Commitments and Contingencies

12 Months Ended

Dec. 31, 2012

Commitments and Contingencies [Line Items]

Commitments and Contingencies

Commitments and Contingencies

Operating Ground Leases

Certain Wholly Owned Properties are subject to operating ground leases. Rental payments on these leases are adjusted periodically based on either the consumer price index or on a pre-determined schedule. Total rental property expense recorded on the straight-line basis for operating ground leases was $1.5 million, $1.4 million and $1.5 million for the years ended December 31, 2012, 2011 and 2010, respectively.

The following table sets forth our scheduled obligations for future minimum payments on operating ground leases at December 31, 2012:

Years Ending December 31,	Minimum Payments
2013	$	2,383
2014	2,404
2015	2,427
2016	2,451
2017	2,476
Thereafter	49,875
	$	62,016

9. Commitments and Contingencies - Continued

Lease and Contractual Commitments

We have $122.0 million of lease and contractual commitments at December 31, 2012. Lease and contractual commitments represent commitments under signed leases and contracts for operating properties (excluding tenant-funded tenant improvements) and contracts for development/redevelopment projects, of which $22.1 million was recorded on the Consolidated Balance Sheet at December 31, 2012.

DLF I Obligation

At the formation of DLF I, the amount our partner contributed in cash to the venture and subsequently distributed to us was determined to be $7.2 million in excess of the amount required based on its ownership interest and the agreed-upon value of the real estate assets. We are required to repay this amount over 14 years, beginning in the first quarter of 1999. The $7.2 million was discounted to net present value of $3.8 million using a discount rate of 9.62% specified in the agreement. Payments of $0.6 million were made in each of the years ended December 31, 2012, 2011 and 2010. The balance at December 31, 2012 and 2011 was $0.2 million and $0.8 million, respectively, which is included in accounts payable, accrued expenses and other liabilities.

Environmental Matters

Substantially all of our in-service and development properties have been subjected to Phase I environmental assessments and, in certain instances, Phase II environmental assessments. Such assessments and/or updates have not revealed, nor are we aware of, any environmental liability that we believe would have a material adverse effect on our Consolidated Financial Statements.

Litigation, Claims and Assessments

We are from time to time a party to a variety of legal proceedings, claims and assessments arising in the ordinary course of our business. We regularly assess the liabilities and contingencies in connection with these matters based on the latest information available. For those matters where it is probable that we have incurred or will incur a loss and the loss or range of loss can be reasonably estimated, the estimated loss is accrued and charged to income in our Consolidated Financial Statements. In other instances, because of the uncertainties related to both the probable outcome and amount or range of loss, a reasonable estimate of liability, if any, cannot be made. Based on the current expected outcome of such matters, none of these proceedings, claims or assessments is expected to have a material effect on our business, financial condition, results of operations or cash flows.

Highwoods Realty Limited Partnership [Member]

Commitments and Contingencies [Line Items]

Commitments and Contingencies

Commitments and Contingencies

Operating Ground Leases

Certain Wholly Owned Properties are subject to operating ground leases. Rental payments on these leases are adjusted periodically based on either the consumer price index or on a pre-determined schedule. Total rental property expense recorded on the straight-line basis for operating ground leases was $1.5 million, $1.4 million and $1.5 million for the years ended December 31, 2012, 2011 and 2010, respectively.

The following table sets forth our scheduled obligations for future minimum payments on operating ground leases at December 31, 2012:

Years Ending December 31,	Minimum Payments
2013	$	2,383
2014	2,404
2015	2,427
2016	2,451
2017	2,476
Thereafter	49,875
	$	62,016

9. Commitments and Contingencies - Continued

Lease and Contractual Commitments

We have $122.0 million of lease and contractual commitments at December 31, 2012. Lease and contractual commitments represent commitments under signed leases and contracts for operating properties (excluding tenant-funded tenant improvements) and contracts for development/redevelopment projects, of which $22.1 million was recorded on the Consolidated Balance Sheet at December 31, 2012.

DLF I Obligation

At the formation of DLF I, the amount our partner contributed in cash to the venture and subsequently distributed to us was determined to be $7.2 million in excess of the amount required based on its ownership interest and the agreed-upon value of the real estate assets. We are required to repay this amount over 14 years, beginning in the first quarter of 1999. The $7.2 million was discounted to net present value of $3.8 million using a discount rate of 9.62% specified in the agreement. Payments of $0.6 million were made in each of the years ended December 31, 2012, 2011 and 2010. The balance at December 31, 2012 and 2011 was $0.2 million and $0.8 million, respectively, which is included in accounts payable, accrued expenses and other liabilities.

Environmental Matters

Substantially all of our in-service and development properties have been subjected to Phase I environmental assessments and, in certain instances, Phase II environmental assessments. Such assessments and/or updates have not revealed, nor are we aware of, any environmental liability that we believe would have a material adverse effect on our Consolidated Financial Statements.

Litigation, Claims and Assessments

We are from time to time a party to a variety of legal proceedings, claims and assessments arising in the ordinary course of our business. We regularly assess the liabilities and contingencies in connection with these matters based on the latest information available. For those matters where it is probable that we have incurred or will incur a loss and the loss or range of loss can be reasonably estimated, the estimated loss is accrued and charged to income in our Consolidated Financial Statements. In other instances, because of the uncertainties related to both the probable outcome and amount or range of loss, a reasonable estimate of liability, if any, cannot be made. Based on the current expected outcome of such matters, none of these proceedings, claims or assessments is expected to have a material effect on our business, financial condition, results of operations or cash flows.