8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): May 8, 2006

HIGHWOODS PROPERTIES, INC.

(Exact name of registrant specified in its charter)

Maryland	1-13100	56-1871668
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

HIGHWOODS REALTY LIMITED PARTNERSHIP

(Exact name of registrant specified in its charter)

North Carolina	000-21731	56-1869557
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3100 Smoketree Court, Suite 600

Raleigh, North Carolina 27604

(Address of principal executive offices, zip code)

Registrants’ telephone number, including area code: (919) 872-4924

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On May 8, 2006, we issued a press release announcing operational information for the quarter ended March 31, 2006. This press release is attached as Exhibit 99.1. In addition, we posted on our web site supplemental information regarding our operations for the quarter ended March 31, 2006, a copy of which is attached as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

No.	Description
99.1	Press release dated May 8, 2006
99.2	Supplemental operating information for the quarter ended March 31, 2006

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
	Vice President and Chief Financial Officer

HIGHWOODS REALTY LIMITED PARTNERSHIP
By:	Highwoods Properties, Inc., its general partner

By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Vice President and Chief Financial Officer

Dated: May 9, 2006

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE		Ref: 06-17
Contact:	Tabitha Zane
	Vice President, Investor Relations
	919-431-1529

Highwoods Properties Reports:

First Quarter 2006 Operational Results

Five Development Projects Commenced

$154 Million of Non-Core Property Dispositions

$50 Million of Preferred Stock Redeemed

Raleigh, NC – May 8, 2006 – Highwoods Properties, Inc. (NYSE: HIW), the largest owner and operator of suburban office properties in the Southeast, today reported operational results for the first quarter ended March 31, 2006.

Total occupancy in the Company’s wholly-owned portfolio at March 31, 2006 was 87.7%, a 390 basis point increase from March 31, 2005. The Company’s office portfolio, which contributes 82% of annual revenue, posted a stronger performance than the Company’s portfolio as a whole with occupancy increasing 480 basis points from the first quarter of 2005. Strong leasing activity and the sale of lower performing, non-core properties contributed to the office portfolio’s occupancy. As expected and previously forecasted, occupancy dropped from December 31, 2005, mostly due to the large number of scheduled lease expirations in the first three months of the year.

Ed Fritsch, President and Chief Executive Officer of Highwoods Properties, stated “Throughout most of our portfolio, leasing activity was solid and the majority of our markets continue to improve with strong employment growth and positive net absorption. Occupancy in seven of our nine largest markets is now at or above 90%.”

“We also made additional progress on our goal of improving our balance sheet through the redemption of $50 million of 8% preferred stock on February 23. Since the beginning of 2005 through the end of the first quarter, we have paid off or redeemed over $376 million of secured and unsecured debt and preferred stock at a weighted average cost of 7.3%,” added Mr. Fritsch.

First Quarter 2006 Operating Highlights

• Second generation leasing activity in Highwoods’ portfolio totaled approximately 1.3 million square feet, including 944,000 square feet of office space.

• Straight-line (GAAP) rental rates for signed office leases increased 2.2% from straight line rental rates under the previous leases, ahead of the Company’s 2006 expectations. Cash rents for office leases signed in the first quarter declined 6.3%, in line with the Company’s expectations.

Highwoods Properties

May 8, 2006

• Office tenant improvements and leasing commissions as a percentage of term base rent (netting out free rent) were 12.1% compared to the five-quarter average of 11.5%. On a dollar per square foot basis, tenant improvements and leasing commissions were $10.20, an improvement from the fourth quarter and in line with our 2006 guidance.

2006 Development Activity

The Company’s wholly-owned development pipeline at March 31, 2006, was $198 million and included eleven projects encompassing 1.5 million square feet that were 54.2% pre-leased. Including the Company’s share of joint venture development projects, the development pipeline is $225 million.

Since January 1, 2006, the Company has announced and/or commenced five new development projects representing $121 million of value creating projects. These new projects are detailed in the table below:

Market	RSF	Total Investment	Pre-Leased	Estimated Completion
Tampa (O)	115,000	$21,200,000	100%	1Q 07
Nashville (O)	255,000	58,300,000	100%	1Q 08
Orlando (O)	99,000	13,200,000	0%	1Q 07
Kansas City (O&R)	47,000	13,900,000	49%	4Q 06
Triad (I)	418,000	14,400,000	44%	3Q 06
TOTALS	934,000	$121,000,000	62%

Mr. Fritsch noted, “Our development strategy, particularly as it pertains to multi-tenant buildings, is to build properties in well-leased, highly desirable submarkets where available inventory is scarce. In the majority of cases, we already own the land which is positive to our long term investment return. We are also pleased to have announced in the last three weeks two fully leased build-to-suit office projects—MetLife in Tampa and Healthways in Nashville—which represent a total investment of approximately $80 million. These high-quality companies have signed long-term leases and we look forward to working with both of these firms on these important projects.”

2006 Disposition Activity

In the first quarter of 2006, the Company sold close to two million square feet of non-core properties in four markets, Atlanta, Columbia, Raleigh and Tampa, for gross proceeds of approximately $154 million at an average cap rate of 6.9%. The average age of the properties sold was almost 19 years and included industrial (flex) assets and single story office buildings.

Mr. Fritsch added, “From January 1, 2005 through March 31, 2006, we completed 15 sales transactions in seven markets, selling 6.6 million square feet of office and industrial properties for gross proceeds of $510 million at an average cap rate of 6.8%. We expect to sell an additional $90 million to $140 million of non-core properties through the end of 2007, in line with the revised three-year goal of our Strategic Management Plan.”

Filing Status Update

The Company is working with its auditors, Deloitte & Touche LLP, to finalize its 2005 financial statements. The Company continues to believe its 2005 10-Qs and 2005 Form 10-K will be completed and filed with the Securities and Exchange Commission (“SEC”) by the end of June 2006.

2

Highwoods Properties

May 8, 2006

SEC Update

The Company noted that there has been no change in the status of the formal investigation by the SEC. Management continues to cooperate fully and remains confident and comfortable with the information being provided to the SEC.

Funds from Operations Outlook

The Company continues to expect to report FFO per diluted share for full year 2005 of $2.39 to $2.42 per diluted share. This range excludes property impairments and the preferred stock redemption charge.

The Company also reaffirmed its guidance for 2006 FFO of $2.28 to $2.42 per diluted share. This estimate continues to reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, operating expenses, land sale gains, asset dispositions and acquisitions and development. This estimate excludes any gains or impairments associated with potential operating property dispositions, as well as any unusual or non-recurring credits or charges that may occur during the year. It also excludes a reduction of $1.7 million, or $0.03 per share, related to the redemption of $50 million of 8.0% Series B Preferred Shares on February 23, 2006. Factors that could cause actual results to differ materially from Highwoods’ current expectations are discussed below and are also detailed in the Company’s 2004 Annual Report on Form 10-K.

Non-GAAP Information

We believe that FFO and FFO per share are beneficial to management and investors as important indicators of the performance of an equity REIT. FFO and FFO per share can facilitate comparisons of operating performance between periods and between other REITs because they exclude factors, such as depreciation, amortization and gains and losses from sales of real estate assets, which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates. FFO and FFO per share as disclosed by other REITs may not be comparable to our calculations of FFO and FFO per share. FFO and FFO per share are non-GAAP financial measures and do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP. They should not be considered as alternatives to net income as indicators of our operating performance or to cash flows as measures of liquidity. Furthermore, FFO per share does not depict the amount that accrues directly to the stockholders’ benefit.

FFO is defined by NAREIT as net income or loss, excluding gains or losses from sales of depreciated property, plus operating property depreciation and amortization and adjustments for minority interest and unconsolidated companies on the same basis. As clarified by NAREIT in October 2003, impairment losses on depreciable real estate assets are included in FFO. Our calculation of FFO is consistent with FFO as defined by NAREIT.

Supplemental Information

A copy of the Company’s first quarter 2006 Supplemental Information that includes leasing and operational statistics is available in the “Investor Relations/Quarterly Earnings” section of the Company’s Web site at www.highwoods.com. You may also obtain a copy of all Supplemental Information published by the Company by contacting Highwoods Investor Relations at 919-431-1521/ 800-256-2963 or by e-mail to HIW-IR@highwoods.com. If you would like to receive future Supplemental Information packages by e-mail, please contact the Investor Relations department as noted above or by written request to: Investor Relations Department, Highwoods Properties, Inc., 3100 Smoketree Court, Suite 600, Raleigh, NC 27604.

3

Highwoods Properties

May 8, 2006

Conference Call

On Tuesday, May 9, 2006 at 10:00 a.m. Eastern time, Highwoods will host a teleconference call to discuss the matters outlined in this press release. For US/Canada callers, dial (888) 202-5268 and international callers dial (706) 643-7509. A live listen-only Web cast can be accessed through the Company’s Web site at www.highwoods.com under the “Investor Relations” section.

Telephone, Web cast and Pod cast replays will be available two hours after the completion of the call. The replays will be available for two weeks beginning at 1:00 p.m. Eastern time. Dial-in numbers for the replay are (800) 642-1687 US/Canada, (706) 645-9291 international. The conference ID is 8321901.

About the Company

Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. As of March 31, 2006, the Company owned or had an interest in 417 in-service office, industrial and retail properties encompassing approximately 35.0 million square feet. Highwoods also owns 896 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our Web site at www.highwoods.com.

Certain matters discussed in this press release, such as expected FFO for 2005 and 2006 and the related assumptions underlying these amounts, expected timing of the filing of our SEC reports, expected leasing and financing activities and financial and operating performance and the cost and timing of expected development projects and asset dispositions, are forward-looking statements within the meaning of the federal securities laws. These statements are distinguished by use of the words “will”, “expect”, “intends” and words of similar meaning. Although Highwoods believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.

Factors that could cause actual results to differ materially from Highwoods’ current expectations include, among others, the following: the financial condition of our customers could deteriorate; the final completion of audited financial statements and SOX 404 testing could necessitate unexpected adjustments and/or result in unexpected costs; unwaived defaults, if any, under our debt instruments could result in an acceleration of some of our outstanding debt; speculative development by others could result in excessive supply of office properties relative to customer demand; we may not be able to lease or re-lease space quickly or on as favorable terms as old leases; unexpected difficulties in obtaining additional capital to satisfy our future cash needs or unexpected increases in interest rates would increase our debt service costs; and others detailed in the Company’s 2004 Annual Report on Form 10-K and subsequent SEC reports.

4

EX-99.2

Supplemental Information

March 31, 2006

Supplemental Information

Table of Contents

March 31, 2006

Schedule	Page
Summary and Corporate Information	ii and iii
Capitalization	1
Long-Term Debt Summary	2
Long-Term Debt Detail	3
Portfolio Summary	4, 5 and 6
Occupancy Trends	7
Leasing Statistics	8, 9 and 10
Leasing Statistics by Market	11
Rental Rate Comparisons by Market	12
Lease Expirations	13 and 14
Office Lease Expirations by Market by Quarter	15
Industrial Lease Expirations by Market by Quarter	16
Office Lease Expirations by Market by Year	17
Industrial Lease Expirations by Market by Year	18
Customer Diversification	19
Acquisition Activity	20
Disposition Activity	21
Development Activity	22
Development Land	23
Joint Ventures Portfolio Summary	24
Joint Ventures Lease Expirations	25
Joint Ventures Development	26

The information within refers to all Highwoods Properties’ wholly-owned entities, except pages 24 to 26 unless

noted otherwise.

Certain matters discussed in this supplemental, including estimates of net operating income, pre-leasing commitments and the cost, timing and stabilization of announced development projects, are forward-looking statements within the meaning of the federal securities laws. Although Highwoods believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from Highwoods’ current expectations include general economic conditions, local real estate conditions, the timely development and lease-up of properties, and the other risks detailed from time to time in the Company’s SEC reports.

Highwoods Properties, Inc. 3/31/06

Corporate Information

Board of Directors Thomas W. Adler Gene H. Anderson Kay N. Callison Edward J. Fritsch Lawrence S. Kaplan Sherry Kellett L. Glenn Orr Jr. O. Temple Sloan Jr., Chairman F. William Vandiver, Jr.

Research Coverage Deutsche Banc Securities Lou Taylor - 212-469-4912 Green Street Advisors Jim Sullivan - 949-640-8780 Stifel Nicolaus John Guinee - 410-454-5520 Morgan Stanley Dean Witter David Cohen - 212-761-8564 Smith Barney Citigroup Jonathan Litt - 212-816-0231 Wachovia Securities Chris Haley - 443-263-6773

Corporate Officers Edward J. Fritsch President, Chief Executive Officer and Director Michael E. Harris Executive Vice President and Chief Operating Officer Terry L. Stevens Vice President, Chief Financial Officer S. Hugh Esleeck Treasurer Julie M. Kelly Vice President, Compliance and Internal Audit Carman J. Liuzzo Vice President, Investments Kevin E. Penn Chief Information Officer and Vice President, Strategy Mack D. Pridgen III Vice President, General Counsel and Secretary Tabitha Zane Vice President, Investor Relations and Corporate Communications

Highwoods Properties, Inc. ii 3/31/06

Corporate Information

Divisional Officers Atlanta/Piedmont Triad Gene H. Anderson - Regional Manager Atlanta, GA Gene H. Anderson, Senior Vice President Piedmont Triad, NC Mark W. Shumaker, Vice President Orlando/Tampa Michael F. Beale - Regional Manager Orlando, FL Michael F. Beale, Senior Vice President Tampa, FL Stephen A. Meyers, Vice President Raleigh Raleigh, NC Thomas “Skip” Hill, Vice President Richmond Richmond, VA Paul W. Kreckman, Vice President Memphis/Nashville/Columbia/Greenville W. Brian Reames - Regional Manager Nashville, TN W. Brian Reames, Senior Vice President Columbia, SC and Greenville, SC W. Brian Reames, Senior Vice President Memphis, TN Steven Guinn, Vice President Kansas City Kansas City, MO Barrett Brady, Senior Vice President

Corporate Headquarters Highwoods Properties, Inc. 3100 Smoketree Court, Suite 600 Raleigh, NC 27604 919-872-4924 Stock Exchange NYSE Trading Symbol: HIW Investor Relations Contact Tabitha Zane Vice President, Investor Relations and Corporate Communications Phone: 919-431-1529 Fax: 919-876-6929 E-mail: tabitha.zane@highwoods.com Information Request To request a standard Investor Relations package, Annual Report or to be added to our e-mail or fax list, please contact the Corporate Communications/IR Specialist at: Phone: 919-431-1521 Email: HIW-IR@highwoods.com The Company Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. As of March 31, 2006, the Company owned or had an interest in 417 in-service office, industrial and retail properties encompassing approximately 35.0 million square feet. Highwoods also owns 896 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our Web site at www.highwoods.com.

Highwoods Properties, Inc. iii 3/31/06

Exhibit 99.2

Capitalization

Dollars, shares, and units in thousands
	03/31/06		12/31/05		09/30/05		06/30/05		03/31/05
Long-Term Debt (see pages 2 & 3):	$	1,450,424	$	1,471,615	$	1,441,081	$	1,559,352	$	1,582,388
Eastshore Debt 1/		—		—		—		19,800		—
Total debt per the balance sheet		1,450,424		1,471,615		1,441,081		1,579,152		1,582,388
Finance Obligations:	$	33,833	$	33,706	$	34,746	$	43,168	$	63,096
Preferred Stock (at redemption value):
Series A 8 5/8% Perpetual Preferred Stock	$	104,945	$	104,945	$	104,945	$	104,945	$	104,945
Series B 8% Perpetual Preferred Stock		92,500		142,500		142,500		172,500		172,500
Series D 8% Perpetual Preferred Stock		—		—		—		100,000		100,000
Total preferred stock	$	197,445	$	247,445	$	247,445	$	377,445	$	377,445
Shares and Units Outstanding:
Common stock outstanding		54,054		54,029		54,030		54,037		54,053
Minority interest partnership units		5,401		5,450		5,493		5,668		5,828
Total shares and units outstanding		59,455		59,479		59,523		59,705		59,881
Stock price at period end	$	33.73	$	28.45	$	29.51	$	29.76	$	26.82
Market value of common equity	$	2,005,417	$	1,692,178	$	1,756,524	$	1,776,821	$	1,606,008
Total market capitalization with debt and obligations	$	3,687,119	$	3,444,944	$	3,479,796	$	3,756,786	$	3,628,937

1/ This debt is the 100% obligation of an entity that Highwoods has no ownership interest in but which had been consolidated according to GAAP. The value of this debt is not included in “total market capitalization with debt and obligations.” These properties are no longer consolidated as of 9/30/05.

Highwoods Properties, Inc. Page    1 3/31/06

Long-Term Debt Summary

Dollars in thousands
	03/31/06			12/31/05			09/30/05			06/30/05			03/31/05
Balances Outstanding:
Secured:
Conventional fixed rate 1/	$	700,122		$	667,137		$	676,855		$	709,948		$	754,604
Variable rate debt 2/		12,302			53,978			46,226			84,404			67,784
Secured total	$	712,424		$	721,115		$	723,081		$	794,352		$	822,388
Unsecured:
Fixed rate bonds and notes	$	460,000		$	460,000		$	460,000		$	460,000		$	460,000
Variable rate debt		100,000			100,000			100,000			120,000			120,000
Credit facility		178,000			190,500			158,000			185,000			180,000
Unsecured total	$	738,000		$	750,500		$	718,000		$	765,000		$	760,000
Total	$	1,450,424		$	1,471,615		$	1,441,081		$	1,559,352		$	1,582,388
Average Interest Rates:
Secured:
Conventional fixed rate		6.9	%		7.0	%		7.0	%		7.1	%		7.2	%
Variable rate debt		5.4	%		5.5	%		5.0	%		4.9	%		4.7	%
Secured total		6.9	%		6.9	%		6.9	%		6.8	%		6.9	%
Unsecured:
Fixed rate bonds		7.4	%		7.4	%		7.4	%		7.4	%		7.4	%
Variable rate debt		5.8	%		5.4	%		5.4	%		4.7	%		3.5	%
Credit facility		5.8	%		5.4	%		4.9	%		4.3	%		3.4	%
Unsecured total		6.8	%		6.6	%		6.5	%		6.2	%		6.0	%
Average		6.8	%		6.7	%		6.7	%		6.5	%		6.5	%
Maturity Schedule:
				Future Maturities of Debt						Total Debt 3/			Average Interest Rate
Year				Secured Debt 3/			Unsecured Debt
2006 4/				$	—		$	388,000		$	388,000			6.1	%
2007					80,513			—			80,513			7.8	%
2008					—			100,000			100,000			7.1	%
2009					154,486			50,000			204,486			7.9	%
2010					134,476			—			134,476			7.8	%
2011					—			—			—			—
2012					22,800			—			22,800			6.1	%
2013					276,218			—			276,218			5.9	%
2014					38,799			—			38,799			5.8	%
2015					—			—			—			—
Thereafter					5,132			200,000			205,132			7.5	%
Total maturities				$	712,424		$	738,000		$	1,450,424			6.8	%

Weighted average maturity = 4.3 years

1/ March 31, 2006 includes a $22.8 million loan related to a consolidated 20% owned joint venture property (Harborview) and $38.8 million in loans related to consolidated 50% joint venture properties (Markel)

2/ March 31, 2006 includes an $8.9 million construction loan related to a consolidated 50% owned joint venture property (Vinings)

3/ All periods exclude annual principal amortization

4/ The $388.0 million of unsecured debt maturities at 3/31/06 includes $178.0 million related to a credit facility and $100 million bank term loan that were scheduled to mature in July, 2006. On May 1, 2006, the company entered into a new $350 million credit facility that matures in 2009, which can be extended for an additional year, and paid off the old facility and bank term loan.

Highwoods Properties, Inc. Page    2 3/31/06

Long-Term Debt Detail

Dollars in thousands
Secured Loans
Lender	Rate		Maturity Date	Loan Balance 03/31/06
Monumental Life Ins. Co.	7.8	%	Nov-09	$	148,471
Northwestern Mutual	6.0	%	Mar-13		139,358
Northwestern Mutual	7.8	%	Nov-10		134,476
Massachusetts Mutual Life Ins. Co. 1/	5.7	%	Dec-13		124,913
Northwestern Mutual	8.2	%	Feb-07		62,904
Metropolitan Life Ins. Co. 2/	6.1	%	Oct-12		22,800
Principal Life Insurance Company 3/	5.8	%	Jan-14		11,894
Principal Life Insurance Company 3/	5.8	%	Jan-14		11,894
Massachusetts Mutual Life Ins. Co. 1/	6.5	%	Dec-13		11,000
Principal Life Insurance Company 3/	5.7	%	Jan-14		9,382
Central Carolina Bank 4/ 5/	4.8	%	Jan-08		8,888
Principal Life Insurance Company 3/	5.9	%	Jan-14		5,629
PFL Life Ins. Co. 6/	8.1	%	Jun-07		5,308
Ohio National	8.0	%	Nov-17		5,132
Lutheran Brotherhood	6.8	%	Apr-09		3,891
PFL Life Ins. Co. 6/ 7/	7.1	%	Jun-07		3,414
Security Life of Denver	8.9	%	Aug-09		2,124
American United Life	9.0	%	Jun-13		946
	6.9	%		$	712,424
Unsecured Bonds
Bonds	7.0	%	Dec-06	$	110,000
Bonds	7.1	%	Feb-08		100,000
Bonds	8.1	%	Jan-09		50,000
Bonds	7.5	%	Apr-18		200,000
	7.4	%		$	460,000
Unsecured Loans
Term Loan 5/ 8/	5.8	%	Jul-06	$	100,000
Line of Credit 5/ 8/	5.8	%	Jul-06		178,000
	5.8	%		$	278,000
Total Debt	6.8	%		$	1,450,424

1/ These two loans are secured by the same assets.

2/ Loan relates to a consolidated 20% owned joint venture property (Harborview).

3/ Loans relate to a consolidated 50% owned joint venture property (Markel).

4/ Loan relates to a consolidated 50% owned joint venture property (Vinings).

5/ Floating rate loan based on one month libor.

6/ These two loans are secured by the same assets.

7/ Floating rate loan based on ninety day libor.

8/ On May 1, 2006 these two loans were paid off when the company closed on a new $350 million line of credit.

Highwoods Properties, Inc. Page    3 3/31/06

Portfolio Summary - Wholly-Owned Properties Only 1/

(Rentable Square Feet)
Office Industrial & Retail	03/31/06		12/31/05		09/30/05		06/30/05		03/31/05
In-Service:
Office 2/	19,691,000		21,412,000		21,432,000		23,849,000		24,254,000
Industrial	6,706,000		6,977,000		6,977,000		6,623,000		6,991,000
Retail 3/	1,408,000		1,416,000		1,417,000		1,417,000		1,409,000
Total	27,805,000		29,805,000		29,826,000		31,889,000		32,654,000
Development Completed - Not Stabilized:
Office 2/	—		—		—		—		—
Industrial	—		—		—		353,000		353,000
Retail	9,600		9,600		9,600		9,600		—
Total	9,600		9,600		9,600		362,600		353,000
Development - In Process:
Office 2/	1,026,000		533,000		780,000		710,000		358,000
Industrial	418,000		—		—		—		—
Retail	23,000		—		—		—		9,600
Total	1,467,000		533,000		780,000		710,000		367,600
Total:
Office 2/	20,717,000		21,945,000		22,212,000		24,559,000		24,612,000
Industrial	7,124,000		6,977,000		6,977,000		6,976,000		7,344,000
Retail 3/	1,440,600		1,425,600		1,426,600		1,426,600		1,418,600
Total	29,281,600		30,347,600		30,615,600		32,961,600		33,374,600
Same Property
Office 2/	19,323,000		19,323,000		19,323,000		19,323,000		19,323,000
Industrial	6,352,000		6,352,000		6,352,000		6,352,000		6,352,000
Retail	1,408,000		1,408,000		1,408,000		1,408,000		1,408,000
Total	27,083,000		27,083,000		27,083,000		27,083,000		27,083,000
Percent Leased/Pre-Leased:
In-Service:
Office	87.1	%	87.5	%	85.0	%	83.5	%	82.3	%
Industrial	88.0	%	92.4	%	86.2	%	83.8	%	86.8	%
Retail	95.7	%	97.5	%	96.4	%	96.0	%	95.5	%
Total	87.7	%	89.1	%	85.8	%	84.1	%	83.8	%
Development Completed - Not Stabilized:
Office	—		—		—		—		—
Industrial	—		—		—		100.0	%	100.0	%
Retail	88.0	%	87.0	%	87.0	%	87.0	%	—
Total	88.0	%	87.0	%	87.0	%	99.7	%	100.0	%
Development - In Process:
Office	57.1	%	37.2	%	57.1	%	60.8	%	100.0	%
Industrial	43.8	%	—		—		—		—
Retail	100.0	%	—		—		—		66.0	%
Total	54.0	%	37.2	%	57.1	%	60.8	%	99.1	%
Same Property
Office	86.8	%	88.3	%	86.6	%	86.2	%	85.8	%
Industrial	87.3	%	92.8	%	86.9	%	84.4	%	86.9	%
Retail	95.7	%	98.1	%	97.0	%	96.6	%	95.6	%
Total	87.4	%	89.9	%	87.3	%	86.3	%	86.6	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Substantially all of our Office properties are located in suburban markets

3/ Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City retail properties

Highwoods Properties, Inc. Page    4 3/31/06

Portfolio Summary

(Continued)

As of March 31, 2006
Summary by Location, Wholly-Owned Properties Only 1/:
					Percentage of Annualized Revenue 2/
Market	Rentable Square Feet		Occupancy		Office		Industrial		Retail		Total
Raleigh /3	4,102,000		82.7	%	14.9	%	0.2	%	—		15.1	%
Atlanta	5,584,000		91.1	%	10.6	%	3.9	%	—		14.5	%
Kansas City	2,306,000	4/	90.4	%	4.5	%	—		10.0	%	14.5	%
Nashville	2,874,000		90.7	%	13.3	%	—		—		13.3	%
Tampa	2,523,000		91.9	%	12.1	%	—		—		12.1	%
Piedmont Triad /5	5,589,000		86.7	%	7.4	%	3.8	%	—		11.2	%
Richmond	1,954,000		91.3	%	8.3	%	—		—		8.3	%
Memphis	1,197,000		89.9	%	5.4	%	—		—		5.4	%
Greenville	1,106,000		73.4	%	3.5	%	0.1	%	—		3.6	%
Orlando	218,000		99.5	%	1.2	%	—		—		1.2	%
Columbia	252,000		41.4	%	0.4	%	—		—		0.4	%
Other	100,000		62.4	%	0.4	%	—		—		0.4	%
Total	27,805,000		87.7	%	82.0	%	8.0	%	10.0	%	100.0	%

Summary by Location, Including Joint Venture Properties:
					Percentage of Annualized Revenue 2/ 6/
Market	Rentable Square Feet		Occupancy		Office		Industrial		Retail		Multi-Family		Total
Atlanta	6,419,000		91.6	%	10.7	%	3.5	%	—		—		14.2	%
Kansas City	3,019,000	4/	88.3	%	5.0	%	—		8.8	%	—		13.8	%
Raleigh	4,557,000		84.4	%	13.5	%	0.1	%	—		—		13.6	%
Nashville	2,874,000		90.7	%	11.7	%	—		—		—		11.7	%
Tampa	2,728,000		92.5	%	10.9	%	—		—		—		10.9	%
Piedmont Triad	5,953,000		87.5	%	6.9	%	3.3	%	—		—		10.2	%
Richmond	2,367,000		92.8	%	7.9	%	—		—		—		7.9	%
Des Moines	2,315,000		93.1	%	3.7	%	0.5	%	0.1	%	0.4	%	4.7	%
Memphis	1,197,000		89.9	%	4.7	%	—		—		—		4.7	%
Orlando	1,903,000		95.4	%	4.2	%	—		—		—		4.2	%
Greenville	1,106,000		73.4	%	3.1	%	0.1	%	—		—		3.2	%
Columbia	252,000		41.4	%	0.4	%	—		—		—		0.4	%
Other	210,000		82.1	%	0.4	%	—		—		—		0.4	%
Charlotte	148,000		100.0	%	0.1	%	—		—		—		0.1	%
Total	35,048,000		89.1	%	83.2	%	7.5	%	8.9	%	0.4	%	100.0	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

3/ Raleigh Market encompasses Raleigh, Durham, Cary, and Research Triangle metropolitan area.

4/ Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City retail properties

5/ Piedmont Triad Market encompasses Greensboro, Winston-Salem metropolitan area.

6/ Includes Highwoods’ share of Joint Venture Annualized Rental Revenue, see page 24

Highwoods Properties, Inc. Page    5 3/31/06

Portfolio Summary—Wholly-Owned Properties Only 1/

(Continued)

As of March 31, 2006
	Office Properties					Industrial
Market	Rentable Square Feet	Occupancy		Percentage of Office Annualized Revenue 2/		Rentable Square Feet	Occupancy		Percentage of Industrial Annualized Revenue 2/
Raleigh	4,001,000	83.2	%	18.3	%	101,000	63.0	%	1.9	%
Nashville	2,874,000	90.7	%	16.2	%	—	—		—
Tampa	2,523,000	91.9	%	14.7	%	—	—		—
Atlanta	2,529,000	86.0	%	13.0	%	3,055,000	95.4	%	49.5	%
Richmond	1,954,000	91.3	%	10.1	%	—	—		—
Piedmont Triad	2,146,000	90.8	%	9.0	%	3,443,000	84.2	%	47.6	%
Memphis	1,197,000	89.9	%	6.5	%	—	—		—
Kansas City	894,000	82.0	%	5.4	%	4,000	100.0	%	0.1	%
Greenville	1,003,000	78.8	%	4.3	%	103,000	20.7	%	0.9	%
Orlando	218,000	99.5	%	1.5	%	—	—		—
Columbia	252,000	41.4	%	0.5	%	—	—		—
Other	100,000	62.4	%	0.5	%	—	—		—
	19,691,000	87.1	%	100.0	%	6,706,000	88.0	%	100.0	%
	Retail
Market	Rentable Square Feet	Occupancy		Percentage of Retail Annualized Revenue 2/
Kansas City 3/	1,408,000	95.7	%	100.0	%
	1,408,000	95.7	%	100.0	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

3/ Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City retail properties

Highwoods Properties, Inc. Page    6 3/31/06

Occupancy Trends - Office, Industrial and Retail Properties 1/

Market	Measurement	03/31/06		12/31/05		09/30/05		06/30/05		03/31/05
Atlanta	Rentable Square Feet	5,584,000		6,806,000		6,818,000		6,465,000		6,826,000
	Occupancy	91.1	%	87.4	%	83.3	%	81.9	%	83.0	%
	Current Properties 2/	90.3	%	90.1	%	88.0	%	86.7	%	86.7	%
Charlotte	Rentable Square Feet	—		—		—		1,492,000		1,492,000
	Occupancy	—		—		—		66.9	%	67.7	%
	Current Properties 2/	—		—		—		—		—
Columbia	Rentable Square Feet	252,000		426,000		426,000		426,000		426,000
	Occupancy	41.4	%	58.9	%	62.0	%	61.6	%	59.9	%
	Current Properties 2/	41.4	%	38.2	%	41.9	%	40.8	%	39.9	%
Greenville	Rentable Square Feet	1,106,000		1,105,000		1,105,000		1,105,000		1,127,000
	Occupancy	73.4	%	73.0	%	71.2	%	75.5	%	81.1	%
	Current Properties 2/	73.4	%	72.9	%	71.1	%	75.5	%	82.6	%
Kansas City 3/	Rentable Square Feet	2,306,000		2,314,000		2,315,000		2,315,000		2,308,000
	Occupancy	90.4	%	92.2	%	91.7	%	91.4	%	91.6	%
	Current Properties 2/	90.4	%	92.5	%	92.1	%	91.8	%	91.7	%
Memphis	Rentable Square Feet	1,197,000		1,197,000		1,216,000		1,216,000		1,216,000
	Occupancy	90.0	%	88.8	%	83.8	%	82.3	%	80.6	%
	Current Properties 2/	90.0	%	88.8	%	83.8	%	82.3	%	80.6	%
Nashville	Rentable Square Feet	2,874,000		2,874,000		2,874,000		2,873,000		2,870,000
	Occupancy	90.6	%	94.0	%	95.6	%	95.1	%	92.8	%
	Current Properties 2/	90.6	%	94.0	%	95.6	%	95.0	%	92.7	%
Orlando	Rentable Square Feet	218,000		218,000		218,000		218,000		222,000
	Occupancy	99.5	%	100.0	%	100.0	%	96.8	%	97.7	%
	Current Properties 2/	99.5	%	100.0	%	100.0	%	96.8	%	99.5	%
Piedmont Triad	Rentable Square Feet	5,589,000		5,589,000		5,589,000		5,593,000		5,722,000
	Occupancy	86.7	%	93.1	%	89.1	%	88.3	%	90.4	%
	Current Properties 2/	86.7	%	93.1	%	89.1	%	88.4	%	91.0	%
Raleigh	Rentable Square Feet	4,102,000		4,232,000		4,358,000		4,432,000		4,432,000
	Occupancy	82.7	%	87.5	%	85.5	%	83.8	%	83.3	%
	Current Properties 2/	82.7	%	87.7	%	86.6	%	85.1	%	84.4	%
Richmond	Rentable Square Feet	1,954,000		1,955,000		1,955,000		1,841,000		1,836,000
	Occupancy	91.3	%	94.4	%	93.1	%	93.2	%	95.1	%
	Current Properties 2/	90.7	%	94.0	%	92.7	%	93.2	%	94.8	%
Tampa	Rentable Square Feet	2,523,000		2,989,000		2,851,000		3,813,000		4,077,000
	Occupancy	91.9	%	87.6	%	76.7	%	77.2	%	70.5	%
	Current Properties 2/	91.4	%	88.9	%	77.5	%	73.8	%	70.9	%
Total 4/	Rentable Square Feet	27,705,000		29,705,000		29,725,000		31,789,000		32,554,000
	Occupancy	87.7	%	89.1	%	85.8	%	84.1	%	83.8	%
	Current Properties 2/	87.4	%	89.9	%	87.3	%	86.3	%	86.6	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Only properties that were owned and in-service for all periods shown are included.

3/ Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City retail properties

4/ Excludes a 100,000 square foot building located in South Florida

Highwoods Properties, Inc. Page    7 3/31/06

Leasing Statistics

Office Portfolio 1/

	Three Months Ended
	3/31/06 2/			12/31/05 3/			9/30/05 4/			6/30/05 5/			3/31/05 6/			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		188			171			180			223			188			190
Rentable square footage leased		944,222			1,169,148			1,069,468			1,155,513			1,235,718			1,114,814
Square footage of Renewal Deals		528,275			890,582			826,512			785,827			677,799			741,799
Renewed square footage (% of total)		55.9	%		76.2	%		77.3	%		68.0	%		54.9	%		66.5	%
New Leases square footage (% of total)		44.1	%		23.8	%		22.7	%		32.0	%		45.1	%		33.5	%
Weighted average per rentable square foot over the lease term:
Base rent	$	18.06		$	17.37		$	17.71		$	17.31		$	16.20		$	17.33
Tenant improvements		(1.52	)		(1.67	)		(1.10	)		(1.45	)		(0.94	)		(1.34	)
Leasing commissions 7/		(0.62	)		(0.66	)		(0.57	)		(0.60	)		(0.66	)		(0.62	)
Rent concessions		(0.31	)		(0.27	)		(0.27	)		(0.31	)		(0.41	)		(0.31	)
Effective rent		15.61			14.77			15.77			14.95			14.19			15.06
Expense stop		(5.57	)		(4.79	)		(4.85	)		(5.33	)		(4.46	)		(5.00	)
Equivalent effective net rent	$	10.04		$	9.98		$	10.92		$	9.62		$	9.73		$	10.06
Weighted average term in years		4.3			5.0			3.8			4.1			5.7			4.6
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	7,270,758		$	10,506,779		$	5,996,413		$	8,869,553		$	5,644,830		$	7,657,667
Rentable square feet		944,222			1,169,148			1,069,468			1,155,513			1,235,718			1,114,814
Per rentable square foot	$	7.70		$	8.99		$	5.61		$	7.68		$	4.57		$	6.87
Leasing Commissions:
Total dollars committed under signed leases 7/	$	2,363,857		$	3,551,312		$	2,398,139		$	2,629,936		$	4,109,601		$	3,010,569
Rentable square feet		944,222			1,169,148			1,069,468			1,155,513			1,235,718			1,114,814
Per rentable square foot	$	2.50		$	3.04		$	2.24		$	2.28		$	3.33		$	2.70
Total:
Total dollars committed under signed leases	$	9,634,615		$	14,058,091		$	8,394,552		$	11,499,489		$	9,754,431		$	10,668,236
Rentable square feet		944,222			1,169,148			1,069,468			1,155,513			1,235,718			1,114,814
Per rentable square foot	$	10.20		$	12.02		$	7.85		$	9.95		$	7.89		$	9.57

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Includes 82K square feet of leases that start in 2008 or later

3/ Includes 171K square feet of leases that start in 2008 or later

4/ Includes 115K square feet of leases that start in 2008 or later

5/ Includes 68K square feet of leases that start in 2008 or later

6/ Includes 89K square feet of leases that start in 2008 or later

7/ Excludes a full allocation of internal leasing costs

Highwoods Properties, Inc. Page    8 3/31/06

Leasing Statistics

Industrial Portfolio

	Three Months Ended
	3/31/06 1/			12/31/05 2/			9/30/05 3/			6/30/05 4/			3/31/05			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		22			29			32			30			15			26
Rentable square footage leased		300,496			532,917			498,819			359,342			599,048			458,124
Square footage of Renewal Deals		165,621			274,174			349,405			224,203			579,069			318,494
Renewed square footage (% of total)		55.1	%		51.4	%		70.0	%		62.4	%		96.7	%		69.5	%
New Leases square footage (% of total)		44.9	%		48.6	%		30.0	%		37.6	%		3.3	%		30.5	%
Weighted average per rentable square foot over the lease term:
Base rent	$	4.46		$	4.14		$	4.19		$	5.16		$	3.39		$	4.27
Tenant improvements		(0.79	)		(0.32	)		(0.45	)		(0.51	)		(0.16	)		(0.45	)
Leasing commissions 5/		(0.15	)		(0.14	)		(0.06	)		(0.12	)		(0.06	)		(0.11	)
Rent concessions		(0.13	)		(0.09	)		(0.02	)		(0.16	)		(0.01	)		(0.08	)
Effective rent		3.39			3.59			3.66			4.37			3.16			3.63
Expense stop		(0.17	)		(0.15	)		(0.38	)		(0.31	)		(0.08	)		(0.22	)
Equivalent effective net rent	$	3.22		$	3.44		$	3.28		$	4.06		$	3.08		$	3.41
Weighted average term in years		3.5			3.9			4.1			3.7			1.3			3.3
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	1,032,151		$	796,212		$	1,256,241		$	917,527		$	361,044		$	872,635
Rentable square feet		300,496			532,917			498,819			359,342			599,048			458,124
Per rentable square foot	$	3.43		$	1.49		$	2.52		$	2.55		$	0.60		$	1.90
Leasing Commissions:
Total dollars committed under signed leases 5/	$	191,615		$	355,767		$	185,669		$	172,719		$	63,473		$	193,849
Rentable square feet		300,496			532,917			498,819			359,342			599,048			458,124
Per rentable square foot	$	0.64		$	0.67		$	0.37		$	0.48		$	0.11		$	0.42
Total:
Total dollars committed under signed leases	$	1,223,766		$	1,151,979		$	1,441,910		$	1,090,246		$	424,517		$	1,066,484
Rentable square feet		300,496			532,917			498,819			359,342			599,048			458,124
Per rentable square foot	$	4.07		$	2.16		$	2.89		$	3.03		$	0.71		$	2.33

1/ Includes 10K square feet of leases that start in 2008 or later

2/ Includes 12K square feet of leases that start in 2008 or later

3/ Includes 113K square feet of leases that start in 2008 or later

4/ Includes 4K square feet of leases that start in 2008 or later

5/ Excludes a full allocation of internal leasing costs

Highwoods Properties, Inc. Page    9 3/31/06

Leasing Statistics

Retail Portfolio

	Three Months Ended
	3/31/06			12/31/05			9/30/05			6/30/05 1/			3/31/05			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		12			9			7			10			4			8
Rentable square footage leased		49,479			19,320			10,721			39,723			10,993			26,047
Square footage of Renewal Deals		36,129			2,729			6,502			36,118			1,750			16,646
Renewed square footage (% of total)		73.0	%		14.1	%		60.6	%		90.9	%		15.9	%		63.9	%
New Leases square footage (% of total)		27.0	%		85.9	%		39.4	%		9.1	%		84.1	%		36.1	%
Weighted average per rentable square foot over the lease term:
Base rent	$	19.22		$	23.03		$	17.61		$	21.49		$	26.09		$	21.49
Tenant improvements		(0.41	)		(1.33	)		(1.21	)		(1.64	)		(2.65	)		(1.45	)
Leasing commissions 2/		(0.28	)		(0.60	)		(1.11	)		(0.40	)		(0.88	)		(0.65	)
Rent concessions		(0.06	)		(0.35	)		(0.08	)		0.00			0.00			(0.10	)
Effective rent		18.47			20.75			15.21			19.45			22.56			19.29
Expense stop		0.00			0.00			0.00			0.00			0.00			0.00
Equivalent effective net rent	$	18.47		$	20.75		$	15.21		$	19.45		$	22.56		$	19.29
Weighted average term in years		11.1			6.1			4.3			8.7			9.3			7.9
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	186,372		$	251,252		$	62,187		$	695,152		$	308,098		$	300,612
Rentable square feet		49,479			19,320			10,721			39,723			10,993			26,047
Per rentable square foot	$	3.77		$	13.00		$	5.80		$	17.50		$	28.03		$	11.54
Leasing Commissions:
Total dollars committed under signed leases 2/	$	42,804		$	13,721		$	12,026		$	43,041		$	3,778		$	23,074
Rentable square feet		49,479			19,320			10,721			39,723			10,993			26,047
Per rentable square foot	$	0.87		$	0.71		$	1.12		$	1.08		$	0.34		$	0.89
Total:
Total dollars committed under signed leases	$	229,176		$	264,973		$	74,213		$	738,193		$	311,876		$	323,686
Rentable square feet		49,479			19,320			10,721			39,723			10,993			26,047
Per rentable square foot	$	4.63		$	13.71		$	6.92		$	18.58		$	28.37		$	12.43

1/ Includes 16K square feet of leases that start in 2008 or later

2/ Excludes a full allocation of internal leasing costs

Highwoods Properties, Inc. Page    10 3/31/06

Leasing Statistics by Market

For the Three Months ended March 31, 2006

Office Portfolio 1/
Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/
Raleigh	386,248	4.6	$	16.13	$	9.04	$	2.47
Tampa	120,635	6.0		22.30		10.54		3.82
Nashville	109,123	3.8		19.13		6.38		1.81
Richmond	102,065	3.2		18.90		2.99		1.57
Kansas City	63,089	3.5		20.68		4.51		3.05
Atlanta	48,838	4.0		16.88		12.12		2.82
Piedmont Triad	43,906	3.4		15.21		3.87		0.94
Memphis	38,993	3.4		17.53		7.98		1.43
Columbia	24,371	2.6		9.85		2.29		1.32
Greenville	5,930	5.2		14.68		14.03		3.79
Orlando	1,024	5.3		16.61		8.75		0.00
	944,222	4.3	$	17.75	$	7.70	$	2.50
Industrial Portfolio
Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/
Atlanta	213,906	4.4	$	4.19	$	4.75	$	0.85
Piedmont Triad	86,590	1.5		4.67		0.20		0.02
	300,496	3.5	$	4.33	$	3.43	$	0.64
Retail Portfolio
Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF
Kansas City	49,479	11.1	$	19.16	$	3.77	$	0.87
	49,479	11.1	$	19.16	$	3.77	$	0.87

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Total lease commisions per square foot excludes capitalized internal leasing costs.

Highwoods Properties, Inc. Page    11 3/31/06

Rental Rate Comparisons by Market

For the Three Months ended March 31, 2006

Office Portfolio 1/
Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Raleigh	386,248	$	16.13	$	16.02	0.7	%
Tampa	120,635		22.30		19.49	14.4	%
Nashville	109,123		19.13		19.03	0.5	%
Richmond	102,065		18.90		17.71	6.7	%
Kansas City	63,089		20.68		19.83	4.3	%
Atlanta	48,838		16.88		19.54	-13.6	%
Piedmont Triad	43,906		15.21		14.39	5.7	%
Memphis	38,993		17.53		19.56	-10.4	%
Columbia	24,371		9.85		11.35	-13.2	%
Greenville	5,930		14.68		17.56	-16.4	%
Orlando	1,024		16.61		16.61	0.0	%
GAAP Rent Growth	944,222	$	17.75	$	17.37	2.2	%
Cash Rent Growth	944,222	$	17.55	$	18.73	-6.3	%
Industrial Portfolio
Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Atlanta	213,906	$	4.19	$	4.49	-6.7	%
Piedmont Triad	86,590		4.67		4.50	3.7	%
GAAP Rent Growth	300,496	$	4.33	$	4.47	-3.2	%
Cash Rent Growth	300,496	$	4.46	$	5.00	-10.8	%
Retail Portfolio
Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Kansas City	49,479	$	19.16	$	17.46	9.7	%
GAAP Rent Growth	49,479	$	19.16	$	17.46	9.7	%
Cash Rent Growth	49,479	$	19.68	$	18.97	3.7	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

Highwoods Properties, Inc. Page    12 3/31/06

Lease Expirations

March 31, 2006

Dollars in thousands
Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Revenue 1/		Average Rental Rate		Percent of Annualized Revenue 1/
Office: 2/
2006 /3	1,604,678	9.4	%	$	28,934	$	18.03	9.4	%
2007	1,540,883	9.0	%		28,137		18.26	9.1	%
2008	2,738,894	15.9	%		47,610		17.38	15.4	%
2009	2,552,031	14.9	%		47,630		18.66	15.4	%
2010	2,247,969	13.1	%		44,581		19.83	14.4	%
2011	2,124,661	12.4	%		37,461		17.63	12.1	%
2012	1,209,745	7.1	%		23,259		19.23	7.5	%
2013	552,102	3.2	%		9,271		16.79	3.0	%
2014	451,009	2.6	%		9,694		21.49	3.1	%
2015	602,137	3.5	%		12,017		19.96	3.9	%
2016 and thereafter	1,517,739	8.9	%		20,562		13.55	6.7	%
	17,141,848	100.0	%	$	309,156	$	18.04	100.0	%
Industrial:
2006 /4	1,126,442	19.0	%	$	4,668	$	4.14	15.6	%
2007	920,517	15.6	%		5,631		6.12	18.8	%
2008	1,017,104	17.2	%		5,003		4.92	16.7	%
2009	683,795	11.6	%		4,275		6.25	14.3	%
2010	529,339	9.0	%		2,659		5.02	8.9	%
2011	418,352	7.1	%		1,610		3.85	5.4	%
2012	203,897	3.5	%		961		4.71	3.2	%
2013	146,784	2.5	%		750		5.11	2.5	%
2014	206,731	3.5	%		1,093		5.29	3.6	%
2015	137,882	2.3	%		695		5.04	2.3	%
2016 and thereafter	511,330	8.7	%		2,618		5.12	8.7	%
	5,902,173	100.0	%	$	29,963	$	5.08	100.0	%

1/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

2/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

3/ Includes 157,000 square feet of leases that are on a month to month basis or 0.7% of total annualized revenue

4/ Includes 288,000 square feet of leases that are on a month to month basis or 0.2% of total annualized revenue

Note: 2006 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.

Highwoods Properties, Inc. Page    13 3/31/06

Lease Expirations

March 31, 2006

(Continued)

Dollars in thousands
Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Revenue 1/		Average Rental Rate		Percent of Annualized Revenue 1/
Retail:
2006 2/	61,096	4.5	%	$	1,532	$	25.08	4.0	%
2007	78,381	5.8	%		2,341		29.87	6.2	%
2008	130,164	9.6	%		3,691		28.36	9.7	%
2009	179,434	13.2	%		4,657		25.95	12.3	%
2010	104,180	7.7	%		3,569		34.26	9.4	%
2011	62,294	4.6	%		1,917		30.77	5.1	%
2012	135,597	10.0	%		4,017		29.62	10.6	%
2013	105,564	7.8	%		2,607		24.70	6.9	%
2014	80,159	5.9	%		1,464		18.26	3.9	%
2015	134,858	9.9	%		4,322		32.05	11.4	%
2016 and thereafter	283,910	21.0	%		7,814		27.52	20.5	%
	1,355,637	100.0	%	$	37,931	$	27.98	100.0	%
Total:
2006 3/4/	2,792,216	11.4	%	$	35,134	$	12.58	9.3	%
2007	2,539,781	10.4	%		36,109		14.22	9.6	%
2008	3,886,162	16.0	%		56,304		14.49	14.9	%
2009	3,415,260	14.0	%		56,562		16.56	15.1	%
2010	2,881,488	11.8	%		50,809		17.63	13.5	%
2011	2,605,307	10.7	%		40,988		15.73	10.9	%
2012	1,549,239	6.3	%		28,237		18.23	7.5	%
2013	804,450	3.3	%		12,628		15.70	3.3	%
2014	737,899	3.0	%		12,251		16.60	3.2	%
2015	874,877	3.6	%		17,034		19.47	4.5	%
2016 and thereafter	2,312,979	9.5	%		30,994		13.40	8.2	%
	24,399,658	100.0	%	$	377,050	$	15.45	100.0	%

1/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

2/ Includes 4,000 square feet of leases that are on a month to month basis or 0.0% of total annualized revenue

3/ Includes 449,000 square feet of leases that are on a month to month basis or 0.9% of total annualized revenue

4/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

Note: 2006 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.

Highwoods Properties, Inc. Page    14 3/31/06

Office Lease Expirations by Market by Quarter 1/

Dollars in thousands
			Three Months Ended
			6/30/06 2/			09/30/06			12/31/06			03/31/07			Total
Atlanta	RSF			66,888			151,866			18,345			32,635			269,734
	% of Total Office RSF			0.4	%		0.9	%		0.1	%		0.2	%		1.6	%
	Annualized Revenue	3/	$	830		$	2,578		$	371		$	448		$	4,227
	% of Total Office Annl Rev			0.3	%		0.8	%		0.1	%		0.1	%		1.4	%
Columbia	RSF			0			831			2,831			0			3,662
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	3/	$	—		$	13		$	42		$	—		$	55
	% of Total Office Annl Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Greenville	RSF			118,521			10,699			28,545			0			157,765
	% of Total Office RSF			0.7	%		0.1	%		0.2	%		0.0	%		0.9	%
	Annualized Revenue	3/	$	2,227		$	221		$	535		$	—		$	2,983
	% of Total Office Annl Rev			0.7	%		0.1	%		0.2	%		0.0	%		1.0	%
Kansas City	RSF			30,786			22,735			40,701			29,913			124,135
	% of Total Office RSF			0.2	%		0.1	%		0.2	%		0.2	%		0.7	%
	Annualized Revenue	3/	$	615		$	502		$	869		$	625		$	2,611
	% of Total Office Annl Rev			0.2	%		0.2	%		0.3	%		0.2	%		0.8	%
Memphis	RSF			30,695			16,128			5,590			56,495			108,908
	% of Total Office RSF			0.2	%		0.1	%		0.0	%		0.3	%		0.6	%
	Annualized Revenue	3/	$	561		$	323		$	112		$	1,105		$	2,101
	% of Total Office Annl Rev			0.2	%		0.1	%		0.0	%		0.4	%		0.7	%
Nashville	RSF			77,189			53,716			176,394			33,720			341,019
	% of Total Office RSF			0.5	%		0.3	%		1.0	%		0.2	%		2.0	%
	Annualized Revenue	3/	$	1,394		$	1,164		$	3,869		$	679		$	7,106
	% of Total Office Annl Rev			0.5	%		0.4	%		1.3	%		0.2	%		2.3	%
Orlando	RSF			0			0			6,465			2,389			8,854
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.1	%
	Annualized Revenue	3/	$	—		$	—		$	183		$	62		$	245
	% of Total Office Annl Rev			0.0	%		0.0	%		0.1	%		0.0	%		0.1	%
Piedmont Triad	RSF			77,152			63,278			35,187			224,302			399,919
	% of Total Office RSF			0.5	%		0.4	%		0.2	%		1.3	%		2.3	%
	Annualized Revenue	3/	$	1,265		$	1,065		$	571		$	2,708		$	5,609
	% of Total Office Annl Rev			0.4	%		0.3	%		0.2	%		0.9	%		1.8	%
Raleigh	RSF			88,365			244,776			31,362			134,905			499,408
	% of Total Office RSF			0.5	%		1.4	%		0.2	%		0.8	%		2.9	%
	Annualized Revenue	3/	$	1,775		$	3,205		$	561		$	2,727		$	8,268
	% of Total Office Annl Rev			0.6	%		1.0	%		0.2	%		0.9	%		2.7	%
Richmond	RSF			79,821			38,286			49,762			47,077			214,946
	% of Total Office RSF			0.5	%		0.2	%		0.3	%		0.3	%		1.3	%
	Annualized Revenue	3/	$	1,470		$	740		$	1,076		$	961		$	4,247
	% of Total Office Annl Rev			0.5	%		0.2	%		0.3	%		0.3	%		1.4	%
Tampa	RSF			21,405			4,046			9,929			23,922			59,302
	% of Total Office RSF			0.1	%		0.0	%		0.1	%		0.1	%		0.3	%
	Annualized Revenue	3/	$	485		$	104		$	206		$	527		$	1,322
	% of Total Office Annl Rev			0.2	%		0.0	%		0.1	%		0.2	%		0.4	%
Other	RSF			2,384			0			0			0			2,384
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	3/	$	5		$	—		$	—		$	—		$	5
	% of Total Office Annl Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Total	RSF			593,206			606,361			405,111			585,358			2,190,036
	% of Total Office RSF			3.4	%		3.5	%		2.4	%		3.4	%		12.7	%
	Annualized Revenue	3/	$	10,627		$	9,915		$	8,395		$	9,842		$	38,779
	% of Total Office Annl Rev			3.4	%		3.2	%		2.7	%		3.2	%		12.5	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Includes 157,000 square feet of leases that are on a month to month basis or 0.7% of total annualized revenue

3/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    15 3/31/06

Industrial Lease Expirations by Market by Quarter

Dollars in thousands
			Three Months Ended
			6/30/06 1/			09/30/06			12/31/06			03/31/07			Total
Atlanta	RSF			116,853			82,920			69,763			247,028			516,564
	% of Total Industrial RSF			2.0	%		1.4	%		1.2	%		4.2	%		8.8	%
	Annualized Revenue	2/	$	425		$	394		$	489		$	1,362		$	2,670
	% of Total Industrial Annl Rev			1.5	%		1.3	%		1.6	%		4.5	%		9.0	%
Greenville	RSF			0			0			0			0			0
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	2/	$	—		$	—		$	—		$	—		$	—
	% of Total Industrial Annl Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Kansas City	RSF			2,018			0			0			0			2,018
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	2/	$	17		$	—		$	—		$	—		$	17
	% of Total Industrial Annl Rev			0.1	%		0.0	%		0.0	%		0.0	%		0.1	%
Piedmont Triad	RSF			532,416			264,608			52,752			184,319			1,034,095
	% of Total Industrial RSF			9.0	%		4.5	%		0.9	%		3.1	%		17.5	%
	Annualized Revenue	2/	$	1,669		$	1,291		$	332		$	1,008		$	4,300
	% of Total Industrial Annl Rev			5.6	%		4.3	%		1.1	%		3.4	%		14.4	%
Raleigh	RSF			0			5,112			0			3,550			8,662
	% of Total Industrial RSF			0.0	%		0.1	%		0.0	%		0.1	%		0.1	%
	Annualized Revenue	2/	$	—		$	53		$	—		$	36		$	89
	% of Total Industrial Annl Rev			0.0	%		0.2	%		0.0	%		0.1	%		0.3	%
Total	RSF			651,287			352,640			122,515			434,897			1,561,339
	% of Total Industrial RSF			11.0	%		6.0	%		2.1	%		7.4	%		26.5	%
	Annualized Revenue	2/	$	2,111		$	1,738		$	821		$	2,406		$	7,076
	% of Total Industrial Annl Rev			7.1	%		5.8	%		2.7	%		8.0	%		23.7	%

1/ Includes 288,000 square feet of leases that are on a month to month basis or 0.2% of total annualized revenue

2/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    16 3/31/06

Office Lease Expirations by Market by Year 1/

Dollars in thousands
		2006 2/			2007			2008			2009			Thereafter
Atlanta	RSF		237,099			111,342			473,962			325,491			1,025,915
	% of Total Office RSF		1.4	%		0.6	%		2.8	%		1.9	%		6.0	%
	Annualized Revenue 3/	$	3,779		$	1,891		$	7,913		$	5,609		$	20,949
	% of Total Office Annl Rev		1.2	%		0.6	%		2.6	%		1.8	%		6.8	%
Columbia	RSF		3,662			3,258			48,880			8,409			40,054
	% of Total Office RSF		0.0	%		0.0	%		0.3	%		0.0	%		0.2	%
	Annualized Revenue 3/	$	54		$	56		$	857		$	86		$	473
	% of Total Office Annl Rev		0.0	%		0.0	%		0.3	%		0.0	%		0.2	%
Greenville	RSF		157,765			10,050			99,410			49,133			474,142
	% of Total Office RSF		0.9	%		0.1	%		0.6	%		0.3	%		2.8	%
	Annualized Revenue 3/	$	2,983		$	193		$	1,824		$	713		$	7,474
	% of Total Office Annl Rev		1.0	%		0.1	%		0.6	%		0.2	%		2.4	%
Kansas City	RSF		94,222			97,177			75,762			88,211			376,957
	% of Total Office RSF		0.5	%		0.6	%		0.4	%		0.5	%		2.2	%
	Annualized Revenue 3/	$	1,985		$	2,043		$	1,565		$	1,786		$	9,470
	% of Total Office Annl Rev		0.6	%		0.7	%		0.5	%		0.6	%		3.1	%
Memphis	RSF		52,413			115,171			184,695			213,522			511,258
	% of Total Office RSF		0.3	%		0.7	%		1.1	%		1.2	%		3.0	%
	Annualized Revenue 3/	$	996		$	2,222		$	3,873		$	4,104		$	9,016
	% of Total Office Annl Rev		0.3	%		0.7	%		1.3	%		1.3	%		2.9	%
Nashville	RSF		307,299			199,349			203,376			683,034			1,212,037
	% of Total Office RSF		1.8	%		1.2	%		1.2	%		4.0	%		7.1	%
	Annualized Revenue 3/	$	6,426		$	3,897		$	4,014		$	12,705		$	23,099
	% of Total Office Annl Rev		2.1	%		1.3	%		1.3	%		4.1	%		7.5	%
Orlando	RSF		6,465			21,694			6,133			6,788			175,828
	% of Total Office RSF		0.0	%		0.1	%		0.0	%		0.0	%		1.0	%
	Annualized Revenue 3/	$	183		$	446		$	153		$	157		$	3,625
	% of Total Office Annl Rev		0.1	%		0.1	%		0.0	%		0.1	%		1.2	%
Piedmont Triad	RSF		175,617			307,685			560,204			101,461			803,880
	% of Total Office RSF		1.0	%		1.8	%		3.3	%		0.6	%		4.7	%
	Annualized Revenue 3/	$	2,901		$	4,023		$	7,468		$	1,512		$	11,859
	% of Total Office Annl Rev		0.9	%		1.3	%		2.4	%		0.5	%		3.8	%
Raleigh	RSF		364,503			377,392			521,446			452,871			1,612,292
	% of Total Office RSF		2.1	%		2.2	%		3.0	%		2.6	%		9.4	%
	Annualized Revenue 3/	$	5,541		$	7,371		$	8,864		$	8,560		$	26,328
	% of Total Office Annl Rev		1.8	%		2.4	%		2.9	%		2.8	%		8.5	%
Richmond	RSF		167,869			167,053			297,911			180,765			969,733
	% of Total Office RSF		1.0	%		1.0	%		1.7	%		1.1	%		5.7	%
	Annualized Revenue 3/	$	3,286		$	3,089		$	5,733		$	3,318		$	15,701
	% of Total Office Annl Rev		1.1	%		1.0	%		1.9	%		1.1	%		5.1	%
Tampa	RSF		35,380			116,875			247,666			436,180			1,482,785
	% of Total Office RSF		0.2	%		0.7	%		1.4	%		2.5	%		8.7	%
	Annualized Revenue 3/	$	794		$	2,549		$	4,838		$	8,967		$	28,405
	% of Total Office Annl Rev		0.3	%		0.8	%		1.6	%		2.9	%		9.2	%
Other	RSF		2,384			13,837			19,449			6,166			20,481
	% of Total Office RSF		0.0	%		0.1	%		0.1	%		0.0	%		0.1	%
	Annualized Revenue 3/	$	5		$	357		$	510		$	114		$	450
	% of Total Office Annl Rev		0.0	%		0.1	%		0.2	%		0.0	%		0.1	%
Total	RSF		1,604,678			1,540,883			2,738,894			2,552,031			8,705,362
	% of Total Office RSF		9.4	%		9.0	%		16.0	%		14.9	%		50.8	%
	Annualized Revenue 3/	$	28,933		$	28,137		$	47,612		$	47,631		$	156,849
	% of Total Office Annl Rev		9.4	%		9.1	%		15.4	%		15.4	%		50.7	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Includes 157,000 square feet of leases that are on a month to month basis or 0.7% of total annualized revenue

3/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    17 3/31/06

Industrial Lease Expirations by Market by Year

Dollars in thousands
		2006 1/			2007			2008			2009			Thereafter
Atlanta	RSF		269,536			377,856			551,736			275,316			1,441,499
	% of Total Industrial RSF		4.6	%		6.4	%		9.3	%		4.7	%		24.4	%
	Annualized Revenue 2/	$	1,308		$	1,997		$	2,776		$	1,714		$	7,029
	% of Total Industrial Annl Rev		4.4	%		6.7	%		9.3	%		5.7	%		23.5	%
Greenville	RSF		0			16,081			5,350			0			0
	% of Total Industrial RSF		0.0	%		0.3	%		0.1	%		0.0	%		0.0	%
	Annualized Revenue 2/	$	—		$	212		$	59		$	—		$	—
	% of Total Industrial Annl Rev		0.0	%		0.7	%		0.2	%		0.0	%		0.0	%
Kansas City	RSF		2,018			0			0			1,756			0
	% of Total Industrial RSF		0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue 2/	$	17		$	—		$	—		$	20		$	—
	% of Total Industrial Annl Rev		0.1	%		0.0	%		0.0	%		0.1	%		0.0	%
Piedmont Triad	RSF		849,776			523,030			444,830			378,797			700,880
	% of Total Industrial RSF		14.4	%		8.9	%		7.5	%		6.4	%		11.9	%
	Annualized Revenue 2/	$	3,291		$	3,386		$	2,006		$	2,311		$	3,255
	% of Total Industrial Annl Rev		11.0	%		11.3	%		6.7	%		7.7	%		10.9	%
Raleigh	RSF		5,112			3,550			15,188			27,926			11,936
	% of Total Industrial RSF		0.1	%		0.1	%		0.3	%		0.5	%		0.2	%
	Annualized Revenue 2/	$	53		$	36		$	162		$	230		$	102
	% of Total Industrial Annl Rev		0.2	%		0.1	%		0.5	%		0.8	%		0.3	%
Total	RSF		1,126,442			920,517			1,017,104			683,795			2,154,315
	% of Total Industrial RSF		19.1	%		15.6	%		17.2	%		11.6	%		36.5	%
	Annualized Revenue 2/	$	4,669		$	5,631		$	5,003		$	4,275		$	10,386
	% of Total Industrial Annl Rev		15.6	%		18.8	%		16.7	%		14.3	%		34.7	%

1/ Includes 288,000 square feet of leases that are on a month to month basis or 0.2% of total annualized revenue

2/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    18 3/31/06

Customer Diversification 1/

March 31, 2006

Dollars in thousands
Top 20 Customers
Customer	RSF	Annualized Revenue 2/		Percent of Annualized Revenue 2/	Average Remaining Lease Term in Years
Federal Government	1,453,186	$	26,025	6.90%	8.9
AT&T	537,529		10,409	2.76%	2.9
Price Waterhouse Coopers	332,931		8,408	2.23%	4.1
State Of Georgia	356,175		6,835	1.81%	3.6
T-Mobile USA	205,855		4,859	1.29%	7.9
US Airways	293,007		4,032	1.07%	1.5
Volvo	278,940		3,799	1.01%	3.3
Lockton Companies	145,651		3,736	0.99%	8.9
Northern Telecom	246,000		3,651	0.97%	1.9
SCI Services, Inc.	162,784		3,455	0.92%	11.3
BB&T	197,893		2,875	0.76%	6.2
Metropolitan Life Insurance	174,944		2,731	0.72%	6.7
MCI	127,268		2,477	0.66%	1.1
Lifepoint Corporate Services	120,112		2,270	0.60%	5.3
Jacobs Engineering Group, Inc.	164,417		2,269	0.60%	10.2
Vanderbilt University	115,693		2,225	0.59%	9.5
Icon Clinical Research, Inc.	99,163		2,185	0.58%	6.4
Wachovia	98,531		2,129	0.56%	3.4
The Martin Agency	118,518		2,038	0.54%	11.0
CIGNA Healthcare of NC, Inc.	180,000		2,006	0.53%	0.3
	5,408,597	$	98,414	26.09%	6.1
By Industry
Category	Percent of Annualized Revenue 2/
Professional, Scientific, and Technical Services	20.8%
Insurance	9.8%
Government/Public Administration	9.5%
Finance/Banking	8.9%
Retail Trade	7.7%
Telecommunication	7.5%
Manufacturing	6.9%
Health Care and Social Assistance	6.0%
Wholesale Trade	5.8%
Real Estate Rental and Leasing	3.8%
Transportation and Warehousing	3.3%
Accommodation and Food Services	2.7%
Administrative and Support Services	2.6%
Other Services (except Public Administration)	2.3%
Information	1.5%
Educational Services	0.9%
	100.0%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    19 3/31/06

Acquisition Activity

Dollars in thousands
Name	Market	Type	Date         Acquired	Square         Footage	Total         Cost
First quarter 2006:
None

Highwoods Properties, Inc. Page    20 3/31/06

Disposition Activity

Dollars in thousands
Name	Market	Type 1/	Date Sold	Square Footage	Occupancy		Gross Sales Price
First quarter 2006:
Office properties	Atlanta/Columbia/Tampa	O	01/09/06	1,596,000	74.9	%
Industrial properties	Atlanta	I	01/09/06	271,000	72.8	%
				1,867,000	74.6	%	$	141,000
Concourse	Raleigh	O	03/30/06	132,000	77.2	%		12,900
First quarter totals				1,999,000	74.8	%	$	153,900

1/ The letters “O” and “I” represent Office and Industrial, respectively.

Highwoods Properties, Inc. Page    21 3/31/06

Development Activity

Dollars in thousands
Property	Market	Type 1/	Rentable Square Feet	Anticipated Total Investment		Investment @ 03/31/06		Pre- Leasing		Estimated Completion Date	Estimated Stabilization Date
In - Process
Office:
Cordoba /2	Kansas City	O	24,000	$	3,546	$	1,295	0	%	4Q 06	1Q 08
ThyssenKrupp	Memphis	O	78,000		8,800		2,533	100	%	1Q 07	1Q 07
Cool Springs III	Nashville	O	153,000		21,640		9,609	8	%	2Q 06	4Q 07
Healthways (Cool Springs)	Nashville	O	255,000		58,300		3,500	100	%	2Q 08	2Q 08
Berkshire	Orlando	O	99,000		13,197		1,669	0	%	1Q 07	2Q 08
3330 Healy Rd 2/	Piedmont Triad	O	40,000		3,600		2,808	0	%	4Q 06	2Q 07
Glenlake Four	Raleigh	O	158,000		27,150		12,249	46	%	3Q 06	1Q 08
Stony Point IV	Richmond	O	104,000		13,125		1,561	51	%	4Q 06	4Q 07
Met Life (Highwoods Preserve)	Tampa	O	115,000		21,245		1,166	100	%	1Q 07	4Q 08
Total or Weighted Average			1,026,000	$	170,603	$	36,390	57	%
Industrial:
Enterprise II	Piedmont Triad	I	418,000	$	14,400	$	3,184	44	%	3Q 06	4Q 08
Total or Weighted Average			418,000	$	14,400	$	3,184	44	%
Retail:
Cordoba /2	Kansas City	R	23,000	$	10,328	$	3,660	100	%	4Q 06	4Q 06
Total or Weighted Average			23,000	$	10,328	$	3,660	100	%
Total or Weighted Average			1,467,000	$	195,331	$	43,234	54	%
Completed Not Stabilized 3/
Retail:
Griffith Road/Boutique Shops	Piedmont Triad	R	9,600	$	2,634	$	2,480	88	%	2Q05	2Q06
Total or Weighted Average			9,600	$	2,634	$	2,480	88	%
Grand Total or Weighted Average			1,476,600	$	197,965	$	45,714	54	%

1/ The letters “O”, “I”, and “R” represent Office, Industrial, and Retail, respectively.

2/ Redevelopment property

3/ Completed Not Stabilized properties are recorded in the Consolidated Balance Sheet in the Land and Building accounts, not Development-in-process.

Highwoods Properties, Inc. Page    22 3/31/06

Development Land

March 31, 2006

Dollars in thousands
Market	Usable Acres	Total Estimated Market Value
On Balance Sheet:
Research Triangle	260	$	55,347
Atlanta	226		41,911
Piedmont Triad	96		20,713
Richmond	57		14,234
Kansas City 1/	44		24,090
Baltimore	44		12,566
Charlotte	41		10,000
Nashville	39		12,486
Tampa	31		14,879
Orlando	25		14,270
Memphis	21		5,100
Greenville	12		1,800
Total 2/	896	$	227,396

1/ Includes 27 acres of residential land

2/ Developable square footage on core land holdings, which constitute 485 of the total 896 acres, is approximately 5.3 million of office space and 1.8 million of industrial space

Highwoods Properties, Inc. Page    23 3/31/06

Joint Ventures Portfolio Summary

As of March 31, 2006
Summary by Location:
				Percentage of Annualized Revenue - Highwoods’ Share Only 3/
Market	Rentable Square Feet 1/	Occupancy 2/		Office		Industrial		Retail		Multi-Family		Total
Des Moines	2,315,000	93.1	%	30.2	%	4.0	%	1.0	%	3.1	%	38.3	%
Orlando	1,685,000	94.9	%	26.0	%	—		—		—		26.0	%
Atlanta	835,000	94.9	%	11.2	%	—		—		—		11.2	%
Kansas City	713,000	81.8	%	8.6	%	—		—		—		8.6	%
Richmond	413,000	100.0	%	5.0	%	—		—		—		5.0	%
Piedmont Triad	364,000	100.0	%	3.9	%	—		—		—		3.9	%
Raleigh	455,000	99.6	%	3.7	%	—		—		—		3.7	%
Tampa	205,000	100.0	%	2.0	%	—		—		—		2.0	%
Charlotte	148,000	100.0	%	0.8	%	—		—		—		0.8	%
Other	110,000	100.0	%	0.5	%	—		—		—		0.5	%
Total	7,243,000	94.2	%	91.9	%	4.0	%	1.0	%	3.1	%	100.0	%

1/ Excludes Des Moines’ apartment units

2/ Excludes Des Moines’ apartment occupancy percentage of 91.6%

3/ Annualized Rental Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    24 3/31/06

Joint Ventures Lease Expirations

March 31, 2006

Dollars in thousands
Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Revenue 1/		Average Rental Rate		Percent of Annualized Revenue 1/
Total
2006	556,657	8.0	%	$	10,945	$	19.66	8.5	%
2007	461,164	6.6	%		9,210		19.97	7.2	%
2008	1,298,570	18.8	%		21,461		16.53	16.6	%
2009	982,438	14.2	%		19,620		19.97	15.3	%
2010	713,408	10.3	%		12,273		17.20	9.5	%
2011	715,052	10.3	%		11,556		16.16	9.0	%
2012	447,892	6.5	%		9,285		20.73	7.2	%
2013	721,580	10.4	%		14,271		19.78	11.1	%
2014	327,606	4.7	%		7,207		22.00	5.6	%
2015	578,431	8.3	%		9,328		16.13	7.3	%
2016 and thereafter	135,110	1.9	%		3,456		25.58	2.7	%
	6,937,908	100.0	%	$	128,612	$	18.54	100.0	%

1/ Annualized Revenue is March, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page    25 3/31/06

Joint Ventures Development

Dollars in thousands
Property	% Ownership		Market	Rentable Square Feet	Anticipated Total Investment		Investment @ 03/31/06		Pre- Leasing		Estimated Completion Date	Estimated Stabilization Date
Sonoma	50	%	Des Moines	75,000	$	9,364	$	9,072	68	%	2Q05	4Q06
The Vinings at University Center 1/ 2/	50	%	Charlotte	156 units		11,300		10,664	68	%	1Q 06	3Q 06
Weston Lakeside 2/	50	%	Raleigh	332 units		33,200		10,046	0	%	1Q 07	1Q 08
Total or Weighted Average 3/				75,000	$	53,864	$	29,782	68	%
Highwoods’ Share of the above					$	26,932	$	14,891

1/ The Vinings at University Center is currently a fifty percent owned joint venture consolidated under the provisions of FIN 46.

2/ Estimated Completion Date is the date the last unit is expected to be delivered

3/ Pre-leasing percentage does not include multi-family

Highwoods Properties, Inc. Page    26 3/31/06