10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

HIGHWOODS PROPERTIES, INC.

(Exact name of registrant as specified in its charter)

Maryland	001-13100	56-1871668
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

HIGHWOODS REALTY LIMITED PARTNERSHIP

(Exact name of registrant as specified in its charter)

North Carolina	000-21731	56-1869557
(State or other jurisdiction of incorporation or organization)	(Commission File Number)	(I.R.S. Employer Identification Number)

3100 Smoketree Court, Suite 600

Raleigh, NC 27604

(Address of principal executive offices) (Zip Code)

919-872-4924

(Registrants’ telephone number, including area code)

______________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Highwoods Properties, Inc.  Yes  S    No £Highwoods Realty Limited Partnership  Yes  S    No £

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Highwoods Properties, Inc.  Yes  S    No £Highwoods Realty Limited Partnership  Yes  S    No £

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of 'large accelerated filer,' 'accelerated filer' and 'smaller reporting company' in Rule 12b-2 of the Securities Exchange Act.

Highwoods Properties, Inc.

Large accelerated filer S    Accelerated filer £      Non-accelerated filer £      Smaller reporting company £

Highwoods Realty Limited Partnership

Large accelerated filer £    Accelerated filer £      Non-accelerated filer S      Smaller reporting company £

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act).

Highwoods Properties, Inc.  Yes  £    No SHighwoods Realty Limited Partnership  Yes  £    No S

The Company had 90,121,773 shares of Common Stock outstanding as of April 21, 2014.

EXPLANATORY NOTE

We refer to Highwoods Properties, Inc. as the “Company,” Highwoods Realty Limited Partnership as the “Operating Partnership,” the Company’s common stock as “Common Stock” or “Common Shares,” the Company’s preferred stock as “Preferred Stock” or “Preferred Shares,” the Operating Partnership’s common partnership interests as “Common Units” and the Operating Partnership’s preferred partnership interests as “Preferred Units." References to “we” and “our” mean the Company and the Operating Partnership, collectively, unless the context indicates otherwise.

The Company conducts its activities through the Operating Partnership and is its sole general partner. The partnership agreement provides that the Operating Partnership will assume and pay when due, or reimburse the Company for payment of, all costs and expenses relating to the ownership and operations of, or for the benefit of, the Operating Partnership. The partnership agreement further provides that all expenses of the Company are deemed to be incurred for the benefit of the Operating Partnership.

Certain information contained herein is presented as of April 21, 2014, the latest practicable date for financial information prior to the filing of this Quarterly Report.

This report combines the Quarterly Reports on Form 10-Q for the period ended March 31, 2014 of the Company and the Operating Partnership. We believe combining the quarterly reports into this single report results in the following benefits:

• combined reports better reflect how management and investors view the business as a single operating unit;

• combined reports enhance investors' understanding of the Company and the Operating Partnership by enabling them to view the business as a whole and in the same manner as management;

• combined reports are more efficient for the Company and the Operating Partnership and result in savings in time, effort and expense; and

• combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review.

To help investors understand the significant differences between the Company and the Operating Partnership, this report presents the following separate sections for each of the Company and the Operating Partnership:

• Consolidated Financial Statements;

• the following Notes to Consolidated Financial Statements:

• Note 7 - Noncontrolling Interests; and

• Note 12 - Earnings Per Share and Per Unit;

• Item 4 - Controls and Procedures; and

• Item 6 - Certifications of CEO and CFO Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act.

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

QUARTERLY REPORT FOR THE PERIOD ENDED MARCH 31, 2014

TABLE OF CONTENTS

	Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (unaudited)	4
HIGHWOODS PROPERTIES, INC.:
Consolidated Balance Sheets at March 31, 2014 and December 31, 2013	4
Consolidated Statements of Income for the Three Months Ended March 31, 2014 and 2013	5
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2014 and 2013	6
Consolidated Statements of Equity for the Three Months Ended March 31, 2014 and 2013	7
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013	8
HIGHWOODS REALTY LIMITED PARTNERSHIP:
Consolidated Balance Sheets at March 31, 2014 and December 31, 2013	10
Consolidated Statements of Income for the Three Months Ended March 31, 2014 and 2013	11
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2014 and 2013	12
Consolidated Statements of Capital for the Three Months Ended March 31, 2014 and 2013	13
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2014 and 2013	14
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS	16
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
Disclosure Regarding Forward-Looking Statements	32
Executive Summary	33
Results of Operations	34
Liquidity and Capital Resources	36
Critical Accounting Estimates	39
Non-GAAP Information	39
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	42
ITEM 4. CONTROLS AND PROCEDURES	42
PART II - OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	43
ITEM 6. EXHIBITS	43

3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

HIGHWOODS PROPERTIES, INC.

Consolidated Balance Sheets

(Unaudited and in thousands, except share and per share data)

	March 31, 2014			December 31, 2013
Assets:
Real estate assets, at cost:
Land	$	394,233		$	393,602
Buildings and tenant improvements	3,782,607			3,748,869
Development in process	69,527			44,621
Land held for development	111,444			110,374
	4,357,811			4,297,466
Less-accumulated depreciation	(1,019,931		)	(985,244		)
Net real estate assets	3,337,880			3,312,222
Cash and cash equivalents	13,344			10,184
Restricted cash	9,140			14,169
Accounts receivable, net of allowance of $1,412 and $1,648, respectively	24,661			26,430
Mortgages and notes receivable, net of allowance of $300 and $302, respectively	10,028			26,409
Accrued straight-line rents receivable, net of allowance of $1,118 and $1,063, respectively	132,038			126,014
Investments in unconsolidated affiliates	28,836			29,901
Deferred financing and leasing costs, net of accumulated amortization of $100,639 and $92,220, respectively	218,831			222,211
Prepaid expenses and other assets, net of accumulated amortization of $13,186 and $12,905, respectively	45,235			39,561
Total Assets	$	3,819,993		$	3,807,101
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
Mortgages and notes payable	$	2,012,554		$	1,956,299
Accounts payable, accrued expenses and other liabilities	198,856			218,962
Financing obligations	26,443			26,664
Total Liabilities	2,237,853			2,201,925
Commitments and contingencies
Noncontrolling interests in the Operating Partnership	112,808			106,480
Equity:
Preferred Stock, $.01 par value, 50,000,000 authorized shares;
8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share), 29,077 shares issued and outstanding	29,077			29,077
Common Stock, $.01 par value, 200,000,000 authorized shares;
90,061,731 and 89,920,915 shares issued and outstanding, respectively	901			899
Additional paid-in capital	2,367,509			2,370,368
Distributions in excess of net income available for common stockholders	(946,530		)	(920,433		)
Accumulated other comprehensive loss	(2,922		)	(2,611		)
Total Stockholders’ Equity	1,448,035			1,477,300
Noncontrolling interests in consolidated affiliates	21,297			21,396
Total Equity	1,469,332			1,498,696
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity	$	3,819,993		$	3,807,101

See accompanying notes to consolidated financial statements.

4

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Income

(Unaudited and in thousands, except per share amounts)

	Three Months Ended March 31,
	2014			2013
Rental and other revenues	$	148,453		$	130,377
Operating expenses:
Rental property and other expenses	56,390			46,594
Depreciation and amortization	48,165			40,088
General and administrative	10,714			10,582
Total operating expenses	115,269			97,264
Interest expense:
Contractual	20,750			22,798
Amortization of deferred financing costs	652			949
Financing obligations	(40		)	121
	21,362			23,868
Other income:
Interest and other income	1,399			1,783
Losses on debt extinguishment	—			(164		)
	1,399			1,619
Income from continuing operations before activity in unconsolidated affiliates	13,221			10,864
Equity in earnings/(losses) of unconsolidated affiliates	(29		)	436
Income from continuing operations	13,192			11,300
Discontinued operations:
Income from discontinued operations	—			2,344
Impairments of real estate assets	—			(1,128		)
Net gains on disposition of discontinued operations	384			1,244
	384			2,460
Net income	13,576			13,760
Net (income) attributable to noncontrolling interests in the Operating Partnership	(398		)	(581		)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Net income available for common stockholders	$	12,128		$	12,349
Earnings per Common Share – basic:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15
Weighted average Common Shares outstanding – basic	89,966			81,029
Earnings per Common Share – diluted:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15
Weighted average Common Shares outstanding – diluted	93,030			84,862
Dividends declared per Common Share	$	0.425		$	0.425
Net income available for common stockholders:
Income from continuing operations available for common stockholders	$	11,756		$	9,998
Income from discontinued operations available for common stockholders	372			2,351
Net income available for common stockholders	$	12,128		$	12,349

See accompanying notes to consolidated financial statements.

5

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

	Three Months Ended March 31,
	2014			2013
Comprehensive income:
Net income	$	13,576		$	13,760
Other comprehensive income/(loss):
Unrealized gains on tax increment financing bond	165			390
Unrealized gains/(losses) on cash flow hedges	(1,404		)	280
Amortization of cash flow hedges	928			788
Total other comprehensive income/(loss)	(311		)	1,458
Total comprehensive income	13,265			15,218
Less-comprehensive (income) attributable to noncontrolling interests	(821		)	(784		)
Comprehensive income attributable to common stockholders	$	12,444		$	14,434

See accompanying notes to consolidated financial statements.

6

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Equity

(Unaudited and in thousands, except share amounts)

	Number of Common Shares		Common Stock		Series A Cumulative Redeemable Preferred Shares		Additional Paid-In Capital			Accumulated Other Compre-hensive Loss			Non-controlling Interests in Consolidated Affiliates			Distributions in Excess of Net Income Available for Common Stockholders			Total
Balance at December 31, 2013	89,920,915		$	899	$	29,077	$	2,370,368		$	(2,611	)	$	21,396		$	(920,433	)	$	1,498,696
Issuances of Common Stock, net of shares redeemed for tax withholdings	(8,427	)	—		—		153			—			—			—			153
Conversions of Common Units to Common Stock	4,417		—		—		162			—			—			—			162
Dividends on Common Stock			—		—		—			—			—			(38,225		)	(38,225		)
Dividends on Preferred Stock			—		—		—			—			—			(627		)	(627		)
Adjustment of noncontrolling interests in the Operating Partnership to fair value			—		—		(7,434		)	—			—			—			(7,434		)
Distributions to noncontrolling interests in consolidated affiliates			—		—		—			—			(522		)	—			(522		)
Issuances of restricted stock	144,826		—		—		—			—			—			—			—
Share-based compensation expense, net of forfeitures	—		2		—		4,260			—			—			—			4,262
Net (income) attributable to noncontrolling interests in the Operating Partnership			—		—		—			—			—			(398		)	(398		)
Net (income) attributable to noncontrolling interests in consolidated affiliates			—		—		—			—			423			(423		)	—
Comprehensive income:
Net income			—		—		—			—			—			13,576			13,576
Other comprehensive loss			—		—		—			(311		)	—			—			(311		)
Total comprehensive income																			13,265
Balance at March 31, 2014	90,061,731		$	901	$	29,077	$	2,367,509		$	(2,922	)	$	21,297		$	(946,530	)	$	1,469,332

	Number of Common Shares	Common Stock		Series A Cumulative Redeemable Preferred Shares		Additional Paid-In Capital			Accumulated Other Compre-hensive Loss			Non-controlling Interests in Consolidated Affiliates			Distributions in Excess of Net Income Available for Common Stockholders			Total
Balance at December 31, 2012	80,311,437	$	803	$	29,077	$	2,040,306		$	(12,628	)	$	4,753		$	(897,418	)	$	1,164,893
Issuances of Common Stock, net of shares redeemed for tax withholdings	1,664,519	17		—		55,787			—			—			—			55,804
Conversions of Common Units to Common Stock	10,071	—		—		351			—			—			—			351
Dividends on Common Stock		—		—		—			—			—			(34,259		)	(34,259		)
Dividends on Preferred Stock		—		—		—			—			—			(627		)	(627		)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—		(23,802		)	—			—			—			(23,802		)
Distributions to noncontrolling interests in consolidated affiliates		—		—		—			—			(265		)	—			(265		)
Issuances of restricted stock	144,566	—		—		—			—			—			—			—
Share-based compensation expense, net of forfeitures	—	1		—		3,439			—			—			—			3,440
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—			—			—			(581		)	(581		)
Net (income) attributable to noncontrolling interests in consolidated affiliates		—		—		—			—			203			(203		)	—
Comprehensive income:
Net income		—		—		—			—			—			13,760			13,760
Other comprehensive income		—		—		—			1,458			—			—			1,458
Total comprehensive income																		15,218
Balance at March 31, 2013	82,130,593	$	821	$	29,077	$	2,076,081		$	(11,170	)	$	4,691		$	(919,328	)	$	1,180,172

See accompanying notes to consolidated financial statements.

7

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Three Months Ended March 31,
	2014			2013
Operating activities:
Net income	$	13,576		$	13,760
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,165			42,292
Amortization of lease incentives and acquisition-related intangible assets and liabilities	82			(136		)
Share-based compensation expense	4,262			3,440
Allowance for losses on accounts and accrued straight-line rents receivable	1,125			426
Accrued interest on mortgages and notes receivable	(115		)	—
Amortization of deferred financing costs	652			949
Amortization of cash flow hedges	928			788
Amortization of mortgages and notes payable fair value adjustments	(809		)	—
Impairments of real estate assets	—			1,128
Losses on debt extinguishment	—			164
Net gains on disposition of property	(384		)	(1,244		)
Equity in (earnings)/losses of unconsolidated affiliates	29			(436		)
Changes in financing obligations	(221		)	(105		)
Distributions of earnings from unconsolidated affiliates	788			1,145
Changes in operating assets and liabilities:
Accounts receivable	713			(1,479		)
Prepaid expenses and other assets	(5,260		)	(2,533		)
Accrued straight-line rents receivable	(6,457		)	(5,788		)
Accounts payable, accrued expenses and other liabilities	(25,690		)	(10,252		)
Net cash provided by operating activities	31,384			42,119
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired	—			(88,332		)
Investments in development in process	(27,232		)	(4,978		)
Investments in tenant improvements and deferred leasing costs	(24,782		)	(18,004		)
Investments in building improvements	(13,007		)	(13,107		)
Net proceeds from disposition of real estate assets	—			14,971
Distributions of capital from unconsolidated affiliates	230			363
Investments in mortgages and notes receivable	(108		)	—
Repayments of mortgages and notes receivable	16,604			—
Investments in unconsolidated affiliates	—			(429		)
Changes in restricted cash and other investing activities	4,043			10,262
Net cash (used in) investing activities	(44,252		)	(99,254		)
Financing activities:
Dividends on Common Stock	(38,225		)	(34,259		)
Redemptions of Common Units	(93		)	—
Dividends on Preferred Stock	(627		)	(627		)
Distributions to noncontrolling interests in the Operating Partnership	(1,249		)	(1,584		)
Distributions to noncontrolling interests in consolidated affiliates	(522		)	(265		)
Proceeds from the issuance of Common Stock	1,313			59,019
Costs paid for the issuance of Common Stock	(14		)	(701		)
Repurchase of shares related to tax withholdings	(1,523		)	(2,514		)
Borrowings on revolving credit facility	96,100			135,900
Repayments of revolving credit facility	(36,800		)	(61,400		)
Repayments of mortgages and notes payable	(2,236		)	(37,214		)
Additions to deferred financing costs and other financing activities	(96		)	(833		)
Net cash provided by financing activities	16,028			55,522
Net increase/(decrease) in cash and cash equivalents	$	3,160		$	(1,613	)

See accompanying notes to consolidated financial statements.

8

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Cash Flows – Continued

(Unaudited and in thousands)

	Three Months Ended March 31,
	2014		2013
Net increase/(decrease) in cash and cash equivalents	$	3,160	$	(1,613	)
Cash and cash equivalents at beginning of the period	10,184		13,783
Cash and cash equivalents at end of the period	$	13,344	$	12,170

Supplemental disclosure of cash flow information:

	Three Months Ended March 31,
	2014		2013
Cash paid for interest, net of amounts capitalized	$	25,054	$	21,887

Supplemental disclosure of non-cash investing and financing activities:

	Three Months Ended March 31,
	2014			2013
Unrealized gains/(losses) on cash flow hedges	$	(1,404	)	$	280
Conversions of Common Units to Common Stock	162			351
Changes in accrued capital expenditures	5,399			5,158
Write-off of fully depreciated real estate assets	3,121			6,467
Write-off of fully amortized deferred financing and leasing costs	3,697			4,872
Unrealized gains on marketable securities of non-qualified deferred compensation plan	59			283
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434			23,802
Unrealized gains on tax increment financing bond	165			390

See accompanying notes to consolidated financial statements.

9

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Balance Sheets

(Unaudited and in thousands, except unit and per unit data)

	March 31, 2014			December 31, 2013
Assets:
Real estate assets, at cost:
Land	$	394,233		$	393,602
Buildings and tenant improvements	3,782,607			3,748,869
Development in process	69,527			44,621
Land held for development	111,444			110,374
	4,357,811			4,297,466
Less-accumulated depreciation	(1,019,931		)	(985,244		)
Net real estate assets	3,337,880			3,312,222
Cash and cash equivalents	13,430			10,281
Restricted cash	9,140			14,169
Accounts receivable, net of allowance of $1,412 and $1,648, respectively	24,661			26,430
Mortgages and notes receivable, net of allowance of $300 and $302, respectively	10,028			26,409
Accrued straight-line rents receivable, net of allowance of $1,118 and $1,063, respectively	132,038			126,014
Investments in unconsolidated affiliates	28,836			29,901
Deferred financing and leasing costs, net of accumulated amortization of $100,639 and $92,220, respectively	218,831			222,211
Prepaid expenses and other assets, net of accumulated amortization of $13,186 and $12,905, respectively	45,201			39,561
Total Assets	$	3,820,045		$	3,807,198
Liabilities, Redeemable Operating Partnership Units and Equity:
Mortgages and notes payable	$	2,012,554		$	1,956,299
Accounts payable, accrued expenses and other liabilities	198,804			218,887
Financing obligations	26,443			26,664
Total Liabilities	2,237,801			2,201,850
Commitments and contingencies
Redeemable Operating Partnership Units:
Common Units, 2,936,955 and 2,943,872 outstanding, respectively	112,808			106,480
Series A Preferred Units (liquidation preference $1,000 per unit), 29,077 units issued and outstanding	29,077			29,077
Total Redeemable Operating Partnership Units	141,885			135,557
Equity:
Common Units:
General partner Common Units, 925,899 and 924,560 outstanding, respectively	14,219			14,508
Limited partner Common Units, 88,727,023 and 88,587,546 outstanding, respectively	1,407,765			1,436,498
Accumulated other comprehensive loss	(2,922		)	(2,611		)
Noncontrolling interests in consolidated affiliates	21,297			21,396
Total Equity	1,440,359			1,469,791
Total Liabilities, Redeemable Operating Partnership Units and Equity	$	3,820,045		$	3,807,198

See accompanying notes to consolidated financial statements.

10

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Income

(Unaudited and in thousands, except per unit amounts)

	Three Months Ended March 31,
	2014			2013
Rental and other revenues	$	148,453		$	130,377
Operating expenses:
Rental property and other expenses	56,374			46,620
Depreciation and amortization	48,165			40,088
General and administrative	10,730			10,556
Total operating expenses	115,269			97,264
Interest expense:
Contractual	20,750			22,798
Amortization of deferred financing costs	652			949
Financing obligations	(40		)	121
	21,362			23,868
Other income:
Interest and other income	1,399			1,783
Losses on debt extinguishment	—			(164		)
	1,399			1,619
Income from continuing operations before activity in unconsolidated affiliates	13,221			10,864
Equity in earnings/(losses) of unconsolidated affiliates	(29		)	383
Income from continuing operations	13,192			11,247
Discontinued operations:
Income from discontinued operations	—			2,344
Impairments of real estate assets	—			(1,128		)
Net gains on disposition of discontinued operations	384			1,244
	384			2,460
Net income	13,576			13,707
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Net income available for common unitholders	$	12,526		$	12,877
Earnings per Common Unit – basic:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15
Weighted average Common Units outstanding – basic	92,497			84,345
Earnings per Common Unit – diluted:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15
Weighted average Common Units outstanding – diluted	92,621			84,453
Distributions declared per Common Unit	$	0.425		$	0.425
Net income available for common unitholders:
Income from continuing operations available for common unitholders	$	12,142		$	10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877

See accompanying notes to consolidated financial statements.

11

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

	Three Months Ended March 31,
	2014			2013
Comprehensive income:
Net income	$	13,576		$	13,707
Other comprehensive income/(loss):
Unrealized gains on tax increment financing bond	165			390
Unrealized gains/(losses) on cash flow hedges	(1,404		)	280
Amortization of cash flow hedges	928			788
Total other comprehensive income/(loss)	(311		)	1,458
Total comprehensive income	13,265			15,165
Less-comprehensive (income) attributable to noncontrolling interests	(423		)	(203		)
Comprehensive income attributable to common unitholders	$	12,842		$	14,962

See accompanying notes to consolidated financial statements.

12

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Capital

(Unaudited and in thousands)

	Common Units						Accumulated Other Comprehensive Loss			Noncontrolling Interests in Consolidated Affiliates			Total Partners’ Capital
	General Partners’ Capital			Limited Partners’ Capital
Balance at December 31, 2013	$	14,508		$	1,436,498		$	(2,611	)	$	21,396		$	1,469,791
Issuances of Common Units, net of units redeemed for tax withholdings	2			151			—			—			153
Redemptions of Common Units	(1		)	(92		)	—			—			(93		)
Distributions paid on Common Units	(393		)	(38,907		)	—			—			(39,300		)
Distributions paid on Preferred Units	(6		)	(621		)	—			—			(627		)
Share-based compensation expense, net of forfeitures	43			4,219			—			—			4,262
Distributions to noncontrolling interests in consolidated affiliates	—			—			—			(522		)	(522		)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(66		)	(6,504		)	—			—			(6,570		)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(4		)	(419		)	—			423			—
Comprehensive income:
Net income	136			13,440			—			—			13,576
Other comprehensive loss	—			—			(311		)	—			(311		)
Total comprehensive income													13,265
Balance at March 31, 2014	$	14,219		$	1,407,765		$	(2,922	)	$	21,297		$	1,440,359

	Common Units						Accumulated Other Comprehensive Loss			Noncontrolling Interests in Consolidated Affiliates			Total Partners’ Capital
	General Partners’ Capital			Limited Partners’ Capital
Balance at December 31, 2012	$	11,427		$	1,131,481		$	(12,628	)	$	4,753		$	1,135,033
Issuances of Common Units, net of units redeemed for tax withholdings	558			55,246			—			—			55,804
Distributions paid on Common Units	(356		)	(35,313		)	—			—			(35,669		)
Distributions paid on Preferred Units	(6		)	(621		)	—			—			(627		)
Share-based compensation expense, net of forfeitures	34			3,406			—			—			3,440
Distributions to noncontrolling interests in consolidated affiliates	—			—			—			(265		)	(265		)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(229		)	(22,625		)	—			—			(22,854		)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(2		)	(201		)	—			203			—
Comprehensive income:
Net income	137			13,570			—			—			13,707
Other comprehensive income	—			—			1,458			—			1,458
Total comprehensive income													15,165
Balance at March 31, 2013	$	11,563		$	1,144,943		$	(11,170	)	$	4,691		$	1,150,027

See accompanying notes to consolidated financial statements.

13

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Three Months Ended March 31,
	2014			2013
Operating activities:
Net income	$	13,576		$	13,707
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,165			42,292
Amortization of lease incentives and acquisition-related intangible assets and liabilities	82			(136		)
Share-based compensation expense	4,262			3,440
Allowance for losses on accounts and accrued straight-line rents receivable	1,125			426
Accrued interest on mortgages and notes receivable	(115		)	—
Amortization of deferred financing costs	652			949
Amortization of cash flow hedges	928			788
Amortization of mortgages and notes payable fair value adjustments	(809		)	—
Impairments of real estate assets	—			1,128
Losses on debt extinguishment	—			164
Net gains on disposition of property	(384		)	(1,244		)
Equity in (earnings)/losses of unconsolidated affiliates	29			(383		)
Changes in financing obligations	(221		)	(105		)
Distributions of earnings from unconsolidated affiliates	788			1,139
Changes in operating assets and liabilities:
Accounts receivable	713			(1,479		)
Prepaid expenses and other assets	(5,226		)	(2,391		)
Accrued straight-line rents receivable	(6,457		)	(5,788		)
Accounts payable, accrued expenses and other liabilities	(25,667		)	(10,155		)
Net cash provided by operating activities	31,441			42,352
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired	—			(88,332		)
Investments in development in process	(27,232		)	(4,978		)
Investments in tenant improvements and deferred leasing costs	(24,782		)	(18,004		)
Investments in building improvements	(13,007		)	(13,107		)
Net proceeds from disposition of real estate assets	—			14,971
Distributions of capital from unconsolidated affiliates	230			363
Investments in mortgages and notes receivable	(108		)	—
Repayments of mortgages and notes receivable	16,604			—
Investments in unconsolidated affiliates	—			(429		)
Changes in restricted cash and other investing activities	4,043			10,262
Net cash (used in) investing activities	(44,252		)	(99,254		)
Financing activities:
Distributions on Common Units	(39,300		)	(35,669		)
Redemptions of Common Units	(93		)	—
Distributions on Preferred Units	(627		)	(627		)
Distributions to noncontrolling interests in consolidated affiliates	(522		)	(265		)
Proceeds from the issuance of Common Units	1,313			59,019
Costs paid for the issuance of Common Units	(14		)	(701		)
Repurchase of units related to tax withholdings	(1,523		)	(2,514		)
Borrowings on revolving credit facility	96,100			135,900
Repayments of revolving credit facility	(36,800		)	(61,400		)
Repayments of mortgages and notes payable	(2,236		)	(37,214		)
Additions to deferred financing costs and other financing activities	(338		)	(1,240		)
Net cash provided by financing activities	15,960			55,289
Net increase/(decrease) in cash and cash equivalents	$	3,149		$	(1,613	)

See accompanying notes to consolidated financial statements.

14

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows - Continued

(Unaudited and in thousands)

	Three Months Ended March 31,
	2014		2013
Net increase/(decrease) in cash and cash equivalents	$	3,149	$	(1,613	)
Cash and cash equivalents at beginning of the period	10,281		13,867
Cash and cash equivalents at end of the period	$	13,430	$	12,254

Supplemental disclosure of cash flow information:

	Three Months Ended March 31,
	2014		2013
Cash paid for interest, net of amounts capitalized	$	25,054	$	21,887

Supplemental disclosure of non-cash investing and financing activities:

	Three Months Ended March 31,
	2014			2013
Unrealized gains/(losses) on cash flow hedges	$	(1,404	)	$	280
Changes in accrued capital expenditures	5,399			5,158
Write-off of fully depreciated real estate assets	3,121			6,467
Write-off of fully amortized deferred financing and leasing costs	3,697			4,872
Unrealized gains on marketable securities of non-qualified deferred compensation plan	59			283
Adjustment of Redeemable Common Units to fair value	6,328			22,448
Unrealized gains on tax increment financing bond	165			390

See accompanying notes to consolidated financial statements.

15

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2014

(tabular dollar amounts in thousands, except per share and per unit data)

(Unaudited)

1.    Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc. (the “Company”) is a fully-integrated real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At March 31, 2014, we owned or had an interest in 32.1 million rentable square feet of in-service office, industrial and retail properties, 0.8 million rentable square feet of office properties under development and approximately 600 acres of development land.

The Company is the sole general partner of the Operating Partnership. At March 31, 2014, the Company owned all of the Preferred Units and 89.7 million, or 96.8%, of the Common Units in the Operating Partnership. Limited partners own the remaining 2.9 million Common Units. During the three months endedMarch 31, 2014, the Company redeemed 2,500 Common Units for less than $0.1 million in cash and redeemed 4,417 Common Units for a like number of shares of Common Stock.

Common Stock Offerings

During the three months endedMarch 31, 2014, the Company issued 23,584 shares of Common Stock under its equity sales agreements at an average gross sales price of $38.29 per share and received net proceeds, after sales commissions, of $0.9 million.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Statements of Income for the three months endedMarch 31, 2013 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties classified as discontinued operations.

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. All intercompany transactions and accounts have been eliminated. At March 31, 2014 and December 31, 2013, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 2).

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2013 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.

16

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

1.    Description of Business and Significant Accounting Policies - Continued

Recently Issued Accounting Standards

Beginning with our Quarterly Report on Form 10-Q for the three months ended March 31, 2015, we will be required to reflect in discontinued operations for only those real estate asset sales representing a strategic shift in operations (e.g. a disposal of a major geographic area or a major line of business).  Currently, we are required to reflect all real estate asset sales as discontinued operations, which requires reclassification of the earnings of the sold assets from continuing operations for all periods presented.  Early adoption is permitted, but only for real estate asset sales that have not been previously reflected as discontinued operations.

2.    Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

	March 31, 2014			December 31, 2013
Seller financing (first mortgages)	$	—		$	16,454
Less allowance	—			—
	—			16,454
Mortgage receivable	9,658			9,435
Less allowance	—			—
	9,658			9,435
Promissory notes	670			822
Less allowance	(300		)	(302		)
	370			520
Mortgages and notes receivable, net	$	10,028		$	26,409

During 2010, we provided seller financing in conjunction with two disposition transactions. We accounted for these dispositions using the installment method, whereby a gain on disposition of property was deferred until the seller financing was repaid. During the first quarter of 2014, the $16.5 million of seller financing was fully repaid and we recorded the $0.4 million gain on disposition of property.

During 2012, we provided secured acquisition financing to a third party. We also agreed to loan such third party $8.4 million on a secured basis to fund future infrastructure development. As of March 31, 2014, $0.4 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

We evaluate the ability to collect our mortgages and notes receivable by monitoring the leasing statistics and/or market fundamentals of these assets. As of March 31, 2014, our mortgages and notes receivable were not in default and there were no other indicators of impairment.

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

	Three Months Ended March 31,
	2014			2013
Beginning notes receivable allowance	$	302		$	182
Recoveries/write-offs/other	(2		)	255
Total notes receivable allowance	$	300		$	437

17

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

3.    Investments in Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financial policies.

The following table sets forth the summarized income statements of our unconsolidated affiliates:

	Three Months Ended March 31,
	2014			2013
Income Statements:
Rental and other revenues	$	12,434		$	23,516
Expenses:
Rental property and other expenses	6,217			11,209
Depreciation and amortization	3,489			6,146
Impairments of real estate assets	—			4,790
Interest expense	2,211			4,739
Total expenses	11,917			26,884
Income/(loss) before disposition of properties	517			(3,368		)
Gains on disposition of properties	1,949			24
Net income/(loss)	$	2,466		$	(3,344	)
Our share of:
Depreciation and amortization	$	1,031		$	2,015
Impairments of real estate assets	$	—		$	1,020
Interest expense	$	776		$	1,752
Gains on disposition of properties	$	955		$	421
Net income	$	1,155		$	4
Our share of net income	$	1,155		$	4
Adjustments for management and other fees	169			432
Impairment of investment in unconsolidated affiliate	(1,353		)	—
Equity in earnings/(losses) of unconsolidated affiliates	$	(29	)	$	436

Board of Trade Investment Company ("Board of Trade")

During the first quarter of 2014, Board of Trade sold an office property to an unrelated third party for gross proceeds of $8.3 million and recorded a gain of $1.9 million. We expect to receive aggregate net distributions of $4.7 million in connection with our investment in this entity. As our cost basis is different from the basis reflected at the entity level, we recorded a net impairment charge on our investment of $0.4 million. This charge represented the other-than-temporary decline in the fair value below the carrying value of our investment.

18

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

4.    Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	March 31, 2014			December 31, 2013
Assets:
Deferred financing costs	$	17,329		$	17,363
Less accumulated amortization	(5,789		)	(5,204		)
	11,540			12,159
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)	302,141			297,068
Less accumulated amortization	(94,850		)	(87,016		)
	207,291			210,052
Deferred financing and leasing costs, net	$	218,831		$	222,211
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	54,996		$	55,323
Less accumulated amortization	(9,673		)	(8,478		)
	$	45,323		$	46,845

The following table sets forth amortization of intangible assets and below market lease liabilities:

	Three Months Ended March 31,
	2014			2013
Amortization of deferred financing costs	$	652		$	949
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	9,928		$	8,075
Amortization of lease incentives (in rental and other revenues)	$	351		$	376
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	1,116		$	466
Amortization of acquisition-related intangible assets (in rental property and other expenses)	$	137		$	137
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(1,522	)	$	(1,122	)

19

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

4.    Intangible Assets and Below Market Lease Liabilities - Continued

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2014	$	2,104	$	29,555	$	983	$	3,221	$	416	$	(4,479	)
2015	2,765		33,532		1,083		3,619		553		(5,718		)
2016	2,500		27,957		910		2,810		553		(5,427		)
2017	2,205		23,985		840		2,269		553		(5,164		)
2018	1,080		19,729		737		1,426		553		(5,016		)
Thereafter	886		44,666		2,487		3,768		1,086		(19,519		)
	$	11,540	$	179,424	$	7,040	$	17,113	$	3,714	$	(45,323	)
Weighted average remaining amortization periods as of March 31, 2014 (in years)	4.5		6.7		8.3		6.6		6.7		8.9

5.    Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	March 31, 2014		December 31, 2013
Secured indebtedness	$	485,525	$	488,664
Unsecured indebtedness	1,527,029		1,467,635
Total mortgages and notes payable	$	2,012,554	$	1,956,299

At March 31, 2014, our secured mortgage loans were collateralized by real estate assets with an aggregate undepreciated book value of $817.9 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature in January 2018 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. The interest rate at our current credit ratings is LIBOR plus 110 basis points and the annual facility fee is 20 basis points. There was $275.0 million and $409.0 million outstanding under our revolving credit facility at March 31, 2014 and April 21, 2014, respectively. At both March 31, 2014 and April 21, 2014, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at March 31, 2014 and April 21, 2014 was $199.9 million and $65.9 million, respectively.

We are currently in compliance with financial covenants and other requirements with respect to our consolidated debt.

20

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

6. Derivative Financial Instruments

Our interest rate 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 three months endedMarch 31, 2014. We have no collateral requirements related to our interest rate swaps.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from April 1, 2014 through March 31, 2015, we estimate that $3.4 million will be reclassified to interest expense.

The following table sets forth the gross fair value of our derivatives:

	March 31, 2014		December 31, 2013
Derivatives:
Derivatives designated as cash flow hedges in prepaid expenses and other assets:
Interest rate swaps	$	—	$	301
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
Interest rate swaps	$	763	$	510

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

	Three Months Ended March 31,
	2014			2013
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(1,404	)	$	280
Amount of losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	928		$	788

21

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

7. Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates

At March 31, 2014, our noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties in Richmond, VA. Our joint venture partner is an unrelated third party.

Noncontrolling Interests in the Operating Partnership

The following table sets forth the Company's noncontrolling interests in the Operating Partnership:

	Three Months Ended March 31,
	2014			2013
Beginning noncontrolling interests in the Operating Partnership	$	106,480		$	124,869
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434			23,802
Conversions of Common Units to Common Stock	(162		)	(351		)
Redemptions of Common Units	(93		)	—
Net income attributable to noncontrolling interests in the Operating Partnership	398			581
Distributions to noncontrolling interests in the Operating Partnership	(1,249		)	(1,584		)
Total noncontrolling interests in the Operating Partnership	$	112,808		$	147,317

The following table sets forth net income available for common stockholders and transfers from the Company's noncontrolling interests in the Operating Partnership:

	Three Months Ended March 31,
	2014		2013
Net income available for common stockholders	$	12,128	$	12,349
Increase in additional paid in capital from conversions of Common Units to Common Stock	162		351
Change from net income available for common stockholders and transfers from noncontrolling interests	$	12,290	$	12,700

22

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

8. Disclosure About Fair Value of Financial Instruments

The following summarizes the three levels of inputs that we use to measure fair value.

Level 1.  Quoted prices in active markets for identical assets or liabilities.

Our Level 1 assets include investments in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan and an investment in an unconsolidated affiliate recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis. The investment is primarily comprised of undistributed cash remaining after the sale of its sole real estate asset. Our Level 1 liability is our non-qualified deferred compensation obligation. The Company's Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Our Level 2 assets include the fair value of certain of our mortgages and notes receivable and certain of our interest rate swaps. Our Level 2 liabilities include the fair value of our mortgages and notes payable and the remainder of our interest rate swaps.

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our Level 3 assets include (1) certain of our mortgages and notes receivable, which were estimated by the income approach utilizing internal cash flow projections and market interest rates to estimate the price that would be paid in an orderly transaction between market participants, (2) our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds, and (3) any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using the terms of definitive sales contracts or the sales comparison approach and substantiated with internal cash flow projections.

Our Level 3 liabilities include the fair value of our contingent consideration to acquire real estate assets and financing obligations, which were estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

23

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

8. Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth our assets and liabilities and the Company's noncontrolling interests in the Operating Partnership that are measured at fair value within the fair value hierarchy.

			Level 1		Level 2		Level 3
	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Fair Value at March 31, 2014:
Assets:
Mortgages and notes receivable, at fair value (1)	$	10,037	$	—	$	370	$	9,667
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,721		3,721		—		—
Impaired investment in unconsolidated affiliate	4,668		4,668		—		—
Tax increment financing bond (in prepaid expenses and other assets)	13,568		—		—		13,568
Total Assets	$	31,994	$	8,389	$	370	$	23,235
Noncontrolling Interests in the Operating Partnership	$	112,808	$	112,808	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	2,101,898	$	—	$	2,101,898	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	763		—		763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,721		3,721		—		—
Financing obligations, at fair value (1)	22,203		—		—		22,203
Total Liabilities	$	2,128,585	$	3,721	$	2,102,661	$	22,203

Fair Value at December 31, 2013:
Assets:
Mortgages and notes receivable, at fair value (1)	$	26,485	$	—	$	17,029	$	9,456
Interest rate swaps (in prepaid expenses and other assets)	301		—		301		—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,996		3,996		—		—
Tax increment financing bond (in prepaid expenses and other assets)	13,403		—		—		13,403
Total Assets	$	44,185	$	3,996	$	17,330	$	22,859
Noncontrolling Interests in the Operating Partnership	$	106,480	$	106,480	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	2,037,385	$	—	$	2,037,385	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	510		—		510		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,996		3,996		—		—
Financing obligations, at fair value (1)	22,478		—		—		22,478
Total Liabilities	$	2,064,369	$	3,996	$	2,037,895	$	22,478

__________

(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2014 and December 31, 2013.

24

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

8. Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

	Three Months Ended March 31,
	2014		2013
Asset:
Tax Increment Financing Bond:
Beginning balance	$	13,403	$	14,496
Principal repayment	—		(562		)
Unrealized gains (in AOCL)	165		390
Ending balance	$	13,568	$	14,324
Liability:
Contingent Consideration to Acquire Real Estate Assets:
Beginning balance	$	—	$	563
Recognized gains (in general and administrative expenses)	—		(188		)
Ending balance	$	—	$	375

During 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at March 31, 2014 was $0.9 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.4 million lower or $0.4 million higher, respectively, as of March 31, 2014. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three months endedMarch 31, 2014 and 2013. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

The following table sets forth quantitative information about the unobservable input of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets:

	Valuation Technique	Unobservable Input	Rate/ Percentage
Asset:
Tax increment financing bond	Income approach	Discount rate	9.7%

9. Share-Based Payments

During the three months endedMarch 31, 2014, the Company granted 166,081 stock options with an exercise price equal to the closing market price of a share of Common Stock on the date of grant. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $6.89. During the three months endedMarch 31, 2014, the Company also granted 79,056 shares of time-based restricted stock and 65,770 shares of total return-based restricted stock with weighted average grant date fair values per share of $37.55 and $35.24, respectively. We recorded share-based compensation expense of $4.3 million and $3.4 million during the three months endedMarch 31, 2014 and 2013, respectively. At March 31, 2014, there was $6.2 million of total unrecognized share-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.7 years.

25

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

10. Accumulated Other Comprehensive Loss

The following table sets forth the components of AOCL:

	Three Months Ended March 31,
	2014			2013
Tax increment financing bond:
Beginning balance	$	(1,029	)	$	(1,898	)
Unrealized gains on tax increment financing bond	165			390
Ending balance	(864		)	(1,508		)
Cash flow hedges:
Beginning balance	(1,582		)	(10,730		)
Unrealized gains/(losses) on cash flow hedges	(1,404		)	280
Amortization of cash flow hedges (1)	928			788
Ending balance	(2,058		)	(9,662		)
Total accumulated other comprehensive loss	$	(2,922	)	$	(11,170	)

__________

(1)    Amounts reclassified out of AOCL into contractual interest expense.

11. Discontinued Operations

The following table sets forth our operations classified as discontinued operations:

	Three Months Ended March 31,
	2014		2013
Rental and other revenues	$	—	$	6,998
Operating expenses:
Rental property and other expenses	—		2,450
Depreciation and amortization	—		2,204
Total operating expenses	—		4,654
Income from discontinued operations	—		2,344
Impairments of real estate assets	—		(1,128		)
Net gains on disposition of discontinued operations	384		1,244
Total discontinued operations	$	384	$	2,460

26

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

12. Earnings Per Share and Per Unit

The following table sets forth the computation of basic and diluted earnings per share of the Company:

	Three Months Ended March 31,
	2014			2013
Earnings per Common Share - basic:
Numerator:
Income from continuing operations	$	13,192		$	11,300
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(386		)	(472		)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Income from continuing operations available for common stockholders	11,756			9,998
Income from discontinued operations	384			2,460
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(12		)	(109		)
Income from discontinued operations available for common stockholders	372			2,351
Net income available for common stockholders	$	12,128		$	12,349
Denominator:
Denominator for basic earnings per Common Share – weighted average shares	89,966			81,029
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15
Earnings per Common Share - diluted:
Numerator:
Income from continuing operations	$	13,192		$	11,300
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	12,142			10,470
Income from discontinued operations available for common stockholders	384			2,460
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	$	12,526		$	12,930
Denominator:
Denominator for basic earnings per Common Share – weighted average shares	89,966			81,029
Add:
Stock options using the treasury method	124			108
Noncontrolling interests Common Units	2,940			3,725
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1) (2)	93,030			84,862
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15

__________

(1) There were 0.3 million and 0.5 million options outstanding during the three months endedMarch 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

27

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

12. Earnings Per Share and Per Unit - Continued

The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:

	Three Months Ended March 31,
	2014			2013
Earnings per Common Unit - basic:
Numerator:
Income from continuing operations	$	13,192		$	11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Income from continuing operations available for common unitholders	12,142			10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877
Denominator:
Denominator for basic earnings per Common Unit – weighted average units	92,497			84,345
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15
Earnings per Common Unit - diluted:
Numerator:
Income from continuing operations	$	13,192		$	11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Income from continuing operations available for common unitholders	12,142			10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877
Denominator:
Denominator for basic earnings per Common Unit – weighted average units	92,497			84,345
Add:
Stock options using the treasury method	124			108
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1) (2)	92,621			84,453
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15

__________

(1) There were 0.3 million and 0.5 million options outstanding during the three months endedMarch 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

28

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

13. Segment Information

The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker, which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments:

	Three Months Ended March 31,
	2014		2013
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	22,977	$	17,167
Greenville, SC	841		851
Kansas City, MO	4,097		3,969
Memphis, TN	9,835		9,380
Nashville, TN	19,605		14,070
Orlando, FL	8,920		2,221
Piedmont Triad, NC	6,450		6,377
Pittsburgh, PA	13,757		13,688
Raleigh, NC	21,491		20,660
Richmond, VA	11,743		11,772
Tampa, FL	16,627		17,434
Total Office Segment	136,343		117,589
Industrial:
Atlanta, GA	204		203
Piedmont Triad, NC	2,688		3,122
Total Industrial Segment	2,892		3,325
Retail:
Kansas City, MO	9,218		9,463
Total Retail Segment	9,218		9,463
Total Rental and Other Revenues	$	148,453	$	130,377

29

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

13. Segment Information - Continued

	Three Months Ended March 31,
	2014			2013
Net Operating Income: (1)
Office:
Atlanta, GA	$	13,697		$	10,893
Greenville, SC	475			496
Kansas City, MO	2,605			2,562
Memphis, TN	5,607			5,629
Nashville, TN	13,153			9,685
Orlando, FL	5,376			1,078
Piedmont Triad, NC	3,998			4,099
Pittsburgh, PA	7,193			7,418
Raleigh, NC	15,032			14,624
Richmond, VA	7,676			8,113
Tampa, FL	10,035			11,219
Total Office Segment	84,847			75,816
Industrial:
Atlanta, GA	122			119
Piedmont Triad, NC	1,867			2,245
Total Industrial Segment	1,989			2,364
Retail:
Kansas City, MO	5,265			5,621
Total Retail Segment	5,265			5,621
Corporate and other	(38		)	(18		)
Total Net Operating Income	92,063			83,783
Reconciliation to income from continuing operations before activity in unconsolidated affiliates:
Depreciation and amortization	(48,165		)	(40,088		)
General and administrative expenses	(10,714		)	(10,582		)
Interest expense	(21,362		)	(23,868		)
Other income	1,399			1,619
Income from continuing operations before activity in unconsolidated affiliates	$	13,221		$	10,864

__________

(1) Net of discontinued operations.

30

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(tabular dollar amounts in thousands, except per share and per unit data)

14. Subsequent Events

On April 1, 2014, we prepaid without penalty the remaining $123.7 million balance on a secured mortgage loan with an effective interest rate of 3.11% that was originally scheduled to mature in July 2014.

In early April 2014, the Company issued 50,293 shares of Common Stock at an average gross sales price of $38.38 per share and received net proceeds, after sales commissions, of $1.9 million.

31

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company is a fully integrated REIT that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts its activities through the Operating Partnership. The Operating Partnership is managed by the Company, its sole general partner. At March 31, 2014, we owned or had an interest in 32.1 million rentable square feet of in-service office, industrial and retail properties, 0.8 million rentable square feet of office properties under development and approximately 600 acres of development land. We are based in Raleigh, North Carolina, and our properties and development land are located in Florida, Georgia, Missouri, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia. Additional information about us can be found on our website at www.highwoods.com. Information on our website is not part of this Quarterly Report.

You should read the following discussion and analysis in conjunction with the accompanying Consolidated Financial Statements and related notes contained elsewhere in this Quarterly Report.

Disclosure Regarding Forward-Looking Statements

Some of the information in this Quarterly Report may contain forward-looking statements. Such statements include, in particular, statements about our plans, strategies and prospects under this section. You can identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words. Although we believe that our plans, intentions and expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that our plans, intentions or expectations will be achieved. When considering such forward-looking statements, you should keep in mind the following important factors that could cause our actual results to differ materially from those contained in any forward-looking statement:

• the financial condition of our customers could deteriorate;

• we may not be able to lease or release second generation space, defined as previously occupied space that becomes available for lease, quickly or on as favorable terms as old leases;

• we may not be able to lease our newly constructed buildings as quickly or on as favorable terms as originally anticipated;

• we may not be able to complete development, acquisition, reinvestment, disposition or joint venture projects as quickly or on as favorable terms as anticipated;

• development activity by our competitors in our existing markets could result in an excessive supply of office properties relative to customer demand;

• our markets may suffer declines in economic growth;

• unanticipated increases in interest rates could increase our debt service costs;

• unanticipated increases in operating expenses could negatively impact our operating results;

• we may not be able to meet our liquidity requirements or obtain capital on favorable terms to fund our working capital needs and growth initiatives or repay or refinance outstanding debt upon maturity; and

• the Company could lose key executive officers.

This list of risks and uncertainties, however, is not intended to be exhaustive. You should also review the other cautionary statements we make in “Business – Risk Factors” set forth in our 2013 Annual Report on Form 10-K. Given these uncertainties, you should not place undue reliance on forward-looking statements. We undertake no obligation to publicly release the results of any revisions to these forward-looking statements to reflect any future events or circumstances or to reflect the occurrence of unanticipated events.

32

Executive Summary

Our Strategic Plan focuses on:

• owning high-quality, differentiated real estate assets in the key infill business districts in our core markets;

• improving the operating results of our existing properties through concentrated leasing, asset management, cost control and customer service efforts;

• developing and acquiring office properties in key infill business districts that improve the overall quality of our portfolio and generate attractive returns over the long-term for our stockholders;

• disposing of properties no longer considered to be core assets primarily due to location, age, quality and overall strategic fit; and

• maintaining a conservative and flexible balance sheet with ample liquidity to meet our funding needs and growth prospects.

While we own and operate a limited number of industrial and retail properties, our operating results depend heavily on successfully leasing and operating our office properties. Economic growth and employment levels in our core markets are and will continue to be important factors in predicting our future operating results.

The key components affecting our rental and other revenues are average occupancy, rental rates, cost recovery income, new developments placed in service, acquisitions and dispositions. Average occupancy generally increases during times of improving economic growth, as our ability to lease space outpaces vacancies that occur upon the expirations of existing leases. Average occupancy generally declines during times of slower economic growth, when new vacancies tend to outpace our ability to lease space. Asset acquisitions, dispositions and new developments placed in service directly impact our rental revenues and could impact our average occupancy, depending upon the occupancy rate of the properties that are acquired, sold or placed in service. A further indicator of the predictability of future revenues is the expected lease expirations of our portfolio. As a result, in addition to seeking to increase our average occupancy by leasing current vacant space, we also must concentrate our leasing efforts on renewing our existing leases prior to expiration. For more information regarding our lease expirations, see "Properties - Lease Expirations" in our 2013 Annual Report. Our occupancy declined from 89.9% at December 31, 2013 to 89.2% at March 31, 2014 primarily due to the scheduled expiration of a 91,000 square foot customer in Tampa, FL and 145,000 square feet vacated by a customer in Nashville, TN. We recently completed a 203,000 square foot build-to-suit for the customer in Nashville, TN. In light of leases signed to date and our forecasted leasing activity for the remainder of 2014, we expect average occupancy to be approximately 90.5% over the last three quarters of 2014 and year-end 2014 occupancy to be 91.3% to 92.5%.

Whether or not our rental revenue tracks average occupancy proportionally depends upon whether rents under signed new and renewal leases are higher or lower than the rents under expiring leases. Annualized rental revenues from second generation leases expiring during any particular year are generally less than 15% of our total annual rental revenues. The following table sets forth information regarding second generation leases signed during the first quarter of 2014 (we define second generation leases as leases with new customers and renewals of existing customers in space that has been previously occupied under our ownership and leases with respect to vacant space in acquired buildings):

	Office						Industrial						Retail
	New			Renewal			New			Renewal			New		Renewal
Leased space (in rentable square feet)	376,904			781,243			26,020			156,982			19,029		8,372
Rentable square foot weighted average term (in years)	6.4			5.1			5.0			8.9			10.1		1.9
Base rents (per rentable square foot) (1)	$	23.97		$	22.83		$	6.55		$	4.80		$	17.54	$	43.94
Rent concessions (per rentable square foot) (1)	(1.08		)	(0.47		)	(0.42		)	(0.12		)	—		(0.09		)
GAAP rents (per rentable square foot) (1)	$	22.89		$	22.36		$	6.13		$	4.68		$	17.54	$	43.85
Tenant improvements (per rentable square foot) (1)	$	2.92		$	1.82		$	1.21		$	0.09		$	6.22	$	—
Leasing commissions (per rentable square foot) (1)	$	0.95		$	0.80		$	0.18		$	—		$	0.51	$	0.52

__________

(1) Weighted average per rentable square foot on an annual basis over the lease term.

33

Compared to previous leases in the same spaces, annual combined GAAP rents for new and renewal leases signed in the first quarter were $22.54 per rentable square foot, or 7.8%higher, for office leases, $4.89 per rentable square foot, or 12.9%higher, for industrial leases and $25.58 per rentable square foot, or 1.0%lower, for retail leases.

We strive to maintain a diverse, stable and creditworthy customer base. We have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with the Company's Board of Directors. No customer currently accounts for more than 2% of our revenues other than the Federal Government, which accounted for less than 10.0% of our revenues on an annualized basis, as of March 31, 2014.

Our expenses primarily consist of rental property expenses, depreciation and amortization, general and administrative expenses and interest expense. From time to time, expenses also include impairments of real estate assets. Rental property expenses are expenses associated with our ownership and operation of rental properties and include expenses that vary somewhat proportionately to occupancy levels, such as janitorial services and utilities, and expenses that do not vary based on occupancy, such as property taxes and insurance. Depreciation and amortization is a non-cash expense associated with the ownership of real property and generally remains relatively consistent each year, unless we buy, place in service or sell assets, since we depreciate our properties and related building and tenant improvement assets on a straight-line basis over fixed lives. General and administrative expenses consist primarily of management and employee salaries and other personnel costs, corporate overhead and short and long-term incentive compensation.

We intend to maintain a conservative and flexible balance sheet that allows us to capitalize on favorable development and acquisition opportunities as they arise. We anticipate commencing up to $150 million of new development in 2014. Such projects would likely not be placed in service until 2015 or beyond. We also anticipate acquiring up to $300 million of new properties and selling up to $175 million of non-core properties in 2014. We generally seek to acquire and develop assets that improve the average quality of our overall portfolio and deliver consistent and sustainable value for our stockholders over the long-term. Whether or not an asset acquisition or new development results in higher per share net income or funds from operations ("FFO") in any given period depends upon a number of factors, including whether the net operating income for any such period exceeds the actual cost of capital used to finance the acquisition. Forward-looking information regarding 2014 operating performance contained below under "Results of Operations" excludes the impact of any potential acquisitions or dispositions.

Results of Operations

Three Months Ended March 31,2014 and 2013

Rental and Other Revenues

Rental and other revenues from continuing operations were $18.1 million, or 13.9%, higher in the first quarter of 2014 as compared to 2013 primarily due to recent acquisitions and development properties placed in service, which accounted for $20.3 million of the increase, partly offset by lower same property revenues of $1.7 million. Same property rental and other revenues were lower primarily due to a decrease in average occupancy to 89.6% in the first quarter of 2014 from 91.1% in the first quarter of 2013 as a result of large customer move-outs in 2013 in Tampa, FL and Atlanta, GA and the first quarter 2014 move-outs discussed above, partly offset by higher cost recovery income in 2014. We expect rental and other revenues for the remainder of 2014 to increase over 2013 primarily due to the full year contribution of acquisitions closed and development properties placed in service in 2013 and higher same property revenues resulting from increasing average occupancy, higher cost recovery income and higher average GAAP rents per rentable square foot.

Operating Expenses

Rental property and other expenses were $9.8 million, or 21.0%, higher in the first quarter of 2014 as compared to 2013 primarily due to recent acquisitions and development properties placed in service, which accounted for $7.8 million of the increase, and higher same property operating expenses of $2.6 million. Same property operating expenses were higher primarily due to higher utilities and snow removal costs as a result of harsher than normal winter conditions. We expect rental property and other expenses for the remainder of 2014 to increase over 2013 primarily due to the full year contribution of acquisitions closed and development properties placed in service in 2013 and higher same property operating expenses resulting from higher utilities and property taxes, partly offset by lower repairs and maintenance.

Operating margin, defined as rental and other revenues less rental property and other expenses expressed as a percentage of rental and other revenues, was lower at 62.0% for the first quarter of 2014 as compared to 64.3% for the first quarter of 2013. We expect operating margin for the remainder of 2014 to increase slightly over 2013.

34

Depreciation and amortization was $8.1 million, or 20.1%, higher in the first quarter of 2014 as compared to 2013 primarily due to recent acquisitions. We expect depreciation and amortization for the remainder of 2014 to increase over 2013 primarily due to the full year contribution of acquisitions closed in 2013.

General and administrative expenses were relatively unchanged in the first quarter of 2014 as compared to 2013 primarily due to higher incentive compensation and company-wide base salaries, offset by lower acquisition costs and income taxes. We expect general and administrative expenses for the remainder of 2014 to decrease over 2013 primarily due to lower incentive compensation and acquisition costs, partly offset by higher company-wide base salaries. Further, first quarter general and administrative expenses are typically higher than in subsequent quarters due to higher long-term equity incentive compensation recognized for certain employees who meet the age and service eligibility requirements under our retirement plan. Long-term equity incentive compensation awards are typically issued during the first quarter of each year.

Interest Expense

Interest expense was $2.5 million, or 10.5%, lower in the first quarter of 2014 as compared to 2013 primarily due to lower average interest rates, partly offset by higher average debt balances. We expect interest expense for the remainder of 2014 to decrease over 2013 primarily due to lower average interest rates and higher capitalized interest, partly offset by higher average debt balances.

Other Income

Other income was $0.2 million, or 13.6%, lower in the first quarter of 2014 as compared to 2013 primarily due to the repayments in the first quarter of 2014 of $16.5 million of mortgages receivable, which consisted of seller financing provided in connection with 2010 disposition transactions. This decrease in other income was partly offset by a loss on debt extinguishment in the first quarter of 2013. We expect other income for the remainder of 2014 to decrease over 2013 as a result of the repayments of mortgages receivable in the first quarter of 2014.

Equity in Earnings/(Losses) of Unconsolidated Affiliates

Equity in earnings/(losses) of unconsolidated affiliates was $0.5 millionlower in the first quarter of 2014 as compared to 2013 primarily due to a net impairment of our investment in Board of Trade Investment Company in the first quarter of 2014 and the previously disclosed acquisitions of certain joint venture interests and assets in the third quarter of 2013. Partly offsetting these impacts was our share of impairments of real estate assets in a joint venture in the first quarter of 2013. We expect equity in earnings of unconsolidated affiliates for the remainder of 2014 to decrease over 2013 primarily due to the reduction of our overall joint venture investments in 2013 and 2014.

Impairments of Real Estate Assets in Discontinued Operations

We recorded impairments of real estate assets of $1.1 million on seven industrial properties in Atlanta, GA in the first quarter of 2013. These impairments were due to a change in the assumed timing of future dispositions and leasing assumptions. We recorded no such impairments in the first quarter of 2014.

Net Gains on Disposition of Discontinued Operations

Net gains on disposition of discontinued operations were $0.9 millionlower in the first quarter of 2014 as compared to 2013 due to no disposition activity in 2014 and the recognition of a deferred gain in 2014 on a 2010 disposition transaction that was accounted for using the installment method.

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Liquidity and Capital Resources

Overview

Our goal is to maintain a conservative and flexible balance sheet with access to multiple sources of debt and equity capital and sufficient availability under our revolving credit facility. We generally use rents received from customers to fund our operating expenses, recurring capital expenditures and distributions. To fund property acquisitions, development activity or building renovations and repay debt upon maturity, we may use current cash balances, sell assets, obtain new debt and/or issue equity. Our debt generally consists of unsecured debt securities, unsecured bank term loans, mortgage debt and borrowings under our unsecured revolving credit facility.

Statements of Cash Flows

We report and analyze our cash flows based on operating activities, investing activities and financing activities. The following table sets forth the changes in the Company’s cash flows ($ in thousands):

	Three Months Ended March 31,
	2014			2013			Change
Net Cash Provided By Operating Activities	$	31,384		$	42,119		$	(10,735	)
Net Cash (Used In) Investing Activities	(44,252		)	(99,254		)	55,002
Net Cash Provided By Financing Activities	16,028			55,522			(39,494		)
Total Cash Flows	$	3,160		$	(1,613	)	$	4,773

In calculating net cash related to operating activities, depreciation and amortization, which are non-cash expenses, are added back to net income. As a result, we have historically generated a positive amount of cash from operating activities. From period to period, cash flow from operations depends primarily upon changes in our net income, as discussed more fully above under “Results of Operations,” changes in receivables and payables, and net additions or decreases in our overall portfolio, which affect the amount of depreciation and amortization expense.

Net cash related to investing activities generally relates to capitalized costs incurred for leasing and major building improvements and our acquisition, development, disposition and joint venture capital activity. During periods of significant net acquisition and/or development activity, our cash used in such investing activities will generally exceed cash provided by investing activities, which typically consists of cash received upon the sale of properties and distributions of capital from our joint ventures.

Net cash related to financing activities generally relates to distributions, incurrence and repayment of debt, and issuances, repurchases or redemptions of Common Stock, Common Units and Preferred Stock. As discussed previously, we use a significant amount of our cash to fund distributions. Whether or not we have increases in the outstanding balances of debt during a period depends generally upon the net effect of our acquisition, disposition, development and joint venture activity. We generally use our revolving credit facility for daily working capital purposes, which means that during any given period, in order to minimize interest expense, we may record significant repayments and borrowings under our revolving credit facility.

The decrease in net cash provided by operating activities in the first quarter of 2014 as compared to 2013 was primarily due to higher cash paid for operating expenses in 2014, partly offset by higher net cash from the operations of recently acquired properties. We expect net cash provided by operating activities for the remainder of 2014 to be higher as compared to 2013 due to the full year impact of properties acquired in 2013 and higher cash flows from leases signed in 2013 and prior years as free rent periods expire.

The decrease in net cash used in investing activities in the first quarter of 2014 as compared to 2013 was primarily due to lower acquisition activity and higher repayments of mortgages and notes receivable in 2014, partly offset by higher development activity and lower net proceeds from dispositions of real estate assets in 2014. We expect net cash used in investing activities for the remainder of 2014 to be lower as compared to 2013 due to our plans to acquire $100 million to $300 million of office buildings and commence development of $75 million to $150 million of office buildings. Additionally, as of March 31, 2014, we have $135.3 million left to fund of our previously-announced development activity. We expect these uses of cash for investing activities will be partly offset by $100 million to $175 million of non-core dispositions and additional distributions of capital from unconsolidated affiliates in 2014.

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The decrease in net cash provided by financing activities in the first quarter of 2014 as compared to 2013 was primarily due to higher proceeds from the issuance of Common Stock in 2013, partly offset by higher net debt borrowings in 2014. Assuming the net effect of our acquisition, disposition, development and joint venture activity in the remainder of 2014 results in an increase in our assets, we would expect outstanding debt balances to increase. However, because we plan to continue to maintain a flexible and conservative balance sheet with mortgages and notes payable and outstanding preferred stock representing around 40% to 45% of the undepreciated book value of our assets, we would also expect higher outstanding balances of Common Stock in such event.

Capitalization

The following table sets forth the Company’s capitalization (in thousands, except per share amounts):

	March 31, 2014		December 31, 2013
Mortgages and notes payable, at recorded book value	$	2,012,554	$	1,956,299
Financing obligations	$	26,443	$	26,664
Preferred Stock, at liquidation value	$	29,077	$	29,077
Common Stock outstanding	90,062		89,921
Common Units outstanding (not owned by the Company)	2,937		2,944
Per share stock price at period end	$	38.41	$	36.17
Market value of Common Stock and Common Units	$	3,572,092	$	3,358,927
Total capitalization	$	5,640,166	$	5,370,967

At March 31, 2014, our mortgages and notes payable and outstanding preferred stock represented 36.2% of our total capitalization and 42.2% of the undepreciated book value of our assets.

Our mortgages and notes payable as of March 31, 2014 consisted of $485.5 million of secured indebtedness with a weighted average interest rate of 4.98% and $1,527.0 million of unsecured indebtedness with a weighted average interest rate of 3.95%. The secured indebtedness was collateralized by real estate assets with an aggregate undepreciated book value of $817.9 million.

Current and Future Cash Needs

Rental and other revenues are our principal source of funds to meet our short-term liquidity requirements. Other sources of funds for short-term liquidity needs include available working capital and borrowings under our existing revolving credit facility. Our short-term liquidity requirements primarily consist of operating expenses, interest and principal amortization on our debt, distributions and capital expenditures, including building improvement costs, tenant improvement costs and lease commissions. Building improvements are capital costs to maintain or enhance existing buildings not typically related to a specific customer. Tenant improvements are the costs required to customize space for the specific needs of customers. We anticipate that our available cash and cash equivalents and cash provided by operating activities, together with cash available from borrowings under our revolving credit facility, will be adequate to meet our short-term liquidity requirements.

Our long-term liquidity uses generally consist of the retirement or refinancing of debt upon maturity (including mortgage debt, our revolving credit facility, term loans and other unsecured debt), funding of existing and new building development or land infrastructure projects and funding acquisitions of buildings and development land. Our expected future capital expenditures for started and/or committed new development projects were $135.3 million at March 31, 2014. Additionally, we may, from time to time, retire some or all of our remaining outstanding Preferred Stock and/or unsecured debt securities through redemptions, open market repurchases, privately negotiated acquisitions or otherwise.

We expect to meet our long-term liquidity needs through a combination of:

• cash flow from operating activities;

• bank term loans and borrowings under our revolving credit facility;

• the issuance of unsecured debt;

• the issuance of secured debt;

37

• the issuance of equity securities by the Company or the Operating Partnership; and

• the disposition of non-core assets.

2014 Financing Activity

During the first quarter of 2014, we entered into separate sales agreements with each of Merrill Lynch, Pierce, Fenner & Smith Incorporated, Robert W. Baird & Co. Incorporated, BB&T Capital Markets, a division of BB&T Securities, LLC, Capital One Securities, Inc., Comerica Securities, Inc., Jefferies LLC, Mitsubishi UFJ Securities (USA), Inc., Morgan Stanley & Co. LLC, Piper Jaffray & Co., RBC Capital Markets, LLC and Wells Fargo Securities, LLC. Under the terms of the sales agreements, the Company may offer and sell up to $250.0 million in aggregate gross sales price of shares of common stock from time to time through such firms, acting as agents of the Company or as principals. Sales of the shares, if any, may be made by means of ordinary brokers' transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of such firms. During the first quarter of 2014, the Company issued 23,584 shares of Common Stock at an average gross sales price of $38.29 per share and received net proceeds, after sales commissions, of $0.9 million. We paid less than $0.1 million in sales commissions to Piper Jaffray & Co. during the first quarter of 2014. In early April 2014, the Company issued 50,293 shares of Common Stock at an average gross sales price of $38.38 per share and received net proceeds, after sales commissions, of $1.9 million. We paid less than $0.1 million in sales commissions to Piper Jaffray & Co. during April 2014.

Our $475.0 million unsecured revolving credit facility is scheduled to mature in January 2018 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six month periods. The interest rate at our current credit ratings is LIBOR plus 110 basis points and the annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody's Investors Service or Standard & Poor's Ratings Services. We use our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt. The continued ability to borrow under the revolving credit facility allows us to quickly capitalize on strategic opportunities at short-term interest rates. There was $275.0 million and $409.0 million outstanding under our revolving credit facility at March 31, 2014 and April 21, 2014, respectively. At both March 31, 2014 and April 21, 2014, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at March 31, 2014 and April 21, 2014 was $199.9 million and $65.9 million, respectively.

On April 1, 2014, we prepaid without penalty the remaining $123.7 million balance on a secured mortgage loan with an effective interest rate of 3.11% that was originally scheduled to mature in July 2014.

We regularly evaluate the financial condition of the financial institutions that participate in our credit facilities and as counterparties under interest rate swap agreements using publicly available information. Based on this review, we currently expect these financial institutions to perform their obligations under our existing facilities and swap agreements.

Covenant Compliance

We are currently in compliance with financial covenants and other requirements with respect to our consolidated debt. Although we expect to remain in compliance with these covenants and ratios for at least the next year, depending upon our future operating performance, property and financing transactions and general economic conditions, we cannot assure you that we will continue to be in compliance.

Our revolving credit facility and bank term loans require us to comply with customary operating covenants and various financial requirements. Upon an event of default on the revolving credit facility, the lenders having at least 51.0% of the total commitments under the revolving credit facility can accelerate all borrowings then outstanding, and we could be prohibited from borrowing any further amounts under our revolving credit facility, which would adversely affect our ability to fund our operations.

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As of March 31, 2014, the Operating Partnership has the following unsecured notes outstanding ($ in thousands):

	Face Amount		Carrying Amount		Stated Interest Rate		Effective Interest Rate
Notes due March 2017	$	379,685	$	379,340	5.850	%	5.880	%
Notes due April 2018	$	200,000	$	200,000	7.500	%	7.500	%
Notes due January 2023	$	250,000	$	247,689	3.625	%	3.752	%

The indenture that governs these outstanding notes requires us to comply with customary operating covenants and various financial ratios. The trustee or the holders of at least 25.0% in principal amount of either series of bonds can accelerate the principal amount of such series upon written notice of a default that remains uncured after 60 days.

We may not be able to repay, refinance or extend any or all of our debt at maturity or upon any acceleration. If any refinancing is done at higher interest rates, the increased interest expense could adversely affect our cash flow and ability to pay distributions. Any such refinancing could also impose tighter financial ratios and other covenants that restrict our ability to take actions that could otherwise be in our best interest, such as funding new development activity, making opportunistic acquisitions, repurchasing our securities or paying distributions.

Off Balance Sheet Arrangements

During the first quarter of 2014, Board of Trade Investment Company sold an office property to an unrelated third party for gross proceeds of $8.3 million and recorded a gain of $1.9 million. We expect to receive aggregate net distributions of $4.7 million in connection with our investment in this entity. As our cost basis is different from the basis reflected at the entity level, we recorded a net impairment charge on our investment of $0.4 million. This charge represented the other-than-temporary decline in the fair value below the carrying value of our investment.

Critical Accounting Estimates

There were no changes made by management to the critical accounting policies in the three months endedMarch 31, 2014. For a description of our critical accounting estimates, see “Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates” in our 2013 Annual Report on Form 10-K.

Non-GAAP Information

The Company believes that FFO, FFO available for common stockholders and FFO available for common stockholders per share are beneficial to management and investors and are important indicators of the performance of any equity REIT. Because these FFO calculations exclude such factors as depreciation, amortization and impairments 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. 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 on a stand-alone basis. As a result, management believes that the use of FFO, FFO available for common stockholders and FFO available for common stockholders per share, together with the required GAAP presentations, provides a more complete understanding of the Company's performance relative to its competitors and a more informed and appropriate basis on which to make decisions involving operating, financing and investing activities.

FFO, FFO available for common stockholders and FFO available for common stockholders 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 the Company's operating performance because these FFO measures include adjustments that investors may deem subjective, such as adding back expenses such as depreciation, amortization and impairments. Furthermore, FFO available for common stockholders per share does not depict the amount that accrues directly to the stockholders' benefit. Accordingly, FFO, FFO available for common stockholders and FFO available for common stockholders per share should never be considered as alternatives to net income, net income available for common stockholders or net income available for common stockholders per share as indicators of the Company's operating performance.

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The Company's presentation of FFO is consistent with FFO as defined by the National Association of Real Estate Investment Trusts, which is calculated as follows:

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

• Less net income attributable to noncontrolling interests in consolidated affiliates;

• Plus depreciation and amortization of depreciable operating properties;

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

• Plus or minus our share of adjustments, including depreciation and amortization of depreciable operating properties, 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 of depreciable operating properties, plus impairments on depreciable operating properties, and noncontrolling interests in consolidated affiliates related to discontinued operations.

In calculating FFO, the Company includes net income attributable to noncontrolling interests in the Operating Partnership, which the Company believes 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 Common Units not owned by the Company are redeemable on a one-for-one basis for shares of its Common Stock.

The following table sets forth the Company's FFO, FFO available for common stockholders and FFO available for common stockholders per share ($ in thousands, except per share amounts):

	Three Months Ended March 31,
	2014			2013
Funds from operations:
Net income	$	13,576		$	13,760
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423		)	(203		)
Depreciation and amortization of real estate assets	47,593			39,518
Unconsolidated affiliates:
Depreciation and amortization of real estate assets	1,031			2,015
Impairments of depreciable properties	—			1,020
Impairment of investment in unconsolidated affiliate	1,353			—
(Gains) on disposition of depreciable properties	(955		)	(421		)
Discontinued operations:
Depreciation and amortization of real estate assets	—			2,204
Impairments of depreciable properties	—			1,128
(Gains) on disposition of depreciable properties	(384		)	(1,244		)
Funds from operations	61,791			57,777
Dividends on Preferred Stock	(627		)	(627		)
Funds from operations available for common stockholders	$	61,164		$	57,150
Funds from operations available for common stockholders per share	$	0.66		$	0.67
Weighted average shares outstanding (1)	93,030			84,862

__________

(1) Includes assumed conversion of all potentially dilutive Common Stock equivalents.

In addition, the Company believes net operating income from continuing operations (“NOI”) and same property NOI are useful supplemental measures of the Company’s property operating performance because such metrics provide a performance measure of the revenues and expenses directly involved in owning real estate assets and a perspective not immediately apparent from net income or FFO. The Company defines NOI as rental and other revenues from continuing operations, less rental property

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and other expenses from continuing operations. The Company defines cash NOI as NOI less straight-line rent and lease termination fees. Other REITs may use different methodologies to calculate NOI and same property NOI.

As of March 31, 2014, our same property portfolio consisted of 256 in-service office, industrial and retail properties encompassing 25.8 million rentable square feet that were wholly owned during the entirety of the periods presented (from January 1, 2013 to March 31, 2014). As of December 31, 2013, our same property portfolio consisted of 247 in-service office, industrial and retail properties encompassing 24.1 million rentable square feet that were wholly owned during the entirety of the periods presented (from January 1, 2012 to December 31, 2013). The change in our same property portfolio was due to the addition of eight office properties encompassing 1.6 million rentable square feet acquired during 2012 and one newly developed office property encompassing 0.1 million rentable square feet placed in service during 2012.

Rental and other revenues related to properties not in our same property portfolio were $23.8 million and $4.0 million for the three months endedMarch 31, 2014 and 2013, respectively. Rental property and other expenses related to properties not in our same property portfolio were $9.5 million and $2.2 million for the three months endedMarch 31, 2014 and 2013, respectively.

The following table sets forth the Company’s NOI and same property NOI:

	Three Months Ended March 31,
	2014			2013
Income from continuing operations before activity in unconsolidated affiliates	$	13,221		$	10,864
Other income	(1,399		)	(1,619		)
Interest expense	21,362			23,868
General and administrative expenses	10,714			10,582
Depreciation and amortization	48,165			40,088
Net operating income from continuing operations	92,063			83,783
Less – non same property and other net operating income	(14,298		)	(1,775		)
Total same property net operating income from continuing operations	$	77,765		$	82,008
Rental and other revenues	$	148,453		$	130,377
Rental property and other expenses	56,390			46,594
Total net operating income from continuing operations	92,063			83,783
Less – non same property and other net operating income	(14,298		)	(1,775		)
Total same property net operating income from continuing operations	$	77,765		$	82,008
Total same property net operating income from continuing operations	$	77,765		$	82,008
Less – straight-line rent and lease termination fees	(2,748		)	(4,911		)
Same property cash net operating income from continuing operations	$	75,017		$	77,097

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information regarding our market risk as of December 31, 2013, see "Quantitative and Qualitative Disclosures About Market Risk" in our 2013 Annual Report on Form 10-K.

ITEM 4. CONTROLS AND PROCEDURES

SEC rules require us to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our annual and periodic reports filed with the SEC is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. The Company's CEO and CFO have concluded that the disclosure controls and procedures of the Company and the Operating Partnership were each effective at the end of the period covered by this Quarterly Report.

SEC rules also require us to establish and maintain internal control over financial reporting designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. There were no changes in internal control over financial reporting during the three months endedMarch 31, 2014 that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. There were also no changes in internal control over financial reporting during the three months endedMarch 31, 2014 that materially affected, or are reasonably likely to materially affect, the Operating Partnership's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the first quarter of 2014, the Company issued an aggregate of 4,417 shares of Common Stock to holders of Common Units in the Operating Partnership upon the redemption of a like number of Common Units in private offerings exempt from the registration requirements pursuant to Section 4(2) of the Securities Act. Each of the holders of Common Units was an accredited investor under Rule 501 of the Securities Act. The resale of such shares was registered by the Company under the Securities Act.

The following table sets forth information related to shares of Common Stock surrendered by employees to satisfy tax withholding obligations in connection with the vesting of restricted stock during the first quarter of 2014:

	Total Number of Shares Purchased	Weighted Average Price Paid per Share
January 1 to January 31	—	$	—
February 1 to February 28	—	—
March 1 to March 31	39,868	37.12
Total	39,868	$	37.12

ITEM 6. EXHIBITS

Exhibit Number	Description
1	Form of Sales Agreement, dated February 11, 2014, among Highwoods Properties, Inc., Highwoods Realty Limited Partnership and each of the firms named therein (filed as part of the Company's Current Report on Form 8-K dated February 11, 2014)
12.1	Statement re: Computation of Ratios of the Company
12.2	Statement re: Computation of Ratios of the Operating Partnership
31.1	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company
31.2	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Company
31.3	Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Operating Partnership
31.4	Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act for the Operating Partnership
32.1	Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Company
32.2	Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Company
32.3	Certification of CEO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership
32.4	Certification of CFO Pursuant to Section 906 of the Sarbanes-Oxley Act for the Operating Partnership
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Extension Labels Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Highwoods Properties, Inc.
By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Senior Vice President and Chief Financial Officer

Highwoods Realty Limited Partnership
By:	Highwoods Properties, Inc., its sole general partner
By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Senior Vice President and Chief Financial Officer

Date: April 29, 2014

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EX-12.1

Exhibit 12.1

HIGHWOODS PROPERTIES, INC.

RATIO OF EARNINGS TO FIXED CHARGES AND

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND

PREFERRED STOCK DIVIDENDS

	Three Months Ended March 31, 2014
Earnings:
Income from continuing operations before equity in earnings/(losses) of unconsolidated affiliates	$	13,221
Fixed charges	22,795
Capitalized interest	(566		)
Distributions of earnings from unconsolidated affiliates	788
Total earnings	$	36,238
Fixed charges and Preferred Stock dividends:
Contractual interest expense	$	20,750
Amortization of deferred financing costs	652
Financing obligations interest income	(40		)
Capitalized interest	566
Interest component of rental expense	867
Total fixed charges	22,795
Preferred Stock dividends	627
Total fixed charges and Preferred Stock dividends	$	23,422
Ratio of earnings to fixed charges	1.59
Ratio of earnings to combined fixed charges and Preferred Stock dividends	1.55

EX-12.2

Exhibit 12.2

HIGHWOODS REALTY LIMITED PARTNERSHIP

RATIO OF EARNINGS TO FIXED CHARGES AND

RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND

PREFERRED UNIT DISTRIBUTIONS

	Three Months Ended March 31, 2014
Earnings:
Income from continuing operations before equity in earnings/(losses) of unconsolidated affiliates	$	13,221
Fixed charges	22,795
Capitalized interest	(566		)
Distributions of earnings from unconsolidated affiliates	788
Total earnings	$	36,238
Fixed charges and Preferred Unit distributions:
Contractual interest expense	$	20,750
Amortization of deferred financing costs	652
Financing obligations interest income	(40		)
Capitalized interest	566
Interest component of rental expense	867
Total fixed charges	22,795
Preferred Unit distributions	627
Total fixed charges and Preferred Unit distributions	$	23,422
Ratio of earnings to fixed charges	1.59
Ratio of earnings to combined fixed charges and Preferred Unit distributions	1.55

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Edward J. Fritsch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 29, 2014

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Terry L. Stevens, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Properties, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 29, 2014

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer

EX-31.3

Exhibit 31.3

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Edward J. Fritsch, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Realty Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 29, 2014

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer of the General Partner

EX-31.4

Exhibit 31.4

CERTIFICATION PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT

I, Terry L. Stevens, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Highwoods Realty Limited Partnership;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Audit Committee of the Registrant’s Board of Directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: April 29, 2014

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer of the General Partner

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Properties, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward J. Fritsch, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer

April 29, 2014

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Properties, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terry L. Stevens, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer

April 29, 2014

EX-32.3

Exhibit 32.3

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Realty Limited Partnership (the “Operating Partnership”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edward J. Fritsch, President and Chief Executive Officer of Highwoods Properties, Inc., general partner of the Operating Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

/s/ Edward J. Fritsch

Edward J. Fritsch

President and Chief Executive Officer of the General Partner

April 29, 2014

EX-32.4

Exhibit 32.4

CERTIFICATION PURSUANT TO SECTION 906

OF THE SARBANES-OXLEY ACT

In connection with the Quarterly Report of Highwoods Realty Limited Partnership (the “Operating Partnership”) on Form 10-Q for the period ended March 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Terry L. Stevens, Senior Vice President and Chief Financial Officer of Highwoods Properties, Inc., general partner of the Operating Partnership, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Operating Partnership.

/s/ Terry L. Stevens

Terry L. Stevens

Senior Vice President and Chief Financial Officer of the General Partner

April 29, 2014

XML

Mortgages and Notes Payable (Details) (USD $)			3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2014 Revolving Credit Facility due 2015 [Member] extensions	Apr. 21, 2014 Revolving Credit Facility due 2015 [Member]	Mar. 31, 2014 Secured indebtedness [Member]	Dec. 31, 2013 Secured indebtedness [Member]	Mar. 31, 2014 Unsecured indebtedness [Member]	Dec. 31, 2013 Unsecured indebtedness [Member]
Debt Instrument [Line Items]
Mortgages and notes payable	$ 2,012,554,000	$ 1,956,299,000			$ 485,525,000	$ 488,664,000	$ 1,527,029,000	$ 1,467,635,000
Aggregate undepreciated book value of secured real estate assets					817,900,000
Maximum borrowing capacity on revolving credit facility			475,000,000
Maturity date on revolving credit facility			Jan. 01, 2018
Additional borrowing capacity on revolving credit facility			75,000,000
Number of additional maturity extensions			2
Term of optional extensions (in years)			6 months
Interest rate, basis			LIBOR plus 110 basis points
Interest rate, basis spread			1.10%
Annual facility fee (in hundredths)			0.20%
Amount outstanding on revolving credit facility			275,000,000	409,000,000
Outstanding letters of credit on revolving credit facility			100,000	100,000
Unused borrowing capacity on revolving credit facility			$ 199,900,000	$ 65,900,000

XML

Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	$ 148,453		$ 130,377
Total Net Operating Income	92,063		83,783
Reconciliation to income from continuing operations before disposition of property and condominiums and acquisition of interest in and equity in earnings of unconsolidated affiliates:
Depreciation and amortization	(48,165)		(40,088)
General and administrative expenses	(10,714)		(10,582)
Interest expense	(21,362)		(23,868)
Other income	1,399		1,619
Income from continuing operations before activity in unconsolidated affiliates	13,221		10,864
Total Office Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	136,343	[1]	117,589	[1]
Total Net Operating Income	84,847	[1]	75,816	[1]
Office Atlanta, GA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	22,977		17,167
Total Net Operating Income	13,697		10,893
Office Greenville, SC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	841		851
Total Net Operating Income	475		496
Office Kansas City, MO [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	4,097		3,969
Total Net Operating Income	2,605		2,562
Office Memphis, TN [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,835		9,380
Total Net Operating Income	5,607		5,629
Office Nashville, TN [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	19,605		14,070
Total Net Operating Income	13,153		9,685
Office Orlando, FL [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	8,920		2,221
Total Net Operating Income	5,376		1,078
Office Piedmont Triad, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	6,450		6,377
Total Net Operating Income	3,998		4,099
Office Pittsburgh, PA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	13,757		13,688
Total Net Operating Income	7,193		7,418
Office Raleigh, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	21,491		20,660
Total Net Operating Income	15,032		14,624
Office Richmond, VA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	11,743		11,772
Total Net Operating Income	7,676		8,113
Office Tampa, FL [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	16,627		17,434
Total Net Operating Income	10,035		11,219
Total Industrial Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	2,892	[1]	3,325	[1]
Total Net Operating Income	1,989	[1]	2,364	[1]
Industrial Atlanta, GA [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	204		203
Total Net Operating Income	122		119
Industrial Piedmont Triad, NC [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	2,688		3,122
Total Net Operating Income	1,867		2,245
Total Retail Segment [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,218	[1]	9,463	[1]
Total Net Operating Income	5,265	[1]	5,621	[1]
Retail Kansas City, MO [Member]
Segment Reporting Information [Line Items]
Total Rental and Other Revenues	9,218		9,463
Total Net Operating Income	5,265		5,621
Corporate and Other [Member]
Segment Reporting Information [Line Items]
Total Net Operating Income	$ (38)	[1]	$ (18)	[1]

[1] Net of discontinued operations.

XML

Discontinued Operations (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Discontinued operations [Abstract]
Rental and other revenues	$ 0	$ 6,998
Operating expenses:
Rental property and other expenses	0	2,450
Depreciation and amortization	0	2,204
Total operating expenses	0	4,654
Income from discontinued operations	0	2,344
Impairments of real estate assets	0	(1,128)
Net gains on disposition of discontinued operations	384	1,244
Total discontinued operations	$ 384	$ 2,460

XML

Segment Information (Tables)

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information [Table Text Block]

The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker, which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments:

	Three Months Ended March 31,
	2014		2013
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	22,977	$	17,167
Greenville, SC	841		851
Kansas City, MO	4,097		3,969
Memphis, TN	9,835		9,380
Nashville, TN	19,605		14,070
Orlando, FL	8,920		2,221
Piedmont Triad, NC	6,450		6,377
Pittsburgh, PA	13,757		13,688
Raleigh, NC	21,491		20,660
Richmond, VA	11,743		11,772
Tampa, FL	16,627		17,434
Total Office Segment	136,343		117,589
Industrial:
Atlanta, GA	204		203
Piedmont Triad, NC	2,688		3,122
Total Industrial Segment	2,892		3,325
Retail:
Kansas City, MO	9,218		9,463
Total Retail Segment	9,218		9,463
Total Rental and Other Revenues	$	148,453	$	130,377

13. Segment Information - Continued

	Three Months Ended March 31,
	2014			2013
Net Operating Income: (1)
Office:
Atlanta, GA	$	13,697		$	10,893
Greenville, SC	475			496
Kansas City, MO	2,605			2,562
Memphis, TN	5,607			5,629
Nashville, TN	13,153			9,685
Orlando, FL	5,376			1,078
Piedmont Triad, NC	3,998			4,099
Pittsburgh, PA	7,193			7,418
Raleigh, NC	15,032			14,624
Richmond, VA	7,676			8,113
Tampa, FL	10,035			11,219
Total Office Segment	84,847			75,816
Industrial:
Atlanta, GA	122			119
Piedmont Triad, NC	1,867			2,245
Total Industrial Segment	1,989			2,364
Retail:
Kansas City, MO	5,265			5,621
Total Retail Segment	5,265			5,621
Corporate and other	(38		)	(18		)
Total Net Operating Income	92,063			83,783
Reconciliation to income from continuing operations before activity in unconsolidated affiliates:
Depreciation and amortization	(48,165		)	(40,088		)
General and administrative expenses	(10,714		)	(10,582		)
Interest expense	(21,362		)	(23,868		)
Other income	1,399			1,619
Income from continuing operations before activity in unconsolidated affiliates	$	13,221		$	10,864

__________

(1) Net of discontinued operations.

XML

Intangible Assets and Below Market Lease Liabilities (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Total intangible assets and below market lease liabilities [Table Text Block]

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	March 31, 2014			December 31, 2013
Assets:
Deferred financing costs	$	17,329		$	17,363
Less accumulated amortization	(5,789		)	(5,204		)
	11,540			12,159
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)	302,141			297,068
Less accumulated amortization	(94,850		)	(87,016		)
	207,291			210,052
Deferred financing and leasing costs, net	$	218,831		$	222,211
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	54,996		$	55,323
Less accumulated amortization	(9,673		)	(8,478		)
	$	45,323		$	46,845

Amortization of intangible assets and below market lease liabilities [Table Text Block]

The following table sets forth amortization of intangible assets and below market lease liabilities:

	Three Months Ended March 31,
	2014			2013
Amortization of deferred financing costs	$	652		$	949
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	9,928		$	8,075
Amortization of lease incentives (in rental and other revenues)	$	351		$	376
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	1,116		$	466
Amortization of acquisition-related intangible assets (in rental property and other expenses)	$	137		$	137
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(1,522	)	$	(1,122	)

Scheduled future amortization of intangible assets and below market lease liabilities [Table Text Block]

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2014	$	2,104	$	29,555	$	983	$	3,221	$	416	$	(4,479	)
2015	2,765		33,532		1,083		3,619		553		(5,718		)
2016	2,500		27,957		910		2,810		553		(5,427		)
2017	2,205		23,985		840		2,269		553		(5,164		)
2018	1,080		19,729		737		1,426		553		(5,016		)
Thereafter	886		44,666		2,487		3,768		1,086		(19,519		)
	$	11,540	$	179,424	$	7,040	$	17,113	$	3,714	$	(45,323	)
Weighted average remaining amortization periods as of March 31, 2014 (in years)	4.5		6.7		8.3		6.6		6.7		8.9

XML

Disclosure About Fair Value of Financial Instruments - Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis (Details) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014		Dec. 31, 2013
Assets:
Mortgages and notes receivable, at fair value	$ 10,037	[1]	$ 26,485	[1]
Interest rate swaps (in prepaid expenses and other assets)			301
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,721		3,996
Impaired investment in unconsolidated affiliate	4,668
Tax increment financing bond (in prepaid expenses and other assets)	13,568		13,403
Total Assets	31,994		44,185
Liabilities:
Mortgages and notes payable, at fair value	2,101,898	[1]	2,037,385	[1]
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	763		510
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,721		3,996
Financing obligations, at fair value	22,203	[1]	22,478	[1]
Total Liabilities	2,128,585		2,064,369
Level 1 [Member]
Assets:
Mortgages and notes receivable, at fair value	0		0
Interest rate swaps (in prepaid expenses and other assets)			0
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,721		3,996
Impaired investment in unconsolidated affiliate	4,668
Tax increment financing bond (in prepaid expenses and other assets)	0		0
Total Assets	8,389		3,996
Liabilities:
Mortgages and notes payable, at fair value	0		0
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	0		0
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,721		3,996
Financing obligations, at fair value	0		0
Total Liabilities	3,721		3,996
Level 2 [Member]
Assets:
Mortgages and notes receivable, at fair value	370		17,029
Interest rate swaps (in prepaid expenses and other assets)			301
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	0		0
Impaired investment in unconsolidated affiliate	0
Tax increment financing bond (in prepaid expenses and other assets)	0		0
Total Assets	370		17,330
Liabilities:
Mortgages and notes payable, at fair value	2,101,898		2,037,385
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	763		510
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	0		0
Financing obligations, at fair value	0		0
Total Liabilities	2,102,661		2,037,895
Level 3 [Member]
Assets:
Mortgages and notes receivable, at fair value	9,667		9,456
Interest rate swaps (in prepaid expenses and other assets)			0
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	0		0
Impaired investment in unconsolidated affiliate	0
Tax increment financing bond (in prepaid expenses and other assets)	13,568		13,403
Total Assets	23,235		22,859
Liabilities:
Mortgages and notes payable, at fair value	0		0
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	0		0
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	0		0
Financing obligations, at fair value	22,203		22,478
Total Liabilities	22,203		22,478
Highwoods Properties, Inc. [Member]
Assets:
Noncontrolling Interests in the Operating Partnership	112,808		106,480
Highwoods Properties, Inc. [Member] | Level 1 [Member]
Assets:
Noncontrolling Interests in the Operating Partnership	112,808		106,480
Highwoods Properties, Inc. [Member] | Level 2 [Member]
Assets:
Noncontrolling Interests in the Operating Partnership	0		0
Highwoods Properties, Inc. [Member] | Level 3 [Member]
Assets:
Noncontrolling Interests in the Operating Partnership	$ 0		$ 0

[1] Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2014 and December 31, 2013.

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Intangible Assets and Below Market Lease Liabilities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, accumulated amortization	$ (100,639)		$ (92,220)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	218,831		222,211
Deferred Financing Costs [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, gross	17,329		17,363
Deferred financing and leasing costs, accumulated amortization	(5,789)		(5,204)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	11,540		12,159
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	652	949
Deferred Leasing Costs [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, gross	302,141		297,068
Deferred financing and leasing costs, accumulated amortization	(94,850)		(87,016)
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	207,291		210,052
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	179,424
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	9,928	8,075
Lease Incentives [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	7,040
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	351	376
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	17,113
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	1,116	466
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	3,714
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of intangible assets	137	137
Acquisition-Related Below Market Lease Liabilities [Member]
Intangible assets and below market lease liabilities, net [Abstract]
Acquisition-related below market lease liabilities, gross	54,996		55,323
Acquisition-related below market lease liabilities, accumulated amortization	(9,673)		(8,478)
Acquisition-related below market lease liabilities, net	45,323		46,845
Amortization of intangible assets and below market lease liabilities [Abstract]
Amortization of acquisition-related below market lease liabilities	$ (1,522)	$ (1,122)

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Earnings Per Share/Unit (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Numerator:
Income from continuing operations	$ 13,192		$ 11,300
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(386)		(472)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423)		(203)
Dividends on Preferred Stock	(627)		(627)
Income from continuing operations available for common stockholders	11,756		9,998
Income from discontinued operations	384		2,460
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(12)		(109)
Income from discontinued operations available for common stockholders	372		2,351
Net income available for common stockholders	12,128		12,349
Denominator:
Denominator for basic earnings per Common Share - weighted average shares (in shares)	89,966,000	[1],[2]	81,029,000	[1],[2]
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.00		$ 0.03
Net income available for common stockholders (in dollars per share)	$ 0.13		$ 0.15
Numerator:
Income from continuing operations	13,192		11,300
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423)		(203)
Dividends on Preferred Stock	(627)		(627)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	12,142		10,470
Income from discontinued operations available for common stockholders	384		2,460
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	12,526		12,930
Denominator:
Denominator for basic earnings per Common Share - weighted average shares (in shares)	89,966,000	[1],[2]	81,029,000	[1],[2]
Stock options using the treasury method	124,000		108,000
Noncontrolling interests Common Units	2,940,000		3,725,000
Denominator for diluted earnings per Common Share - adjusted weighted average shares and assumed conversions (in shares) (1)	93,030,000	[1],[2]	84,862,000	[1],[2]
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.00		$ 0.03
Net income available for common stockholders (in dollars per share)	$ 0.13		$ 0.15
Earnings per Common Unit - diluted:
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)	300,000		500,000
Highwoods Realty Limited Partnership [Member]
Numerator:
Income from continuing operations	13,192		11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423)		(203)
Distributions on Preferred Units	(627)		(627)
Income from continuing operations available for common unitholders	12,142		10,417
Income from discontinued operations available for common unitholders	384		2,460
Net income available for common unitholders	12,526		12,877
Denominator:
Denominator for basic earnings per Common Unit - weighted average units (in shares)	92,497,000	[2],[3]	84,345,000	[2],[3]
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common unitholders (in dollars per share)	$ 0.01		$ 0.03
Net income available for common unitholders (in dollars per share)	$ 0.14		$ 0.15
Numerator:
Income from continuing operations	13,192		11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423)		(203)
Distributions on Preferred Units	(627)		(627)
Income from continuing operations available for common unitholders	12,142		10,417
Income from discontinued operations available for common unitholders	384		2,460
Net income available for common unitholders	$ 12,526		$ 12,877
Denominator:
Denominator for basic earnings per Common Unit - weighted average units (in shares)	92,497,000	[2],[3]	84,345,000	[2],[3]
Stock options using the treasury method	124,000		108,000
Denominator for diluted earnings per Common Unit - adjusted weighted average units and assumed conversions (in shares)	92,621,000	[2],[3]	84,453,000	[2],[3]
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common unitholders (in dollars per share)	$ 0.01		$ 0.03
Net income available for common unitholders (in dollars per share)	$ 0.14		$ 0.15
Number of anti-dilutive options and warrants not included in earnings per share (in dollars per share)	300,000		500,000

[1] There were 0.3 million and 0.5 million options outstanding during the three months ended March 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

[2] Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

[3] There were 0.3 million and 0.5 million options outstanding during the three months ended March 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

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Mortgages and Notes Receivable

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Mortgages and Notes Receivable

Mortgages and Notes Receivable

The following table sets forth our mortgages and notes receivable:

	March 31, 2014			December 31, 2013
Seller financing (first mortgages)	$	—		$	16,454
Less allowance	—			—
	—			16,454
Mortgage receivable	9,658			9,435
Less allowance	—			—
	9,658			9,435
Promissory notes	670			822
Less allowance	(300		)	(302		)
	370			520
Mortgages and notes receivable, net	$	10,028		$	26,409

During 2010, we provided seller financing in conjunction with two disposition transactions. We accounted for these dispositions using the installment method, whereby a gain on disposition of property was deferred until the seller financing was repaid. During the first quarter of 2014, the $16.5 million of seller financing was fully repaid and we recorded the $0.4 million gain on disposition of property.

During 2012, we provided secured acquisition financing to a third party. We also agreed to loan such third party $8.4 million on a secured basis to fund future infrastructure development. As of March 31, 2014, $0.4 million has been funded to the third party for infrastructure development. We concluded this arrangement to be an interest in a variable interest entity. However, since we do not have the power to direct matters that most significantly impact the activities of the entity, we do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated. Our risk of loss with respect to this arrangement is limited to the carrying value of the mortgage receivable and the future infrastructure development funding commitment.

We evaluate the ability to collect our mortgages and notes receivable by monitoring the leasing statistics and/or market fundamentals of these assets. As of March 31, 2014, our mortgages and notes receivable were not in default and there were no other indicators of impairment.

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

	Three Months Ended March 31,
	2014			2013
Beginning notes receivable allowance	$	302		$	182
Recoveries/write-offs/other	(2		)	255
Total notes receivable allowance	$	300		$	437

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Disclosure About Fair Value of Financial Instruments - Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Unrealized gains (in AOCL)	$ 165,000	$ 390,000
Contingent Consideration to Acquire Real Estate Assets [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	0	563,000
Recognized gains (in general and administrative)	0	(188,000)
Ending balance	0	375,000
Tax Increment Financing Bond [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning balance	13,403,000	14,496,000
Principal repayment	0	(562,000)
Unrealized gains (in AOCL)	165,000	390,000
Ending balance	13,568,000	14,324,000
Maturity date	Dec. 20, 2020
Amount by which outstanding principal amount exceeds estimated fair value	900,000
Change in discount rate (in hundredths)	1.00%
Fair value of Level 3 asset	13,568,000	14,324,000
Discount rate (in hundredths)	9.70%
Tax Increment Financing Bond [Member] | Minimum [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in fair value of bond if discount rate changes	400,000
Tax Increment Financing Bond [Member] | Maximum [Member]
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Change in fair value of bond if discount rate changes	$ 400,000

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Disclosure About Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Fair Value Measurements of Assets, Liabilities and Noncontrolling Interests [Table Text Block]

The following table sets forth our assets and liabilities and the Company's noncontrolling interests in the Operating Partnership that are measured at fair value within the fair value hierarchy.

			Level 1		Level 2		Level 3
	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Fair Value at March 31, 2014:
Assets:
Mortgages and notes receivable, at fair value (1)	$	10,037	$	—	$	370	$	9,667
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,721		3,721		—		—
Impaired investment in unconsolidated affiliate	4,668		4,668		—		—
Tax increment financing bond (in prepaid expenses and other assets)	13,568		—		—		13,568
Total Assets	$	31,994	$	8,389	$	370	$	23,235
Noncontrolling Interests in the Operating Partnership	$	112,808	$	112,808	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	2,101,898	$	—	$	2,101,898	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	763		—		763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,721		3,721		—		—
Financing obligations, at fair value (1)	22,203		—		—		22,203
Total Liabilities	$	2,128,585	$	3,721	$	2,102,661	$	22,203

Fair Value at December 31, 2013:
Assets:
Mortgages and notes receivable, at fair value (1)	$	26,485	$	—	$	17,029	$	9,456
Interest rate swaps (in prepaid expenses and other assets)	301		—		301		—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,996		3,996		—		—
Tax increment financing bond (in prepaid expenses and other assets)	13,403		—		—		13,403
Total Assets	$	44,185	$	3,996	$	17,330	$	22,859
Noncontrolling Interests in the Operating Partnership	$	106,480	$	106,480	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	2,037,385	$	—	$	2,037,385	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	510		—		510		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,996		3,996		—		—
Financing obligations, at fair value (1)	22,478		—		—		22,478
Total Liabilities	$	2,064,369	$	3,996	$	2,037,895	$	22,478

__________

(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2014 and December 31, 2013.

Fair Value Measurements, Unobservable Inputs Reconciliation [Table Text Block]

The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

	Three Months Ended March 31,
	2014		2013
Asset:
Tax Increment Financing Bond:
Beginning balance	$	13,403	$	14,496
Principal repayment	—		(562		)
Unrealized gains (in AOCL)	165		390
Ending balance	$	13,568	$	14,324
Liability:
Contingent Consideration to Acquire Real Estate Assets:
Beginning balance	$	—	$	563
Recognized gains (in general and administrative expenses)	—		(188		)
Ending balance	$	—	$	375

Fair Value Measurements, Valuation Techniques [Table Text Block]

The following table sets forth quantitative information about the unobservable input of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets:

	Valuation Technique	Unobservable Input	Rate/ Percentage
Asset:
Tax increment financing bond	Income approach	Discount rate	9.7%

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Noncontrolling Interests (Tables) (Highwoods Properties, Inc. [Member])

3 Months Ended

Mar. 31, 2014

Highwoods Properties, Inc. [Member]

Noncontrolling Interest [Line Items]

Noncontrolling Interests in the Operating Partnership [Table Text Block]

The following table sets forth the Company's noncontrolling interests in the Operating Partnership:

	Three Months Ended March 31,
	2014			2013
Beginning noncontrolling interests in the Operating Partnership	$	106,480		$	124,869
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434			23,802
Conversions of Common Units to Common Stock	(162		)	(351		)
Redemptions of Common Units	(93		)	—
Net income attributable to noncontrolling interests in the Operating Partnership	398			581
Distributions to noncontrolling interests in the Operating Partnership	(1,249		)	(1,584		)
Total noncontrolling interests in the Operating Partnership	$	112,808		$	147,317

Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Table Text Block]

The following table sets forth net income available for common stockholders and transfers from the Company's noncontrolling interests in the Operating Partnership:

	Three Months Ended March 31,
	2014		2013
Net income available for common stockholders	$	12,128	$	12,349
Increase in additional paid in capital from conversions of Common Units to Common Stock	162		351
Change from net income available for common stockholders and transfers from noncontrolling interests	$	12,290	$	12,700

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Share-Based Payments (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 4,262,000	$ 3,440,000
Total unrecognized stock-based compensation costs	$ 6,200,000
Weighted average remaining contractual term for recognition of unrecognized stock-based compensation costs (in years)	2 years 8 months 12 days
Highwoods Properties, Inc. [Member] | Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock options granted	166,081
Weighted average grant date fair value of each stock option granted (in dollars per option)	$ 6.89
Highwoods Properties, Inc. [Member] | Time-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted	79,056
Weighted average grant date fair value of each restricted stock granted (in dollars per share)	$ 37.55
Highwoods Properties, Inc. [Member] | Total Return-Based Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted	65,770
Weighted average grant date fair value of each restricted stock granted (in dollars per share)	$ 35.24

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Components of Accumulated Other Comprehensive Loss [Table Text Block]

The following table sets forth the components of AOCL:

	Three Months Ended March 31,
	2014			2013
Tax increment financing bond:
Beginning balance	$	(1,029	)	$	(1,898	)
Unrealized gains on tax increment financing bond	165			390
Ending balance	(864		)	(1,508		)
Cash flow hedges:
Beginning balance	(1,582		)	(10,730		)
Unrealized gains/(losses) on cash flow hedges	(1,404		)	280
Amortization of cash flow hedges (1)	928			788
Ending balance	(2,058		)	(9,662		)
Total accumulated other comprehensive loss	$	(2,922	)	$	(11,170	)

__________

(1)    Amounts reclassified out of AOCL into contractual interest expense.

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Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Operations Classified As Discontinued Operations [Table Text Block]

The following table sets forth our operations classified as discontinued operations:

	Three Months Ended March 31,
	2014		2013
Rental and other revenues	$	—	$	6,998
Operating expenses:
Rental property and other expenses	—		2,450
Depreciation and amortization	—		2,204
Total operating expenses	—		4,654
Income from discontinued operations	—		2,344
Impairments of real estate assets	—		(1,128		)
Net gains on disposition of discontinued operations	384		1,244
Total discontinued operations	$	384	$	2,460

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Description of Business and Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Significant Accounting Policies

Description of Business and Significant Accounting Policies

Description of Business

Highwoods Properties, Inc. (the “Company”) is a fully-integrated real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. The Company conducts its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). At March 31, 2014, we owned or had an interest in 32.1 million rentable square feet of in-service office, industrial and retail properties, 0.8 million rentable square feet of office properties under development and approximately 600 acres of development land.

The Company is the sole general partner of the Operating Partnership. At March 31, 2014, the Company owned all of the Preferred Units and 89.7 million, or 96.8%, of the Common Units in the Operating Partnership. Limited partners own the remaining 2.9 million Common Units. During the three months endedMarch 31, 2014, the Company redeemed 2,500 Common Units for less than $0.1 million in cash and redeemed 4,417 Common Units for a like number of shares of Common Stock.

Common Stock Offerings

During the three months endedMarch 31, 2014, the Company issued 23,584 shares of Common Stock under its equity sales agreements at an average gross sales price of $38.29 per share and received net proceeds, after sales commissions, of $0.9 million.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Statements of Income for the three months endedMarch 31, 2013 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties classified as discontinued operations.

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. All intercompany transactions and accounts have been eliminated. At March 31, 2014 and December 31, 2013, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 2).

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2013 Annual Report on Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.

1.    Description of Business and Significant Accounting Policies - Continued

Recently Issued Accounting Standards

Beginning with our Quarterly Report on Form 10-Q for the three months ended March 31, 2015, we will be required to reflect in discontinued operations for only those real estate asset sales representing a strategic shift in operations (e.g. a disposal of a major geographic area or a major line of business).  Currently, we are required to reflect all real estate asset sales as discontinued operations, which requires reclassification of the earnings of the sold assets from continuing operations for all periods presented.  Early adoption is permitted, but only for real estate asset sales that have not been previously reflected as discontinued operations.

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Earnings Per Share/Unit (Tables)

3 Months Ended

Mar. 31, 2014

Earnings Per Share/Unit Basic and Diluted [Line Items]

Earnings Per Share [Table Text Block]

The following table sets forth the computation of basic and diluted earnings per share of the Company:

	Three Months Ended March 31,
	2014			2013
Earnings per Common Share - basic:
Numerator:
Income from continuing operations	$	13,192		$	11,300
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(386		)	(472		)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Income from continuing operations available for common stockholders	11,756			9,998
Income from discontinued operations	384			2,460
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(12		)	(109		)
Income from discontinued operations available for common stockholders	372			2,351
Net income available for common stockholders	$	12,128		$	12,349
Denominator:
Denominator for basic earnings per Common Share – weighted average shares	89,966			81,029
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15
Earnings per Common Share - diluted:
Numerator:
Income from continuing operations	$	13,192		$	11,300
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	12,142			10,470
Income from discontinued operations available for common stockholders	384			2,460
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	$	12,526		$	12,930
Denominator:
Denominator for basic earnings per Common Share – weighted average shares	89,966			81,029
Add:
Stock options using the treasury method	124			108
Noncontrolling interests Common Units	2,940			3,725
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1) (2)	93,030			84,862
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15

__________

(1) There were 0.3 million and 0.5 million options outstanding during the three months endedMarch 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

Highwoods Realty Limited Partnership [Member]

Earnings Per Share/Unit Basic and Diluted [Line Items]

Earnings Per Unit [Table Text Block]

The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:

	Three Months Ended March 31,
	2014			2013
Earnings per Common Unit - basic:
Numerator:
Income from continuing operations	$	13,192		$	11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Income from continuing operations available for common unitholders	12,142			10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877
Denominator:
Denominator for basic earnings per Common Unit – weighted average units	92,497			84,345
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15
Earnings per Common Unit - diluted:
Numerator:
Income from continuing operations	$	13,192		$	11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Income from continuing operations available for common unitholders	12,142			10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877
Denominator:
Denominator for basic earnings per Common Unit – weighted average units	92,497			84,345
Add:
Stock options using the treasury method	124			108
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1) (2)	92,621			84,453
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15

__________

(1) There were 0.3 million and 0.5 million options outstanding during the three months endedMarch 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

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Derivative Financial Instruments (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Expected increase to interest expense	$ 3,400,000
Derivatives designated as cash flow hedges in prepaid expenses and other assets [Abstract]
Derivative Asset, Fair Value, Amount Not Offset Against Collateral	0		301,000
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities [Abstract]
Interest rate swaps	763,000		510,000
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion) [Abstract]
Interest rate swaps	(1,404,000)	280,000
Amount of (gains)/losses reclassified out of AOCL into contractual interest expense (effective portion) [Abstract]
Interest rate swaps	$ 928,000	$ 788,000

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Real estate assets, at cost:
Land	$ 394,233	$ 393,602
Buildings and tenant improvements	3,782,607	3,748,869
Development in process	69,527	44,621
Land held for development	111,444	110,374
Total real estate assets	4,357,811	4,297,466
Less-accumulated depreciation	(1,019,931)	(985,244)
Net real estate assets	3,337,880	3,312,222
Cash and cash equivalents	13,344	10,184
Restricted cash	9,140	14,169
Accounts receivable, net of allowance of $1,412 and $1,648, respectively	24,661	26,430
Mortgages and notes receivable, net of allowance of $300 and $302, respectively	10,028	26,409
Accrued straight-line rents receivable, net of allowance of $1,118 and $1,063, respectively	132,038	126,014
Investments in unconsolidated affiliates	28,836	29,901
Deferred financing and leasing costs, net of accumulated amortization of $100,639 and $92,220, respectively	218,831	222,211
Prepaid expenses and other assets, net of accumulated amortization of $13,186 and $12,905, respectively	45,235	39,561
Total Assets	3,819,993	3,807,101
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity:
Mortgages and notes payable	2,012,554	1,956,299
Accounts payable, accrued expenses and other liabilities	198,856	218,962
Financing obligations	26,443	26,664
Total Liabilities	2,237,853	2,201,925
Commitments and contingencies
Noncontrolling interests in the Operating Partnership	112,808	106,480
Equity:
Preferred Stock, $.01 par value, 50,000,000 authorized shares; 8.625% Series A Cumulative Redeemable Preferred Shares (liquidation preference $1,000 per share; 29,077 shares issued and outstanding)	29,077	29,077
Common Stock, $.01 par value, 200,000,000 authorized shares; 90,061,731 and 89,920,915 shares issued and outstanding, respectively	901	899
Additional paid-in capital	2,367,509	2,370,368
Distributions in excess of net income available for common stockholders	(946,530)	(920,433)
Accumulated other comprehensive loss	(2,922)	(2,611)
Total Stockholders’ Equity	1,448,035	1,477,300
Noncontrolling interests in consolidated affiliates	21,297	21,396
Total Equity	1,469,332	1,498,696
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity	3,819,993	3,807,101
Highwoods Realty Limited Partnership [Member]
Real estate assets, at cost:
Land	394,233	393,602
Buildings and tenant improvements	3,782,607	3,748,869
Development in process	69,527	44,621
Land held for development	111,444	110,374
Total real estate assets	4,357,811	4,297,466
Less-accumulated depreciation	(1,019,931)	(985,244)
Net real estate assets	3,337,880	3,312,222
Cash and cash equivalents	13,430	10,281
Restricted cash	9,140	14,169
Accounts receivable, net of allowance of $1,412 and $1,648, respectively	24,661	26,430
Mortgages and notes receivable, net of allowance of $300 and $302, respectively	10,028	26,409
Accrued straight-line rents receivable, net of allowance of $1,118 and $1,063, respectively	132,038	126,014
Investments in unconsolidated affiliates	28,836	29,901
Deferred financing and leasing costs, net of accumulated amortization of $100,639 and $92,220, respectively	218,831	222,211
Prepaid expenses and other assets, net of accumulated amortization of $13,186 and $12,905, respectively	45,201	39,561
Total Assets	3,820,045	3,807,198
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Liabilities, Redeemable Operating Partnership Units and Equity:
Mortgages and notes payable	2,012,554	1,956,299
Accounts payable, accrued expenses and other liabilities	198,804	218,887
Financing obligations	26,443	26,664
Total Liabilities	2,237,801	2,201,850
Commitments and contingencies
Redeemable Operating Partnership Units:
Common Units, 2,936,955 and 2,943,872 outstanding, respectively	112,808	106,480
Series A Preferred Units (liquidation preference $1,000 per unit), 29,077 units issued and outstanding	29,077	29,077
Total Redeemable Operating Partnership Units	141,885	135,557
Equity:
General partner Common Units, 925,899 and 924,560 outstanding, respectively	14,219	14,508
Limited partner Common Units, 88,727,023 and 88,587,546 outstanding, respectively	1,407,765	1,436,498
Accumulated other comprehensive loss	(2,922)	(2,611)
Noncontrolling interests in consolidated affiliates	21,297	21,396
Total Equity	1,440,359	1,469,791
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity/Total Liabilities, Redeemable Operating Partnership Units and Equity	$ 3,820,045	$ 3,807,198

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Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified				3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Mar. 31, 2013	Mar. 31, 2014 Tax Increment Financing Bond [Member]	Mar. 31, 2013 Tax Increment Financing Bond [Member]	Mar. 31, 2014 Cash Flow Hedges [Member]		Mar. 31, 2013 Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) Calculation [Roll Forward]
Beginning balance	$ (2,922)	$ (2,611)	$ (11,170)	$ (1,029)	$ (1,898)	$ (1,582)		$ (10,730)
Unrealized gains/(losses)				165	390	(1,404)		280
Amortization reclassified out of AOCL						928	[1]	788	[1]
Ending balance	(2,922)	(2,611)	(11,170)	(864)	(1,508)	(2,058)		(9,662)
Total accumulated other comprehensive loss	$ (2,922)	$ (2,611)	$ (11,170)	$ (864)	$ (1,508)	$ (2,058)		$ (9,662)

[1] Amounts reclassified out of AOCL into contractual interest expense.

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Consolidated Statements of Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Highwoods Realty Limited Partnership [Member]	Common Stock [Member]	Series A Cumulative Redeemable Preferred Shares [Member]	General Partner Common Units [Member] Highwoods Realty Limited Partnership [Member]	Limited Partner Common Units [Member] Highwoods Realty Limited Partnership [Member]	Additional Paid-in Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) [Member] Highwoods Realty Limited Partnership [Member]	Noncontrolling Interests in Consolidated Affiliates [Member]	Noncontrolling Interests in Consolidated Affiliates [Member] Highwoods Realty Limited Partnership [Member]	Distributions in Excess of Net Income Available for Common Stockholders [Member]
Balance at Dec. 31, 2012	$ 1,164,893	$ 1,135,033	$ 803	$ 29,077	$ 11,427	$ 1,131,481	$ 2,040,306	$ (12,628)	$ (12,628)	$ 4,753	$ 4,753	$ (897,418)
Balance (in shares) at Dec. 31, 2012			80,311,437
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuances of Common Units, net of units redeemed for tax withholdings		55,804			558	55,246			0		0
Distributions paid on Common Units		(35,669)			(356)	(35,313)			0		0
Distributions paid on Preferred Units		(627)			(6)	(621)			0		0
Issuances of Common Stock - Shares			1,664,519
Issuances of Common Stock, net of shares redeemed for tax withholdings	55,804		17	0			55,787	0		0		0
Conversions of Common Units to Common Stock - Shares			10,071
Conversions of Common Units to Common Stock	351		0	0			351	0		0		0
Dividends on Common Stock	(34,259)		0	0			0	0		0		(34,259)
Dividends on Preferred Stock	(627)		0	0			0	0		0		(627)
Adjustment of noncontrolling interests in the Operating Partnership to fair value	(23,802)		0	0			(23,802)	0		0		0
Distributions to noncontrolling interests in consolidated affiliates	(265)	(265)	0	0	0	0	0	0	0	(265)	(265)	0
Issuances of restricted stock -shares			144,566
Issuances of restricted stock	0		0	0			0	0		0		0
Share-based compensation expense, net of forfeitures	3,440	3,440	1	0	34	3,406	3,439	0	0	0	0	0
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner		(22,854)			(229)	(22,625)			0		0
Net (income) attributable to noncontrolling interests in the Operating Partnership	(581)		0	0			0	0		0		(581)
Net (income) attributable to noncontrolling interests in consolidated affiliates	0	0	0	0	(2)	(201)	0	0	0	203	203	(203)
Comprehensive income:
Net income	13,760	13,707	0	0	137	13,570	0	0	0	0	0	13,760
Other comprehensive income/(loss)	1,458	1,458	0	0	0	0	0	1,458	1,458	0	0	0
Total comprehensive income	15,218	15,165
Balance at Mar. 31, 2013	1,180,172	1,150,027	821	29,077	11,563	1,144,943	2,076,081	(11,170)	(11,170)	4,691	4,691	(919,328)
Balance (in shares) at Mar. 31, 2013			82,130,593
Balance at Dec. 31, 2013	1,498,696	1,469,791	899	29,077	14,508	1,436,498	2,370,368	(2,611)	(2,611)	21,396	21,396	(920,433)
Balance (in shares) at Dec. 31, 2013	89,920,915		89,920,915
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuances of Common Units, net of units redeemed for tax withholdings		153			2	151			0		0
Redemptions of Common Units		(93)			(1)	(92)			0		0
Distributions paid on Common Units		(39,300)			(393)	(38,907)			0		0
Distributions paid on Preferred Units		(627)			(6)	(621)			0		0
Issuances of Common Stock - Shares			(8,427)
Issuances of Common Stock, net of shares redeemed for tax withholdings	153		0	0			153	0		0		0
Conversions of Common Units to Common Stock - Shares			4,417
Conversions of Common Units to Common Stock	162		0	0			162	0		0		0
Dividends on Common Stock	(38,225)		0	0			0	0		0		(38,225)
Dividends on Preferred Stock	(627)		0	0			0	0		0		(627)
Adjustment of noncontrolling interests in the Operating Partnership to fair value	(7,434)		0	0			(7,434)	0		0		0
Distributions to noncontrolling interests in consolidated affiliates	(522)	(522)	0	0	0	0	0	0	0	(522)	(522)	0
Issuances of restricted stock -shares			144,826
Issuances of restricted stock	0		0	0			0	0		0		0
Share-based compensation expense, net of forfeitures - Shares			0
Share-based compensation expense, net of forfeitures	4,262	4,262	2	0	43	4,219	4,260	0	0	0	0	0
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner		(6,570)			(66)	(6,504)			0		0
Net (income) attributable to noncontrolling interests in the Operating Partnership	(398)		0	0			0	0		0		(398)
Net (income) attributable to noncontrolling interests in consolidated affiliates	0	0	0	0	(4)	(419)	0	0	0	423	423	(423)
Comprehensive income:
Net income	13,576	13,576	0	0	136	13,440	0	0	0	0	0	13,576
Other comprehensive income/(loss)	(311)	(311)	0	0	0	0	0	(311)	(311)	0	0	0
Total comprehensive income	13,265	13,265
Balance at Mar. 31, 2014	$ 1,469,332	$ 1,440,359	$ 901	$ 29,077	$ 14,219	$ 1,407,765	$ 2,367,509	$ (2,922)	$ (2,922)	$ 21,297	$ 21,297	$ (946,530)
Balance (in shares) at Mar. 31, 2014	90,061,731		90,061,731

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Mortgages and Notes Receivable (Details) (USD $)	3 Months Ended			3 Months Ended	12 Months Ended		3 Months Ended			3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Mar. 31, 2014 Seller Financing [Member]	Dec. 31, 2010 Seller Financing [Member] transactions	Dec. 31, 2013 Seller Financing [Member]	Mar. 31, 2014 Mortgage Receivable [Member]	Dec. 31, 2013 Mortgage Receivable [Member]	Dec. 31, 2012 Mortgage Receivable [Member]	Mar. 31, 2014 Promissory Notes [Member]	Mar. 31, 2013 Promissory Notes [Member]	Dec. 31, 2013 Promissory Notes [Member]
Schedule of mortgages and notes receivable [Abstract]
Mortgages and notes receivable, gross				$ 0		$ 16,454,000	$ 9,658,000	$ 9,435,000		$ 670,000		$ 822,000
Mortgages and notes receivable, allowance	(300,000)			0			0			(300,000)	(437,000)
Mortgages and notes receivable, net	10,028,000		26,409,000	0		16,454,000	9,658,000	9,435,000		370,000		520,000
Number of transactions with seller financing					2
Repayment of seller financing	16,604,000	0		16,500,000
Deferred gain on sale of real estate				400,000
Additional loan commitment to third party									8,400,000
Cumulative funds for future infrastructure disbursed to third party							400,000
Notes receivable allowance, promissory notes [Roll Forward]
Beginning notes receivable allowance	302,000			0			0			302,000	182,000
Recoveries/write-offs/other										(2,000)	255,000
Total notes receivable allowance	$ 300,000			$ 0			$ 0			$ 300,000	$ 437,000

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Description of Business and Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation [Policy Text Block]

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Our Consolidated Statements of Income for the three months endedMarch 31, 2013 were retrospectively revised from previously reported amounts to reflect in discontinued operations the operations for those properties classified as discontinued operations.

The Company's Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership's Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. All intercompany transactions and accounts have been eliminated. At March 31, 2014 and December 31, 2013, we had involvement with, but are not the primary beneficiary in, an entity that we concluded to be a variable interest entity (see Note 2).

The unaudited interim consolidated financial statements and accompanying unaudited consolidated financial information, in the opinion of management, contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2013 Annual Report on Form 10-K.

Use of Estimates [Policy Text Block]

Use of Estimates

The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.

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Investments In and Advances To Affiliates (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Income Statements:
Rental and other revenues	$ 12,434,000	$ 23,516,000
Expenses:
Rental property and other expenses	6,217,000	11,209,000
Depreciation and amortization	3,489,000	6,146,000
Impairments of real estate assets	0	4,790,000
Interest expense	2,211,000	4,739,000
Total expenses	11,917,000	26,884,000
Income/(loss) before disposition of properties	517,000	(3,368,000)
Gains on disposition of properties	1,949,000	24,000
Net income/(loss)	2,466,000	(3,344,000)
Our share of:
Depreciation and amortization of real estate assets	1,031,000	2,015,000
Impairments of real estate assets	0	1,020,000
Interest expense	776,000	1,752,000
Gains on disposition of properties	955,000	421,000
Net income	1,155,000	4,000
Our share of net income	1,155,000	4,000
Adjustments for management and other fees	169,000	432,000
Impairment of investment in unconsolidated affiliate	(1,353,000)	0
Equity in earnings/(losses) of unconsolidated affiliates	(29,000)	436,000
Percentage of equity interest in joint ventures, maximum (in hundredths)	50.00%
Gains on disposition of properties	1,949,000	24,000
Expected aggregate net distributions	230,000	363,000
Board of Trade Investment Company [Member]
Expenses:
Gains on disposition of properties	1,900,000
Our share of:
Proceeds received from disposition of property	8,300,000
Gains on disposition of properties	1,900,000
Expected aggregate net distributions	4,700,000
Net impairment charge on our investment in unconsolidated affiliate	$ 400,000

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Investments In and Advances To Affiliates (Tables)

3 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Equity Method Investments Summarized Income Statement Information [Table Text Block]

The following table sets forth the summarized income statements of our unconsolidated affiliates:

	Three Months Ended March 31,
	2014			2013
Income Statements:
Rental and other revenues	$	12,434		$	23,516
Expenses:
Rental property and other expenses	6,217			11,209
Depreciation and amortization	3,489			6,146
Impairments of real estate assets	—			4,790
Interest expense	2,211			4,739
Total expenses	11,917			26,884
Income/(loss) before disposition of properties	517			(3,368		)
Gains on disposition of properties	1,949			24
Net income/(loss)	$	2,466		$	(3,344	)
Our share of:
Depreciation and amortization	$	1,031		$	2,015
Impairments of real estate assets	$	—		$	1,020
Interest expense	$	776		$	1,752
Gains on disposition of properties	$	955		$	421
Net income	$	1,155		$	4
Our share of net income	$	1,155		$	4
Adjustments for management and other fees	169			432
Impairment of investment in unconsolidated affiliate	(1,353		)	—
Equity in earnings/(losses) of unconsolidated affiliates	$	(29	)	$	436

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Operating activities:
Net income	$ 13,576	$ 13,760
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,165	42,292
Amortization of lease incentives and acquisition-related intangible assets and liabilities	82	(136)
Share-based compensation expense	4,262	3,440
Allowance for losses on accounts and accrued straight-line rents receivable	1,125	426
Accrued interest on mortgages and notes receivable	(115)	0
Amortization of deferred financing costs	652	949
Amortization of cash flow hedges	928	788
Amortization of mortgages and notes payable fair value adjustments	(809)	0
Impairments of real estate assets	0	1,128
Losses on debt extinguishment	0	164
Net gains on disposition of property	(384)	(1,244)
Equity in (earnings)/losses of unconsolidated affiliates	29	(436)
Changes in financing obligations	(221)	(105)
Distributions of earnings from unconsolidated affiliates	788	1,145
Changes in operating assets and liabilities:
Accounts receivable	713	(1,479)
Prepaid expenses and other assets	(5,260)	(2,533)
Accrued straight-line rents receivable	(6,457)	(5,788)
Accounts payable, accrued expenses and other liabilities	(25,690)	(10,252)
Net cash provided by operating activities	31,384	42,119
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired	0	(88,332)
Investments in development in process	(27,232)	(4,978)
Investments in tenant improvements and deferred leasing costs	(24,782)	(18,004)
Investments in building improvements	(13,007)	(13,107)
Net proceeds from disposition of real estate assets	0	14,971
Distributions of capital from unconsolidated affiliates	230	363
Investments in mortgages and notes receivable	(108)	0
Repayments of mortgages and notes receivable	16,604	0
Investments in unconsolidated affiliates	0	(429)
Changes in restricted cash and other investing activities	4,043	10,262
Net cash (used in) investing activities	(44,252)	(99,254)
Financing activities:
Dividends on Common Stock	(38,225)	(34,259)
Redemptions of Common Units	(93)	0
Dividends on Preferred Stock	(627)	(627)
Distributions to noncontrolling interests in the Operating Partnership	(1,249)	(1,584)
Distributions to noncontrolling interests in consolidated affiliates	(522)	(265)
Proceeds from the issuance of Common Stock	1,313	59,019
Costs paid for the issuance of Common Stock	(14)	(701)
Repurchase of shares related to tax withholdings	(1,523)	(2,514)
Borrowings on revolving credit facility	96,100	135,900
Repayments of revolving credit facility	(36,800)	(61,400)
Repayments of mortgages and notes payable	(2,236)	(37,214)
Additions to deferred financing costs and other financing activities	(96)	(833)
Net cash provided by financing activities	16,028	55,522
Net increase/(decrease) in cash and cash equivalents	3,160	(1,613)
Cash and cash equivalents at beginning of the period	10,184	13,783
Cash and cash equivalents at end of the period	13,344	12,170
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	25,054	21,887
Supplemental disclosure of non-cash investing and financing activities:
Unrealized gains/(losses) on cash flow hedges	(1,404)	280
Conversions of Common Units to Common Stock	162	351
Changes in accrued capital expenditures	5,399	5,158
Write-off of fully depreciated real estate assets	3,121	6,467
Write-off of fully amortized deferred financing and leasing costs	3,697	4,872
Unrealized gains on marketable securities of non-qualified deferred compensation plan	59	283
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434	23,802
Unrealized gains on tax increment financing bond	165	390
Highwoods Realty Limited Partnership [Member]
Operating activities:
Net income	13,576	13,707
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,165	42,292
Amortization of lease incentives and acquisition-related intangible assets and liabilities	82	(136)
Share-based compensation expense	4,262	3,440
Allowance for losses on accounts and accrued straight-line rents receivable	1,125	426
Accrued interest on mortgages and notes receivable	(115)	0
Amortization of deferred financing costs	652	949
Amortization of cash flow hedges	928	788
Amortization of mortgages and notes payable fair value adjustments	(809)	0
Impairments of real estate assets	0	1,128
Losses on debt extinguishment	0	164
Net gains on disposition of property	(384)	(1,244)
Equity in (earnings)/losses of unconsolidated affiliates	29	(383)
Changes in financing obligations	(221)	(105)
Distributions of earnings from unconsolidated affiliates	788	1,139
Changes in operating assets and liabilities:
Accounts receivable	713	(1,479)
Prepaid expenses and other assets	(5,226)	(2,391)
Accrued straight-line rents receivable	(6,457)	(5,788)
Accounts payable, accrued expenses and other liabilities	(25,667)	(10,155)
Net cash provided by operating activities	31,441	42,352
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired	0	(88,332)
Investments in development in process	(27,232)	(4,978)
Investments in tenant improvements and deferred leasing costs	(24,782)	(18,004)
Investments in building improvements	(13,007)	(13,107)
Net proceeds from disposition of real estate assets	0	14,971
Distributions of capital from unconsolidated affiliates	230	363
Investments in mortgages and notes receivable	(108)	0
Repayments of mortgages and notes receivable	16,604	0
Investments in unconsolidated affiliates	0	(429)
Changes in restricted cash and other investing activities	4,043	10,262
Net cash (used in) investing activities	(44,252)	(99,254)
Financing activities:
Distributions on Common Units	(39,300)	(35,669)
Redemptions of Common Units	(93)	0
Distributions on Preferred Units	(627)	(627)
Distributions to noncontrolling interests in consolidated affiliates	(522)	(265)
Proceeds from the issuance of Common Units	1,313	59,019
Costs paid for the issuance of Common Units	(14)	(701)
Repurchase of units related to tax withholdings	(1,523)	(2,514)
Borrowings on revolving credit facility	96,100	135,900
Repayments of revolving credit facility	(36,800)	(61,400)
Repayments of mortgages and notes payable	(2,236)	(37,214)
Additions to deferred financing costs and other financing activities	(338)	(1,240)
Net cash provided by financing activities	15,960	55,289
Net increase/(decrease) in cash and cash equivalents	3,149	(1,613)
Cash and cash equivalents at beginning of the period	10,281	13,867
Cash and cash equivalents at end of the period	13,430	12,254
Supplemental disclosure of cash flow information:
Cash paid for interest, net of amounts capitalized	25,054	21,887
Supplemental disclosure of non-cash investing and financing activities:
Unrealized gains/(losses) on cash flow hedges	(1,404)	280
Changes in accrued capital expenditures	5,399	5,158
Write-off of fully depreciated real estate assets	3,121	6,467
Write-off of fully amortized deferred financing and leasing costs	3,697	4,872
Unrealized gains on marketable securities of non-qualified deferred compensation plan	59	283
Adjustment of Redeemable Common Units to fair value	6,328	22,448
Unrealized gains on tax increment financing bond	$ 165	$ 390

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Assets:
Accounts receivable allowance	$ 1,412	$ 1,648
Mortgages and notes receivable allowance	300	302
Accrued straight-line rents receivable allowance	1,118	1,063
Deferred financing and leasing costs, accumulated amortization	100,639	92,220
Prepaid expenses and other assets, accumulated amortization	13,186	12,905
Equity:
Series A Preferred Stock, dividend rate percentage (in hundredths)	8.625%	8.625%
Series A Preferred Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Series A Preferred Stock, authorized shares (in shares)	50,000,000	50,000,000
Series A Preferred Stock, liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Series A Preferred Stock, shares issued (in shares)	29,077	29,077
Series A Preferred Stock, shares outstanding (in shares)	29,077	29,077
Common Stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common Stock, authorized shares (in shares)	200,000,000	200,000,000
Common Stock, shares issued (in shares)	90,061,731	89,920,915
Common Stock, shares outstanding (in shares)	90,061,731	89,920,915
Highwoods Realty Limited Partnership [Member]
Assets:
Accounts receivable allowance	1,412	1,648
Mortgages and notes receivable allowance	300	302
Accrued straight-line rents receivable allowance	1,118	1,063
Deferred financing and leasing costs, accumulated amortization	100,639	92,220
Prepaid expenses and other assets, accumulated amortization	$ 13,186	$ 12,905
Redeemable Operating Partnership Units: [Abstract]
Redeemable Common Units outstanding (in shares)	2,936,955	2,943,872
Series A Preferred Units, liquidation preference (in dollars per share)	$ 1,000	$ 1,000
Series A Preferred Units, issued (in shares)	29,077	29,077
Series A Preferred Units, outstanding (in shares)	29,077	29,077
Common Units: [Abstract]
General partners' capital account, units outstanding (in shares)	925,899	924,560
Limited partners' capital account, units outstanding (in shares)	88,727,023	88,587,546

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Accumulated Other Comprehensive Loss

3 Months Ended

Mar. 31, 2014

Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The following table sets forth the components of AOCL:

	Three Months Ended March 31,
	2014			2013
Tax increment financing bond:
Beginning balance	$	(1,029	)	$	(1,898	)
Unrealized gains on tax increment financing bond	165			390
Ending balance	(864		)	(1,508		)
Cash flow hedges:
Beginning balance	(1,582		)	(10,730		)
Unrealized gains/(losses) on cash flow hedges	(1,404		)	280
Amortization of cash flow hedges (1)	928			788
Ending balance	(2,058		)	(9,662		)
Total accumulated other comprehensive loss	$	(2,922	)	$	(11,170	)

__________

(1)    Amounts reclassified out of AOCL into contractual interest expense.

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Document and Entity Information Document	3 Months Ended
	Mar. 31, 2014	Apr. 21, 2014
Entity Information [Line Items]
Entity Registrant Name	HIGHWOODS PROPERTIES INC.
Entity Central Index Key	0000921082
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		90,121,773
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Highwoods Realty Limited Partnership [Member]
Entity Information [Line Items]
Entity Registrant Name	HIGHWOODS REALTY LIMITED PARTNERSHIP
Entity Central Index Key	0000941713
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Mar. 31, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes

XML

Discontinued Operations

3 Months Ended

Mar. 31, 2014

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Discontinued Operations

The following table sets forth our operations classified as discontinued operations:

	Three Months Ended March 31,
	2014		2013
Rental and other revenues	$	—	$	6,998
Operating expenses:
Rental property and other expenses	—		2,450
Depreciation and amortization	—		2,204
Total operating expenses	—		4,654
Income from discontinued operations	—		2,344
Impairments of real estate assets	—		(1,128		)
Net gains on disposition of discontinued operations	384		1,244
Total discontinued operations	$	384	$	2,460

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Consolidated Statements of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014		Mar. 31, 2013
Rental and other revenues	$ 148,453		$ 130,377
Operating expenses:
Rental property and other expenses	56,390		46,594
Depreciation and amortization	48,165		40,088
General and administrative	10,714		10,582
Total operating expenses	115,269		97,264
Interest expense:
Contractual	20,750		22,798
Amortization of deferred financing costs	652		949
Financing obligations	(40)		121
Total interest expense	21,362		23,868
Other income:
Interest and other income	1,399		1,783
Losses on debt extinguishment	0		(164)
Total other income	1,399		1,619
Income from continuing operations before activity in unconsolidated affiliates	13,221		10,864
Equity in earnings/(losses) of unconsolidated affiliates	(29)		436
Income from continuing operations	13,192		11,300
Discontinued operations:
Income from discontinued operations	0		2,344
Impairments of real estate assets	0		(1,128)
Net gains on disposition of discontinued operations	384		1,244
Total discontinued operations	384		2,460
Net income	13,576		13,760
Net (income) attributable to noncontrolling interests in the Operating Partnership	(398)		(581)
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423)		(203)
Dividends on Preferred Stock	(627)		(627)
Net income available for common stockholders	12,128		12,349
Earnings per Common Share – basic:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.00		$ 0.03
Net income available for common stockholders (in dollars per share)	$ 0.13		$ 0.15
Weighted average Common Shares outstanding - basic (in shares)	89,966	[1],[2]	81,029	[1],[2]
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common stockholders (in dollars per share)	$ 0.00		$ 0.03
Net income available for common stockholders (in dollars per share)	$ 0.13		$ 0.15
Weighted average Common Shares outstanding - diluted (in shares)	93,030	[1],[2]	84,862	[1],[2]
Dividends declared per Common Share (in dollars per share)	$ 0.425		$ 0.425
Net income available for common stockholders:
Income from continuing operations available for common stockholders	11,756		9,998
Income from discontinued operations available for common stockholders	372		2,351
Net income available for common stockholders	12,128		12,349
Highwoods Realty Limited Partnership [Member]
Rental and other revenues	148,453		130,377
Operating expenses:
Rental property and other expenses	56,374		46,620
Depreciation and amortization	48,165		40,088
General and administrative	10,730		10,556
Total operating expenses	115,269		97,264
Interest expense:
Contractual	20,750		22,798
Amortization of deferred financing costs	652		949
Financing obligations	(40)		121
Total interest expense	21,362		23,868
Other income:
Interest and other income	1,399		1,783
Losses on debt extinguishment	0		(164)
Total other income	1,399		1,619
Income from continuing operations before activity in unconsolidated affiliates	13,221		10,864
Equity in earnings/(losses) of unconsolidated affiliates	(29)		383
Income from continuing operations	13,192		11,247
Discontinued operations:
Income from discontinued operations	0		2,344
Impairments of real estate assets	0		(1,128)
Net gains on disposition of discontinued operations	384		1,244
Total discontinued operations	384		2,460
Net income	13,576		13,707
Net (income) attributable to noncontrolling interests in consolidated affiliates	(423)		(203)
Distributions on Preferred Units	(627)		(627)
Net income available for common unitholders	12,526		12,877
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common unitholders (in dollars per share)	$ 0.01		$ 0.03
Net income available for common unitholders (in dollars per share)	$ 0.14		$ 0.15
Weighted average Common Units outstanding - basic (in shares)	92,497	[2],[3]	84,345	[2],[3]
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders (in dollars per share)	$ 0.13		$ 0.12
Income from discontinued operations available for common unitholders (in dollars per share)	$ 0.01		$ 0.03
Net income available for common unitholders (in dollars per share)	$ 0.14		$ 0.15
Weighted average Common Units outstanding - diluted (in shares)	92,621	[2],[3]	84,453	[2],[3]
Distributions declared per Common Unit (in dollars per unit)	$ 0.425		$ 0.425
Net income available for common unitholders:
Income from continuing operations available for common unitholders	12,142		10,417
Income from discontinued operations available for common unitholders	384		2,460
Net income available for common unitholders	$ 12,526		$ 12,877

[1] There were 0.3 million and 0.5 million options outstanding during the three months ended March 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

[2] Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

[3] There were 0.3 million and 0.5 million options outstanding during the three months ended March 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

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Mortgages and Notes Payable

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Mortgages and Notes Payable

Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	March 31, 2014		December 31, 2013
Secured indebtedness	$	485,525	$	488,664
Unsecured indebtedness	1,527,029		1,467,635
Total mortgages and notes payable	$	2,012,554	$	1,956,299

At March 31, 2014, our secured mortgage loans were collateralized by real estate assets with an aggregate undepreciated book value of $817.9 million.

Our $475.0 million unsecured revolving credit facility is scheduled to mature in January 2018 and includes an accordion feature that allows for an additional $75.0 million of borrowing capacity subject to additional lender commitments. Assuming no defaults have occurred, we have an option to extend the maturity for two additional six-month periods. The interest rate at our current credit ratings is LIBOR plus 110 basis points and the annual facility fee is 20 basis points. There was $275.0 million and $409.0 million outstanding under our revolving credit facility at March 31, 2014 and April 21, 2014, respectively. At both March 31, 2014 and April 21, 2014, we had $0.1 million of outstanding letters of credit, which reduces the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility at March 31, 2014 and April 21, 2014 was $199.9 million and $65.9 million, respectively.

We are currently in compliance with financial covenants and other requirements with respect to our consolidated debt.

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Intangible Assets and Below Market Lease Liabilities

3 Months Ended

Mar. 31, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets and Below Market Lease Liabilities

Intangible Assets and Below Market Lease Liabilities

The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:

	March 31, 2014			December 31, 2013
Assets:
Deferred financing costs	$	17,329		$	17,363
Less accumulated amortization	(5,789		)	(5,204		)
	11,540			12,159
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)	302,141			297,068
Less accumulated amortization	(94,850		)	(87,016		)
	207,291			210,052
Deferred financing and leasing costs, net	$	218,831		$	222,211
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	54,996		$	55,323
Less accumulated amortization	(9,673		)	(8,478		)
	$	45,323		$	46,845

The following table sets forth amortization of intangible assets and below market lease liabilities:

	Three Months Ended March 31,
	2014			2013
Amortization of deferred financing costs	$	652		$	949
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	9,928		$	8,075
Amortization of lease incentives (in rental and other revenues)	$	351		$	376
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	1,116		$	466
Amortization of acquisition-related intangible assets (in rental property and other expenses)	$	137		$	137
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	(1,522	)	$	(1,122	)

4.    Intangible Assets and Below Market Lease Liabilities - Continued

The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:

	Amortization of Deferred Financing Costs		Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization)		Amortization of Lease Incentives (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Intangible Assets (in Rental Property and Other Expenses)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
April 1 through December 31, 2014	$	2,104	$	29,555	$	983	$	3,221	$	416	$	(4,479	)
2015	2,765		33,532		1,083		3,619		553		(5,718		)
2016	2,500		27,957		910		2,810		553		(5,427		)
2017	2,205		23,985		840		2,269		553		(5,164		)
2018	1,080		19,729		737		1,426		553		(5,016		)
Thereafter	886		44,666		2,487		3,768		1,086		(19,519		)
	$	11,540	$	179,424	$	7,040	$	17,113	$	3,714	$	(45,323	)
Weighted average remaining amortization periods as of March 31, 2014 (in years)	4.5		6.7		8.3		6.6		6.7		8.9

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Mortgages and Notes Receivable (Tables)

3 Months Ended

Mar. 31, 2014

Receivables [Abstract]

Schedule of Mortgages and Notes Receivable [Table Text Block]

The following table sets forth our mortgages and notes receivable:

	March 31, 2014			December 31, 2013
Seller financing (first mortgages)	$	—		$	16,454
Less allowance	—			—
	—			16,454
Mortgage receivable	9,658			9,435
Less allowance	—			—
	9,658			9,435
Promissory notes	670			822
Less allowance	(300		)	(302		)
	370			520
Mortgages and notes receivable, net	$	10,028		$	26,409

Schedule of Notes Receivable Allowance [Table Text Block]

The following table sets forth our notes receivable allowance, which relates only to promissory notes:

	Three Months Ended March 31,
	2014			2013
Beginning notes receivable allowance	$	302		$	182
Recoveries/write-offs/other	(2		)	255
Total notes receivable allowance	$	300		$	437

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Earnings Per Share/Unit

3 Months Ended

Mar. 31, 2014

Earnings Per Share [Abstract]

Earnings Per Share/Unit

Earnings Per Share and Per Unit

The following table sets forth the computation of basic and diluted earnings per share of the Company:

	Three Months Ended March 31,
	2014			2013
Earnings per Common Share - basic:
Numerator:
Income from continuing operations	$	13,192		$	11,300
Net (income) attributable to noncontrolling interests in the Operating Partnership from continuing operations	(386		)	(472		)
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Income from continuing operations available for common stockholders	11,756			9,998
Income from discontinued operations	384			2,460
Net (income) attributable to noncontrolling interests in the Operating Partnership from discontinued operations	(12		)	(109		)
Income from discontinued operations available for common stockholders	372			2,351
Net income available for common stockholders	$	12,128		$	12,349
Denominator:
Denominator for basic earnings per Common Share – weighted average shares	89,966			81,029
Earnings per Common Share - basic:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15
Earnings per Common Share - diluted:
Numerator:
Income from continuing operations	$	13,192		$	11,300
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Dividends on Preferred Stock	(627		)	(627		)
Income from continuing operations available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	12,142			10,470
Income from discontinued operations available for common stockholders	384			2,460
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership	$	12,526		$	12,930
Denominator:
Denominator for basic earnings per Common Share – weighted average shares	89,966			81,029
Add:
Stock options using the treasury method	124			108
Noncontrolling interests Common Units	2,940			3,725
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions (1) (2)	93,030			84,862
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders	$	0.13		$	0.12
Income from discontinued operations available for common stockholders	—			0.03
Net income available for common stockholders	$	0.13		$	0.15

__________

(1) There were 0.3 million and 0.5 million options outstanding during the three months endedMarch 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per share because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

12. Earnings Per Share and Per Unit - Continued

The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:

	Three Months Ended March 31,
	2014			2013
Earnings per Common Unit - basic:
Numerator:
Income from continuing operations	$	13,192		$	11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Income from continuing operations available for common unitholders	12,142			10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877
Denominator:
Denominator for basic earnings per Common Unit – weighted average units	92,497			84,345
Earnings per Common Unit - basic:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15
Earnings per Common Unit - diluted:
Numerator:
Income from continuing operations	$	13,192		$	11,247
Net (income) attributable to noncontrolling interests in consolidated affiliates from continuing operations	(423		)	(203		)
Distributions on Preferred Units	(627		)	(627		)
Income from continuing operations available for common unitholders	12,142			10,417
Income from discontinued operations available for common unitholders	384			2,460
Net income available for common unitholders	$	12,526		$	12,877
Denominator:
Denominator for basic earnings per Common Unit – weighted average units	92,497			84,345
Add:
Stock options using the treasury method	124			108
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions (1) (2)	92,621			84,453
Earnings per Common Unit - diluted:
Income from continuing operations available for common unitholders	$	0.13		$	0.12
Income from discontinued operations available for common unitholders	0.01			0.03
Net income available for common unitholders	$	0.14		$	0.15

__________

(1) There were 0.3 million and 0.5 million options outstanding during the three months endedMarch 31, 2014 and 2013, respectively, that were not included in the computation of diluted earnings per unit because the impact of including such options would be anti-dilutive.

(2) Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.

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Disclosure About Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2014

Fair Value Disclosures [Abstract]

Disclosure About Fair Value of Financial Instruments

Disclosure About Fair Value of Financial Instruments

The following summarizes the three levels of inputs that we use to measure fair value.

Level 1.  Quoted prices in active markets for identical assets or liabilities.

Our Level 1 assets include investments in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan and an investment in an unconsolidated affiliate recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis. The investment is primarily comprised of undistributed cash remaining after the sale of its sole real estate asset. Our Level 1 liability is our non-qualified deferred compensation obligation. The Company's Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company.

Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.

Our Level 2 assets include the fair value of certain of our mortgages and notes receivable and certain of our interest rate swaps. Our Level 2 liabilities include the fair value of our mortgages and notes payable and the remainder of our interest rate swaps.

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach utilizing contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future LIBOR interest rates (forward curves) derived from observed market LIBOR interest rate curves. In addition, credit valuation adjustments are incorporated in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.

Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Our Level 3 assets include (1) certain of our mortgages and notes receivable, which were estimated by the income approach utilizing internal cash flow projections and market interest rates to estimate the price that would be paid in an orderly transaction between market participants, (2) our tax increment financing bond, which is not routinely traded but whose fair value is determined by the income approach utilizing contractual cash flows and market-based interest rates to estimate the projected redemption value based on quoted bid/ask prices for similar unrated municipal bonds, and (3) any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which were valued using the terms of definitive sales contracts or the sales comparison approach and substantiated with internal cash flow projections.

Our Level 3 liabilities include the fair value of our contingent consideration to acquire real estate assets and financing obligations, which were estimated by the income approach to approximate the price that would be paid in an orderly transaction between market participants, utilizing: (1) contractual cash flows; (2) market-based interest rates; and (3) a number of other assumptions including demand for space, competition for customers, changes in market rental rates, costs of operation and expected ownership periods.

8. Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth our assets and liabilities and the Company's noncontrolling interests in the Operating Partnership that are measured at fair value within the fair value hierarchy.

			Level 1		Level 2		Level 3
	Total		Quoted Prices in Active Markets for Identical Assets or Liabilities		Significant Observable Inputs		Significant Unobservable Inputs
Fair Value at March 31, 2014:
Assets:
Mortgages and notes receivable, at fair value (1)	$	10,037	$	—	$	370	$	9,667
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,721		3,721		—		—
Impaired investment in unconsolidated affiliate	4,668		4,668		—		—
Tax increment financing bond (in prepaid expenses and other assets)	13,568		—		—		13,568
Total Assets	$	31,994	$	8,389	$	370	$	23,235
Noncontrolling Interests in the Operating Partnership	$	112,808	$	112,808	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	2,101,898	$	—	$	2,101,898	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	763		—		763		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,721		3,721		—		—
Financing obligations, at fair value (1)	22,203		—		—		22,203
Total Liabilities	$	2,128,585	$	3,721	$	2,102,661	$	22,203

Fair Value at December 31, 2013:
Assets:
Mortgages and notes receivable, at fair value (1)	$	26,485	$	—	$	17,029	$	9,456
Interest rate swaps (in prepaid expenses and other assets)	301		—		301		—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	3,996		3,996		—		—
Tax increment financing bond (in prepaid expenses and other assets)	13,403		—		—		13,403
Total Assets	$	44,185	$	3,996	$	17,330	$	22,859
Noncontrolling Interests in the Operating Partnership	$	106,480	$	106,480	$	—	$	—
Liabilities:
Mortgages and notes payable, at fair value (1)	$	2,037,385	$	—	$	2,037,385	$	—
Interest rate swaps (in accounts payable, accrued expenses and other liabilities)	510		—		510		—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	3,996		3,996		—		—
Financing obligations, at fair value (1)	22,478		—		—		22,478
Total Liabilities	$	2,064,369	$	3,996	$	2,037,895	$	22,478

__________

(1)    Amounts recorded at historical cost on our Consolidated Balance Sheets at March 31, 2014 and December 31, 2013.

8. Disclosure About Fair Value of Financial Instruments - Continued

The following table sets forth the changes in our Level 3 asset and liability, which are recorded at fair value on our Consolidated Balance Sheets:

	Three Months Ended March 31,
	2014		2013
Asset:
Tax Increment Financing Bond:
Beginning balance	$	13,403	$	14,496
Principal repayment	—		(562		)
Unrealized gains (in AOCL)	165		390
Ending balance	$	13,568	$	14,324
Liability:
Contingent Consideration to Acquire Real Estate Assets:
Beginning balance	$	—	$	563
Recognized gains (in general and administrative expenses)	—		(188		)
Ending balance	$	—	$	375

During 2007, we acquired a tax increment financing bond associated with a parking garage developed by us. This bond amortizes to maturity in 2020. The estimated fair value at March 31, 2014 was $0.9 million below the outstanding principal due on the bond. If the discount rate used to fair value this bond was 100 basis points higher or lower, the fair value of the bond would have been $0.4 million lower or $0.4 million higher, respectively, as of March 31, 2014. We intend to hold this bond and have concluded that we will not be required to sell this bond before recovery of the bond principal. Payment of the principal and interest for the bond is guaranteed by us. We have recorded no credit losses related to the bond during the three months endedMarch 31, 2014 and 2013. There is no legal right of offset with the liability, which we report as a financing obligation, related to this tax increment financing bond.

The following table sets forth quantitative information about the unobservable input of our Level 3 asset, which is recorded at fair value on our Consolidated Balance Sheets:

	Valuation Technique	Unobservable Input	Rate/ Percentage
Asset:
Tax increment financing bond	Income approach	Discount rate	9.7%

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our interest rate 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 three months endedMarch 31, 2014. We have no collateral requirements related to our interest rate swaps.

Amounts reported in accumulated other comprehensive loss ("AOCL") related to derivatives will be reclassified to interest expense as interest payments are made on our variable-rate debt. During the period from April 1, 2014 through March 31, 2015, we estimate that $3.4 million will be reclassified to interest expense.

The following table sets forth the gross fair value of our derivatives:

	March 31, 2014		December 31, 2013
Derivatives:
Derivatives designated as cash flow hedges in prepaid expenses and other assets:
Interest rate swaps	$	—	$	301
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
Interest rate swaps	$	763	$	510

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

	Three Months Ended March 31,
	2014			2013
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(1,404	)	$	280
Amount of losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	928		$	788

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Noncontrolling Interests

3 Months Ended

Mar. 31, 2014

Noncontrolling Interest [Abstract]

Noncontrolling Interests

Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates

At March 31, 2014, our noncontrolling interests in consolidated affiliates relates to our joint venture partner's 50.0% interest in office properties in Richmond, VA. Our joint venture partner is an unrelated third party.

Noncontrolling Interests in the Operating Partnership

The following table sets forth the Company's noncontrolling interests in the Operating Partnership:

	Three Months Ended March 31,
	2014			2013
Beginning noncontrolling interests in the Operating Partnership	$	106,480		$	124,869
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434			23,802
Conversions of Common Units to Common Stock	(162		)	(351		)
Redemptions of Common Units	(93		)	—
Net income attributable to noncontrolling interests in the Operating Partnership	398			581
Distributions to noncontrolling interests in the Operating Partnership	(1,249		)	(1,584		)
Total noncontrolling interests in the Operating Partnership	$	112,808		$	147,317

The following table sets forth net income available for common stockholders and transfers from the Company's noncontrolling interests in the Operating Partnership:

	Three Months Ended March 31,
	2014		2013
Net income available for common stockholders	$	12,128	$	12,349
Increase in additional paid in capital from conversions of Common Units to Common Stock	162		351
Change from net income available for common stockholders and transfers from noncontrolling interests	$	12,290	$	12,700

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Share-Based Payments

3 Months Ended

Mar. 31, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Payments

Share-Based Payments

During the three months endedMarch 31, 2014, the Company granted 166,081 stock options with an exercise price equal to the closing market price of a share of Common Stock on the date of grant. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model, which resulted in a weighted average grant date fair value per share of $6.89. During the three months endedMarch 31, 2014, the Company also granted 79,056 shares of time-based restricted stock and 65,770 shares of total return-based restricted stock with weighted average grant date fair values per share of $37.55 and $35.24, respectively. We recorded share-based compensation expense of $4.3 million and $3.4 million during the three months endedMarch 31, 2014 and 2013, respectively. At March 31, 2014, there was $6.2 million of total unrecognized share-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.7 years.

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Description of Business and Significant Accounting Policies (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Description of Business and Significant Accounting Policies [Line Items]
Rentable square feet of commercial real estate (in sq feet)	32,100,000
Rentable square feet of commercial real estate under development (in sq feet)	800,000
Undeveloped land suitable for future development (in acres)	600
Common Units redeemed for cash (in shares)	2,500
Redemption of Common Units	$ 93	$ 0
Common Units redeemed for a like number of common shares of stock (in shares)	4,417
Net proceeds of Common Stock sold during the period	153	55,804
Highwoods Properties, Inc. [Member]
Description of Business and Significant Accounting Policies [Line Items]
Common Units of partnership owned by the Company (in shares)	89,700,000
Percentage of ownership of Common Units	96.80%		96.80%
Redemption of Common Units	93	0
Highwoods Properties, Inc. [Member] | ATM Equity Offering [Member]
Description of Business and Significant Accounting Policies [Line Items]
Number of Common Stock sold during the period (in shares)	23,584
Average price of Common Stock sold during the period (in dollars per share)	$ 38.29
Net proceeds of Common Stock sold during the period	900
Highwoods Realty Limited Partnership [Member]
Description of Business and Significant Accounting Policies [Line Items]
Common Units of partnership not owned by the Company (in shares)	2,900,000
Redemption of Common Units	$ 93	$ 0

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Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 1, 2014, we prepaid without penalty the remaining $123.7 million balance on a secured mortgage loan with an effective interest rate of 3.11% that was originally scheduled to mature in July 2014.

In early April 2014, the Company issued 50,293 shares of Common Stock at an average gross sales price of $38.38 per share and received net proceeds, after sales commissions, of $1.9 million.

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Mortgages and Notes Payable (Tables)

3 Months Ended

Mar. 31, 2014

Debt Disclosure [Abstract]

Schedule of Consolidated Mortgages and Notes Payable [Table Text Block]

The following table sets forth our mortgages and notes payable:

	March 31, 2014		December 31, 2013
Secured indebtedness	$	485,525	$	488,664
Unsecured indebtedness	1,527,029		1,467,635
Total mortgages and notes payable	$	2,012,554	$	1,956,299

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Subsequent Events (Details) (USD $)	3 Months Ended		0 Months Ended		0 Months Ended
	Mar. 31, 2014	Mar. 31, 2013	Apr. 07, 2014 5.21% (3.11% effective rate) Mortgage Loan due 2014 [Member]	Apr. 02, 2014 5.21% (3.11% effective rate) Mortgage Loan due 2014 [Member]	Apr. 07, 2014 Highwoods Properties, Inc. [Member] ATM Equity Offering [Member]
Subsequent Event [Line Items]
Early repayment of debt			$ 123,700,000
Current interest rate (in hundredths)				3.11%
Debt instrument maturity date			Jul. 01, 2014
Number of Common Stock sold during the period (in shares)					50,293
Average price of Common Stock sold during the period (in dollars per share)					$ 38.38
Net proceeds of Common Stock sold during the period	$ 153,000	$ 55,804,000			$ 1,900,000

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Noncontrolling Interests (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Noncontrolling Interests in Consolidated Affiliates [Abstract]
Consolidated joint venture, partner's interest (in hundredths)	50.00%
Noncontrolling Interests in the Operating Partnership [Roll Forward]
Beginning noncontrolling interests in the Operating Partnership	$ 106,480
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434	23,802
Conversions of Common Units to Common Stock	(162)	(351)
Redemptions of Common Units	(93)	0
Net income attributable to noncontrolling interests in the Operating Partnership	398	581
Distributions to noncontrolling interests in the Operating Partnership	(1,249)	(1,584)
Total noncontrolling interests in the Operating Partnership	112,808
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
Net income available for common stockholders	12,128	12,349
Highwoods Properties, Inc. [Member]
Noncontrolling Interests in the Operating Partnership [Roll Forward]
Beginning noncontrolling interests in the Operating Partnership	106,480	124,869
Adjustment of noncontrolling interests in the Operating Partnership to fair value	7,434	23,802
Conversions of Common Units to Common Stock	(162)	(351)
Redemptions of Common Units	(93)	0
Net income attributable to noncontrolling interests in the Operating Partnership	398	581
Distributions to noncontrolling interests in the Operating Partnership	(1,249)	(1,584)
Total noncontrolling interests in the Operating Partnership	112,808	147,317
Net Income Available for Common Stockholders and Transfers From Noncontrolling Interests in the Operating Partnership [Abstract]
Net income available for common stockholders	12,128	12,349
Increase in additional paid in capital from conversions of Common Units to Common Stock	162	351
Change from net income available for common stockholders and transfers from noncontrolling interests	$ 12,290	$ 12,700

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Comprehensive income:
Net income	$ 13,576	$ 13,760
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	165	390
Unrealized gains/(losses) on cash flow hedges	(1,404)	280
Amortization of cash flow hedges	928	788
Total other comprehensive income/(loss)	(311)	1,458
Total comprehensive income	13,265	15,218
Less-comprehensive (income) attributable to noncontrolling interests	(821)	(784)
Comprehensive income attributable to common stockholders/Comprehensive income attributable to common unitholders	12,444	14,434
Highwoods Realty Limited Partnership [Member]
Comprehensive income:
Net income	13,576	13,707
Other comprehensive income/(loss):
Unrealized gains/(losses) on tax increment financing bond	165	390
Unrealized gains/(losses) on cash flow hedges	(1,404)	280
Amortization of cash flow hedges	928	788
Total other comprehensive income/(loss)	(311)	1,458
Total comprehensive income	13,265	15,165
Less-comprehensive (income) attributable to noncontrolling interests	(423)	(203)
Comprehensive income attributable to common stockholders/Comprehensive income attributable to common unitholders	$ 12,842	$ 14,962

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Investments In and Advances To Affiliates

3 Months Ended

Mar. 31, 2014

Equity Method Investments and Joint Ventures [Abstract]

Investments In and Advances To Affiliates

Investments in Affiliates

Unconsolidated Affiliates

We have equity interests of up to 50.0% in various joint ventures with unrelated third parties that are accounted for using the equity method of accounting because we have the ability to exercise significant influence over their operating and financial policies.

The following table sets forth the summarized income statements of our unconsolidated affiliates:

	Three Months Ended March 31,
	2014			2013
Income Statements:
Rental and other revenues	$	12,434		$	23,516
Expenses:
Rental property and other expenses	6,217			11,209
Depreciation and amortization	3,489			6,146
Impairments of real estate assets	—			4,790
Interest expense	2,211			4,739
Total expenses	11,917			26,884
Income/(loss) before disposition of properties	517			(3,368		)
Gains on disposition of properties	1,949			24
Net income/(loss)	$	2,466		$	(3,344	)
Our share of:
Depreciation and amortization	$	1,031		$	2,015
Impairments of real estate assets	$	—		$	1,020
Interest expense	$	776		$	1,752
Gains on disposition of properties	$	955		$	421
Net income	$	1,155		$	4
Our share of net income	$	1,155		$	4
Adjustments for management and other fees	169			432
Impairment of investment in unconsolidated affiliate	(1,353		)	—
Equity in earnings/(losses) of unconsolidated affiliates	$	(29	)	$	436

Board of Trade Investment Company ("Board of Trade")

During the first quarter of 2014, Board of Trade sold an office property to an unrelated third party for gross proceeds of $8.3 million and recorded a gain of $1.9 million. We expect to receive aggregate net distributions of $4.7 million in connection with our investment in this entity. As our cost basis is different from the basis reflected at the entity level, we recorded a net impairment charge on our investment of $0.4 million. This charge represented the other-than-temporary decline in the fair value below the carrying value of our investment.

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Derivative Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments, Fair Value [Table Text Block]

	March 31, 2014		December 31, 2013
Derivatives:
Derivatives designated as cash flow hedges in prepaid expenses and other assets:
Interest rate swaps	$	—	$	301
Derivatives designated as cash flow hedges in accounts payable, accrued expenses and other liabilities:
Interest rate swaps	$	763	$	510

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

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

	Three Months Ended March 31,
	2014			2013
Derivatives Designated as Cash Flow Hedges:
Amount of unrealized gains/(losses) recognized in AOCL on derivatives (effective portion):
Interest rate swaps	$	(1,404	)	$	280
Amount of losses reclassified out of AOCL into contractual interest expense (effective portion):
Interest rate swaps	$	928		$	788

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Intangible Assets and Below Market Lease Liabilities - Scheduled Future Amortization (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Scheduled future amortization of intangible assets [Abstract]
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	$ 218,831	$ 222,211
Deferred Financing Costs [Member]
Scheduled future amortization of intangible assets [Abstract]
April 1, 2014 through December 31, 2014	2,104
2015	2,765
2016	2,500
2017	2,205
2018	1,080
Thereafter	886
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	11,540	12,159
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived intangible assets, average useful life (in years)	4 years 6 months
Deferred Leasing Costs and Acquisition-Related Intangible Assets [Member]
Scheduled future amortization of intangible assets [Abstract]
April 1, 2014 through December 31, 2014	29,555
2015	33,532
2016	27,957
2017	23,985
2018	19,729
Thereafter	44,666
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	179,424
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived intangible assets, average useful life (in years)	6 years 8 months 12 days
Lease Incentives [Member]
Scheduled future amortization of intangible assets [Abstract]
April 1, 2014 through December 31, 2014	983
2015	1,083
2016	910
2017	840
2018	737
Thereafter	2,487
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	7,040
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived intangible assets, average useful life (in years)	8 years 3 months 18 days
Acquisition-Related Intangible Assets (in Rental and Other Revenues) [Member]
Scheduled future amortization of intangible assets [Abstract]
April 1, 2014 through December 31, 2014	3,221
2015	3,619
2016	2,810
2017	2,269
2018	1,426
Thereafter	3,768
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	17,113
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived intangible assets, average useful life (in years)	6 years 7 months 6 days
Acquisition-Related Intangible Assets (in Rental Property and Other Expenses) [Member]
Scheduled future amortization of intangible assets [Abstract]
April 1, 2014 through December 31, 2014	416
2015	553
2016	553
2017	553
2018	553
Thereafter	1,086
Deferred financing and leasing costs, net/Total scheduled future amortization of intangible assets	3,714
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived intangible assets, average useful life (in years)	6 years 8 months 12 days
Acquisition-Related Below Market Lease Liabilities [Member]
Scheduled future amortization of below market lease liabilities [Abstract]
April 1, 2014 through December 31, 2014	(4,479)
2015	(5,718)
2016	(5,427)
2017	(5,164)
2018	(5,016)
Thereafter	(19,519)
Total scheduled future amortization of acquisition-related below market lease liabilities	$ (45,323)	$ (46,845)
Weighted average remaining amortization periods for intangible assets and below market lease liabilities [Abstract]
Finite-lived below market lease liabilities, average useful life (in years)	8 years 10 months 24 days

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Segment Information

3 Months Ended

Mar. 31, 2014

Segment Reporting [Abstract]

Segment Information

Segment Information

The following tables summarize the rental and other revenues and net operating income, the primary industry property-level performance metric used by our chief operating decision maker, which is defined as rental and other revenues less rental property and other expenses, for each of our reportable segments:

	Three Months Ended March 31,
	2014		2013
Rental and Other Revenues: (1)
Office:
Atlanta, GA	$	22,977	$	17,167
Greenville, SC	841		851
Kansas City, MO	4,097		3,969
Memphis, TN	9,835		9,380
Nashville, TN	19,605		14,070
Orlando, FL	8,920		2,221
Piedmont Triad, NC	6,450		6,377
Pittsburgh, PA	13,757		13,688
Raleigh, NC	21,491		20,660
Richmond, VA	11,743		11,772
Tampa, FL	16,627		17,434
Total Office Segment	136,343		117,589
Industrial:
Atlanta, GA	204		203
Piedmont Triad, NC	2,688		3,122
Total Industrial Segment	2,892		3,325
Retail:
Kansas City, MO	9,218		9,463
Total Retail Segment	9,218		9,463
Total Rental and Other Revenues	$	148,453	$	130,377

13. Segment Information - Continued

	Three Months Ended March 31,
	2014			2013
Net Operating Income: (1)
Office:
Atlanta, GA	$	13,697		$	10,893
Greenville, SC	475			496
Kansas City, MO	2,605			2,562
Memphis, TN	5,607			5,629
Nashville, TN	13,153			9,685
Orlando, FL	5,376			1,078
Piedmont Triad, NC	3,998			4,099
Pittsburgh, PA	7,193			7,418
Raleigh, NC	15,032			14,624
Richmond, VA	7,676			8,113
Tampa, FL	10,035			11,219
Total Office Segment	84,847			75,816
Industrial:
Atlanta, GA	122			119
Piedmont Triad, NC	1,867			2,245
Total Industrial Segment	1,989			2,364
Retail:
Kansas City, MO	5,265			5,621
Total Retail Segment	5,265			5,621
Corporate and other	(38		)	(18		)
Total Net Operating Income	92,063			83,783
Reconciliation to income from continuing operations before activity in unconsolidated affiliates:
Depreciation and amortization	(48,165		)	(40,088		)
General and administrative expenses	(10,714		)	(10,582		)
Interest expense	(21,362		)	(23,868		)
Other income	1,399			1,619
Income from continuing operations before activity in unconsolidated affiliates	$	13,221		$	10,864

__________

(1) Net of discontinued operations.