Derivative Financial Instruments

12 Months Ended

Dec. 31, 2011

Derivative [Line Items]

Derivative Financial Instruments

Derivative Financial Instruments

In 2011, we entered into six forward-starting, floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings associated with forecasted issuance of debt. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the year ended December 31, 2011.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next year, we estimate that $2.4 million will be reclassified as an increase to interest expense.

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

	Fair Value as of December 31,
	2011		2010
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	2,202	$	—

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

	Year Ended December 31,
	2011			2010		2009
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized gain/(loss) recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(2,202	)	$	—	$	937
Amount of loss/(gain) reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	(118	)	$	237	$	(249	)

Highwoods Realty Limited Partnership [Member]

Derivative [Line Items]

Derivative Financial Instruments

Derivative Financial Instruments

In 2011, we entered into six forward-starting, floating-to-fixed interest rate swaps for seven-year periods each with respect to an aggregate of $225.0 million LIBOR-based borrowings associated with forecasted issuance of debt. These swaps effectively fix the underlying LIBOR rate at a weighted average of 1.678%. The counterparties under the swaps are major financial institutions. These swaps have been designated as and are being accounted for as cash flow hedges with changes in fair value recorded in other comprehensive income each reporting period. No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on our cash flow hedges during the year ended December 31, 2011.

Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the next year, we estimate that $2.4 million will be reclassified as an increase to interest expense.

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

	Fair Value as of December 31,
	2011		2010
Liability Derivatives:
Derivatives designated as cash flow hedges in other liabilities:
Interest rate swaps	$	2,202	$	—

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

	Year Ended December 31,
	2011			2010		2009
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized gain/(loss) recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(2,202	)	$	—	$	937
Amount of loss/(gain) reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	(118	)	$	237	$	(249	)