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): February 11, 2009

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 February 11, 2009, we issued a press release announcing financial information for the quarter ended December 31, 2008. 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 December 31, 2008, a copy of which is attached as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

No.	Description
99.1	Press Release dated February 11, 2009
99.2	Supplemental information for the quarter ended December 31, 2008

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/    Jeffrey D. Miller
	Jeffrey D. Miller
	Vice President, General Counsel and Secretary
HIGHWOODS REALTY LIMITED PARTNERSHIP
By:	Highwoods Properties, Inc., its general partner
By:	/s/    Jeffrey D. Miller
	Jeffrey D. Miller
	Vice President, General Counsel and Secretary

Dated: February 12, 2009

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE Ref: 09-07

Contact:	Tabitha Zane
	Vice President, Investor Relations
	919-431-1529

Highwoods Properties Reports Fourth Quarter

and Year End 2008 Results

$0.68 FFO per Diluted Share for Fourth Quarter 2008

(Excluding Impairment on Non-Core Depreciable Assets)

$2.78 FFO per Diluted Share for Full Year 2008

(Excluding Impairment on Non-Core Depreciable Assets)

11% Increase Year-Over-Year Core FFO

Provides 2009 FFO Guidance of $2.53 to $2.72 per Diluted Share

Raleigh, NC – February 11, 2009 – Highwoods Properties, Inc. (NYSE: HIW), the largest owner and operator of suburban office properties in the Southeast, today reported unaudited financial and operational results for the fourth quarter and full year ended December 31, 2008.

Ed Fritsch, President and CEO stated, “2008 was a year of solid growth for our Company on many fronts. We delivered $201 million of infill development, acquired $43 million of strategically located office properties in Raleigh and Memphis and strengthened our balance sheet with a $195 million common equity raise in September. The 11% year-over-year increase in core FFO reflects the continuing, disciplined execution of our Strategic Plan and is a testament to the hard work and creativity of my co-workers.”

Funds from Operations (FFO) from core operations is reported FFO excluding (1) recurring, non-core operating items such as gains from land and residential condo sales and lease termination fees, and (2) unusual items such as building impairments, preferred stock repurchase charges and insurance settlement gains.

As required by Generally Accepted Accounting Principles (GAAP), the Company regularly evaluates its assets for potential impairment. In connection with an extensive year-end review, the Company recorded a $32.8 million, non-cash impairment charge in the fourth quarter relating to non-core assets in Winston-Salem. These assets include the 472,000 square foot Madison Park office park and the 176,000 square foot Consolidated Center office park. The average age of the buildings is 23 years and the current occupancy is 55%. Both office parks were acquired in the late 1990’s as part of a 2.5 million square foot portfolio acquisition from a single seller. As previously stated, the Company continues to believe that exiting Winston-Salem is the appropriate long-term strategy.

Highwoods Properties

The Company also provided 2009 FFO guidance of $2.53 to $2.72 per share. “Our 2009 FFO guidance reflects the challenging economic environment and expected dilution from planned dispositions and debt financings. It also reflects the benefits of a stronger, better located portfolio, $93 million of development deliveries, and a cycle-tested management team focused on maintaining our strong balance sheet, leasing space, providing excellent customer service and controlling expenses,” added Fritsch.

Fourth Quarter and Full Year 2008 Financial Results

For full year 2008, net income available for common stockholders was $22.1 million, or $0.37 per diluted share, compared to net income available for common stockholders of $75.0 million, or $1.31 per diluted share, for full year 2007.

For the fourth quarter of 2008, the Company reported net loss available for common stockholders of $15.0 million, or $0.24 per diluted share. Net income available for common stockholders for the fourth quarter of 2007 was $12.6 million, or $0.22 per diluted share.

FFO in 2008 and 2007 included charges related to impairments on non-core depreciable assets and preferred stock redemption charges as noted in the tables below:

	3 Months Ended 12/31/08				3 Months Ended 12/31/07
	(000)		Per Share		(000)		Per Share
FFO, as reported	$	13,166	$	0.20	$	39,775	$	0.65
Impairments on depreciable assets		32,442		0.48		0		0.00
FFO as adjusted to exclude these items	$	45,608	$	0.68	$	39,775	$	0.65
	12 Months Ended 12/31/08				12 Months Ended 12/31/07
	(000)		Per Share		(000)		Per Share
FFO, as reported	$	143,472	$	2.27	$	168,094	$	2.73
Impairments on depreciable assets		32,442		0.51		384		0.01
Preferred stock redemption/repurchase charges		108		0.00		2,285		0.04
FFO as adjusted to exclude these items	$	176,022	$	2.78	$	170,763	$	2.77

The following items were included in the determination of net income (loss) available for common shareholders for the three and twelve months ended December 31, 2008 and 2007:

	3 Months Ended 12/31/08						3 Months Ended 12/31/07
	(000)			Per Share			(000)			Per Share
Impairments on depreciable assets	$	(32,442	)	$	(0.48	)	$	0		$	0.00
Land sale gains net of (losses/impairments)		(1,565	)		(0.02	)		(419	)		(0.01	)
Gains on for-sale residential condominiums, net of partner’s interest		4,301			0.06			0			0.00
Lease termination income		216			0.00			840			0.01
Straight line rental income		701			0.01			4,048			0.07
Capitalized interest		1,399			0.02			2,489			0.04
Gains on sales of depreciable assets (1)		6,685			0.10			8,623			0.14

(1) Unlike impairments, gains on sales of depreciable assets are excluded in the calculation of FFO as defined by the National Association of Real Estate Investment Trusts (NAREIT).

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Highwoods Properties

	12 Months Ended 12/31/08						12 Months Ended 12/31/07
	(000)			Per Share			(000)			Per Share
Impairments on depreciable assets	$	(32,442	)	$	(0.51	)	$	(384	)	$	(0.01	)
Preferred stock redemption/repurchase charges		(108	)		(0.00	)		(2,285	)		(0.04	)
Land sale gains net of (losses/impairments)		251			0.00			15,821			0.26
Gains on for-sale residential condominiums, net of partner’s interest		4,301			0.07			0			0.00
Lease termination income		2,578			0.04			3,233			0.05
Straight line rental income		5,964			0.09			7,418			0.12
Capitalized interest		8,312			0.13			9,743			0.16
Gains on sales of depreciable assets (1)		18,611			0.29			45,971			0.75
Gain on property insurance claim		0			0.00			4,128			0.07
Release of FASB FIN 48 tax liability (2)		0			0.00			1,473			0.02

(1) Unlike impairments, gains on sales of depreciable assets are excluded in the calculation of FFO as defined by NAREIT.

(2) This item is excluded in the calculation of FFO.

Fourth Quarter and Full Year 2008 Operating Highlights

• First and second generation leasing activity in the fourth quarter was approximately 1.3 million square feet. Second generation leasing included 868,233 square feet of office space, 297,789 square feet of industrial space and 57,245 square feet of retail space. For the full year, the Company leased approximately 4.7 million square feet of first and second generation space.

• In the fourth quarter of 2008, average in-place cash rental rates across the Company’s total portfolio and office portfolio increased 5.6% and 5.3%, respectively, compared to the same period in 2007. Since the fourth quarter of 2004, average in-place cash rental rates across the Company’s total portfolio and office portfolio have increased 16.4% and 15.2%, respectively.

• Straight-line (GAAP) rental rates for signed office leases in the fourth quarter increased 9.7% from straight line rental rates under the previous leases. For the full year, straight-line rental rates for signed office leases increased 9.1%. Cash rents for office leases signed in the fourth quarter declined 2.9% and for the full year cash rents for signed office leases declined 3.1%.

• Office tenant improvements and leasing commissions for signed second generation leases as a percentage of base rent over the entire lease term (netting out free rent) were 8.7% in the fourth quarter, compared to the five-quarter average of 9.0%.

• In the fourth quarter, two development projects totaling $60 million were placed in service that were, on average, 90% leased. For the full year, nine projects totaling $150 million were placed in service that were, on average, 89% leased.

• Fourth quarter dispositions totaled $20.9 million and consisted of three non-core office buildings in Nashville encompassing 193,000 square feet. These buildings were, on average, 30 years old and 83.7% occupied. In total, the Company sold $56.7 million of non-core buildings in 2008.

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Highwoods Properties

Funds from Operations Outlook

For 2009, the Company expects FFO per diluted share to be in the range of $2.53 to $2.72. This estimate reflects management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, operating and general and administrative expenses, interest rates, gains from land and condominium sales and the timing and impact of development deliveries and acquisitions. This estimate also includes expected dilution from projected property dispositions and expected higher costs from projected debt financings in 2009, which collectively are expected to reduce FFO per diluted share by $0.12 to $0.18. FFO guidance excludes any gains or impairments associated with depreciable properties or joint venture interests, as well as unusual charges or credits that may occur during the year. FFO guidance is based on 67.6 million diluted shares outstanding. Factors that could cause actual 2009 FFO results to differ materially from Highwoods’ current expectations are discussed below and are also detailed in the Company’s 2007 Annual Report on Form 10-K.

Management’s outlook for 2009 is based on the following operating assumptions:

	Low			High
Year End Occupancy		87.0	%		90.0	%
Cash NOI Growth		-1.5	%		+1.0	%
G&A Expenses	$	34.0	M	$	36.0	M
Lease Termination Income	$	1.0	M	$	3.0	M
Gains from Land and Residential Condominium Sales	$	2.0	M	$	4.0	M
Straight Line Rental Income	$	3.0	M	$	5.0	M
Dispositions	$	50	M	$	100	M
Acquisitions	$	0	M	$	100	M
Development Starts	$	0	M	$	50	M

Supplemental Information

A copy of the Company’s fourth quarter 2008 Supplemental Information that includes financial, 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 919-431-1529/ 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.

Conference Call

On Thursday, February 12, at 11:00 a.m. Eastern time, Highwoods will host a teleconference call to discuss the matters outlined in this press release. For US/Canada callers, dial (800) 920-5548. A live, listen-only Web cast can be accessed through the Company’s Web site at www.highwoods.com under the “Investor Relations” section.

A replay of the call will be available on the Investor Relations section of Highwoods web site at www.highwoods.com.

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Highwoods Properties

Non-GAAP Information

Funds from Operations (“FFO”): We believe that 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 and amortization 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. Our 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 by themselves. As a result, management believes that the use of FFO and FFO per share, together with the required GAAP presentations, provide a more complete understanding of our performance relative to our competitors and a more informed and appropriate basis on which to make decisions involving operating, financing and investing activities.

FFO and FFO per share as disclosed by other REITs may not be comparable to our calculation of FFO and FFO per share as described below. 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 our operating performance because FFO and FFO per share include adjustments that investors may deem subjective, such as adding back expenses such as depreciation and amortization. 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 our operating performance.

The calculation of FFO as defined by NAREIT as follows:

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

• Less dividends to holders of preferred stock and less excess of preferred stock redemption cost over carrying value;

• Plus depreciation and amortization of assets uniquely significant to the real estate industry;

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

• Plus or minus adjustments 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 and minority interest related to discontinued operations.

In calculating FFO, the Company also adds back minority interest in the income from its operating partnership, which we believe 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 operating partnership units not owned by the Company are redeemable on a one-for-one basis for shares of the Company’s common stock. The Company’s FFO calculations are reconciled to net income in a table included with this release.

Net operating income from continuing operations (“NOI”): The Company defines NOI as “Rental and other revenues” from continuing operations less “Rental property and other expenses” from continuing operations. Management believes that NOI is a useful supplemental measure of the Company’s property operating performance because it provides 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. Other REITs may use different methodologies to calculate NOI and accordingly the Company’s NOI may not be comparable to other REITs. The Company’s NOI

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Highwoods Properties

calculations are reconciled to “Income before disposition of property, insurance gain, minority interest and equity in earnings of unconsolidated affiliates” and to “Rental and other revenues” and “Rental property and other expenses” in a table included with this release.

Same property NOI from continuing operations: The Company defines same property NOI as NOI for the Company’s in-service properties included in continuing operations that were wholly-owned during the entirety of the periods presented (from January 1, 2007 to December 31, 2008). The Company’s same property NOI calculations are reconciled to NOI in a table included with this release.

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. At December 31, 2008, the Company owned or had an interest in 383 in-service office, industrial and retail properties encompassing approximately 35.3 million square feet. Highwoods also owned 580 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Missouri, Mississippi, 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 2009 financial and operational results and the related assumptions underlying our expected results, are forward-looking statements within the meaning of the federal securities laws. These statements are distinguished by use of the words “will”, “expect”, “intend” 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; speculative development by others could result in excessive supply of properties relative to customer demand; development, acquisition, reinvestment, disposition or joint venture projects may not be completed as quickly or on as favorable terms as anticipated; we may not be able to lease or re-lease space as quickly as anticipated or on as favorable terms as old leases; difficulties in obtaining additional capital to satisfy our future cash needs or increases in interest rates could adversely impact our ability to fund important business initiatives and increase our debt service costs; our Southeastern and Midwestern markets may suffer declines in economic growth; our banking and joint venture partners may suffer financial difficulties that adversely impact their ability to satisfy their contractual obligations to us; and others detailed in the Company’s 2007 Annual Report on Form 10-K and subsequent SEC reports.

Tables Follow

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Highwoods Properties, Inc.

Consolidated Statements of Income

(Unaudited and in thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2008			2007			2008			2007
Rental and other revenues	$	117,103		$	113,082		$	461,003		$	428,446
Operating expenses:
Rental property and other expenses		44,132			40,478			165,733			153,407
Depreciation and amortization		32,862			30,309			126,767			120,254
Impairment of assets held for use		32,846			—			32,846			789
General and administrative		8,681			10,142			38,043			41,570
Total operating expenses		118,521			80,929			363,389			316,020
Interest expenses:
Contractual		23,055			24,478			92,858			93,992
Amortization of deferred financing costs		678			624			2,716			2,415
Financing obligations		631			962			2,918			3,930
		24,364			26,064			98,492			100,337
Other income:
Interest and other income		419			1,304			3,832			6,393
		419			1,304			3,832			6,393
Income/(loss) before disposition of property and condominiums, insurance gain, minority interest and equity in earnings of unconsolidated affiliates		(25,363	)		7,393			2,954			18,482
Net gains/(losses) on disposition of property		(1,071	)		190			781			20,562
Gains on for-sale residential condominiums		5,617			—			5,617			—
Gain from property insurance settlement		—			—			—			4,128
Minority interests		(75	)		(439	)		(2,334	)		(3,547	)
Equity in earnings of unconsolidated affiliates		1,155			180			5,878			13,110
Income/(loss) from continuing operations		(19,737	)		7,324			12,896			52,735
Discontinued operations:
Income from discontinued operations, net of minority interest		194			655			1,773			4,525
Net gains on sales of discontinued operations, net of minority interest		6,198			7,479			17,323			32,012
Release of FASB FIN 48 tax liability		—			—			—			1,473
		6,392			8,134			19,096			38,010
Net income/(loss)		(13,345	)		15,458			31,992			90,745
Dividends on preferred stock		(1,677	)		(2,838	)		(9,804	)		(13,477	)
Excess of preferred stock redemption/repurchase cost over carrying value		—			—			(108	)		(2,285	)
Net income/(loss) available for common stockholders	$	(15,022	)	$	12,620		$	22,080		$	74,983
Net income/(loss) per common share - basic:
Income/(loss) from continuing operations	$	(0.34	)	$	0.08		$	0.05		$	0.66
Income from discontinued operations		0.10			0.14			0.33			0.67
Net income/(loss)	$	(0.24	)	$	0.22		$	0.38		$	1.33
Weighted average common shares outstanding - basic		63,038			56,640			58,803			56,444
Net income/(loss) per common share - diluted:
Income/(loss) from continuing operations	$	(0.34	)	$	0.08		$	0.05		$	0.65
Income from discontinued operations		0.10			0.14			0.32			0.66
Net income/(loss)	$	(0.24	)	$	0.22		$	0.37		$	1.31
Weighted average common shares outstanding - diluted		63,038			61,347			63,238			61,547

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Highwoods Properties, Inc.

Consolidated Balance Sheets

(Unaudited and in thousands)

	December 31, 2008			December 31, 2007
Assets:
Real estate assets, at cost:
Land	$	352,872		$	357,841
Buildings and tenant improvements		2,819,844			2,708,989
Development in process		61,938			101,661
Land held for development		98,946			103,365
		3,333,600			3,271,856
Less-accumulated depreciation		(714,224	)		(649,765	)
Net real estate assets		2,619,376			2,622,091
For-sale residential condominiums		24,284			—
Real estate and other assets, net, held for sale		1,242			10,466
Cash and cash equivalents		13,757			3,140
Restricted cash		2,258			15,896
Accounts receivable, net		23,687			23,521
Notes receivable, net		3,602			5,226
Accrued straight-line rents receivable, net		79,979			74,427
Investment in unconsolidated affiliates		67,723			58,046
Deferred financing and leasing costs, net		73,216			72,188
Prepaid expenses and other assets		37,046			41,954
Total Assets	$	2,946,170		$	2,926,955
Liabilities, Minority Interest and Stockholders’ Equity:
Mortgages and notes payable	$	1,604,685		$	1,641,987
Accounts payable, accrued expenses and other liabilities		135,609			157,766
Financing obligations		34,174			35,071
Total Liabilities		1,774,468			1,834,824
Minority interest in the Operating Partnership		65,635			63,294
Minority interest in consolidated affiliates		6,176			6,804
Stockholders’ Equity:
Preferred stock		81,592			135,437
Common stock		636			572
Additional paid-in capital		1,661,736			1,448,055
Distributions in excess of net earnings		(639,281	)		(561,093	)
Accumulated other comprehensive loss		(4,792	)		(938	)
Total Stockholders’ Equity		1,099,891			1,022,033
Total Liabilities, Minority Interest and Stockholders’ Equity	$	2,946,170		$	2,926,955

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Highwoods Properties, Inc.

Funds from Operations

(Unaudited and in thousands, except per share amounts)

	Three Months Ended December 31,						Year Ended December 31,
	2008			2007			2008			2007
Funds from operations:
Net income/(loss)	$	(13,345	)	$	15,458		$	31,992		$	90,745
Dividends on preferred stock		(1,677	)		(2,838	)		(9,804	)		(13,477	)
Excess of preferred stock redemption/repurchase cost over carrying value		—			—			(108	)		(2,285	)
Net income/(loss) available for common stockholders		(15,022	)		12,620			22,080			74,983
Add/(deduct):
Depreciation and amortization of real estate assets		32,389			29,733			124,822			117,836
(Gains) on disposition of depreciable properties		(90	)		(609	)		(126	)		(3,952	)
Minority interest from the Operating Partnership in income from continuing operations		(1,376	)		278			293			2,868
Unconsolidated affiliates:
Depreciation and amortization of real estate assets		3,285			4,587			12,751			13,438
(Gains) on disposition of depreciable properties		—			—			—			(7,158	)
Discontinued operations:
Depreciation and amortization of real estate assets		166			598			853			3,610
(Gains) on disposition of depreciable properties		(6,595	)		(8,014	)		(18,485	)		(34,861	)
Minority interest in income from discontinued operations		409			582			1,284			2,803
Release of FASB FIN 48 tax liability		—			—			—			(1,473	)
Funds from operations	$	13,166		$	39,775		$	143,472		$	168,094
Funds from operations per share - diluted:
Net income/(loss) available for common stockholders	$	(0.24	)	$	0.22		$	0.37		$	1.31
Add/(deduct):
Depreciation and amortization of real estate assets		0.49			0.48			1.98			1.91
(Gains) on disposition of depreciable properties		—			(0.01	)		—			(0.06	)
Unconsolidated affiliates:
Depreciation and amortization of real estate assets		0.05			0.08			0.20			0.22
(Gains) on disposition of depreciable properties		—			—			—			(0.12	)
Discontinued operations:
Depreciation and amortization of real estate assets		—			0.01			0.01			0.06
(Gains) on disposition of depreciable properties		(0.10	)		(0.13	)		(0.29	)		(0.57	)
Release of FASB FIN 48 tax liability		—			—			—			(0.02	)
Funds from operations	$	0.20		$	0.65		$	2.27		$	2.73
Weighted average shares outstanding - diluted		67,308			61,347			63,238			61,547

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Highwoods Properties, Inc.

Net Operating Income Reconcilation

(Unaudited and in thousands)

	Three Months Ended December 31,						Year Ended December 31,
	2008			2007			2008			2007
Income/(loss) before disposition of property, insurance gain, minority interest and equity in earnings of unconsolidated affiliates	$	(25,363	)	$	7,393		$	2,954		$	18,482
Other income/(expense)		(419	)		(1,304	)		(3,832	)		(6,393	)
Interest expense		24,364			26,064			98,492			100,337
General and administrative expense		8,681			10,142			38,043			41,570
Impairment of assets held for use		32,846			—			32,846			789
Depreciation and amortization expense		32,862			30,309			126,767			120,254
Net operating income from continuing operations		72,971			72,604			295,270			275,039
Less - non same property and other net operating income		12,091			8,593			43,008			25,027
Total same property net operating income from continuing operations	$	60,880		$	64,011		$	252,262		$	250,012
Rental and other revenues	$	117,103		$	113,082		$	461,003		$	428,446
Rental property and other expenses		44,132			40,478			165,733			153,407
Total net operating income from continuing operations		72,971			72,604			295,270			275,039
Less - non same property and other net operating income		12,091			8,593			43,008			25,027
Total same property net operating income from continuing operations	$	60,880		$	64,011		$	252,262		$	250,012

10

EX-99.2

Exhibit 99.2

Supplemental Information

December 31, 2008

Supplemental Information

Table of Contents

December 31, 2008

Schedule	Page
Summary and Corporate Information	i, ii and iii
Consolidated Statements of Income	1
Statement of Funds from Operations and Additional Information	2
Consolidated Balance Sheets	3
Components of Net Asset Value	4
Components of Discontinued Operations	5
Capitalization	6
Long-Term Debt Summary	7
Long-Term Debt Detail	8
Portfolio Summary	9 and 10, 11
Occupancy Trends	12
Leasing Statistics	13 and 14, 15
Leasing Statistics by Market	16
Rental Rate Comparisons by Market	17
Lease Expirations	and 18, 19
Office Lease Expirations by Market by Quarter	20
Industrial Lease Expirations by Market by Quarter	21
Office Lease Expirations by Market by Year	22
Industrial Lease Expirations by Market by Year	23
Customer Diversification	24
Same Property Performance	25
Disposition Activity	26
Development Activity	27
Development Land	28
Acquisition Activity	29
Unconsolidated Joint Ventures Assets, Debt and Liabilities	30
Unconsolidated Joint Ventures Income (Three Months)	31
Unconsolidated Joint Ventures Income (Twelve Months)	32
Joint Ventures Long-Term Debt Detail	33
Joint Ventures Portfolio Summary	34
Joint Ventures Lease Expirations	35
Joint Venture Acquisition and Disposition Activity	36

The information within refers to all Highwoods Properties’ wholly-owned entities, except pages 30 to 36, unless noted otherwise. Wholly-owned entities include properties classified as both continuing operations and discontinued operations.

All financial information contained in this document is unaudited. In addition, 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 other risks listed at the end of our fourth quarter earnings press release and detailed from time to time in the Company’s SEC reports. Highwoods assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

This supplemental also includes non-GAAP financial measures, such as Funds From Operations (FFO) and net operating income (NOI). Definitions of FFO and NOI and an explanation of management’s view of the usefulness and risks of FFO and NOI can be found toward the end of the third quarter earnings press release.

Highwoods Properties, Inc. TOC 12/31/08

Summary

Amounts in thousands, except per share amounts

	Three Months Ended
	12/31/08			09/30/08			06/30/08			03/31/08			12/31/07
Shares and units:
Common shares outstanding at end of period		63,572			63,545			57,632			57,309			57,167
Common units outstanding at end of period		4,067			3,906			3,933			3,951			4,057
Weighted average common shares outstanding—basic		63,038			58,497			56,940			56,729			56,640
Weighted average common shares outstanding—diluted		67,308			62,938			61,492			61,050			61,347
Share price:
At end of period	$	27.36		$	35.56		$	31.42		$	31.07		$	29.38
High close during period		34.29			37.94			37.38			32.34			38.26
Low close during period		15.59			29.88			31.42			26.67			28.89
Financial information:
Land sale gains, net of (impairments)	$	(1,565	)	$	1,727		$	89		$	—		$	(419	)
Gains on for-sale residential condominiums, net of partner’s interest		4,301			—			—			—			—
Lease termination income		216			436			26			1,900			840
Straight line rental income		701			967			1,892			2,404			4,048
Capitalized interest		1,399			2,106			2,221			2,585			2,489
Impairments on depreciable properties		(32,442	)		—			—			—			—
Gains on sales of depreciable properties		6,685			3,155			5,045			3,726			8,623
Funds from operations per share—diluted	$	0.20		$	0.71		$	0.69		$	0.71		$	0.65
Funds from operations per share—diluted, excluding certain items 1/	$	0.68		$	0.71		$	0.69		$	0.71		$	0.65
Wholly-owned property information:
In-Service rentable square feet:
Office		19,556			19,416			19,416			19,565			19,260
Industrial		6,467			6,049			6,299			6,036			6,036
Retail		1,350			1,342			1,343			1,314			1,317
Total		27,373			26,807			27,058			26,915			26,613
In-Service occupancy:
Office		90.2	%		90.4	%		90.8	%		90.4	%		91.1	%
Industrial		92.6	%		95.2	%		91.4	%		91.0	%		94.2	%
Retail		94.6	%		93.6	%		93.5	%		92.9	%		94.9	%
Total		91.0	%		91.6	%		91.1	%		90.7	%		92.0	%

1/ Excludes impairments on depreciable assets and preferred stock redemption/repurchase charges.

Highwoods Properties, Inc. i 12/31/08

Corporate Information

Board of Directors Thomas W. Adler Gene H. Anderson Edward J. Fritsch David J. Hartzell, Ph.D. Lawrence S. Kaplan Sherry A. Kellett L. Glenn Orr Jr. O. Temple Sloan Jr., Chairman   Corporate Officers   Edward J. Fritsch President, Chief Executive Officer and Director   Michael E. Harris Executive Vice President and Chief Operating Officer   Terry L. Stevens Senior Vice President, Chief Financial Officer   Daniel L. Clemmens Vice President, Chief Accounting Officer   S. Hugh Esleeck Treasurer   Peter T. Jardine Vice President, Corporate Marketing   Carman J. Liuzzo Vice President, Investments   Art H. McCann Chief Information Officer   Jeffrey D. Miller Vice President, General Counsel and
Secretary   Kevin E. Penn Vice President, Strategy   Michael D. Starchville Vice President, Asset Management   Tabitha N. Zane Vice President, Investor Relations and Corporate Communications Research Coverage Credit Suisse—North America Steve Benyik—212-538-0239   Citigroup Global Markets Michael Bilerman—212-816-1383   Deutsche Banc Securities Lou Taylor—212-469-4912   Friedman, Billings, Ramsey & Co., Inc. Wilkes Graham—703-312-9737   Green Street Advisors Cedric Lachance—949-640-8780   RW Baird Chris Lucas—703-821-5780   Stifel Nicolaus John Guinee—443-224-1307 Erin Aslakson—443-224-1350   UBS Securities Jamie Feldman—212-713-4932   Wachovia Securities Chris Haley - 443-263-6773   Macquarie Research Nick Pirsos—212-231-2457

Highwoods Properties, Inc. ii 12/31/08

Corporate Information

Divisional Officers Atlanta/Piedmont Triad Gene H. Anderson—Senior Vice President   Atlanta, GA James V. Bacchetta, Vice President   Piedmont Triad, NC E. F. “Rick” Dehnert, Vice President   Orlando, FL Steven J. Garrity, Vice President   Tampa, FL Daniel E. Woodward, Vice President   Raleigh, NC Thomas “Skip” Hill, Vice President   Richmond, VA Paul W. Kreckman, Vice President   Nashville/Memphis/Greenville W. Brian Reames—Senior Vice President   Nashville, TN and Greenville, SC W. Brian Reames, Senior Vice President   Memphis, TN Steven L. Guinn, Vice President   Kansas City, MO Glenn E. Stephenson, 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:        919-431-1439 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:    919-431-1529 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 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. As of December 31, 2008, the Company owned or had an interest in 383 in-service office, industrial and retail properties encompassing approximately 35.3 million square feet. Highwoods also wholly-owned 580 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, Mississippi, Missouri, North Carolina, South Carolina, Tennessee, and Virginia. For more information about Highwoods Properties, please visit our website at www.highwoods.com.  

Highwoods Properties, Inc. iii 12/31/08

Consolidated Statements of Income

Amounts in thousands, except per share amounts

	Year Ended						Three Months Ended
	12/31/08			12/31/07			12/31/08			09/30/08			06/30/08			03/31/08			12/31/07
Rental and other revenues	$	461,003		$	428,446		$	117,103		$	115,451		$	115,015		$	113,434		$	113,082
Operating expenses:
Rental property and other expenses		165,733			153,407			44,132			41,795			41,229			38,577			40,478
Depreciation and amortization		126,767			120,254			32,862			31,939			31,217			30,749			30,309
Impairment of assets held for use		32,846			789			32,846			—			—			—			—
General and administrative		38,043			41,570			8,681			8,885			10,766			9,711			10,142
Total operating expenses		363,389			316,020			118,521			82,619			83,212			79,037			80,929
Interest expenses:
Contractual		92,858			93,992			23,055			22,995			23,345			23,463			24,478
Amortization of deferred financing costs		2,716			2,415			678			714			686			638			624
Financing obligations		2,918			3,930			631			783			764			740			962
		98,492			100,337			24,364			24,492			24,795			24,841			26,064
Other income:
Interest and other income		3,832			6,393			419			1,017			1,601			795			1,304
		3,832			6,393			419			1,017			1,601			795			1,304
Income/(loss) before disposition of property and condominiums, insurance gain, minority interest and equity in earnings of unconsolidated affiliates		2,954			18,482			(25,363	)		9,357			8,609			10,351			7,393
Net gains/(losses) on disposition of property		781			20,562			(1,071	)		1,745			107			—			190
Gains on for-sale residential condominiums 1/		5,617			—			5,617			—			—			—			—
Gain from property insurance settlement		—			4,128			—			—			—			—			—
Minority interests		(2,334	)		(3,547	)		(75	)		(799	)		(656	)		(804	)		(439	)
Equity in earnings of unconsolidated affiliates		5,878			13,110			1,155			1,214			1,520			1,989			180
Income/(loss) from continuing operations		12,896			52,735			(19,737	)		11,517			9,580			11,536			7,324
Discontinued operations:
Income from discontinued operations, net of minority interest		1,773			4,525			194			254			701			624			655
Net gains on sales of discontinued operations, net of minority interest		17,323			32,012			6,198			2,940			4,702			3,483			7,479
Release of FASB FIN 48 tax liability		—			1,473			—			—			—			—			—
		19,096			38,010			6,392			3,194			5,403			4,107			8,134
Net income/(loss)		31,992			90,745			(13,345	)		14,711			14,983			15,643			15,458
Dividends on preferred stock		(9,804	)		(13,477	)		(1,677	)		(2,451	)		(2,838	)		(2,838	)		(2,838	)
Excess of preferred stock redemption cost over carrying value		(108	)		(2,285	)		—			(108	)		—			—			—
Net income/(loss) available for common stockholders	$	22,080		$	74,983		$	(15,022	)	$	12,152		$	12,145		$	12,805		$	12,620
Net income/(loss) per common share—diluted:
Income/(loss) from continuing operations	$	0.05		$	0.65		$	(0.34	)	$	0.15		$	0.12		$	0.15		$	0.08
Income from discontinued operations		0.32			0.66			0.10			0.06			0.09			0.07			0.14
Net income/(loss)	$	0.37		$	1.31		$	(0.24	)	$	0.21		$	0.21		$	0.22		$	0.22
Weighted average common shares outstanding—diluted		63,238			61,547			63,038			62,938			61,492			61,050			61,347
Dividends declared and paid per common share	$	1.700		$	1.700		$	0.425		$	0.425		$	0.425		$	0.425		$	0.425

1/ After deducting our partner’s share, which is reflected in “Minority interest”, net gains to the Company were $4,301.

Highwoods Properties, Inc. 1 12/31/08

Funds from Operations

and Additional Information

Amounts in thousands, except per share amounts

	Year Ended						Three Months Ended
	12/31/08			12/31/07			12/31/08			09/30/08			06/30/08			03/31/08			12/31/07
Funds from operations:
Net income/(loss)	$	31,992		$	90,745		$	(13,345	)	$	14,711		$	14,983		$	15,643		$	15,458
Dividends on preferred stock		(9,804	)		(13,477	)		(1,677	)		(2,451	)		(2,838	)		(2,838	)		(2,838	)
Excess of preferred stock redemption cost over carrying value		(108	)		(2,285	)		—			(108	)		—			—			—
Net income/(loss) available for common stockholders		22,080			74,983			(15,022	)		12,152			12,145			12,805			12,620
Add/(deduct):
Depreciation and amortization of real estate assets		124,822			117,836			32,389			31,469			30,772			30,192			29,733
(Gains) on disposition of depreciable properties		(126	)		(3,952	)		(90	)		(18	)		(18	)		—			(609	)
Minority interest from the Operating Partnership in income from continuing operations		293			2,868			(1,376	)		598			465			606			278
Unconsolidated affiliates:
Depreciation and amortization of real estate assets		12,751			13,438			3,285			3,136			3,395			2,935			4,587
(Gains) on disposition of depreciable properties		—			(7,158	)		—			—			—			—			—
Discontinued operations:
Depreciation and amortization of real estate assets		853			3,610			166			170			157			360			598
(Gains) on disposition of depreciable properties		(18,485	)		(34,861	)		(6,595	)		(3,137	)		(5,027	)		(3,726	)		(8,014	)
Release of FASB FIN 48 tax liability		—			(1,473	)		—			—			—			—			—
Minority interest in income from discontinued operations		1,284			2,803			409			214			374			287			582
Funds from operations	$	143,472		$	168,094		$	13,166		$	44,584		$	42,263		$	43,459		$	39,775
Funds from operations per share—diluted
Net income/(loss) available for common stockholders	$	0.37		$	1.31		$	(0.24	)	$	0.21		$	0.21		$	0.22		$	0.22
Add/(deduct):
Depreciation and amortization of real estate assets		1.98			1.91			0.49			0.50			0.50			0.49			0.48
(Gains) on disposition of depreciable properties		—			(0.06	)		—			—			—			—			(0.01	)
Unconsolidated affiliates:
Depreciation and amortization of real estate assets		0.20			0.22			0.05			0.05			0.06			0.05			0.08
(Gains) on disposition of depreciable properties		—			(0.12	)		—			—			—			—			—
Discontinued operations:
Depreciation and amortization of real estate assets		0.01			0.06			—			—			—			0.01			0.01
(Gains) on disposition of depreciable properties		(0.29	)		(0.57	)		(0.10	)		(0.05	)		(0.08	)		(0.06	)		(0.13	)
Release of FASB FIN 48 tax liability		—			(0.02	)		—			—			—			—			—
Funds from operations	$	2.27		$	2.73		$	0.20		$	0.71		$	0.69		$	0.71		$	0.65
Weighted average shares outstanding—diluted		63,238			61,547			67,308			62,938			61,492			61,050			61,347
Additional information: 1/
Funds from operations, excluding certain items 2/	$	176,022		$	170,763		$	45,608		$	44,692		$	42,263		$	43,459		$	39,775
Funds from operations per share, excluding certain items 2/	$	2.78		$	2.77		$	0.68		$	0.71		$	0.69		$	0.71		$	0.65
Straight line rental income	$	(5,964	)
Amortization of lease incentives		1,041
Depreciation of non-real estate assets		1,312
Ground lease straight line rent		165
Amortization of stock-based compensation		6,717
Amortization of deferred financing costs		2,717
Amortization of accumulated other comprehensive loss		181
Harborview non-cash FMV charge		(140	)
Non-incremental revenue generating capital expenditures paid: 3/
Building improvements		(22,202	)
2nd generation tenant improvements		(27,076	)
2nd generation lease commissions		(12,177	)
Common dividends and unit distributions paid		(106,957	)

1/ Increase or (decrease) to cash flows.

2/ Excludes impairments on depreciable assets and preferred stock redemption/repurchase charges.

3/ Excludes capital expenditures paid for buildings sold prior to December 31, 2008.

Highwoods Properties, Inc. 2 12/31/08

Consolidated Balance Sheets

Dollars in thousands

	12/31/08			12/31/07
Assets:
Real estate assets, at cost:
Land	$	352,872		$	357,841
Buildings and tenant improvements		2,819,844			2,708,989
Development in process		61,938			101,661
Land held for development		98,946			103,365
		3,333,600			3,271,856
Less-accumulated depreciation		(714,224	)		(649,765	)
Net real estate assets		2,619,376			2,622,091
For-sale residential condominiums		24,284			—
Real estate and other assets, net, held for sale		1,242			10,466
Cash and cash equivalents		13,757			3,140
Restricted cash		2,258			15,896
Accounts receivable, net		23,687			23,521
Notes receivable, net		3,602			5,226
Accrued straight-line rents receivable, net		79,979			74,427
Investment in unconsolidated affiliates		67,723			58,046
Deferred financing and leasing costs, net		73,216			72,188
Prepaid expenses and other assets		37,046			41,954
Total Assets	$	2,946,170		$	2,926,955
Liabilities, Minority Interest and Stockholders’ Equity:
Mortgages and notes payable	$	1,604,685		$	1,641,987
Accounts payable, accrued expenses and other liabilities		135,609			157,766
Financing obligations		34,174			35,071
Total Liabilities		1,774,468			1,834,824
Minority interest in the Operating Partnership		65,635			63,294
Minority interest in consolidated affiliates		6,176			6,804
Stockholders’ Equity:
Preferred stock		81,592			135,437
Common stock		636			572
Additional paid-in capital		1,661,736			1,448,055
Distributions in excess of net earnings		(639,281	)		(561,093	)
Accumulated other comprehensive loss		(4,792	)		(938	)
Total Stockholders’ Equity		1,099,891			1,022,033
Total Liabilities, Minority Interest and Stockholders’ Equity	$	2,946,170		$	2,926,955

Highwoods Properties, Inc. 3 12/31/08

Components of Net Asset Value

Dollars in thousands

Note: The purpose of providing the following information at the beginning of each year is to enable readers to derive their own estimate of net asset value. The Company updates this information annually based on management’s assumptions regarding projected current year net operating income as of the date of initial publication and will not be updated to reflect any facts, circumstances or changes in financial or operating assumptions that may occur during the year. This information is not intended to be an asset-by-asset or enterprise valuation.

Consolidated Properties Projected Net Operating Income (NOI) 1/
Office	$	230,671
Retail		28,914
Industrial/Other		20,404
Deduct Partner’s Share of Consolidated JV’s (Office)		(5,529	)
Total Net Operating Income	$	274,460
Highwoods’ Share of Unconsolidated Joint Ventures Projected NOI
Office	$	30,577
Other income
Development, leasing and management fees	$	4,502
Add Other assets:
Development investment at cost	$	204,299
Assets not fairly valued by capitalized NOI valuation method 2/		108,822
Property held for sale at net sales price		1,400
Land held for development at market value		142,802
Cash and cash equivalents		13,757
Highwoods share of unconsolidated JV’s cash and cash equivalents		20,032
Restricted cash		2,258
Accounts receivable, net		23,687
Notes receivable and prepaid expenses		40,648
Deduct partner’s share of Consolidated JV’s other assets		(1,218	)
Other assets total	$	556,487
Deductions:
Total liabilities	$	135,609
Mortgages and notes payable		1,604,685
Deduct partner’s share of Consolidated JV’s liabilities and mortgages		(36,811	)
Market value of debt adjustment 3/		(271,860	)
Preferred stock, at liquidation value		81,592
Highwoods’ share of unconsolidated joint ventures liabilities		259,778
	$	1,772,993
Estimated diluted common shares and common units for 2009 (000’s)		67,639

1/ Projected 2009 NOI excludes straight line income, lease termination fee income, NOI related to completed not stabilized developments, and NOI related to assets undervalued by capitalized NOI method.

2/ Consolidated Properties projected 2009 NOI is adjusted to eliminate the net NOI for properties for which a NOI capitalization approach is not appropriate. For these assets, an alternative methodology has been applied.

3/ In accordance with prior practice, we included an adjustment to mark our debt and bonds to estimated fair value as of December 31, 2008.

Highwoods Properties, Inc. 4 12/31/08

Components of Discontinued Operations

Dollars in thousands

	Year Ended						Three Months Ended
	12/31/08			12/31/07			12/31/08			09/30/08			06/30/08			03/31/08			12/31/07
Rental and other revenues	$	4,860		$	15,697		$	670		$	826		$	1,512		$	1,852		$	2,726
Operating expenses:
Rental property and other expenses		2,135			7,273			306			387			609			833			1,447
Depreciation and amortization		853			3,610			166			170			157			360			598
Total operating expenses		2,988			10,883			472			557			766			1,193			2,045
Other income		23			49			8			2			4			9			21
Income before minority interest and gains on sales of discontinued operations		1,895			4,863			206			271			750			668			702
Minority interest in discontinued operations		(122	)		(338	)		(12	)		(17	)		(49	)		(44	)		(47	)
Income from discontinued operations before gains on sales of discontinued operations		1,773			4,525			194			254			701			624			655
Net gains on sales of discontinued operations		18,485			34,477			6,595			3,137			5,027			3,726			8,014
Minority interest in discontinued operations		(1,162	)		(2,465	)		(397	)		(197	)		(325	)		(243	)		(535	)
Net gains on sales of discontinued operations, net of minority interest		17,323			32,012			6,198			2,940			4,702			3,483			7,479
Net income from discontinued operations before release of FASB FIN 48 tax liability		19,096			36,537			6,392			3,194			5,403			4,107			8,134
Release of FASB FIN 48 tax liability		—			1,473			—			—			—			—			—
Net income from discontinued operations	$	19,096		$	38,010		$	6,392		$	3,194		$	5,403		$	4,107		$	8,134

Highwoods Properties, Inc. 5 12/31/08

Capitalization

Dollars, shares, and units in thousands

	12/31/08		9/30/08		6/30/08		3/31/08		12/31/07
Long-Term Debt (see pages 7 & 8):	$	1,604,685	$	1,588,954	$	1,732,082	$	1,703,238	$	1,641,987
Financing Obligations:	$	34,174	$	35,195	$	35,145	$	35,296	$	35,071
Preferred Stock (at liquidation value):
Series A 8 5/8% Perpetual Preferred Stock	$	29,092	$	29,092	$	82,937	$	82,937	$	82,937
Series B 8% Perpetual Preferred Stock		52,500		52,500		52,500		52,500		52,500
Total preferred stock	$	81,592	$	81,592	$	135,437	$	135,437	$	135,437
Common Shares and Units Outstanding:
Common stock outstanding		63,572		63,545		57,632		57,309		57,167
Minority interest partnership units		4,067		3,906		3,933		3,951		4,057
Total common shares and units outstanding		67,639		67,451		61,565		61,260		61,224
Stock price at period end	$	27.36	$	35.56	$	31.42	$	31.07	$	29.38
Market value of common equity	$	1,850,603	$	2,398,558	$	1,934,372	$	1,903,348	$	1,798,761
Total market capitalization with debt and obligations	$	3,571,054	$	4,104,299	$	3,837,036	$	3,777,319	$	3,611,256

See pages 30 to 36 for information regarding Highwoods’ Joint Ventures.

Highwoods Properties, Inc. 6 12/31/08

Long-Term Debt Summary

Dollars in thousands

	12/31/08			9/30/08			6/30/08			3/31/08			12/31/07
Balances Outstanding:
Secured:
Conventional fixed rate 1/	$	634,317		$	638,032		$	640,557		$	643,041		$	645,500
Variable rate debt		20,869			31,954			47,087			26,890			19,811
Secured total		655,186			669,986			687,644			669,931			665,311
Unsecured:
Fixed rate bonds and notes		648,999			648,968			648,938			648,907			748,876
Bank term loan		137,500			137,500			137,500			137,500			—
Credit facility		163,000			132,500			258,000			246,900			227,800
Unsecured total		949,499			918,968			1,044,438			1,033,307			976,676
Total	$	1,604,685		$	1,588,954		$	1,732,082		$	1,703,238		$	1,641,987
End of Period Weighted Average Interest Rates:
Secured:
Conventional fixed rate		6.61	%		6.62	%		6.61	%		6.62	%		6.62	%
Variable rate debt		1.73	%		3.94	%		4.01	%		4.34	%		6.61	%
Secured total		6.45	%		6.49	%		6.44	%		6.50	%		6.62	%
Unsecured:
Fixed rate bonds		6.53	%		6.53	%		6.53	%		6.53	%		6.61	%
Bank term loan		2.66	%		4.38	%		3.53	%		3.71	%		—
Credit facility		2.39	%		4.02	%		3.43	%		3.65	%		5.80	%
Unsecured total		5.26	%		5.85	%		5.37	%		5.47	%		6.42	%
Average		5.75	%		6.12	%		5.79	%		5.88	%		6.50	%

Maturity Schedule:

	Future Maturities of Debt				Total Debt 2/		Average Interest Rate
Year	Secured Debt 2/		Unsecured Debt
2009	$	118,370	$	213,000	$	331,370	5.13	%
2010		16,605		—		16,605	1.33	%
2011		—		137,500		137,500	2.66	%
2012		212,331		—		212,331	6.95	%
2013		262,952		—		262,952	5.90	%
2014		36,629		—		36,629	5.79	%
2015		—		—		—	—
2016		8,299		—		8,299	7.65	%
2017		—		398,999		398,999	5.85	%
2018		—		200,000		200,000	7.50	%
Total maturities	$	655,186	$	949,499	$	1,604,685	5.75	%
Weighted average maturity = 4.8 years

1/ Includes a $22.3 million loan related to a consolidated 20% owned joint venture (Harborview) and $36.6 million in loans at December 31, 2008 related to a consolidated 50% joint venture (Markel).

2/ All periods exclude annual principal amortization.

Highwoods Properties, Inc. 7 12/31/08

Long-Term Debt Detail

Dollars in thousands

Secured Loans

Lender	Rate		Maturity Date	Loan Balance 12/31/08		Undepreciated Book Value of Assets Secured
Northwestern Mutual	7.05	%	Jan-12	$	190,000	$	301,885
Northwestern Mutual	6.03	%	Mar-13		133,241		183,327
Massachusetts Mutual Life Ins. Co. 1/	5.68	%	Dec-13		118,535		213,725
Monumental Life Ins. Co. 2/	7.77	%	Nov-09		78,016		187,700
Monumental Life Ins. Co. 2/	7.87	%	Nov-09		30,685
Metropolitan Life Ins. Co. 3/	6.06	%	Oct-12		22,331		39,126
PNC/Regions/Union Bank of California/U.S. Bank 4/	1.33	%	Dec-10		16,605		18,938
Principal Life Insurance Company 5/	5.79	%	Jan-14		11,229		14,408
Principal Life Insurance Company 5/	5.79	%	Jan-14		11,229		18,781
Massachusetts Mutual Life Ins. Co. 1/	6.48	%	Dec-13		10,517
Principal Life Insurance Company 5/	5.74	%	Jan-14		8,853		14,162
Union Realty Co.	7.65	%	Feb-16		8,299		15,973
Principal Life Insurance Company 5/	5.89	%	Jan-14		5,318		7,514
Royal Bank of Canada 4/	3.30	%	Dec-09		4,264		24,284
Lutheran Brotherhood	6.75	%	Apr-09		3,558		8,196
Security Life of Denver	8.85	%	Aug-09		1,848		9,693
American United Life	9.00	%	Jun-13		658		3,325
	6.45	%			655,186	$	1,061,037
Unsecured Bonds
Bonds	5.85	%	Mar-17		398,999
Bonds	7.50	%	Apr-18		200,000
Bonds 6/	8.13	%	Jan-09		50,000
	6.53	%			648,995
Unsecured Loans
Credit facility 4/	2.39	%	May-09		163,000
Bank term loan 4/	2.66	%	Feb-11		137,500
	2.51	%			300,500
Total Debt	5.75	%		$	1,604,685

Note: Credit facility maturity date excludes one-year extension option which management exercised on February 5, 2009.

Revolving Credit Facility

Name of Lender	Total Commitment		Amount Outstanding at 12/31/08		Unfunded Commitment at 12/31/08
Bank of America, N.A.	$	50,000	$	18,111	$	31,889
Branch Banking and Trust Co.		50,000		18,111		31,889
Wachovia Bank, N.A. 7/		50,000		18,111		31,889
Wells Fargo Bank, N.A.		50,000		18,111		31,889
Emigrant Bank		35,000		12,678		22,322
Eurohypo AG, New York Branch		35,000		12,678		22,322
PNC Bank, N.A.		30,000		10,866		19,134
Regions Bank		30,000		10,866		19,134
Comerica Bank		25,000		9,055		15,945
RBC Bank		25,000		9,055		15,945
Union Bank of California, N.A.		25,000		9,055		15,945
US Bank		20,000		7,246		12,754
First Horizon Bank		15,000		5,434		9,566
Chevy Chase Bank		10,000		3,622		6,378
	$	450,000	$	163,000	$	287,000

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

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

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

4/ Floating rate loans based on one month libor.

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

6/ Paid off on 1/15/2009.

7/ Wells Fargo acquired Wachovia effective December 31, 2008.

Highwoods Properties, Inc. 8 12/31/08

Portfolio Summary—Wholly-Owned Properties Only 1/

(Rentable Square Feet)

	12/31/08		9/30/08		6/30/08		3/31/08		12/31/07
Office Industrial & Retail
In-Service:
Office 2/	19,556,000		19,416,000		19,416,000		19,565,000		19,260,000
Industrial	6,467,000		6,049,000		6,299,000		6,036,000		6,036,000
Retail 3/	1,350,000		1,342,000		1,343,000		1,314,000		1,317,000
Total 4/	27,373,000		26,807,000		27,058,000		26,915,000		26,613,000
Development Completed—Not Stabilized:
Office 2/	665,000		873,000		428,000		524,000		607,000
Industrial	—		418,000		418,000		681,000		681,000
Retail	—		—		—		—		—
Total	665,000		1,291,000		846,000		1,205,000		1,288,000
Development—In Process:
Office 2/	358,000		358,000		803,000		717,000		887,000
Industrial	200,000		200,000		200,000		200,000		—
Retail	—		—		—		—		30,000
Total	558,000		558,000		1,003,000		917,000		917,000
Total:
Office 2/	20,579,000		20,647,000		20,647,000		20,806,000		20,754,000
Industrial	6,667,000		6,667,000		6,917,000		6,917,000		6,717,000
Retail 3/	1,350,000		1,342,000		1,343,000		1,314,000		1,347,000
Total 4/	28,596,000		28,656,000		28,907,000		29,037,000		28,818,000
Same Property
Office 2/	18,020,000		18,020,000		18,020,000		18,020,000		18,020,000
Industrial	5,666,000		5,666,000		5,666,000		5,666,000		5,666,000
Retail	1,319,000		1,319,000		1,319,000		1,319,000		1,319,000
Total	25,005,000		25,005,000		25,005,000		25,005,000		25,005,000
Percent Leased/Pre-Leased:
In-Service:
Office	90.2	%	90.3	%	90.8	%	90.4	%	91.1	%
Industrial	92.6	%	95.2	%	91.4	%	91.0	%	94.2	%
Retail	94.6	%	93.6	%	93.5	%	92.9	%	94.9	%
Total	91.0	%	91.6	%	91.1	%	90.7	%	92.0	%
Development Completed—Not Stabilized:
Office	64.2	%	69.4	%	73.6	%	67.4	%	75.9	%
Industrial	—		91.0	%	72.0	%	78.2	%	78.2	%
Retail	—		—		—		—		—
Total	64.2	%	76.4	%	72.8	%	73.5	%	77.1	%
Development—In Process:
Office	65.7	%	65.7	%	63.5	%	65.7	%	59.9	%
Industrial	50.0	%	50.0	%	50.0	%	50.0	%	—
Retail	—		—		—		—		100.0	%
Total	60.1	%	60.1	%	60.8	%	62.3	%	61.2	%
Same Property
Office	90.1	%	90.3	%	90.8	%	90.6	%	91.3	%
Industrial	92.8	%	95.5	%	91.1	%	90.5	%	93.9	%
Retail	94.4	%	93.7	%	93.6	%	93.2	%	95.4	%
Total	90.9	%	91.7	%	91.0	%	90.7	%	92.1	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

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

3/ Excludes 426,000 square feet of basement space in the Country Club Plaza and other Kansas City Retail properties.

4/ Excludes minor for rent apartment buildings.

Highwoods Properties, Inc. 9 12/31/08

Portfolio Summary

(Continued)

As of December 31, 2008

Summary by Location, Wholly-Owned Properties Only 1/:

Market	Rentable Square Feet		Occupancy		Percentage of Annualized Cash Revenue 2/
					Office		Industrial		Retail		Total
Raleigh 3/	3,711,000		88.6	%	16.4	%	—		—		16.4	%
Atlanta	5,552,000		93.4	%	10.1	%	3.8	%	—		13.9	%
Nashville	2,988,000		95.0	%	13.7	%	—		—		13.7	%
Tampa	2,627,000		91.6	%	13.6	%	—		—		13.6	%
Kansas City	1,953,000	4/	92.3	%	3.4	%	0.0	%	9.0	%	12.4	%
Piedmont Triad 5/	5,526,000		86.1	%	6.0	%	3.4	%	0.2	%	9.6	%
Richmond	2,229,000		90.8	%	8.6	%	—		—		8.6	%
Memphis	1,473,000		92.5	%	6.1	%	—		—		6.1	%
Greenville	897,000		94.4	%	3.4	%	—		—		3.4	%
Orlando	317,000		98.4	%	1.7	%	—		—		1.7	%
Other	100,000		84.3	%	0.6	%	—		—		0.6	%
Total	27,373,000		91.0	%	83.6	%	7.2	%	9.2	%	100.0	%

Summary by Location, Including Joint Venture Properties:

Market	Rentable Square Feet		Occupancy		Percentage of Annualized Cash Revenue 2/ 6/
					Office		Industrial		Retail		Multi-Family		Total
Raleigh	4,525,000		88.9	%	15.3	%	—		—		—		15.3	%
Atlanta	6,387,000		93.1	%	10.2	%	3.3	%	—		—		13.5	%
Nashville	2,988,000		95.0	%	12.2	%	—		—		—		12.2	%
Tampa	2,832,000		91.8	%	12.3	%	—		—		—		12.3	%
Kansas City	2,667,000	4/	89.8	%	4.0	%	0.0	%	8.0	%	—		12.0	%
Piedmont Triad	5,890,000		83.5	%	5.6	%	3.0	%	0.2	%	—		8.8	%
Richmond	2,642,000		92.2	%	8.2	%	—		—		—		8.2	%
Memphis	1,473,000		92.5	%	5.4	%	—		—		—		5.4	%
Orlando	2,169,000		90.3	%	4.6	%	—		—		—		4.6	%
Des Moines	2,505,000		87.1	%	3.0	%	0.5	%	0.1	%	0.4	%	4.0	%
Greenville	897,000		94.5	%	3.0	%	—		—		—		3.0	%
Other	210,000		92.5	%	0.6	%	—		—		—		0.6	%
Charlotte	148,000		100.0	%	0.1	%	—		—		—		0.1	%
Total	35,333,000		90.2	%	84.5	%	6.8	%	8.3	%	0.4	%	100.0	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

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

4/ Excludes 426,000 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 Cash Revenue, see page 34.

Highwoods Properties, Inc. 10 12/31/08

Portfolio Summary—Wholly-Owned Properties Only

(Continued)

As of December 31, 2008

	Office Properties 1/					Industrial
Market	Rentable Square Feet	Occupancy		Percentage of Office Annualized Cash Revenue 2/		Rentable Square Feet	Occupancy		Percentage of Industrial Annualized Cash Revenue 2/
Raleigh	3,711,000	88.6	%	19.5	%	—	—		—
Nashville	2,988,000	95.0	%	16.4	%	—	—		—
Tampa	2,627,000	91.6	%	16.3	%	—	—		—
Atlanta	2,470,000	90.9	%	12.1	%	3,082,000	95.3	%	52.4	%
Richmond	2,229,000	90.8	%	10.3	%	—	—		—
Memphis	1,473,000	92.5	%	7.3	%	—	—		—
Piedmont Triad	2,105,000	79.3	%	7.2	%	3,381,000	90.2	%	47.5	%
Kansas City	639,000	88.3	%	4.1	%	4,000	46.5	%	0.1	%
Greenville	897,000	94.4	%	4.1	%	—	—		—
Orlando	317,000	98.4	%	2.0	%	—	—		—
Other	100,000	84.3	%	0.7	%	—	—		—
	19,556,000	90.2	%	100.0	%	6,467,000	92.6	%	100.0	%

	Retail
Market	Rentable Square Feet	Occupancy		Percentage of Retail Annualized Cash Revenue 2/
Kansas City 3/	1,310,000	94.4	%	97.6	%
Piedmont Triad	40,000	100.0	%	2.4	%
	1,350,000	94.6	%	100.0	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

3/ Excludes 426,000 square feet of basement space in the Country Club Plaza and other Kansas City Retail properties.

Highwoods Properties, Inc. 11 12/31/08

Occupancy Trends—Office, Industrial and Retail Properties 1/

Market	Measurement	12/31/08		9/30/08		6/30/08		3/31/08		12/31/07
Atlanta	Rentable Square Feet	5,552,000		5,552,000		5,552,000		5,289,000		5,289,000
	Occupancy	93.4	%	93.2	%	92.0	%	91.6	%	93.0	%
	Current Properties 2/	93.6	%	93.5	%	92.2	%	91.6	%	93.0	%
Greenville	Rentable Square Feet	897,000		897,000		897,000		897,000		897,000
	Occupancy	94.4	%	94.4	%	91.4	%	86.4	%	85.6	%
	Current Properties 2/	94.4	%	94.4	%	91.4	%	86.4	%	85.6	%
Kansas City 3/	Rentable Square Feet	1,953,000		1,955,000		1,956,000		2,229,000		2,215,000
	Occupancy	92.3	%	91.6	%	91.3	%	88.8	%	89.4	%
	Current Properties 2/	92.5	%	91.8	%	91.6	%	91.0	%	92.1	%
Memphis	Rentable Square Feet	1,473,000		1,337,000		1,337,000		1,276,000		1,276,000
	Occupancy	92.5	%	93.0	%	93.5	%	93.8	%	94.9	%
	Current Properties 2/	92.4	%	92.6	%	93.2	%	93.8	%	94.9	%
Nashville	Rentable Square Feet	2,988,000		3,181,000		3,181,000		3,184,000		3,184,000
	Occupancy	95.0	%	94.8	%	94.9	%	95.0	%	95.1	%
	Current Properties 2/	95.0	%	95.7	%	95.6	%	95.8	%	95.9	%
Orlando	Rentable Square Feet	317,000		317,000		317,000		317,000		218,000
	Occupancy	98.4	%	98.4	%	98.4	%	96.9	%	100.0	%
	Current Properties 2/	97.6	%	97.6	%	97.6	%	95.4	%	100.0	%
Piedmont Triad	Rentable Square Feet	5,526,000		5,108,000		5,358,000		5,358,000		5,328,000
	Occupancy	86.1	%	88.4	%	85.9	%	85.2	%	89.3	%
	Current Properties 2/	85.6	%	88.3	%	85.1	%	84.4	%	88.8	%
Raleigh	Rentable Square Feet	3,711,000		3,711,000		3,711,000		3,712,000		3,554,000
	Occupancy	88.6	%	89.9	%	89.7	%	90.3	%	91.5	%
	Current Properties 2/	88.8	%	90.3	%	90.1	%	90.8	%	91.5	%
Richmond	Rentable Square Feet	2,229,000		2,230,000		2,230,000		2,135,000		2,134,000
	Occupancy	90.8	%	90.0	%	92.1	%	93.5	%	92.5	%
	Current Properties 2/	91.6	%	91.4	%	93.6	%	93.5	%	92.6	%
Tampa	Rentable Square Feet	2,627,000		2,419,000		2,419,000		2,418,000		2,418,000
	Occupancy	91.6	%	92.2	%	94.5	%	94.7	%	95.0	%
	Current Properties 2/	92.4	%	92.2	%	94.5	%	94.7	%	94.9	%
Total 4/	Rentable Square Feet	27,273,000		26,707,000		26,958,000		26,815,000		26,513,000
	Occupancy	91.0	%	91.6	%	91.1	%	90.7	%	92.0	%
	Current Properties 2/	91.1	%	91.9	%	91.2	%	90.8	%	92.2	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

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

3/ Excludes 426,000 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. 12 12/31/08

Leasing Statistics

Office Portfolio 1/

	Three Months Ended
	12/31/08 2/			9/30/08 3/			6/30/08 4/			3/31/08 5/			12/31/07 6/			Average
Net Effective Rents Related to Re-leased Space:
Number of lease transactions (signed leases)		129			96			113			126			126			118
Rentable square footage leased		868,233			471,486			997,600			602,049			920,405			771,955
Square footage of Renewal Deals		703,690			330,751			913,530			385,756			730,702			612,886
Renewed square footage (% of total)		81.0	%		70.2	%		91.6	%		64.1	%		79.4	%		79.4	%
New Leases square footage (% of total)		19.0	%		29.8	%		8.4	%		35.9	%		20.6	%		20.6	%
Weighted average per rentable square foot over the lease term:
Base rent	$	21.21		$	20.84		$	22.47		$	19.82		$	19.35		$	20.74
Tenant improvements		(1.21	)		(1.35	)		(1.16	)		(1.10	)		(1.64	)		(1.29	)
Leasing commissions 7/		(0.60	)		(0.51	)		(0.63	)		(0.44	)		(0.62	)		(0.56	)
Rent concessions		(0.35	)		(0.22	)		(0.28	)		(0.13	)		(0.19	)		(0.23	)
Effective rent		19.05			18.76			20.40			18.15			16.90			18.66
Expense stop		(6.07	)		(6.64	)		(7.12	)		(5.90	)		(6.05	)		(6.36	)
Equivalent effective net rent	$	12.98		$	12.12		$	13.28		$	12.25		$	10.85		$	12.30
Weighted average term in years		4.7			4.5			3.2			4.0			4.4			4.1
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	5,973,249		$	3,041,354		$	5,224,995		$	3,504,078		$	7,696,269		$	5,087,989
Rentable square feet		868,233			471,486			997,600			602,049			920,405			771,955
Per rentable square foot	$	6.88		$	6.45		$	5.24		$	5.82		$	8.36		$	6.59
Leasing Commissions:
Total dollars committed under signed leases 7/	$	2,463,135		$	970,896		$	2,300,840		$	1,190,054		$	2,719,401		$	1,928,865
Rentable square feet		868,233			471,486			997,600			602,049			920,405			771,955
Per rentable square foot	$	2.84		$	2.06		$	2.31		$	1.98		$	2.95		$	2.50
Total:
Total dollars committed under signed leases	$	8,436,384		$	4,012,250		$	7,525,835		$	4,694,132		$	10,415,670		$	7,016,854
Rentable square feet		868,233			471,486			997,600			602,049			920,405			771,955
Per rentable square foot	$	9.72		$	8.51		$	7.54		$	7.80		$	11.32		$	9.09

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Includes 38K square feet of leases that start in 2011 or later.

3/ Includes 62K square feet of leases that start in 2010 or later.

4/ Includes 346K square feet of leases that start in 2010 or later.

5/ Includes 84K square feet of leases that start in 2010 or later.

6/ Includes 91K square feet of leases that start in 2010 or later.

7/ Excludes a full allocation of internal leasing costs.

Highwoods Properties, Inc. 13 12/31/08

Leasing Statistics

Industrial Portfolio

	Three Months Ended
	12/31/08			9/30/08 1/			6/30/08			3/31/08			12/31/07			Average
Net Effective Rents Related to Re-leased Space:
Number of lease transactions (signed leases)		14			14			14			7			10			12
Rentable square footage leased		297,789			358,284			367,684			158,324			694,808			375,378
Square footage of Renewal Deals		249,927			294,376			155,126			150,170			538,836			277,687
Renewed square footage (% of total)		83.9	%		82.2	%		42.2	%		94.8	%		77.6	%		74.0	%
New Leases square footage (% of total)		16.1	%		17.8	%		57.8	%		5.2	%		22.4	%		26.0	%
Weighted average per rentable square foot over the lease term:
Base rent	$	4.37		$	4.50		$	3.85		$	5.95		$	4.03		$	4.54
Tenant improvements		(0.26	)		(0.45	)		(0.18	)		(0.07	)		(0.04	)		(0.20	)
Leasing commissions 2/		(0.08	)		(0.09	)		(0.10	)		0.00			(0.05	)		(0.06	)
Rent concessions		(0.01	)		(0.01	)		0.00			0.00			0.00			0.00
Effective rent		4.02			3.95			3.57			5.88			3.94			4.28
Expense stop		(0.08	)		(0.05	)		(0.19	)		(0.10	)		(0.05	)		(0.09	)
Equivalent effective net rent	$	3.94		$	3.90		$	3.38		$	5.78		$	3.89		$	4.19
Weighted average term in years		3.7			3.0			1.8			3.3			2.6			2.9
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	420,373		$	385,175		$	269,635		$	50,537		$	40,925		$	233,329
Rentable square feet		297,789			358,284			367,684			158,324			694,808			375,378
Per rentable square foot	$	1.41		$	1.08		$	0.73		$	0.32		$	0.06		$	0.62
Leasing Commissions:
Total dollars committed under signed leases 2/	$	71,111		$	142,626		$	62,837		$	1,918		$	136,633		$	83,025
Rentable square feet		297,789			358,284			367,684			158,324			694,808			375,378
Per rentable square foot	$	0.24		$	0.40		$	0.17		$	0.01		$	0.20		$	0.22
Total:
Total dollars committed under signed leases	$	491,484		$	527,801		$	332,471		$	52,455		$	177,558		$	316,354
Rentable square feet		297,789			358,284			367,684			158,324			694,808			375,378
Per rentable square foot	$	1.65		$	1.47		$	0.90		$	0.33		$	0.26		$	0.84

1/ Includes 256K square feet of leases that start in 2010 or later.

2/ Excludes a full allocation of internal leasing costs.

Highwoods Properties, Inc. 14 12/31/08

Leasing Statistics

Retail Portfolio

	Three Months Ended
	12/31/08 1/			9/30/08			6/30/08 2/			3/31/08			12/31/07 3/			Average
Net Effective Rents Related to Re-leased Space:
Number of lease transactions (signed leases)		13			3			6			7			12			8
Rentable square footage leased		57,245			7,719			15,839			30,942			44,509			31,251
Square footage of Renewal Deals		53,385			2,898			14,162			18,826			37,318			25,318
Renewed square footage (% of total)		93.3	%		37.5	%		89.4	%		60.8	%		83.8	%		81.0	%
New Leases square footage (% of total)		6.7	%		62.5	%		10.6	%		39.2	%		16.2	%		19.0	%
Weighted average per rentable square foot over the lease term:
Base rent	$	18.46		$	25.81		$	27.61		$	31.80		$	20.44		$	24.82
Tenant improvements		(0.65	)		0.00			(1.52	)		(0.40	)		(1.46	)		(0.81	)
Leasing commissions 4/		(0.04	)		(0.15	)		(0.67	)		(0.54	)		(0.26	)		(0.33	)
Rent concessions		(0.05	)		0.00			0.00			(1.47	)		0.00			(0.30	)
Effective rent		17.72			25.66			25.42			29.39			18.72			23.38
Expense stop		0.00			0.00			0.00			0.00			0.00			0.00
Equivalent effective net rent	$	17.72		$	25.66		$	25.42		$	29.39		$	18.72		$	23.38
Weighted average term in years		7.6			8.6			7.7			8.6			5.6			7.6
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	344,272		$	—		$	177,176		$	161,500		$	509,473		$	238,484
Rentable square feet		57,245			7,719			15,839			30,942			44,509			31,251
Per rentable square foot	$	6.01		$	—		$	11.19		$	5.22		$	11.45		$	7.63
Leasing Commissions:
Total dollars committed under signed leases 4/	$	20,072		$	1,165		$	5,794		$	123,220		$	21,542		$	34,359
Rentable square feet		57,245			7,719			15,839			30,942			44,509			31,251
Per rentable square foot	$	0.35		$	0.15		$	0.37		$	3.98		$	0.48		$	1.10
Total:
Total dollars committed under signed leases	$	364,344		$	1,165		$	182,970		$	284,720		$	531,015		$	272,843
Rentable square feet		57,245			7,719			15,839			30,942			44,509			31,251
Per rentable square foot	$	6.36		$	0.15		$	11.55		$	9.20		$	11.93		$	8.73

1/ Includes 5K square feet of leases that start in 2011 or later.

2/ Includes 3K square feet of leases that start in 2010 or later.

3/ Includes 9K square feet of leases that start in 2010 or later.

4/ Excludes a full allocation of internal leasing costs.

Highwoods Properties, Inc. 15 12/31/08

Leasing Statistics by Market

For the Three Months Ended As of 12/31/08

Office Portfolio 1/

Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/ 3/
Raleigh	299,167	5.7	$	21.23	$	5.67	$	2.95
Nashville	175,139	4.7		21.05		7.30		3.21
Richmond	122,833	3.7		19.65		6.53		2.50
Tampa	102,141	3.5		24.11		7.96		2.89
Memphis	64,479	5.0		20.93		11.09		3.02
Piedmont Triad	34,802	2.9		17.61		2.19		1.69
Other	32,076	5.0		15.68		7.16		0.05
Atlanta	24,393	3.5		19.56		10.59		3.11
Kansas City	8,509	3.3		22.37		11.11		4.33
Orlando	4,694	2.0		14.93		2.00		0.00
	868,233	4.7	$	20.86	$	6.88	$	2.84

Industrial Portfolio

Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/ 3/
Piedmont Triad	279,806	3.6	$	4.36	$	1.36	$	0.18
Atlanta	17,983	5.0		4.39		2.14		1.10
	297,789	3.7	$	4.36	$	1.41	$	0.24

Retail Portfolio

Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/ 3/
Kansas City	57,245	7.6	$	18.41	$	6.01	$	0.35
	57,245	7.6	$	18.41	$	6.01	$	0.35

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Lease commissions by market per square foot excludes capitalized internal leasing costs.

3/ The amount of capitalized internal leasing cost not allocated to individual deals or product types was $722K.

Highwoods Properties, Inc. 16 12/31/08

Rental Rate Comparisons by Market

For the Three Months Ended As of 12/31/08

Office Portfolio 1/

Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Raleigh	299,167	$	21.23	$	19.34	9.8	%
Nashville	175,139		21.05		18.55	13.5	%
Richmond	122,833		19.65		18.96	3.6	%
Tampa	102,141		24.11		20.93	15.2	%
Memphis	64,479		20.93		19.79	5.8	%
Piedmont Triad	34,802		17.61		16.70	5.4	%
Other	32,076		15.68		13.25	18.4	%
Atlanta	24,393		19.56		19.89	-1.7	%
Kansas City	8,509		22.37		21.76	2.8	%
Orlando	4,694		14.93		14.71	1.5	%
GAAP Rent Growth	868,233	$	20.86	$	19.02	9.7	%
Cash Rent Growth	868,233	$	20.05	$	20.66	-2.9	%

Industrial Portfolio

Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Piedmont Triad	279,806	$	4.36	$	4.04	8.0	%
Atlanta	17,983		4.39		3.58	22.5	%
GAAP Rent Growth	297,789	$	4.36	$	4.01	8.8	%
Cash Rent Growth	297,789	$	4.25	$	5.42	-21.5	%

Retail Portfolio

Market	Rentable Square Feet Leased	Current Rent		Previous Rent 2/		Percentage Change Rent
Kansas City	57,245	$	18.41	$	15.07	22.2	%
GAAP Rent Growth	57,245	$	18.41	$	15.07	22.2	%
Cash Rent Growth	57,245	$	17.89	$	16.22	10.3	%

Average Cash Rental Rates for All In Place Leases at: 1/ 3/

Type	12/31/08			12/31/07			12/31/06			12/31/05			12/31/04
Office	$	20.15		$	19.14		$	18.57		$	17.57		$	17.49
Industrial		5.22			5.07			5.14			4.76			4.59
Retail 2/		31.41			31.20			29.66			27.61			26.35
Weighted average rate	$	17.18		$	16.27		$	15.89		$	14.99		$	14.76
Annual % growth rate		5.6	%		2.4	%		6.0	%		1.6	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Excludes percentage rent.

3/ Average cash rental rates represent December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12 and divided by the related leased square feet.

Highwoods Properties, Inc. 17 12/31/08

Lease Expirations

December 31, 2008

Dollars in thousands

Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Cash Revenue 1/		Average Rental Rate		Percent of Annualized Cash Revenue 1/
Office: 2/
2009 /3	1,905,484	10.6	%	$	38,282	$	20.09	10.6	%
2010	2,003,395	11.1	%		40,951		20.44	11.3	%
2011	2,641,415	14.6	%		51,930		19.66	14.3	%
2012	2,445,060	13.6	%		50,544		20.67	13.9	%
2013	2,473,836	13.8	%		49,458		19.99	13.6	%
2014	1,858,582	10.3	%		37,532		20.19	10.4	%
2015	1,166,516	6.5	%		23,951		20.53	6.6	%
2016	785,679	4.4	%		14,676		18.68	4.1	%
2017	982,741	5.5	%		19,814		20.16	5.5	%
2018	519,332	2.9	%		9,863		18.99	2.7	%
2019 and thereafter	1,202,570	6.7	%		25,352		21.08	7.0	%
	17,984,610	100.0	%	$	362,353	$	20.15	100.0	%
Industrial:
2009 /4	1,408,570	23.5	%	$	6,696	$	4.75	21.5	%
2010	810,964	13.5	%		4,323		5.33	13.8	%
2011	942,453	15.8	%		5,357		5.68	17.2	%
2012	430,580	7.2	%		2,632		6.11	8.4	%
2013	622,840	10.4	%		3,836		6.16	12.3	%
2014	512,806	8.6	%		2,757		5.38	8.8	%
2015	271,382	4.5	%		1,198		4.41	3.8	%
2016	264,597	4.4	%		1,055		3.99	3.4	%
2017	22,000	0.4	%		109		4.95	0.3	%
2018	71,884	1.2	%		240		3.34	0.8	%
2019 and thereafter	629,440	10.5	%		3,038		4.83	9.7	%
	5,987,516	100.0	%	$	31,241	$	5.22	100.0	%

1/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

2/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

3/ Includes 44,000 square feet of leases that are on a month to month basis or 0.2% of total annualized revenue.

4/ Includes 113,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue.

Note: 2009 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.

Highwoods Properties, Inc. 18 12/31/08

Lease Expirations

December 31, 2008

(Continued)

Dollars in thousands

Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Cash Revenue 1/		Average Rental Rate		Percent of Annualized Cash Revenue 1/
Retail:
2009 2/	156,664	12.3	%	$	4,243	$	27.08	10.6	%
2010	93,405	7.3	%		3,552		38.03	8.9	%
2011	54,981	4.3	%		1,892		34.41	4.7	%
2012	165,979	13.0	%		5,223		31.47	13.0	%
2013	80,760	6.3	%		3,039		37.63	7.6	%
2014	108,911	8.5	%		2,838		26.06	7.1	%
2015	147,301	11.5	%		4,750		32.25	11.9	%
2016	69,166	5.4	%		2,773		40.09	6.9	%
2017	107,946	8.5	%		2,733		25.32	6.8	%
2018	61,341	4.8	%		2,022		32.96	5.0	%
2019 and thereafter	229,783	18.1	%		7,019		30.55	17.5	%
	1,276,237	100.0	%	$	40,084	$	31.41	100.0	%
Total:
2009 3/ 4/	3,470,718	13.7	%	$	49,221	$	14.18	11.3	%
2010	2,907,764	11.5	%		48,826		16.79	11.3	%
2011	3,638,849	14.5	%		59,179		16.26	13.6	%
2012	3,041,619	12.0	%		58,399		19.20	13.5	%
2013	3,177,436	12.6	%		56,333		17.73	13.0	%
2014	2,480,299	9.8	%		43,127		17.39	9.9	%
2015	1,585,199	6.3	%		29,899		18.86	6.9	%
2016	1,119,442	4.4	%		18,504		16.53	4.3	%
2017	1,112,687	4.4	%		22,656		20.36	5.2	%
2018	652,557	2.6	%		12,125		18.58	2.8	%
2019 and thereafter	2,061,793	8.2	%		35,409		17.17	8.2	%
	25,248,363	100.0	%	$	433,678	$	17.18	100.0	%

1/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

2/ Includes 17,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue.

3/ Includes 174,000 square feet of leases that are on a month to month basis or 0.4% of total annualized revenue.

4/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

Note: 2009 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.

Highwoods Properties, Inc. 19 12/31/08

Office Lease Expirations by Market by Quarter 1/

Dollars in thousands

			Three Months Ended
			3/31/09 2/			6/30/09			9/30/09			12/31/09			Total
Atlanta	RSF			63,528			64,921			167,806			14,915			311,170
	% of Total Office RSF			0.4	%		0.4	%		0.9	%		0.1	%		1.7	%
	Annualized Cash Revenue	3/	$	989		$	936		$	3,016		$	265		$	5,206
	% of Total Office Annl Cash Rev			0.3	%		0.3	%		0.8	%		0.1	%		1.4	%
Greenville	RSF			20,118			29,135			0			10,989			60,242
	% of Total Office RSF			0.1	%		0.2	%		0.0	%		0.1	%		0.3	%
	Annualized Cash Revenue	3/	$	334		$	492		$	—		$	202		$	1,028
	% of Total Office Annl Cash Rev			0.1	%		0.1	%		0.0	%		0.1	%		0.3	%
Kansas City	RSF			15,318			6,748			9,499			9,987			41,552
	% of Total Office RSF			0.1	%		0.0	%		0.1	%		0.1	%		0.2	%
	Annualized Cash Revenue	3/	$	391		$	169		$	220		$	244		$	1,024
	% of Total Office Annl Cash Rev			0.1	%		0.0	%		0.1	%		0.1	%		0.3	%
Memphis	RSF			39,974			15,348			38,475			79,664			173,461
	% of Total Office RSF			0.2	%		0.1	%		0.2	%		0.4	%		1.0	%
	Annualized Cash Revenue	3/	$	830		$	315		$	732		$	1,636		$	3,513
	% of Total Office Annl Cash Rev			0.2	%		0.1	%		0.2	%		0.5	%		1.0	%
Nashville	RSF			58,805			34,518			217,090			85,131			395,544
	% of Total Office RSF			0.3	%		0.2	%		1.2	%		0.5	%		2.2	%
	Annualized Cash Revenue	3/	$	1,201		$	752		$	4,787		$	1,701		$	8,441
	% of Total Office Annl Cash Rev			0.3	%		0.2	%		1.3	%		0.5	%		2.3	%
Orlando	RSF			0			6,788			0			4,733			11,521
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.1	%
	Annualized Cash Revenue	3/	$	—		$	181		$	—		$	125		$	306
	% of Total Office Annl Cash Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.1	%
Piedmont Triad	RSF			20,960			19,989			69,986			8,590			119,525
	% of Total Office RSF			0.1	%		0.1	%		0.4	%		0.0	%		0.7	%
	Annualized Cash Revenue	3/	$	415		$	306		$	1,057		$	151		$	1,929
	% of Total Office Annl Cash Rev			0.1	%		0.1	%		0.3	%		0.0	%		0.5	%
Raleigh	RSF			210,950			9,372			73,971			101,236			395,529
	% of Total Office RSF			1.1	%		0.1	%		0.4	%		0.6	%		2.1	%
	Annualized Cash Revenue	3/	$	4,076		$	178		$	1,488		$	2,386		$	8,128
	% of Total Office Annl Cash Rev			1.1	%		0.0	%		0.4	%		0.7	%		2.2	%
Richmond	RSF			77,533			25,219			47,422			29,549			179,723
	% of Total Office RSF			0.4	%		0.1	%		0.3	%		0.2	%		1.0	%
	Annualized Cash Revenue	3/	$	1,598		$	438		$	894		$	592		$	3,522
	% of Total Office Annl Cash Rev			0.4	%		0.1	%		0.2	%		0.2	%		1.0	%
Tampa	RSF			105,427			12,082			11,024			81,899			210,432
	% of Total Office RSF			0.6	%		0.1	%		0.1	%		0.5	%		1.2	%
	Annualized Cash Revenue	3/	$	2,522		$	271		$	273		$	1,963		$	5,029
	% of Total Office Annl Cash Rev			0.7	%		0.1	%		0.1	%		0.5	%		1.4	%
Other	RSF			6,166			0			619			0			6,785
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Cash Revenue	3/	$	146		$	—		$	11		$	—		$	157
	% of Total Office Annl Cash Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Total	RSF			618,779			224,120			635,892			426,693			1,905,484
	% of Total Office RSF			3.4	%		1.2	%		3.5	%		2.4	%		10.5	%
	Annualized Cash Revenue	3/	$	12,502		$	4,038		$	12,478		$	9,265		$	38,283
	% of Total Office Annl Cash Rev			3.5	%		1.1	%		3.4	%		2.6	%		10.6	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Includes 44,000 square feet of leases that are on a month to month basis or 0.2% of total annualized revenue.

3/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Highwoods Properties, Inc. 20 12/31/08

Industrial Lease Expirations by Market by Quarter

Dollars in thousands

			Three Months Ended
			3/31/09 1/			6/30/09			9/30/09			12/31/09			Total
Atlanta	RSF			150,499			34,300			108,791			40,617			334,207
	% of Total Industrial RSF			2.5	%		0.6	%		1.8	%		0.7	%		5.6	%
	Annualized Cash Revenue	2/	$	825		$	215		$	855		$	255		$	2,150
	% of Total Industrial Annl Cash Rev			2.7	%		0.7	%		2.7	%		0.8	%		6.9	%
Kansas City	RSF			1,756			0			0			0			1,756
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Cash Revenue	2/	$	20		$	—		$	—		$	—		$	20
	% of Total Industrial Annl Cash Rev			0.1	%		0.0	%		0.0	%		0.0	%		0.1	%
Piedmont Triad	RSF			565,088			470,320			4,314			32,885			1,072,607
	% of Total Industrial RSF			9.4	%		7.9	%		0.1	%		0.5	%		17.9	%
	Annualized Cash Revenue	2/	$	2,692		$	1,472		$	41		$	321		$	4,526
	% of Total Industrial Annl Cash Rev			8.6	%		4.7	%		0.1	%		1.0	%		14.5	%
Total	RSF			717,343			504,620			113,105			73,502			1,408,570
	% of Total Industrial RSF			12.0	%		8.4	%		1.9	%		1.2	%		23.5	%
	Annualized Cash Revenue	2/	$	3,537		$	1,687		$	896		$	576		$	6,696
	% of Total Industrial Annl Cash Rev			11.4	%		5.4	%		2.9	%		1.8	%		21.5	%

1/ Includes 113,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue.

2/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Highwoods Properties, Inc. 21 12/31/08

Office Lease Expirations by Market by Year 1/

Dollars in thousands

			2009 2/			2010			2011			2012			Thereafter
Atlanta	RSF			311,170			92,676			289,729			341,462			1,211,816
	% of Total Office RSF			1.7	%		0.5	%		1.6	%		1.9	%		6.7	%
	Annualized Cash Revenue	3/	$	5,206		$	1,770		$	6,343		$	7,529		$	23,005
	% of Total Office Annl Cash Rev			1.4	%		0.5	%		1.8	%		2.1	%		6.3	%
Greenville	RSF			60,242			57,236			104,244			242,769			383,058
	% of Total Office RSF			0.3	%		0.3	%		0.6	%		1.3	%		2.1	%
	Annualized Cash Revenue	3/	$	1,029		$	971		$	1,903		$	4,106		$	6,750
	% of Total Office Annl Cash Rev			0.3	%		0.3	%		0.5	%		1.1	%		1.9	%
Kansas City	RSF			41,552			106,132			79,417			71,842			265,294
	% of Total Office RSF			0.2	%		0.6	%		0.4	%		0.4	%		1.5	%
	Annualized Cash Revenue	3/	$	1,024		$	3,081		$	2,035		$	1,763		$	7,040
	% of Total Office Annl Cash Rev			0.3	%		0.9	%		0.6	%		0.5	%		1.9	%
Memphis	RSF			173,461			207,320			171,742			166,206			644,282
	% of Total Office RSF			1.0	%		1.2	%		1.0	%		0.9	%		3.6	%
	Annualized Cash Revenue	3/	$	3,512		$	4,330		$	3,540		$	3,332		$	11,714
	% of Total Office Annl Cash Rev			1.0	%		1.2	%		1.0	%		0.9	%		3.2	%
Nashville	RSF			395,544			433,476			401,260			292,963			1,324,345
	% of Total Office RSF			2.2	%		2.4	%		2.2	%		1.6	%		7.4	%
	Annualized Cash Revenue	3/	$	8,439		$	8,886		$	8,275		$	6,346		$	27,640
	% of Total Office Annl Cash Rev			2.3	%		2.5	%		2.3	%		1.8	%		7.6	%
Orlando	RSF			11,521			77,080			111,007			9,999			101,677
	% of Total Office RSF			0.1	%		0.4	%		0.6	%		0.1	%		0.6	%
	Annualized Cash Revenue	3/	$	306		$	1,802		$	2,431		$	251		$	2,377
	% of Total Office Annl Cash Rev			0.1	%		0.5	%		0.7	%		0.1	%		0.7	%
Piedmont Triad	RSF			119,525			232,395			426,979			404,056			487,264
	% of Total Office RSF			0.7	%		1.3	%		2.4	%		2.2	%		2.7	%
	Annualized Cash Revenue	3/	$	1,930		$	3,697		$	6,287		$	7,715		$	6,320
	% of Total Office Annl Cash Rev			0.5	%		1.0	%		1.7	%		2.1	%		1.7	%
Raleigh	RSF			395,529			328,984			567,279			399,562			1,929,586
	% of Total Office RSF			2.2	%		1.8	%		3.2	%		2.2	%		10.7	%
	Annualized Cash Revenue	3/	$	8,128		$	6,167		$	11,438		$	7,914		$	37,485
	% of Total Office Annl Cash Rev			2.2	%		1.7	%		3.2	%		2.2	%		10.3	%
Richmond	RSF			179,723			243,789			399,746			258,748			940,527
	% of Total Office RSF			1.0	%		1.4	%		2.2	%		1.4	%		5.2	%
	Annualized Cash Revenue	3/	$	3,522		$	4,695		$	7,541		$	4,919		$	16,489
	% of Total Office Annl Cash Rev			1.0	%		1.3	%		2.1	%		1.4	%		4.6	%
Tampa	RSF			210,432			223,018			88,432			257,453			1,626,872
	% of Total Office RSF			1.2	%		1.2	%		0.5	%		1.4	%		9.0	%
	Annualized Cash Revenue	3/	$	5,028		$	5,515		$	2,080		$	6,669		$	39,653
	% of Total Office Annl Cash Rev			1.4	%		1.5	%		0.6	%		1.8	%		10.9	%
Other	RSF			6,785			1,289			1,580			0			74,535
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.4	%
	Annualized Cash Revenue	3/	$	157		$	36		$	57		$	—		$	2,174
	% of Total Office Annl Cash Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.6	%
Total	RSF			1,905,484			2,003,395			2,641,415			2,445,060			8,989,256
	% of Total Office RSF			10.6	%		11.1	%		14.7	%		13.6	%		50.0	%
	Annualized Cash Revenue	3/	$	38,281		$	40,950		$	51,930		$	50,544		$	180,647
	% of Total Office Annl Cash Rev			10.6	%		11.3	%		14.3	%		13.9	%		49.9	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Includes 44,000 square feet of leases that are on a month to month basis or 0.2% of total annualized revenue.

3/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Highwoods Properties, Inc. 22 12/31/08

Industrial Lease Expirations by Market by Year

Dollars in thousands

			2009 1/			2010			2011			2012			Thereafter
Atlanta	RSF			334,207			316,221			575,416			296,179			1,414,216
	% of Total Industrial RSF			5.6	%		5.3	%		9.6	%		4.9	%		23.6	%
	Annualized Cash Revenue	2/	$	2,150		$	1,904		$	3,164		$	1,748		$	7,406
	% of Total Industrial Annl Cash Rev			6.9	%		6.1	%		10.1	%		5.6	%		23.7	%
Kansas City	RSF			1,756			0			0			0			0
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Cash Revenue	2/	$	20		$	—		$	—		$	—		$	—
	% of Total Industrial Annl Cash Rev			0.1	%		0.0	%		0.0	%		0.0	%		0.0	%
Piedmont Triad	RSF			1,072,607			494,743			367,037			134,401			980,733
	% of Total Industrial RSF			17.9	%		8.3	%		6.1	%		2.2	%		16.4	%
	Annualized Cash Revenue	2/	$	4,527		$	2,419		$	2,193		$	884		$	4,826
	% of Total Industrial Annl Cash Rev			14.5	%		7.7	%		7.0	%		2.8	%		15.4	%
Total	RSF			1,408,570			810,964			942,453			430,580			2,394,949
	% of Total Industrial RSF			23.5	%		13.5	%		15.7	%		7.2	%		40.0	%
	Annualized Cash Revenue	2/	$	6,697		$	4,323		$	5,357		$	2,632		$	12,232
	% of Total Industrial Annl Cash Rev			21.4	%		13.8	%		17.1	%		8.4	%		39.2	%

1/ Includes 113,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue.

2/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Highwoods Properties, Inc. 23 12/31/08

Customer Diversification 1/

December 31, 2008

Dollars in thousands

Top 20 Customers

Customer	RSF	Annualized Cash Revenue 2/		Percent of Annualized Cash Revenue 2/		Average Remaining Lease Term in Years
Federal Government	1,645,591	$	32,524	7.50	%	7.9
AT&T	896,611		15,062	3.47	%	4.4
Price Waterhouse Coopers	400,178		11,014	2.54	%	3.7
State of Georgia 3/	367,986		7,862	1.81	%	1.8
Healthways	282,132		6,260	1.44	%	13.4
T-Mobile USA	207,517		5,740	1.32	%	5.0
Metropolitan Life Insurance	267,787		5,428	1.25	%	8.9
Lockton Companies	160,561		4,402	1.02	%	6.2
BB&T	258,363		4,237	0.98	%	4.2
Syniverse Technologies	198,750		4,026	0.93	%	7.8
RBC Bank	171,138		3,979	0.92	%	17.1
Fluor Enterprises	209,474		3,737	0.86	%	3.1
SCI Services 4/	162,784		3,668	0.85	%	8.6
Wells Fargo/Wachovia 5/	129,389		3,039	0.70	%	2.2
Vanderbilt University	144,161		2,911	0.67	%	6.8
Jacobs Engineering Group	181,794		2,858	0.66	%	6.7
Lifepoint Corporate Services	139,625		2,836	0.65	%	2.5
Icon Clinical Research	110,909		2,580	0.59	%	4.7
Talecris Biotherapeutics	122,870		2,417	0.56	%	3.5
Hilton Grand Vacations	97,325		2,112	0.49	%	2.7
	6,154,945	$	126,692	29.21	%	6.3

By Industry

Category	Percent of Annualized Cash Revenue 2/
Professional, Scientific, and Technical Services	20.6	%
Government/Public Administration	9.8	%
Finance/Banking	9.7	%
Insurance	8.8	%
Retail Trade	7.3	%
Health Care and Social Assistance	6.5	%
Manufacturing	6.4	%
Wholesale Trade	6.4	%
Telecommunication	6.2	%
Real Estate Rental and Leasing	3.7	%
Information	3.0	%
Administrative and Support Services	2.9	%
Accommodation and Food Services	2.7	%
Other Services (except Public Administration)	2.2	%
Transportation and Warehousing	2.1	%
Educational Services	1.7	%
	100.0	%

1/ Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

3/ Includes 123,000 square feet of annually renewable leases.

4/ SCI Services (Saxon Capital, Inc.) is a wholly owned subsidiary of Morgan Stanley.

5/ Wells Fargo acquired Wachovia effective December 31, 2008.

Highwoods Properties, Inc. 24 12/31/08

Same Property Performance

Dollars and Square Feet in thousands

	Three months ended December 31,						Percentage Change
	2008			2007
Rental revenues 1/	$	101,252		$	99,237		2.0	%
Operating expenses		(39,634	)		(38,113	)	-4.0	%
		61,618			61,124		0.8	%
Straight line rent		(953	)		2,068		-146.1	%
		60,665			63,192		-4.0	%
Lease termination fees		215			819		-73.7	%
Net operating income	$	60,880		$	64,011		-4.9	%
Average occupancy		91.2	%		91.5	%	-0.3	%
Rentable square feet		25,005			25,005

	Twelve months ended December 31,						Percentage Change
	2008			2007
Rental revenues 1/	$	402,650		$	391,173		2.9	%
Operating expenses		(151,704	)		(145,798	)	-4.1	%
		250,946			245,375		2.3	%
Straight line rent		(1,259	)		2,952		-142.6	%
		249,687			248,327		0.5	%
Lease termination fees		2,575			1,685		52.8	%
Net operating income	$	252,262		$	250,012		0.9	%
Average occupancy		91.2	%		90.7	%	0.6	%
Rentable square feet		25,005			25,005

	Fourth Quarter: 2008 vs 2007				December YTD: 2008 vs 2007
Market	NOI 2/ Percentage Change		Occupancy Percentage Change		NOI 2/ Percentage Change		Occupancy Percentage Change
Atlanta	-14.4	%	0.6	%	-7.8	%	0.0	%
Greenville	32.3	%	12.2	%	16.2	%	7.4	%
Kansas City	1.0	%	0.4	%	-1.7	%	-0.6	%
Memphis	-1.5	%	-2.0	%	3.3	%	0.2	%
Nashville	-3.6	%	-0.3	%	4.8	%	2.4	%
Orlando	-12.6	%	-2.4	%	-5.5	%	-1.9	%
Piedmont Triad	-13.8	%	-1.7	%	-6.1	%	-1.3	%
Raleigh	-7.1	%	-1.1	%	4.7	%	2.7	%
Richmond	0.0	%	-0.5	%	2.9	%	2.2	%
Tampa	-1.5	%	-3.1	%	1.5	%	-2.9	%
	-4.0	%	-0.3	%	0.5	%	0.6	%

1/ Excludes straight line rents and lease termination fees.

2/ Includes straight line rents and excludes lease termination fees.

Highwoods Properties, Inc. 25 12/31/08

Disposition Activity

Dollars in thousands

Name	Market	Type 1/	Date Sold	Square Footage	Occupancy		Gross Sales Price
First quarter 2008:
Parkway Medical	Kansas City	O	02/15/08	30,000	81.4	%	$	6,050
First quarter totals				30,000	81.4	%	$	6,050
Second quarter 2008:
Fairway North & West	Kansas City	O	04/02/08	130,000	74.6	%	$	11,676
Corinth Office	Kansas City	O	06/20/08	141,000	75.3	%		9,950
Second quarter totals				271,000	74.9	%	$	21,626
Third quarter 2008:
Chesapeake	Winston-Salem	I	07/20/08	250,000	100.0	%	$	8,150
Third quarter totals				250,000	100.0	%	$	8,150
Fourth quarter 2008:
Eastpark I, II & III	Nashville	O	12/31/08	193,000	83.7	%	$	20,850
Fourth quarter totals				193,000	83.7	%	$	20,850
2008 totals				744,000	85.9	%	$	56,676

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

Highwoods Properties, Inc. 26 12/31/08

Development Activity

Dollars in thousands

Property	Market	Type	Rentable Square Feet	Anticipated Total Investment		Investment @ 12/31/08			Pre Leased %		Estimated Completion Date	Estimated Stabilization Date
In - Process
Office:
FAA	Atlanta	O	100,000	$	18,071	$	11,382		100	%	2Q 09	2Q 09
Jackson FBI	Jackson, MS	O	110,000		34,900		18,938		100	%	2Q 09	2Q 09
Triad Centre III	Memphis	O	148,000		29,187		13,745		17	%	3Q 09	2Q 11
Total or Weighted Average			358,000	$	82,158	$	44,065		66	%
						$	Weighted	%	70	%
Industrial:
River Point IV	Atlanta	I	200,000	$	10,435	$	8,628		50	%	1Q 09	2Q 10
			200,000	$	10,435	$	8,628		50	%
In-Process Total or Weighted Average			558,000	$	92,593	$	52,693		60	%
						$	Weighted	%	68	%
Completed Not Stabilized 1/
Office:
Cool Springs IV	Nashville	O	153,000	$	27,597	$	21,054		8	%	3Q 08	1Q 10
Centregreen V	Raleigh	O	98,000		15,662		13,853		75	%	1Q 08	3Q 09
Glenlake VI	Raleigh	O	122,000		24,448		22,872		57	%	1Q 08	3Q 09
RBC Plaza 2/	Raleigh	O	292,000		76,056		69,543		93	%	3Q 08	4Q 09
Total or Weighted Average			665,000	$	143,763	$	127,322		64	%
						$	Weighted	%	69	%
Grand Total or Weighted Average			1,223,000	$	236,356	$	180,015		62	%
						$	Weighted	%	68	%

Placed in Service in 4Q

Property	Market	Type	Rentable Square Feet	Anticipated Total Investment		Investment @ 12/31/08			Pre Leased %		Occ %		In-Service Date
Enterprise II	Piedmont Triad	I	418,000	$	17,222	$	16,049		91	%	91	%	12/01/08
Highwoods Baycenter I	Tampa	O	208,000		43,100		42,285		88	%	82	%	12/01/08
Total or Weighted Average			626,000	$	60,322	$	58,334		90	%	88	%
						$	Weighted	%	89	%	85	%

For-Sale Residential Condominiums

			Units For Sale	Units Sold	Gross Sale Proceeds		Gain 4/
RBC Plaza Condominiums 3/	Raleigh	As of 2/10/09	66	73	$	30,529	$	4,843

1/ “Completed Not Stabilized” properties are recorded in the Consolidated Balance Sheet in the Land and Building accounts, not Development-in-Process.

2/ Includes ancillary retail space on the ground level of approximately 11,000 square feet.

3/ In January 2007 the Company executed a Joint Venture agreement for this development. The Company has a 93% interest and consolidates this Joint Venture.

4/ Gain is net of Partner’s interest.

Highwoods Properties, Inc. 27 12/31/08

Development Land

December 31, 2008

Dollars in thousands

Market	Usable Acres	Total Estimated Market Value
Atlanta	233	$	31,979
Raleigh	190		43,574
Greensboro	47		10,155
Richmond	33		8,325
Tampa	20		15,409
Nashville	16		8,100
Memphis	15		3,496
Orlando	15		16,364
Baltimore	7		1,800
Winston-Salem	3		1,500
Kansas City	1		2,100
Total 1/ 2/ 3/	580	$	142,802

1/ Includes 75 acres currently undergoing infrastructure improvements, and thus classified as Development in Process on our consolidated balance sheet.

2/ Developable square footage on core land holdings, which constitute 490 of the total 580 acres, is approximately 5.1 million of office space and 2.5 million of industrial space.

3/ Includes 4.4 acres ($1.4 million based on expected gross proceeds) included in property held for sale at December 31, 2008.

Highwoods Properties, Inc. 28 12/31/08

Acquisition Activity

Dollars in thousands

Name	Market	Type	Date Acquired	Square Footage	Total Cost
First quarter 2008:
None
Second quarter 2008:
None
Third quarter 2008:
None
Fourth quarter 2008:
Penn Marc	Memphis	O	10/15/08	135,000	$	14,968
Fourth quarter totals				135,000		14,968
2008 totals				135,000	$	14,968

1/ The letter “O” represents Office.

Highwoods Properties, Inc. 29 12/31/08

Unconsolidated Joint Ventures Assets, Debt and Liabilities

December 31, 2008

Dollars in thousands

				Venture’s Books
Joint Venture	Type 1/	Own %		Total Assets		Debt		Total Liabilities
Board of Trade Investment Co.	O	49.00	%	$	7,288	$	—	$	373
Dallas County Partners I, LP	O/ I	50.00	%		30,925		48,349		51,562
Dallas County Partners II, LP	O	50.00	%		13,954		14,779		16,291
Dallas County Partners III, LP	O	50.00	%		129		—		41
Fountain Three	O/I /R	50.00	%		25,180		32,314		34,777
RRHWoods, LLC	O/M	50.00	%		85,587		80,829		85,228
Kessinger/Hunter, LLC	—	26.50	%		7,650		—		473
4600 Madison Associates, LP	O	12.50	%		17,803		12,625		13,345
Highwoods DLF 98/29, LP	O	22.81	%		146,221		74,730		79,678
Highwoods DLF 97/26 DLF 99/32, LP	O	42.93	%		97,379		54,846		57,463
Concourse Center Associates, LLC	O	50.00	%		13,207		8,679		8,785
Plaza Colonnade, LLC	O/R	50.00	%		71,113		65,690		66,756
Highwoods KC Glenridge Office, LP	O	40.00	%		22,825		16,364		17,030
Highwoods KC Glenridge Land, LP	O	40.00	%		780		—		109
Highwoods KC Orlando, LLC	O	40.00	%		201,101		139,440		146,249
Highwoods DLF Forum, LLC	O	25.00	%		119,108		67,500		71,533
Total				$	860,250	$	616,145	$	649,693

				Highwoods’ Share of Joint Venture
Joint Venture	Type 1/	Own %		Total Assets		Debt		Total Liabilities
Board of Trade Investment Co.	O	49.00	%	$	3,571	$	—	$	183
Dallas County Partners I, LP	O/ I	50.00	%		15,463		24,175		25,781
Dallas County Partners II, LP	O	50.00	%		6,977		7,390		8,146
Dallas County Partners III, LP	O	50.00	%		65		—		21
Fountain Three	O/I /R	50.00	%		12,590		16,157		17,389
RRHWoods, LLC	O/M	50.00	%		42,794		40,415		42,614
Kessinger/Hunter, LLC	—	26.50	%		2,027		—		125
4600 Madison Associates, LP	O	12.50	%		2,225		1,578		1,668
Highwoods DLF 98/29, LP	O	22.81	%		33,353		17,046		18,175
Highwoods DLF 97/26 DLF 99/32, LP	O	42.93	%		41,805		23,546		24,669
Concourse Center Associates, LLC	O	50.00	%		6,604		4,340		4,393
Plaza Colonnade, LLC	O/R	50.00	%		35,557		32,845		33,378
Highwoods KC Glenridge Office, LP	O	40.00	%		9,130		6,546		6,812
Highwoods KC Glenridge Land, LP	O	40.00	%		312		—		44
Highwoods KC Orlando, LLC	O	40.00	%		80,440		55,776		58,500
Highwoods DLF Forum, LLC	O	25.00	%		29,772		16,872		17,880
Total 2/				$	322,685	$	246,686	$	259,778

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

2/ Highwoods’ share of equity from these tables will not equal Investments in Unconsolidated Affiliates on the Consolidated Balance Sheet due to various purchase accounting and related adjustments as well as negative investment balances reclassed to Liabilities, which are not reflected in the Joint Ventures’ stand-alone financial statements.

Highwoods Properties, Inc. 30 12/31/08

Unconsolidated Joint Ventures Income

For the Three Months Ended December 31, 2008

Dollars in thousands

			Venture’s Books
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort			Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	581	$	379	$	—	$	138		$	64
Dallas County Partners I, LP	50.00	%		2,713		1,732		759		448			(226	)
Dallas County Partners II, LP	50.00	%		1,670		819		369		217			265
Dallas County Partners III, LP	50.00	%		59		59		—		(3	)		3
Fountain Three	50.00	%		1,919		1,012		522		327			58
RRHWoods, LLC	50.00	%		4,440		2,636		943		1,059			(198	)
Kessinger/Hunter, LLC	26.50	%		4,205		3,659		—		152			394
4600 Madison Associates, LP	12.50	%		1,333		698		221		404			10
Highwoods DLF 98/29, LP	22.81	%		4,903		1,754		1,244		1,225			680
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		3,581		1,596		1,062		1,011			(88	)
Concourse Center Associates, LLC	50.00	%		498		153		159		78			108
Plaza Colonnade, LLC	50.00	%		2,562		950		962		556			94
Highwoods KC Glenridge Office, LP	40.00	%		805		508		210		174			(87	)
Highwoods KC Glenridge Land, LP	40.00	%		—		2		—		—			(2	)
Highwoods KC Orlando, LLC	40.00	%		8,163		3,546		1,838		1,872			907
Highwoods DLF Forum, LLC	25.00	%		3,474		1,189		878		1,459			(52	)
Total			$	40,906	$	20,692	$	9,167	$	9,117		$	1,930

			Highwoods’ Share of Joint Venture
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort			Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	285	$	186	$	—	$	67		$	32
Dallas County Partners I, LP	50.00	%		1,356		866		379		224			(113	)
Dallas County Partners II, LP	50.00	%		835		409		185		109			132
Dallas County Partners III, LP	50.00	%		30		29		—		(2	)		3
Fountain Three	50.00	%		960		506		261		164			29
RRHWoods, LLC	50.00	%		2,220		1,318		471		530			(99	)
Kessinger/Hunter, LLC	26.50	%		1,114		970		—		41			103
4600 Madison Associates, LP	12.50	%		167		87		27		51			2
Highwoods DLF 98/29, LP	22.81	%		1,118		400		284		280			154
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		1,537		685		456		434			(38	)
Concourse Center Associates, LLC	50.00	%		249		76		80		39			54
Plaza Colonnade, LLC	50.00	%		1,281		475		481		278			47
Highwoods KC Glenridge Office, LP	40.00	%		322		203		84		69			(34	)
Highwoods KC Glenridge Land, LP	40.00	%		—		1		—		—			(1	)
Highwoods KC Orlando, LLC	40.00	%		3,265		1,418		735		749			363
Highwoods DLF Forum, LLC	25.00	%		868		297		220		365			(14	)
Total 1/ 2/			$	15,607	$	7,926	$	3,663	$	3,398		$	620

1/ Highwoods’ share of Depreciation and Amortization from these tables will not equal Depreciation and Amortization of Real Estate Assets for Unconsolidated Affiliates on the Statement of Funds from Operations due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.

2/ Highwoods’ share of Net Income from these tables will not equal Equity in Earnings of Unconsolidated Affiliates on the Consolidated Income Statement due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.

Highwoods Properties, Inc. 31 12/31/08

Unconsolidated Joint Ventures Income

For the Year Ended December 31, 2008

Dollars in thousands

			Venture’s Books
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	2,324	$	1,567	$	—	$	562	$	195
Dallas County Partners I, LP	50.00	%		11,018		6,800		3,078		1,891		(751	)
Dallas County Partners II, LP	50.00	%		6,784		3,346		1,595		865		978
Dallas County Partners III, LP	50.00	%		253		232		—		2		19
Fountain Three	50.00	%		8,065		3,943		2,115		1,651		356
RRHWoods, LLC	50.00	%		17,657		10,155		3,826		4,257		(581	)
Kessinger/Hunter, LLC	26.50	%		16,457		14,557		—		602		1,298
4600 Madison Associates, LP	12.50	%		5,111		2,426		913		1,606		166
Highwoods DLF 98/29, LP	22.81	%		19,412		6,817		4,972		5,111		2,512
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		15,826		6,245		4,277		3,832		1,472
Concourse Center Associates, LLC	50.00	%		1,939		572		639		310		418
Plaza Colonnade, LLC	50.00	%		9,988		3,678		3,853		2,197		260
Highwoods KC Glenridge Office, LP	40.00	%		3,343		1,797		837		768		(59	)
Highwoods KC Glenridge Land, LP	40.00	%		—		9		—		—		(9	)
Highwoods KC Orlando, LLC	40.00	%		33,025		13,863		7,401		7,435		4,326
Highwoods DLF Forum, LLC	25.00	%		10,364		3,640		2,611		4,246		(133	)
Total			$	161,566	$	79,647	$	36,117	$	35,335	$	10,467

			Highwoods’ Share of Joint Venture
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	1,139	$	768	$	—	$	275	$	96
Dallas County Partners I, LP	50.00	%		5,509		3,400		1,539		946		(376	)
Dallas County Partners II, LP	50.00	%		3,392		1,673		798		433		488
Dallas County Partners III, LP	50.00	%		127		116		—		1		10
Fountain Three	50.00	%		4,033		1,972		1,058		826		177
RRHWoods, LLC	50.00	%		8,829		5,078		1,913		2,129		(291	)
Kessinger/Hunter, LLC	26.50	%		4,361		3,858		—		160		343
4600 Madison Associates, LP	12.50	%		639		303		114		201		21
Highwoods DLF 98/29, LP	22.81	%		4,428		1,555		1,134		1,166		573
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		6,794		2,681		1,836		1,645		632
Concourse Center Associates, LLC	50.00	%		970		286		320		155		209
Plaza Colonnade, LLC	50.00	%		4,994		1,839		1,927		1,099		129
Highwoods KC Glenridge Office, LP	40.00	%		1,337		719		335		307		(24	)
Highwoods KC Glenridge Land, LP	40.00	%		—		4		—		—		(4	)
Highwoods KC Orlando, LLC	40.00	%		13,210		5,545		2,960		2,974		1,731
Highwoods DLF Forum, LLC	25.00	%		2,591		910		653		1,062		(34	)
Total 1/ 2/			$	62,353	$	30,707	$	14,587	$	13,379	$	3,680

1/ Highwoods’ share of Depreciation and Amortization from these tables will not equal Depreciation and Amortization of Real Estate Assets for Unconsolidated Affiliates on the Statement of Funds from Operations due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.

2/ Highwoods’ share of Net Income from these tables will not equal Equity in Earnings of Unconsolidated Affiliates on the Consolidated Income Statement due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.

Highwoods Properties, Inc. 32 12/31/08

Joint Ventures Long-Term Debt Detail 1/

Dollars in thousands

Joint Venture	Own %		Lender	Interest Rate		Maturity Date	Loan Balance 12/31/08
Dallas County Partners I, LP	50.0	%	Massachusetts Mutual Life Ins. Co.	6.19	%	Aug-18	$	41,245
Dallas County Partners I, LP	50.0	%	Regions	6.30	%	Jun-14		3,410
Dallas County Partners I, LP	50.0	%	Thrivent	8.45	%	Aug-10		1,546
Dallas County Partners I, LP	50.0	%	Bankers Trust	8.00	%	Jul-11		1,137
Dallas County Partners I, LP	50.0	%	Sun Life	5.92	%	Feb-16		1,011
				6.31	%			48,349
Dallas County Partners II, LP	50.0	%	Principal Life Insurance Company	10.19	%	Jun-13		14,779
Fountain Three	50.0	%	Massachusetts Mutual Life Ins. Co.	6.19	%	Aug-18		16,462
Fountain Three	50.0	%	Thrivent	7.00	%	Sep-12		5,129
Fountain Three	50.0	%	Thrivent	6.01	%	Oct-10		3,642
Fountain Three	50.0	%	Thrivent	6.01	%	Apr-09		3,642
Fountain Three	50.0	%	Lehman Brothers	8.02	%	Jul-09		3,439
				6.47	%			32,314
RRHWoods, LLC	50.0	%	Bank of America	6.80	%	Sep-12		26,078
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds /2	2.14	%	Nov-15		23,000
RRHWoods, LLC	50.0	%	Massachusetts Mutual Life Ins. Co.	5.85	%	Mar-16		8,352
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds /2	2.14	%	Sep-15		6,000
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds /2	2.49	%	Nov-15		5,500
RRHWoods, LLC	50.0	%	Massachusetts Mutual Life Ins. Co.	6.19	%	Aug-18		4,555
RRHWoods, LLC	50.0	%	UNUM Life Insurance Company	5.67	%	Mar-17		3,934
RRHWoods, LLC	50.0	%	Regions	6.30	%	Jun-14		3,410
				4.63	%			80,829
Plaza Colonnade, LLC	50.0	%	Met Life	5.72	%	Jan-17		48,005
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	5.90	%	Mar-24		11,620
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	6.00	%	Mar-16		4,290
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	5.38	%	Mar-10		1,775
				5.76	%			65,690
Highwoods KC Orlando, LLC	40.0	%	Met Life	5.21	%	Jul-14		139,440
Highwoods DLF Forum, LLC	25.0	%	Jackson National Life Insurance Company	5.13	%	Nov-13		67,500
Highwoods DLF 97/26 DLF 99/32, LP	42.9	%	Massachusetts Mutual Life Ins. Co.	7.66	%	May-12		54,846
Highwoods DLF 98/29, LP	22.8	%	USG Annuity & Life Company	6.78	%	Apr-11		47,080
Highwoods DLF 98/29, LP	22.8	%	Goldman Sachs	6.11	%	Jul-17		27,650
Highwoods KC Glenridge Office	40.0	%	Wachovia	4.84	%	May-14		16,364
4600 Madison Associates, LLC	12.5	%	State Farm	6.85	%	Apr-18		12,625
Concourse Center Associates, LLC	50.0	%	Lincoln National Life Insurance Co.	6.95	%	Jul-10		8,679
				5.90	%			374,184
				5.88	%		$	616,145
Highwoods’ share of the above							$	246,686

1/ Excludes loans related to two “consolidated” joint ventures.

2/ Floating rate loan based on market rates.

Highwoods Properties, Inc. 33 12/31/08

Joint Ventures Portfolio Summary

As of December 31, 2008

Summary by Location:

Market	Rentable Square Feet	Occupancy		Percentage of Annualized Cash Revenue Highwoods’ Share Only 1/
				Office		Industrial		Retail		Multi-Family		Total
Des Moines 2/	2,505,000	87.1	%	27.0	%	4.3	%	0.7	%	3.3	%	35.3	%
Orlando	1,852,000	89.0	%	27.6	%	—		—		—		27.6	%
Atlanta	835,000	91.7	%	11.0	%	—		—		—		11.0	%
Kansas City	714,000	83.1	%	8.5	%	—		—		—		8.5	%
Raleigh	814,000	90.4	%	7.3	%	—		—		—		7.3	%
Richmond	413,000	100.0	%	5.1	%	—		—		—		5.1	%
Piedmont Triad	364,000	43.0	%	2.1	%	—		—		—		2.1	%
Tampa	205,000	94.2	%	1.9	%	—		—		—		1.9	%
Charlotte	148,000	100.0	%	0.7	%	—		—		—		0.7	%
Other	110,000	100.0	%	0.5	%	—		—		—		0.5	%
Total 3/	7,960,000	87.3	%	91.7	%	4.3	%	0.7	%	3.3	%	100.0	%

1/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

2/ Excludes 418 apartment units and related occupancy percentage of 90.4%.

3/ Includes 618,000 square feet of properties in joint ventures that are consolidated.

Highwoods Properties, Inc. 34 12/31/08

Joint Ventures Lease Expirations

December 31, 2008

Dollars in thousands

Year	Rentable Square Feet Expiring 1/	Percent of Rentable Square Feet 1/		Annualized Cash Revenue 2/		Average Rental Rate		Percent of Annualized Cash Revenue 2/
Total
2009	747,832	10.8	%	$	15,737	$	21.04	11.3	%
2010	818,824	11.8	%		15,810		19.31	11.4	%
2011	1,111,252	16.0	%		22,314		20.08	16.1	%
2012	592,906	8.5	%		12,510		21.10	9.0	%
2013	1,321,137	19.0	%		25,204		19.08	18.0	%
2014	698,579	10.1	%		14,682		21.02	10.6	%
2015	714,465	10.3	%		13,297		18.61	9.6	%
2016	53,508	0.8	%		1,363		25.47	1.0	%
2017	523,678	7.5	%		11,652		22.25	8.4	%
2018	78,634	1.1	%		1,803		22.93	1.3	%
2019 and thereafter	281,340	4.1	%		4,635		16.47	3.3	%
	6,942,155	100.0	%	$	139,007	$	20.02	100.0	%

1/ Includes square feet expiring in properties in joint ventures that are consolidated.

2/ Annualized Cash Revenue is December, 2008 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Highwoods Properties, Inc. 35 12/31/08

Joint Venture Acquisition and Disposition Activity

Dollars in thousands

Acquisitions

Name	Market	Type	Date Acquired	Square Footage	Total Cost 2/
First quarter 2008:
None
Second quarter 2008:
Forum	Raleigh	O	04/03/08	635,000	$	28,000
Third quarter 2008:
None
Fourth quarter 2008:
None

Dispositions

Name	Market	Type	Date Sold	Square Footage	Occupancy	Gross Sales Price
First quarter 2008:
None
Second quarter 2008:
None
Third quarter 2008:
None
Fourth quarter 2008:
None

1/ The letters “O” represents Office.

2/ Reflects Highwoods pro-rata share only.

Highwoods Properties, Inc. 36 12/31/08