:
Numerator:
Income from continuing operations	$	12,357		$	13,695		$	25,020		$	25,223
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(584		)	(586		)	(1,133		)	(1,047		)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common stockholders	10,923			9,410			22,226			18,677
Income from discontinued operations	2,141			739			7,810			1,654
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(102		)	(37		)	(380		)	(83		)
Income from discontinued operations available for common stockholders	2,039			702			7,430			1,571
Net income available for common stockholders	$	12,962		$	10,112		$	29,656		$	20,248
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1) (2)	74,662			72,211			73,749			72,015
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28
Earnings per Common Share - diluted:
Numerator:
Income from continuing operations	$	12,357		$	13,695		$	25,020		$	25,223
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Dividends on Preferred Stock	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Stock redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	11,507			9,996			23,359			19,724
Income from discontinued operations available for common stockholders	2,141			739			7,810			1,654
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	$	13,648		$	10,735		$	31,169		$	21,378
Denominator:
Denominator for basic earnings per Common Share –weighted average shares (1) (2)	74,662			72,211			73,749			72,015
Add:
Stock options using the treasury method	141			202			129			185
Noncontrolling interests Common Units	3,718			3,784			3,723			3,787
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1)	78,521			76,197			77,601			75,987
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common stockholders	0.02			0.01			0.10			0.02
Net income available for common stockholders	$	0.17		$	0.14		$	0.40		$	0.28

__________

13. Earnings Per Share - Continued

(1) There were 0.5 million and 0.3 million options outstanding during the three months endedJune 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months endedJune 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.

Highwoods Realty Limited Partnership [Member]

Earnings Per Share Basic and Diluted [Line Items]

Earnings Per Unit

Earnings Per Unit

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2012			2011			2012			2011
Earnings per Common Unit - basic:
Numerator:
Income from continuing operations	$	12,360		$	13,699		$	25,025		$	25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common unitholders	11,510			10,000			23,364			19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1) (2)	77,971			75,586			77,063			75,393
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.03			0.01			0.10			0.02
Net income available for common unitholders	$	0.18		$	0.14		$	0.40		$	0.28
Earnings per Common Unit - diluted:
Numerator:
Income from continuing operations	$	12,360		$	13,699		$	25,025		$	25,235
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(223		)	(182		)	(407		)	(305		)
Distributions on Preferred Units	(627		)	(1,622		)	(1,254		)	(3,299		)
Excess of Preferred Unit redemption/repurchase cost over carrying value	—			(1,895		)	—			(1,895		)
Income from continuing operations available for common unitholders	11,510			10,000			23,364			19,736
Income from discontinued operations available for common unitholders	2,141			739			7,810			1,654
Net income available for common unitholders	$	13,651		$	10,739		$	31,174		$	21,390
Denominator:
Denominator for basic earnings per Common Unit –weighted average units (1) (2)	77,971			75,586			77,063			75,393
Add:
Stock options using the treasury method	141			202			129			185
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1)	78,112			75,788			77,192			75,578
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders	$	0.15		$	0.13		$	0.30		$	0.26
Income from discontinued operations available for common unitholders	0.02			0.01			0.10			0.02
Net income available for common unitholders	$	0.17		$	0.14		$	0.40		$	0.28

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(1) There were 0.5 million and 0.3 million options outstanding during the three months endedJune 30, 2012 and 2011, respectively, and 0.5 million and 0.6 million options outstanding during the six months endedJune 30, 2012 and 2011, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock since dividends on restricted stock are non-forfeitable.