Real Estate Assets

12 Months Ended

Dec. 31, 2011

Significant Acquisitions and Disposals [Line Items]

Real Estate Assets

Real Estate Assets

Acquisitions

In 2011, we acquired a six-building, 1.54 million square foot office complex in Pittsburgh, PA for a purchase price of $188.5 million. The purchase price included the assumption of secured debt recorded at fair value of $124.5 million, with an effective interest rate of 4.27%, including amortization of deferred financing costs. This debt matures in November 2017. We expensed $4.0 million of costs related to this acquisition, which are included in general and administrative expense. Additionally, we acquired a 503,000 square foot office building in Atlanta, GA for a purchase price of $78.3 million. The purchase price included the assumption of secured debt recorded at fair value of $67.9 million, with an effective interest rate of 5.45%, including amortization of deferred financing costs. This debt matures in January 2014. We expensed $0.3 million of costs related to this acquisition.

The following table sets forth a summary of the acquisition purchase price consideration for each major class of assets acquired and liabilities assumed in the acquisitions discussed above:

	Total Purchase Price Consideration
Real estate assets	$	241,602
Acquisition-related intangible assets (in deferred financing and leasing costs)	39,721
Furniture, fixtures and equipment (in prepaid expenses and other assets)	1,101
Acquisition-related intangible liabilities (in accounts payable, accrued expenses and other liabilities)	(15,627		)
Total consideration	$	266,797

2. Real Estate Assets - Continued

The following tables set forth our rental and other revenues and net income, adjusted for interest expense and depreciation and amortization related to purchase price allocation, assuming the acquisitions discussed above both occurred as of the beginning of each annual reporting period:

	Year Ended December 31,
	2011		2010		2009
Proforma rental and other revenues	$	524,480	$	511,861	$	505,840
Proforma net income	$	45,674	$	65,409	$	57,471
Proforma earnings per share - basic	$	0.50	$	0.77	$	0.70
Proforma earnings per share - diluted	$	0.50	$	0.77	$	0.70

In 2011, we also acquired a 48,000 square foot medical office property in Raleigh, NC for approximately $8.9 million in cash and incurred $0.1 million of acquisition-related costs, which are included in general and administrative expense.

In 2010, we acquired a 336,000 square foot office property in Memphis, TN for a purchase price of $52.6 million. The purchase price included the assumption of secured debt recorded at fair value of $40.3 million, with an effective interest rate of 6.43%. This debt matures in November 2015. We incurred $0.4 million of acquisition-related costs. We also acquired a 117,000 square foot office property and 32.6 acres of development land in Tampa, FL for a purchase price of $12.0 million. We incurred $0.2 million of acquisition-related costs. Lastly, we acquired our partner’s interest in a joint venture that owned for-sale residential condominiums for a purchase price of $0.5 million.

In 2009, we acquired a 220,000 square foot office building in Tampa, FL for a purchase price of $22.3 million. We expensed $0.1 million of costs related to this acquisition.

Dispositions

In 2011, we sold an office property and adjacent land parcel in a single transaction in Winston-Salem, NC for gross proceeds of $15.0 million. We recorded gain on disposition of discontinued operations of $2.6 million related to the office property and gain on disposition of property of $0.3 million related to the land.

In 2010, we sold seven office properties in Winston Salem, NC and six industrial properties in Greensboro, NC in two separate transactions for gross proceeds of $24.9 million. In the aggregate, we received cash of $7.9 million. provided seller financing of $17.0 million and committed to lend up to an additional $1.7 million for tenant improvements and lease commissions, of which $0.2 million was funded as of December 31, 2011. We have accounted for these dispositions using the installment method, whereby the $0.4 million gain on disposition of property related to the office properties has been deferred and will be recognized when the seller financing is repaid, and recorded impairment of $0.3 million related to the industrial properties. In 2010, we also recorded a completed sale in connection with the disposition of an office property in Raleigh, NC in the fourth quarter of 2009 where the buyer's limited right to compel us to repurchase the property expired and recorded a gain of $0.2 million.

In 2009, we sold 517,000 square feet of non-core retail and office properties for gross proceeds of $78.2 million and recorded gains of $21.7 million.

Impairments

In 2011, we recorded impairment of assets held for use of $2.4 million on two office properties located in Orlando, FL due to a change in the assumed timing of future disposition, which reduced the future expected cash flows from the properties.

2. Real Estate Assets - Continued

In 2009, we recorded impairment of assets held for use of $2.6 million on four office properties located in Winston-Salem, NC and recorded impairment of $11.0 million on the office, industrial and retail properties in Winston-Salem and Greensboro, NC that were sold in 2010 and required discontinued operations presentation. These impairments were also due to a change in the assumed timing of future disposition, which reduced the future expected cash flows from the properties.

Highwoods Realty Limited Partnership [Member]

Significant Acquisitions and Disposals [Line Items]

Real Estate Assets

Real Estate Assets

Acquisitions

In 2011, we acquired a six-building, 1.54 million square foot office complex in Pittsburgh, PA for a purchase price of $188.5 million. The purchase price included the assumption of secured debt recorded at fair value of $124.5 million, with an effective interest rate of 4.27%, including amortization of deferred financing costs. This debt matures in November 2017. We expensed $4.0 million of costs related to this acquisition, which are included in general and administrative expense. Additionally, we acquired a 503,000 square foot office building in Atlanta, GA for a purchase price of $78.3 million. The purchase price included the assumption of secured debt recorded at fair value of $67.9 million, with an effective interest rate of 5.45%, including amortization of deferred financing costs. This debt matures in January 2014. We expensed $0.3 million of costs related to this acquisition.

2. Real Estate Assets - Continued

The following table sets forth a summary of the acquisition purchase price consideration for each major class of assets acquired and liabilities assumed in the acquisitions discussed above:

	Total Purchase Price Consideration
Real estate assets	$	241,602
Acquisition-related intangible assets (in deferred financing and leasing costs)	39,721
Furniture, fixtures and equipment (in prepaid expenses and other assets)	1,101
Acquisition-related intangible liabilities (in accounts payable, accrued expenses and other liabilities)	(15,627		)
Total consideration	$	266,797

The following tables set forth our rental and other revenues and net income, adjusted for interest expense and depreciation and amortization related to purchase price allocation, assuming the acquisitions discussed above both occurred as of the beginning of each annual reporting period:

	Year Ended December 31,
	2011		2010		2009
Proforma rental and other revenues	$	524,480	$	511,861	$	505,840
Proforma net income	$	38,470	$	58,216	$	50,752
Proforma earnings per unit - basic	$	0.51	$	0.78	$	0.71
Proforma earnings per unit - diluted	$	0.51	$	0.77	$	0.71

In 2011, we also acquired a 48,000 square foot medical office property in Raleigh, NC for approximately $8.9 million in cash and incurred $0.1 million of acquisition-related costs, which are included in general and administrative expense.

In 2010, we acquired a 336,000 square foot office property in Memphis, TN for a purchase price of $52.6 million. The purchase price included the assumption of secured debt recorded at fair value of $40.3 million, with an effective interest rate of 6.43%. This debt matures in November 2015. We incurred $0.4 million of acquisition-related costs. We also acquired a 117,000 square foot office property and 32.6 acres of development land in Tampa, FL for a purchase price of $12.0 million. We incurred $0.2 million of acquisition-related costs. Lastly, we acquired our partner’s interest in a joint venture that owned for-sale residential condominiums for a purchase price of $0.5 million.

In 2009, we acquired a 220,000 square foot office building in Tampa, FL for a purchase price of $22.3 million. We expensed $0.1 million of costs related to this acquisition.

Dispositions

In 2011, we sold an office property and adjacent land parcel in a single transaction in Winston-Salem, NC for gross proceeds of $15.0 million. We recorded gain on disposition of discontinued operations of $2.6 million related to the office property and gain on disposition of property of $0.3 million related to the land.

2. Real Estate Assets - Continued

In 2010, we sold seven office properties in Winston Salem, NC and six industrial properties in Greensboro, NC in two separate transactions for gross proceeds of $24.9 million. In the aggregate, we received cash of $7.9 million. provided seller financing of $17.0 million and committed to lend up to an additional $1.7 million for tenant improvements and lease commissions, of which $0.2 million was funded as of December 31, 2011. We have accounted for these dispositions using the installment method, whereby the $0.4 million gain on disposition of property related to the office properties has been deferred and will be recognized when the seller financing is repaid, and recorded impairment of $0.3 million related to the industrial properties. In 2010, we also recorded a completed sale in connection with the disposition of an office property in Raleigh, NC in the fourth quarter of 2009 where the buyer's limited right to compel us to repurchase the property expired and recorded a gain of $0.2 million.

In 2009, we sold 517,000 square feet of non-core retail and office properties for gross proceeds of $78.2 million and recorded gains of $21.7 million.

Impairments

In 2011, we recorded impairment of assets held for use of $2.4 million on two office properties located in Orlando, FL due to a change in the assumed timing of future disposition, which reduced the future expected cash flows from the properties.

In 2009, we recorded impairment of assets held for use of $2.6 million on four office properties located in Winston-Salem, NC and recorded impairment of $11.0 million on the office, industrial and retail properties in Winston-Salem and Greensboro, NC that were sold in 2010 and required discontinued operations presentation. These impairments were also due to a change in the assumed timing of future disposition, which reduced the future expected cash flows from the properties.