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SUPPLEMENTAL
INFORMATIONFourth Quarter 2016
Page
Summary and Corporate Information ……………………………………………………………………………………………………………………………. i, ii, iii
Consolidated Statements of Income …………………………………………………………………………………………………………………………………………….1
Funds from Operations and Additional Information ………………………………………………………………………………………………………………..2
Consolidated Balance Sheets ………………………………………………………………………………………………………………………………………..3
Components of Net Asset Value…………………………………………………………………………………………………………………………………………………...4
Revenue Detail; Discontinued Operations Detail……………………………………………………………………………………………………………………………………..5
Capitalization ……………………………………………………………………………………………………………………………………………………………..6
Mortgages and Notes Payable Summary ……………………………………………………………………………………………………………………………….7
Mortgages and Notes Payable Detail ………………………………………………………………………………………………………………………………….8
Portfolio Summary ………………………………………………………………………………………………………………………………………………….9, 10, 11
Occupancy Trends …………………………………………………………………………………………………………………………………………………………12
Office Leasing Statistics...………………………………………………………………………………………………………………………………………….13
Office Leasing Statistics and Rental Rate Comparisons by Market ……………………………………………………………………………………………………………………………..14
Office Lease Expirations ……………………………………………………………………………………………………………..…………………………………….15
Office Lease Expirations by Market by Year …………………………………………………………………………………………………………………………16
Customer Diversification ……………………………………………………………………………………………………………………………………………17
Same Property Performance ……………………………………………………………………………………………………………………………………….18
Acquisition Activity …………………………………………………………………………………………………………………………………………………19
Disposition Activity …………………………………………………………………………………………………………………………………………………20
Development Activity ……………………………………………………………………………………………………………………………….……………….21
Land Held for Development …………………………………………………………………………………………………………………………………………22
Unconsolidated Joint Venture Financial Information…………………………………………………………………………………………………………………………23
Joint Ventures Summary and Dispositions Activity …………………………………………………………………………………………………………………………24
The information within refers to all Highwoods Properties' wholly-owned entities unless noted otherwise. Wholly-owned entities include properties
classified as both continuing operations and discontinued operations and exclude properties recorded on our Balance Sheet that relate to joint
venture investments that are consolidated under GAAP.
All financial information contained in this document is unaudited. In addition, certain matters presented in this supplemental, including estimates
of net operating income, pre-leasing commitments and the cost, timing and stabilization of announced development projects, are forward-looking
statements within the meaning of the federal securities laws. Although Highwoods believes that the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause
actual results to differ materially from Highwoods’ current expectations include, among others, general economic conditions, local real estate
conditions, the timely development and lease-up of properties, and other risks listed at the end of our fourth quarter earnings release and
detailed from time to time in the Company’s SEC reports. Highwoods assumes no obligation to update or supplement forward-looking statements
that become untrue due to subsequent events.
This supplemental also includes non-GAAP financial measures, such as funds from operations (FFO) and net operating income (NOI). Definitions
of FFO and NOI and an explanation of management's view of the usefulness and risks of FFO and NOI can be found toward the end of our fourth
quarter earnings release.
COVER
Bridgestone
Nashville, TN
Table of Contents
TOC
Three Months Ended
12/31/16 12/31/15
Financial:
Revenues 1/ 167,646$ 160,126$
Net operating income (NOI) 1/ 110,276$ 103,499$
Same property cash NOI growth 5.8% 4.4%
Funds from operations per share 0.82$ 0.82$
Weighted average common shares outstanding, diluted 103,640 98,607
Balance Sheet:
Leverage (includes preferred stock) based on gross book assets 34.7% 44.9%
Debt-to-EBITDA 4.78x 6.13x
Unencumbered NOI % 92.6% 91.0%
Credit facility availability 475,000$ 176,000$
Operations:
Quarter end occupancy 93.1% 93.1%
Office square feet leased 726 1,047
Office GAAP rent growth 2/ 13.9% 10.6%
Average office cash rental rate per square foot for in-place leases 24.12$ 23.49$
Twelve Months Ended
12/31/16
Capital Activity:
Building acquisitions 83,500$
Building dispositions 694,778$
Development pipeline 540,540$
Pipeline pre-leased percent 70.5%
1/ Includes continuing operations only.
2/ GAAP rent growth is calculated by comparing average cash rent psf over the term (GAAP rent) of the new lease to the average cash rent psf over
the term related to the previous lease in the same space. Adjustments are made if and to the extent necessary to illustrate the current and prior
deal on a consistent gross lease basis.
Summary (amounts in thousands, except percentages, ratios, and per share amounts)
i
Board of Directors Division Officers
Chuck Anderson Jim Bacchetta
Gene Anderson Vice President, Atlanta
Carlos Evans Rick Dehnert
Ed Fritsch Vice President, Greensboro
David Hartzell, Ph.D. Steve Garrity
Sherry Kellett Vice President, Orlando
Temple Sloan, Jr., Chair Steve Guinn
Vice President, Memphis
Corporate Officers Skip Hill
Vice President, Raleigh
Dan Clemmens Walton Makepeace
Vice President, Chief Accounting Officer Vice President, Richmond
Hugh Esleeck Brian Reames
Vice President, Treasurer Senior Vice President, Nashville
Ed Fritsch Andy Wisniewski
President, Chief Executive Officer Vice President, Pittsburgh
Ted Klinck Dan Woodward
Executive Vice President, Chief Operating and Vice President, Tampa
Investment Officer
Carman Liuzzo
Senior Vice President, Investments
Brendan Maiorana
Senior Vice President, Finance and Investor Relations
Art McCann
Vice President, Chief Information Officer
Jeff Miller
Executive Vice President, General Counsel and Secretary
Mark Mulhern
Executive Vice President, Chief Financial Officer
Randy Roberson
Senior Vice President, Development
Mike Starchville
Senior Vice President, Asset Management
Corporate Information
ii
Research Coverage Corporate Headquarters
Highwoods Properties, Inc.
Bank of America/Merrill Lynch Morgan Stanley 3100 Smoketree Court, Suite 600
Jamie Feldman Sumit Sharma Raleigh, NC 27604
646-855-5808 212-761-7567 919-872-4924
BTIG Oppenheimer & Co. Stock Exchange
Tom Catherwood Steve Manaker NYSE: HIW
212-738-6140 212-667-5950
Investor Relations
Capital One Securities RW Baird Brendan Maiorana
Tom Lesnick David Rodgers Vice President, Finance and Investor Relations
571-633-8191 216-737-7341 Phone: 919-431-1529
Ryan Wineman Fax: 919-431-1439
571-633-8414 Stifel Nicolaus [email protected]
John Guinee http://www.highwoods.com/
Citigroup Global Markets 443-224-1307
Michael Bilerman Erin Aslakson Information Request
212-816-1383 443-224-1350 To request a Supplemental Package or Annual Report
Emmanuel Korchman or to be added to our e-mail distribution list, please contact
212-816-1382 SunTrust Robinson Humphrey Investor Relations.
Michael Lewis
D.A. Davidson & Co. 212-319-5659
Barry Oxford The Company
212-240-9871 Highwoods Properties, headquartered in Raleigh, is a publicly
traded (NYSE:HIW) real estate investment trust (“REIT”) and
Green Street Advisors a member of the S&P MidCap 400 Index. The Company is a
Jed Reagan fully-integrated office REIT that owns, develops, acquires, leases and
949-640-8780 manages properties primarily in the best business districts (BBDs)
of Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh,
Jefferies & Company, Inc. Raleigh, Richmond and Tampa. For more information about
Jonathan Petersen Highwoods Properties, please visit our website at:
212-284-1705 www.highwoods.com.
Corporate Information
iii
12/31/16 12/31/15 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Rental and other revenues 665,634$ 604,671$ 167,646$ 166,269$ 166,860$ 164,859$ 160,126$
Operating expenses:
Rental property and other expenses 231,085 215,941 57,370 58,620 57,515 57,580 56,627
Depreciation and amortization 220,140 201,918 58,406 52,923 55,317 53,494 56,160
General and administrative 38,153 37,642 8,826 9,863 8,327 11,137 8,744
Total operating expenses 489,378 455,501 124,602 121,406 121,159 122,211 121,531
Interest expense:
Contractual 73,142 82,245 17,031 17,722 18,674 19,715 20,462
Amortization of debt issuance costs 3,506 3,645 861 844 811 990 1,144
Financing obligation - 162 - - - - -
76,648 86,052 17,892 18,566 19,485 20,705 21,606
Other income:
Interest and other income 2,338 1,969 454 833 534 517 488
Losses on debt extinguishment - (243) - - - - (23)
2,338 1,726 454 833 534 517 465
Income from continuing operations before disposition of investment properties
and activity in unconsolidated affiliates 101,946 64,844 25,606 27,130 26,750 22,460 17,454
Gains on disposition of property 14,807 11,444 647 3,902 5,861 4,397 863
Gain on disposition of investment in unconsolidated affiliate - 4,155 - - - - -
Equity in earnings of unconsolidated affiliates 5,793 5,078 783 2,808 917 1,285 711
Income from continuing operations 122,546 85,521 27,036 33,840 33,528 28,142 19,028
Discontinued operations:
Income from discontinued operations 4,097 15,739 - - - 4,097 2,889
Net gains on disposition of discontinued operations 414,496 - - - - 414,496 -
418,593 15,739 - - - 418,593 2,889
Net income 541,139 101,260 27,036 33,840 33,528 446,735 21,917
Net (income) attributable to noncontrolling interests in the Operating Partnership (15,596) (2,918) (720) (926) (939) (13,011) (622)
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,253) (1,264) (312) (319) (314) (308) (316)
Dividends on Preferred Stock (2,501) (2,506) (624) (624) (627) (626) (627)
Net income available for common stockholders 521,789$ 94,572$ 25,380$ 31,971$ 31,648$ 432,790$ 20,352$
Earnings per Common Share – basic:
Income from continuing operations available for common stockholders 1.17$ 0.84$ 0.25$ 0.32$ 0.32$ 0.27$ 0.18$
Income from discontinued operations available for common stockholders 4.13 0.16 - - - 4.22 0.03
Net income available for common stockholders 5.30$ 1.00$ 0.25$ 0.32$ 0.32$ 4.49$ 0.21$
Weighted average Common Shares outstanding - basic 98,439 94,404 100,733 98,973 97,648 96,373 95,617
Earnings per Common Share - diluted:
Income from continuing operations available for common stockholders 1.17$ 0.84$ 0.25$ 0.32$ 0.32$ 0.27$ 0.18$
Income from discontinued operations available for common stockholders 4.13 0.16 - - - 4.22 0.03
Net income available for common stockholders 5.30$ 1.00$ 0.25$ 0.32$ 0.32$ 4.49$ 0.21$
Weighted average Common Shares outstanding - diluted 101,398 97,406 103,640 101,939 100,628 99,357 98,607
Dividends declared per Common Share 2.50$ 1.70$ 1.225$ 0.425$ 0.425$ 0.425$ 0.425$
Net income available for common stockholders:
Income from continuing operations available for common stockholders 115,461$ 79,308$ 25,380$ 31,971$ 31,648$ 26,462$ 17,549$
Income from discontinued operations available for common stockholders 406,328 15,264 - - - 406,328 2,803
Net income available for common stockholders 521,789$ 94,572$ 25,380$ 31,971$ 31,648$ 432,790$ 20,352$
Year Ended Three Months Ended
Consolidated Statements of Income (amounts in thousands, except per share amounts)
1
Year Ended Three Months Ended
12/31/16 12/31/15 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Funds from operations:
Net income 541,139$ 101,260$ 27,036$ 33,840$ 33,528$ 446,735$ 21,917$
Net (income) attributable to noncontrolling interests in consolidated affiliates (1,253) (1,264) (312) (319) (314) (308) (316)
Depreciation and amortization of real estate assets 217,533 199,449 57,753 52,303 54,680 52,797 55,476
(Gains) on disposition of depreciable properties (8,915) (9,147) - - (5,861) (3,054) -
(Gain) on disposition of investment in unconsolidated affiliate - (4,155) - - - - -
Unconsolidated affiliates:
Depreciation and amortization of real estate assets 2,978 3,203 751 736 749 742 791
(Gains) on disposition of depreciable properties (2,173) (946) - (1,842) - (331) -
Discontinued operations:
Depreciation and amortization of real estate assets - 13,820 - - - - 3,543
(Gains) on disposition of depreciable properties (414,496) - - - - (414,496) -
Funds from operations 334,813 302,220 85,228 84,718 82,782 82,085 81,411
Dividends on Preferred Stock (2,501) (2,506) (624) (624) (627) (626) (627)
Funds from operations available for common stockholders 332,312$ 299,714$ 84,604$ 84,094$ 82,155$ 81,459$ 80,784$
Funds from operations available for common stockholders per share 3.28$ 3.08$ 0.82$ 0.82$ 0.82$ 0.82$ 0.82$
Weighted average shares outstanding 101,398 97,406 103,640 101,939 100,628 99,357 98,607
Additional information: 1/ 2/
Losses on debt extinguishment -$ 243$ -$ -$ -$ -$ 23$
Property acquisition costs 751 1,004 - 751 - - -
Straight-line rental income (23,846) (22,308) (5,328) (5,140) (6,786) (6,592) (5,813)
Straight-line rental write-offs related to termination fees 545 484 1 210 - 334 143
Amortization of lease incentives 1,779 1,534 405 273 390 711 372
Depreciation of non-real estate assets 2,101 2,241 525 495 514 567 622
Ground lease straight-line rent expense 398 407 101 105 95 97 97
Share-based compensation expense 6,251 6,884 839 862 994 3,556 888
Amortization of debt issuance costs 3,506 3,645 861 844 811 990 1,144
Amortization of accumulated other comprehensive income 318 317 80 80 79 79 80
Amortization of Harborview financing obligation - (541) - - - - -
Amortization of acquired above/(below) market leases (3,775) (1,447) (802) (693) (1,678) (602) (499)
Non-incremental revenue generating capital expenditures incurred: 3/
Building improvements (40,202) (28,259) (16,900) (12,549) (7,173) (3,580) (11,837)
2nd generation tenant improvements (51,505) (53,989) (13,920) (14,078) (10,931) (12,576) (12,996)
2nd generation lease commissions (22,593) (24,104) (6,130) (7,028) (5,429) (4,006) (6,821)
Common dividends and unit distributions paid (171,749) (165,296) (43,837) (43,177) (42,622) (42,113) (41,846)
1/ Includes those properties classified as discontinued operations.
2/ Increase or (decrease) to cash flows.
3/ Excludes capital expenditures (a) incurred within 12 months prior to the disposition date for buildings sold, (b) related to first generation leases and leases
with respect to vacant space in acquired buildings, (c) building improvements that are recoverable from future operating cost savings, (d) building improvements
that constitute part of the total investment cost disclosed in connection with an acquisition and (e) property re-developments.
Funds from Operations and Additional Information (amounts in thousands, except per share amounts)
2
12/31/16 12/31/15
Assets:
Real estate assets, at cost:
Land 474,375$ 443,705$
Buildings and tenant improvements 4,313,373 4,063,328
Development in-process 279,602 194,050
Land held for development 77,355 68,244
5,144,705 4,769,327
Less-accumulated depreciation (1,134,103) (1,007,104)
Net real estate assets 4,010,602 3,762,223
Real estate and other assets, net, held for sale - 240,948
Cash and cash equivalents 49,490 5,036
Restricted cash 29,141 16,769
Accounts receivable, net of allowance of $624 and $928, respectively 17,372 29,077
Mortgages and notes receivable, net of allowance of $105 and $287, respectively 8,833 2,096
Accrued straight-line rents receivable, net of allowance of $692 and $257, respectively 172,829 150,392
Investments in and advances to unconsolidated affiliates 18,846 20,676
Deferred leasing costs, net of accumulated amortization of $140,081 and $115,172, respectively 213,500 231,765
Prepaid expenses and other assets, net of accumulated amortization of $19,904 and $17,830,
respectively 40,437 26,649
Total Assets 4,561,050$ 4,485,631$
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
Mortgages and notes payable, net 1,948,047$ 2,491,813$
Accounts payable, accrued expenses and other liabilities 313,885 233,988
Liabilities held for sale - 14,119
Total Liabilities 2,261,932 2,739,920
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 144,802 126,429
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), 28,920 and 29,050 shares issued and outstanding, respectively 28,920 29,050
Common Stock, $.01 par value, 200,000,000 authorized shares;
101,665,554 and 96,091,932 shares issued and outstanding, respectively 1,017 961
Additional paid-in capital 2,850,881 2,598,242
Distributions in excess of net income available for common stockholders (749,412) (1,023,135)
Accumulated other comprehensive income/(loss) 4,949 (3,811)
Total Stockholders' Equity 2,136,355 1,601,307
Noncontrolling interests in consolidated affiliates 17,961 17,975
Total Equity 2,154,316 1,619,282
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity 4,561,050$ 4,485,631$
Consolidated Balance Sheets (dollars in thousands)
3
Note: The purpose of providing the following information at the beginning of each year is to enable readers to derive their own estimate of net asset
value. The Company updates this information once annually based on management's assumptions regarding projected current year net operating
income for the existing property portfolio as of the date of initial publication (February 7, 2017). This information is not intended to be an asset-
by-asset or enterprise valuation.
Wholly-owned properties projected cash net operating income (NOI) 1/
Office 407,286$
Industrial 9,049
Total Net Operating Income 416,335$
Highwoods share of projected NOI at Joint Ventures 1/
Office 7,728$
Other income
Development, leasing and management fees 4,109$
In Service Assets Not Fairly Valued by Capitalized NOI Method
Wholly-owned assets 141,564$
Highwoods' share of joint venture assets 13,213
Total 154,777$
Add other assets:
Development investment at cost incurred 355,456$
Land held for development at market value 122,500
Cash and cash equivalents 49,490
Restricted cash 29,141
Accounts receivable, net 17,372
Notes receivable and prepaid expenses 49,270
Highwoods' share of unconsolidated joint venture other assets 10,899
Deduct partner's share of consolidated joint venture other assets (2,138)
Total other assets 631,990$
Liabilities:
Mortgages and notes payable 1,948,047$
Accounts payable, accrued expenses and other liabilities 313,885
Deduct partner's share of Consolidated joint venture's liabilities (355)
Market value of debt adjustment 17,563
Preferred stock, at liquidation value 28,920
Highwoods' share of unconsolidated joint ventures liabilities 46,620
Market value of debt adjustment for joint venture debt 2/ 251
Total deductions 2,354,931$
1/ Projected 2017 Cash NOI for the existing property portfolio excludes straight-line income, lease termination fee income, fee income, NOI related to
developments listed on page 21, and NOI related to assets undervalued by a capitalized NOI method. Assets undervalued by a capitalized NOI
method are identified generally by occupancies under 70% or free rent that lowers the cash NOI to effectively less than 70% of a stabilized cash
NOI. For the assets in this category an NOI capitalization approach is not appropriate and accordingly an alternative valuation methodology
has been applied.
2/ In accordance with prior practice, we included an adjustment to mark our debt including our pro rata share of unconsolidated joint venture to
estimated fair value as of December 31, 2016.
Components of Net Asset Value (dollars in thousands)
4
Year Ended Three Months Ended
12/31/16 12/31/15 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Continuing Operations Revenue Detail:
Rental and other revenues
Contractual rents, net 561,242$ 513,909$ 144,109$ 140,943$ 138,958$ 137,232$ 136,927$
Straight-line rental income, net 23,909 22,054 5,328 5,140 6,786 6,655 5,613
Cost recovery income, net 48,730 45,247 10,930 12,539 12,672 12,589 10,728
Lease termination fees 2,311 990 3 350 20 1,938 110
Other miscellaneous operating revenues 29,442 22,471 7,276 7,297 8,424 6,445 6,748
665,634$ 604,671$ 167,646$ 166,269$ 166,860$ 164,859$ 160,126$
Discontinued Operations:
Rental and other revenues 8,484$ 50,935$ -$ -$ -$ 8,484$ 13,298$
Operating expenses:
Rental property and other expenses 3,334 20,805 - - - 3,334 5,570
Depreciation and amortization - 14,039 - - - - 3,597
General and administrative 1,388 2,366 - - - 1,388 1,753
Total operating expenses 4,722 37,210 - - - 4,722 10,920
Interest expense 85 621 - - - 85 130
Other income 420 2,635 - - - 420 641
Income from discontinued operations 4,097 15,739 - - - 4,097 2,889
Net gains on disposition of discontinued operations 414,496 - - - - 414,496 -
Total income from discontinued operations 418,593$ 15,739$ -$ -$ -$ 418,593$ 2,889$
Revenue Detail; Discontinued Operations Detail (dollars in thousands)
5
12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Mortgages and Notes Payable (see pages 7 & 8): 1,948,047$ 1,901,066$ 2,082,207$ 2,100,937$ 2,491,813$
Financing Obligation: -$ -$ -$ -$ 7,402$
Preferred Stock (at liquidation value):
Series A 8 5/8% Cumulative Redeemable 28,920$ 28,920$ 28,935$ 29,030$ 29,050$
Common Shares and Units Outstanding:
Common stock outstanding 101,666 100,204 98,571 97,392 96,092
Noncontrolling interest partnership units 2,839 2,840 2,867 2,900 2,900
Total Common Shares and Units outstanding 104,505 103,044 101,438 100,292 98,992
Stock price at period end 51.01$ 52.12$ 52.80$ 47.81$ 43.60$
Market value of common equity 5,330,800$ 5,370,653$ 5,355,926$ 4,794,961$ 4,316,051$
Total capitalization 7,307,767$ 7,300,639$ 7,467,068$ 6,924,928$ 6,844,316$
Capitalization
Capitalization (dollars, shares and units in thousands)
Debt26.7%
Preferred Equity0.4%
Common Equity72.9%
6
Balances Outstanding: 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Secured:
Conventional fixed rate 128,204$ 129,013$ 130,001$ 174,475$ 175,281$
Unsecured - Fixed:
Fixed rate bonds and notes 1,126,145 1,125,942 1,125,739 1,125,536 1,125,333
Bank term loan 1/ 225,000 225,000 225,000 225,000 225,000
Unsecured - fixed total 1,351,145 1,350,942 1,350,739 1,350,536 1,350,333
Unsecured - Floating:
Bank term loan 200,000 200,000 200,000 200,000 200,000
Bank term loan 125,000 125,000 125,000 125,000 125,000
Bank term loan 150,000 75,000 - - -
Bridge facility - - - - 350,000
Credit facility 2/ - 28,000 283,000 258,000 299,000
Unsecured - floating total 475,000 428,000 608,000 583,000 974,000
Unsecured total 1,826,145 1,778,942 1,958,739 1,933,536 2,324,333
Total 1,954,349$ 1,907,955$ 2,088,740$ 2,108,011$ 2,499,614$
Total Net of Debt Issuance Costs 1,948,047$ 1,901,066$ 2,082,207$ 2,100,937$ 2,491,813$
End of Period Weighted Average Interest Rates:
Secured:
Conventional fixed rate 4.35% 4.35% 4.35% 5.14% 5.13%
Unsecured - Fixed:
Fixed rate bonds 5.03% 5.03% 5.03% 5.03% 5.03%
Bank term loan 1/ 2.78% 2.78% 2.78% 2.78% 2.78%
Unsecured - fixed total 4.66% 4.66% 4.66% 4.66% 4.66%
Unsecured - Floating:
Bank term loan 1.82% 1.72% 1.66% 1.64% 1.44%
Bank term loan 1.77% 1.62% 1.55% 1.54% 1.41%
Bank term loan 1.72% 1.62% - - -
Bridge facility - - - - 1.49%
Credit facility 2/ - 1.62% 1.55% 1.54% 1.45%
Unsecured - floating total 1.77% 1.67% 1.59% 1.57% 1.46%
Unsecured total 3.91% 3.94% 3.70% 3.73% 3.32%
Weighted Average 3.94% 3.97% 3.74% 3.84% 3.44%
Maturity Schedule
1/ The interest rate on this loan is based on one-month LIBOR plus a spread based on the company's credit rating. Swap agreements effectively
fix one-month LIBOR until January 2019.
2/ Maturity date assumes exercise of two six-month extension options.
3/ All periods exclude annual principal amortization.
Mortgages and Notes Payable Summary (dollars in thousands)
-
100
200
300
400
500
600
2016 2017 2018 2019 2020 2021 2022 2023
To
tal
Deb
t (i
n m
illio
ns)
Secured Debt 3/ Unsecured Debt
Weighted Average Maturity = 2.9 years
$
7
Undepreciated
Secured Loans Loan Book Value of
Effective Maturity Balance Real Estate & Related
Lender Rate Date 12/31/16 Assets Secured
Wells Fargo Bank, N.A. 4.22% Nov-17 109,138$ 235,309$
Wells Fargo Bank, N.A. 5.36% Jul-17 19,066 22,300
4.35% 128,204 257,609$
Unsecured Bonds
Bonds 5.88% Mar-17 379,661
Bonds 3.36% Jun-21 298,072
Bonds 3.75% Jan-23 248,412
Bonds 7.50% Apr-18 200,000
5.03% 1,126,145
Unsecured Loans
Credit facility 1/ 2/ - Jan-19 -
Bank term loan 3/ 2.78% Jun-20 225,000
Bank term loan 1/ 1.82% Jan-19 200,000
Bank term loan 1/ 1.77% Jun-20 125,000
Bank term loan 1/ 1.72% Jan-22 150,000
2.10% 700,000
Total Debt 3.94% 1,954,349$
Total Net of Debt Issuance Costs 1,948,047$
Secured and Unsecured Debt Fixed and Variable Rate Debt
1/ Floating rate loans based on one-month LIBOR.
2/ Maturity date assumes exercise of two six-month extension options.
3/ This loan maturing June 2020 is swapped to an effective fixed rate of 2.78% until January 2019, including the current spread based on the
company's credit rating.
Mortgages and Notes Payable Detail (dollars in thousands)
Secured6.6%
Unsecured93.4%
Variable24.3%
Fixed75.7%
Bond Covenants as of December 31, 2016
Overall indebtedness (<60%) 36.8%
Secured indebtedness (<40%) 2.4%
Income available for debt service (>1.5x) 5.30x
Total unencumbered assets to unsecured debt (>200%) 276.0%
Agency Rating Outlook Affirmed
S&P BBB Stable 4/27/16
Moody's Baa2 Stable 1/6/17
8
12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Total In-Service
Rentable Square Feet
Office 27,002,000 27,080,000 26,836,000 26,922,000 27,282,000
Industrial 2,413,000 2,413,000 2,413,000 2,413,000 2,413,000
Retail 59,000 59,000 59,000 59,000 835,000
Total 29,474,000 29,552,000 29,308,000 29,394,000 30,530,000
Occupancy
Office 92.9% 92.2% 92.0% 92.2% 92.6%
Industrial 95.6% 98.4% 98.4% 98.3% 97.3%
Retail 100.0% 93.0% 93.0% 96.4% 96.0%
Total 93.1% 92.7% 92.5% 92.7% 93.1%
Same Property:
Rentable Square Feet
Office 24,231,000 24,231,000 24,231,000 24,231,000 24,231,000
Industrial 2,413,000 2,413,000 2,413,000 2,413,000 2,413,000
Retail 59,000 59,000 59,000 59,000 59,000
Total 26,703,000 26,703,000 26,703,000 26,703,000 26,703,000
Occupancy
Office 93.3% 92.8% 92.3% 92.3% 92.7%
Industrial 95.6% 98.4% 98.4% 98.3% 97.3%
Retail 100.0% 93.0% 93.0% 96.4% 96.4%
Total 93.6% 93.3% 92.9% 92.9% 93.1%
Rentable Square Feet and Occupancy Trend: Total In-Service Office Only
Portfolio Summary
85%
87%
89%
91%
93%
95%
20
21
22
23
24
25
26
27
28
12/31/15 3/31/16 6/30/16 9/30/16 12/31/16
Occu
pan
cy
Sq
uare
Feet
in M
illio
ns
Rentable Square Feet Occupancy
9
Rentable Percentage of Annualized Cash Revenue 1/
Market Square Feet Occupancy Office Industrial Retail Total
Atlanta 5,239,000 92.1% 19.2% - - 19.2%
Raleigh 5,096,000 92.7% 17.5% - - 17.5%
Nashville 3,379,000 99.6% 14.3% - 0.2% 14.5%
Tampa 3,822,000 90.9% 13.4% - - 13.4%
Pittsburgh 2,162,000 93.8% 8.7% - - 8.7%
Memphis 2,226,000 89.9% 7.7% - 0.1% 7.8%
Orlando 1,977,000 88.2% 7.5% - - 7.5%
Richmond 1,942,000 94.6% 5.7% - - 5.7%
Greensboro 3,564,000 94.8% 3.5% 2.0% - 5.5%
Kansas City 67,000 95.6% 0.2% - - 0.2%
Total 29,474,000 93.1% 97.7% 2.0% 0.3% 100.0%
Annualized Cash Revenue by Market 1/
1/ Annualized Cash Revenue is December 2016 cash rental revenue (base rent plus operating expense pass through revenue excluding
straight-line rental income) multiplied by 12.
Portfolio Summary
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Atlanta Raleigh Nashville Tampa Pittsburgh Memphis Orlando Richmond Greensboro Kansas City
10
Percentage Percentage
of Segment of Total
Annualized Annualized
Rentable Cash Cash
Market Square Feet Occupancy Revenue 1/ Revenue 1/
Office
Atlanta 5,239,000 92.1% 19.7% 19.2%
Raleigh 5,096,000 92.7% 18.0% 17.5%
Nashville 3,338,000 99.6% 14.6% 14.3%
Tampa 3,822,000 90.9% 13.7% 13.4%
Pittsburgh 2,162,000 93.8% 8.9% 8.7%
Memphis 2,208,000 89.8% 7.9% 7.7%
Orlando 1,977,000 88.2% 7.6% 7.5%
Richmond 1,942,000 94.6% 5.9% 5.7%
Greensboro 1,151,000 93.2% 3.5% 3.5%
Kansas City 67,000 95.6% 0.2% 0.2%
27,002,000 92.9% 100.0% 97.7%
Industrial
Greensboro 2,413,000 95.6% 100.0% 2.0%
2,413,000 95.6% 100.0% 2.0%
Retail
Nashville 41,000 100.0% 65.9% 0.2%
Memphis 18,000 100.0% 34.1% 0.1%
59,000 100.0% 100.0% 0.3%
Office Segment: Annualized Cash Revenue by Market 1/
1/ Annualized Cash Revenue is December 2016 cash rental revenue (base rent plus operating expense pass through revenue excluding
straight-line rental income) multiplied by 12.
Portfolio Summary
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Atlanta Raleigh Nashville Tampa Pittsburgh Memphis Orlando Richmond Greensboro Kansas City
11
Market Measurement 12/31/16 9/30/16 6/30/16 3/31/16 12/31/15
Atlanta Rentable Square Feet 5,239,000 5,317,000 5,317,000 5,317,000 5,361,000
Occupancy 92.1% 91.7% 91.2% 92.1% 92.4%
Current Properties 1/ 92.1% 92.4% 91.9% 92.8% 93.2%
Greensboro Rentable Square Feet 3,564,000 3,564,000 3,564,000 3,564,000 3,564,000
Occupancy 94.8% 96.5% 96.7% 96.6% 95.8%
Current Properties 1/ 94.8% 96.5% 96.7% 96.6% 95.8%
Kansas City Rentable Square Feet 67,000 67,000 67,000 150,000 1,393,000
Occupancy 95.6% 95.6% 95.6% 98.0% 97.2%
Current Properties 1/ 95.6% 95.6% 95.6% 95.6% 100.0%
Memphis Rentable Square Feet 2,226,000 2,226,000 2,226,000 2,226,000 2,226,000
Occupancy 89.9% 90.9% 91.5% 90.7% 91.0%
Current Properties 1/ 89.9% 90.9% 91.5% 90.7% 91.0%
Nashville Rentable Square Feet 3,379,000 3,379,000 3,379,000 3,379,000 3,379,000
Occupancy 99.6% 99.5% 99.0% 99.6% 99.2%
Current Properties 1/ 99.6% 99.5% 99.0% 99.6% 99.2%
Orlando Rentable Square Feet 1,977,000 1,977,000 1,977,000 1,978,000 1,978,000
Occupancy 88.2% 87.0% 87.5% 85.9% 86.0%
Current Properties 1/ 88.2% 87.0% 87.5% 85.9% 86.0%
Pittsburgh Rentable Square Feet 2,162,000 2,162,000 2,162,000 2,162,000 2,157,000
Occupancy 93.8% 92.2% 91.6% 91.4% 95.7%
Current Properties 1/ 93.8% 92.2% 91.6% 91.4% 95.7%
Raleigh Rentable Square Feet 5,096,000 5,096,000 4,852,000 4,852,000 4,882,000
Occupancy 92.7% 90.8% 91.9% 93.0% 92.8%
Current Properties 1/ 94.0% 92.1% 91.9% 93.0% 92.7%
Richmond Rentable Square Feet 1,942,000 1,942,000 1,942,000 1,941,000 1,941,000
Occupancy 94.6% 94.2% 92.9% 93.6% 93.9%
Current Properties 1/ 94.6% 94.2% 92.9% 93.6% 93.9%
Tampa Rentable Square Feet 3,822,000 3,822,000 3,822,000 3,825,000 3,649,000
Occupancy 90.9% 90.8% 88.9% 88.3% 87.4%
Current Properties 1/ 90.4% 90.4% 88.3% 87.8% 87.4%
Total Rentable Square Feet 29,474,000 29,552,000 29,308,000 29,394,000 30,530,000
Occupancy 93.1% 92.7% 92.5% 92.7% 93.1%
Current Properties 1/ 93.3% 93.1% 92.6% 92.8% 93.0%
1/ Only includes properties that were owned and in-service for all periods shown.
Occupancy Trends
12
Leasing Statistics
Three Months Ended Five Quarter
12/31/16 9/30/16 6/30/16 3/31/16 12/31/15 Average
Leasing Activity:
Square footage of Renewal Deals 460,308 594,326 661,722 694,258 809,940 644,111
Square footage of New Deals (Relets) 266,025 1/ 273,067 1/ 245,193 1/ 207,880 237,493 245,932
Rentable square footage leased 726,333 867,393 906,915 902,138 1,047,433 890,042
Renewed square footage (% of total) 63.4% 68.5% 73.0% 77.0% 77.3% 72.4%
New Leases square footage (% of total) 36.6% 31.5% 27.0% 23.0% 22.7% 27.6%
Number of lease transactions (signed leases) 105 99 131 119 121 115
Weighted average per rentable square foot
over the lease term:
Base rent 27.52$ 27.31$ 25.14$ 24.42$ 24.90$ 25.86$
Rent concessions (0.56) (0.39) (0.57) (0.63) (0.62) (0.55)
GAAP rent 26.96 26.92 24.57 23.79 24.28 25.31
Tenant improvements (2.89) (2.86) (2.44) (2.05) (2.35) (2.52)
Leasing commissions 2/ (0.96) (0.84) (0.74) (0.53) (0.82) (0.78)
Effective rent after capex 23.11 23.22 21.39 21.21 21.11 22.01
Expense stop (9.11) (8.61) (8.42) (6.67) (7.99) (8.16)
Effective rent after capex and opex 14.00$ 14.61$ 12.97$ 14.54$ 13.12$ 13.85$
Square feet weighted average term in years 6.0 7.0 5.4 6.5 6.9 6.4
Dollar weighted average term in years 6.2 7.2 5.6 6.5 6.9 6.5
Capital Expenditures Related to Above Leasing Activity:
Tenant Improvements:
Total dollars committed under signed leases 14,808,837$ 20,521,494$ 13,738,272$ 13,050,044$ 18,907,341$ 16,205,198$
Rentable square feet 726,333 867,393 906,915 902,138 1,047,433 890,042
Per rentable square foot 20.39$ 23.66$ 15.15$ 14.47$ 18.05$ 18.21$
Leasing Commissions:
Total dollars committed under signed leases 2/ 4,961,541$ 5,827,656$ 4,219,120$ 2,876,029$ 6,576,006$ 4,892,070$
Rentable square feet 726,333 867,393 906,915 902,138 1,047,433 890,042
Per rentable square foot 6.83$ 6.72$ 4.65$ 3.19$ 6.28$ 5.50$
Total:
Total dollars committed under signed leases 19,770,378$ 26,349,150$ 17,957,392$ 15,926,073$ 25,483,347$ 21,097,268$
Rentable square feet 726,333 867,393 906,915 902,138 1,047,433 890,042
Per rentable square foot 27.22$ 30.38$ 19.80$ 17.65$ 24.33$ 23.70$
1/ Expected occupancy as follows: 24,000 in Q4 '16; 104,000 in Q1 '17; 78,000 in Q2 '17; 18,000 in Q3 '17; 18,000 in Q4 '17; 22,000 in Q1 '18; and
2,000 in Q1 '20.
2/ Excludes internal leasing costs.
Office Leasing Statistics
13
For Three Months Ended December 31, 2016
Leasing Statistics Rentable Lease
Square Feet Average TI's Commissions Rental Previous Percentage
Leased Term Per SF Per SF 1/ Rate Rent Change
Raleigh 143,266 6.9 20.98$ 7.14$ 24.11$ 19.91$ 21.1%
Tampa 122,833 3.4 12.01 3.84 29.50 27.25 8.3%
Pittsburgh 112,501 9.5 39.88 14.93 30.86 28.96 6.6%
Atlanta 102,938 6.1 22.94 9.08 29.68 25.58 16.0%
Memphis 74,376 4.1 11.71 0.90 23.44 21.06 11.3%
Orlando 60,756 6.9 23.03 6.89 25.98 20.08 29.4%
Nashville 49,020 7.0 18.52 4.05 28.15 23.40 20.3%
Greensboro 32,039 3.1 3.57 2.36 20.00 18.60 7.5%
Richmond 24,173 4.2 7.75 2.81 22.04 18.66 18.1%
Kansas City 4,431 4.0 0.00 5.46 22.75 19.68 15.6%
GAAP Rent Growth 2/ 726,333 6.0 20.39$ 6.83$ 26.96$ 23.67$ 13.9%
Cash Rent Growth 3/ 726,333 6.0 20.39$ 6.83$ 25.92$ 25.17$ 3.0%
Average Office Cash Rental Rates for All In-Place Leases as of:
1/ Excludes capitalized internal leasing costs, which totaled $578,000.
2/ GAAP rent growth is calculated by comparing average cash rent psf over the term (GAAP rent) of the new lease to the average cash rent psf
over the term related to the previous lease in the same space. Adjustments are made if necessary to put both the current and prior deal on a
consistent gross lease basis.
3/ Cash rent growth is calculated by comparing beginning annualized cash rent psf (after rent concessions burn off) under the new lease to ending
annualized cash rent psf (including recovery income and rent escalations) related to the previous lease in the same space. Adjustments are
made if necessary to put both the current and prior deal on a consistent gross lease basis.
Office Leasing Statistics and Rental Rate Comparisons by Market
$20.86
$21.48
$22.27
$23.49
$24.12
$19
$20
$21
$22
$23
$24
$25
12/31/12 12/31/13 12/31/14 12/31/15 12/31/16
14
Occupied Percent of Percent of
Rentable Occupied Annualized Average Annualized
Square Feet Rentable Cash Rental Cash
Year Expiring Square Feet Revenue 1/ Rate Revenue 1/
2017 2/ 2,319,501 9.3% 59,525$ 25.66$ 9.8%
2018 2,735,958 10.9% 66,598 24.34 11.0%
2019 3,535,333 14.0% 85,950 24.31 14.3%
2020 2,754,909 11.0% 73,892 26.82 12.2%
2021 2,767,479 11.0% 64,430 23.28 10.7%
2022 1,710,029 6.8% 39,457 23.07 6.5%
2023 1,614,168 6.4% 37,364 23.15 6.2%
2024 1,769,755 7.1% 43,016 24.31 7.1%
2025 947,576 3.8% 26,392 27.85 4.4%
2026 1,245,338 5.0% 28,625 22.99 4.7%
2027 and thereafter 3,673,904 14.7% 79,502 21.64 13.1%
25,073,950 100.0% 604,751$ 24.12$ 100.0%
Percent of Total Annualized Cash Revenue Expiring by Year
1/ Annualized Cash Revenue is December 2016 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line
rental income) multiplied by 12.
2/ Includes 62,000 square feet of leases that are on a month to month basis, which constitute 0.3% of total annualized revenue.
Note: 2017 and beyond expirations that have been renewed are reflected above based on the renewal expiration date. Expirations include leases
related to completed not stabilized development properties and exclude leases related to developments in-process.
Office Lease Expirations (dollars in thousands)
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
2017 2/ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 andthereafter
15
2017 1/ 2018 2019 2020 Thereafter
Atlanta RSF 576,385 288,770 674,654 601,087 2,686,112
% of Total RSF 2.3% 1.2% 2.7% 2.4% 10.7%
Annualized Cash Revenue 2/ 14,757$ 7,587$ 17,194$ 15,992$ 63,759$
% of Total Annl Cash Rev 2.4% 1.3% 2.8% 2.6% 10.5%
Greensboro RSF 205,506 196,287 113,155 91,778 466,515
% of Total RSF 0.8% 0.8% 0.5% 0.4% 1.9%
Annualized Cash Revenue 2/ 4,095$ 4,032$ 2,763$ 1,673$ 8,833$
% of Total Annl Cash Rev 0.7% 0.7% 0.5% 0.3% 1.5%
Kansas City RSF 45,032 2,448 5,423 0 11,560
% of Total RSF 0.2% 0.0% 0.0% 0.0% 0.0%
Annualized Cash Revenue 2/ 1,019$ 62$ 129$ -$ 269$
% of Total Annl Cash Rev 0.2% 0.0% 0.0% 0.0% 0.0%
Memphis RSF 142,600 248,572 349,408 216,288 1,025,440
% of Total RSF 0.6% 1.0% 1.4% 0.9% 4.1%
Annualized Cash Revenue 2/ 3,289$ 6,075$ 8,189$ 5,630$ 24,300$
% of Total Annl Cash Rev 0.5% 1.0% 1.4% 0.9% 4.0%
Nashville RSF 365,196 401,931 491,299 387,169 1,680,292
% of Total RSF 1.5% 1.6% 2.0% 1.5% 6.7%
Annualized Cash Revenue 2/ 9,840$ 10,093$ 12,463$ 9,790$ 46,236$
% of Total Annl Cash Rev 1.6% 1.7% 2.1% 1.6% 7.6%
Orlando RSF 195,243 254,262 257,811 195,857 839,505
% of Total RSF 0.8% 1.0% 1.0% 0.8% 3.3%
Annualized Cash Revenue 2/ 7,098$ 6,376$ 6,007$ 6,098$ 20,671$
% of Total Annl Cash Rev 1.2% 1.1% 1.0% 1.0% 3.4%
Pittsburgh RSF 81,554 87,656 124,003 73,293 1,660,832
% of Total RSF 0.3% 0.3% 0.5% 0.3% 6.6%
Annualized Cash Revenue 2/ 2,257$ 2,241$ 3,117$ 4,387$ 41,624$
% of Total Annl Cash Rev 0.4% 0.4% 0.5% 0.7% 6.9%
Raleigh RSF 215,985 697,089 754,239 352,839 2,701,442
% of Total RSF 0.9% 2.8% 3.0% 1.4% 10.8%
Annualized Cash Revenue 2/ 4,828$ 14,805$ 17,946$ 9,057$ 61,969$
% of Total Annl Cash Rev 0.8% 2.4% 3.0% 1.5% 10.2%
Richmond RSF 293,435 216,532 204,795 189,800 932,173
% of Total RSF 1.2% 0.9% 0.8% 0.8% 3.7%
Annualized Cash Revenue 2/ 6,882$ 4,189$ 4,305$ 4,003$ 16,201$
% of Total Annl Cash Rev 1.1% 0.7% 0.7% 0.7% 2.7%
Tampa RSF 198,565 342,411 560,546 646,798 1,724,378
% of Total RSF 0.8% 1.4% 2.2% 2.6% 6.9%
Annualized Cash Revenue 2/ 5,461$ 11,137$ 13,836$ 17,261$ 34,927$
% of Total Annl Cash Rev 0.9% 1.8% 2.3% 2.9% 5.8%
Total RSF 2,319,501 2,735,958 3,535,333 2,754,909 13,728,249
% of Total RSF 9.3% 10.9% 14.1% 11.0% 54.8%
Annualized Cash Revenue 2/ 59,526$ 66,597$ 85,949$ 73,891$ 318,789$
% of Total Annl Cash Rev 9.8% 11.0% 14.2% 12.2% 52.7%
1/ Includes 62,000 square feet of leases that are on a month to month basis, which constitute 0.3% of total annualized revenue.
2/ Annualized Cash Revenue is December 2016 cash rental revenue (base rent plus operating expense pass through revenue excluding
straight-line rental income) multiplied by 12.
Office Lease Expirations by Market by Year (dollars in thousands)
16
Percent of Average
Rentable Annualized Annualized Remaining
Square Cash Cash Lease
Top 20 Customers Feet Revenue 1/ Revenue 1/ Term in Years
Federal Government 1,418,042 34,369$ 5.52% 4.4
Metropolitan Life Insurance 661,060 16,369 2.63% 10.2
PPG Industries 356,215 9,721 1.56% 14.3
HCA Corporation 297,909 8,064 1.29% 0.3
EQT Corporation 319,269 7,512 1.21% 7.8
Healthways 263,598 6,903 1.11% 6.2
International Paper 278,444 6,457 1.04% 11.9
Bass, Berry & Sims 195,846 6,356 1.02% 8.1
State of Georgia 318,506 6,222 1.00% 4.0
Willis Towers Watson 239,506 6,172 0.99% 5.1
Novelis 168,949 5,577 0.89% 7.7
Marsh USA 175,390 5,474 0.88% 5.2
Aon 190,683 5,408 0.87% 2.9
PNC Bank 187,076 5,364 0.86% 9.9
Vanderbilt University 209,989 5,216 0.84% 3.8
Syniverse Technologies 218,678 4,906 0.79% 9.8
Lifepoint Corporate Services 202,991 4,691 0.75% 12.3
Morgan Stanley 144,616 4,642 0.74% 2.8
AT&T 197,826 4,571 0.73% 2.6
SunTrust 141,735 4,345 0.70% 3.3
6,186,328 158,339$ 25.42% 6.6
Percent of Annualized Revenue by Industry
1/ Annualized Cash Revenue is December 2016 cash rental revenue (base rent plus operating expense pass through revenue excluding
straight-line rental income) multiplied by 12.
Customer Diversification (dollars in thousands)
Professional, Scientific, and Technical Services
25.6%
Finance/Banking14.3%
Health Care and Social Assistance
14.0%
Insurance8.1%
Manufacturing6.9%
Government/Public Administration
6.8%
Real Estate Rental and Leasing
4.8%
Administrative and Support Services
3.9%
Educational Services2.8%
Telecommunication2.6%
Information2.5%
Accommodation and Food Services
1.6%
Transportation and Warehousing
1.6%
Energy1.5%
Other Services (except Public Administration)
1.4%
Wholesale Trade1.0%
Retail Trade0.6%
17
Three months ended
December 31, Dollar Percentage
2016 2015 Change B/(W) Change B/(W)
Rental revenues 1/ 142,228$ 137,214$ 5,014$ 3.7%
Operating expenses (50,133) (50,174) 41 0.1%
Cash NOI 1/ 92,095 87,040 5,055 5.8%
Lease termination fees 2/ 3 110 (107) (97.3%)
Cash NOI with Term Fees 3/ 92,098 87,150 4,948 5.7%
Straight-line rent and other non-cash adjustments 2/ 4/ 2,791 3,583 (792) (22.1%)
GAAP NOI 94,889$ 90,733$ 4,156$ 4.6%
Average occupancy 93.4% 92.8% 0.6%
Rentable square feet 26,703,000 26,703,000
Twelve months ended
December 31, Dollar Percentage
2016 2015 Change B/(W) Change B/(W)
Rental revenues 1/ 564,512$ 545,871$ 18,641$ 3.4%
Operating expenses (202,974) (202,344) (630) (0.3%)
Cash NOI 1/ 361,538 343,527 18,011 5.2%
Lease termination fees 2/ 2,310 990 1,320 133.3%
Cash NOI with Term Fees 3/ 363,848 344,517 19,331 5.6%
Straight-line rent and other non-cash adjustments 2/ 4/ 11,788 16,083 (4,295) (26.7%)
GAAP NOI 375,636$ 360,600$ 15,036$ 4.2%
Average occupancy 93.1% 92.3% 0.9%
Rentable square feet 26,703,000 26,703,000
Year to Date: 2016 vs 2015
GAAP NOI Occupancy
Percentage Percentage
Market Change Change
Atlanta 7.4% 1.8%
Greensboro 0.4% 0.4%
Kansas City (5.1%) (4.4%)
Memphis 2.1% (1.2%)
Nashville 4.7% 2.2%
Orlando 2.6% 1.5%
Pittsburgh (0.6%) (3.1%)
Raleigh 4.2% 1.1%
Richmond 7.6% 1.6%
Tampa 4.6% 2.0%
4.2% 0.9%
1/ Excludes straight-line rents, lease termination fees, adjustments related to amortization of acquired above and below market leases and
amortization of lease incentives.
2/ Straight-line rent write-offs related to lease terminations are reflected here as a reduction of lease termination fees.
3/ Excludes straight-line rents, adjustments related to amortization of acquired above and below market leases and amortization of lease incentives.
4/ Includes adjustments related to amortization of acquired above and below market leases and amortization of lease incentives.
Same Property Performance (dollars in thousands)
18
Twelve Months
Ended Three Months Ended
12/31/16 12/31/16 9/30/16 6/30/16 3/31/16
Occupancy at Acquisition 65.0% - 65.0% - -
Square feet 243,000 - 243,000 - -
Gross total investment $83,500 - $83,500 - -
Charter Square
Market Raleigh
Submarket CBD
Property type Office
Date acquired September 27, 2016
Occupancy at Acquisition 65%
Square feet (1 building) 243,000
Gross total investment 1/ $83,500
1/ Includes $5.1 million of planned near-term capital improvements.
Acquisition Activity (dollars In thousands)
19
Twelve Months
Ended
12/31/16
Occupancy 1/ 96.4%
Square feet 1,429,000
Gross sales price $685,192
Country Club Plaza
Market Kansas City
Property type Retail/Office/Land
Number of properties 18
Date sold March 1, 2016
Occupancy 1/ 2/ 96.9%
Square feet 2/ 1,272,000
Gross sales price $660,000
4900 North Park
Market Raleigh
Property type Office
Number of properties 1
Date sold March 17, 2016
Occupancy 1/ 100.0%
Square feet 32,000
Gross sales price $4,692
Highwoods Center III at Tradeport
Market Atlanta
Property type Office
Number of properties 1
Date sold March 31, 2016
Occupancy 1/ 73.3%
Square feet 43,000
Gross sales price $6,350
Park Plaza
Market Kansas City
Property type Office
Number of properties 1
Date sold June 7, 2016
Occupancy 1/ 100.0%
Square feet 82,000
Gross sales price $14,150
1/ As of last reported quarter-end occupancy prior to date of disposition.
2/ Plaza 211, a development in-process on the date of disposition, is included in the rentable square feet but excluded from occupancy calculation.
Disposition Activity (dollars In thousands)
20
Rentable Anticipated Investment Estimated Estimated
Square Total As Of Pre Completion Stabilization
Office In-Process Market Feet Investment 1/ 12/31/16 1/ Leased % Date Date
Riverwood 200 Atlanta 299,000 107,000$ 76,583$ 72.7% 2Q 17 2Q 19
Seven Springs II Nashville 131,000 38,100 25,288 52.3% 2Q 17 3Q 18
Bridgestone Americas 2/ 3/ Nashville 514,000 200,000 135,856 100.0% 3Q 17 3Q 17
5000 CentreGreen Raleigh 166,500 40,850 15,365 0.0% 3Q 17 3Q 19
Virginia Urology 4/ Richmond 87,000 29,140 1,479 100.0% 3Q 18 3Q 18
751 Corporate Center 4/ 5/ Raleigh 89,700 21,850 1,322 35.3% 4Q 18 4Q 20
1,287,200 436,940$ 255,893$ 71.4%
Office Completed Not Stabilized 6/
GlenLake V Raleigh 166,000 37,000$ 36,866$ 93.7% 1Q 15 1Q 17
Seven Springs West Nashville 203,000 59,000 56,295 91.3% 3Q 16 1Q 17
369,000 96,000$ 93,161$ 92.4%
Industrial Completed Not Stabilized 6/
Enterprise V Greensboro 131,200 7,600$ 6,402$ 0.0% 2Q 16 2Q 17
Total Pipeline 1,787,400 540,540$ 355,456$ 70.5%
751 Corporate Center in Raleigh
1/ Includes deferred lease commissions, which are not classified as development in-process on our consolidated balance sheet.
2/ Includes 7,000 square feet of amenity retail space.
3/ This project is scheduled to deliver in Q3 '17. We are required to commence recording straight-line rental income due to early
possession by the customer starting in Q2 '17.
4/ Recorded on our consolidated balance sheet in land held for development, not development in-process.
5/ This development project was announced February 2017.
6/ "Completed not stabilized" properties are recorded on our consolidated balance sheet in the land and building and tenant improvement
accounts, not development in-process.
Development Activity (dollars in thousands)
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Usable
Market Acres Office IndustrialNashville 2/ 82 1,468,000 - Raleigh 3/ 42 1,186,000 - Greensboro 37 240,000 356,000 Tampa 4/ 37 813,000 - Richmond 5/ 6/ 13 200,000 - Memphis 10 145,000 - Orlando 2 410,000 - Atlanta 1 175,000 -
Core total 224 4,637,000 356,000
Non-core total 196
Total 420
Cost Basis 1/ 2/ 3/ 4/ 5/ 6/ 110,780$
The 420 acres of Development Land has an estimated market value of between $120M to $125M.
1/ Represents approximately $1.1 billion in total development.
2/ Includes 68 acres and approximately 1.4M square feet currently classified as development in-process on our consolidated balance sheet.
3/ Excludes 10 acres to be used to develop a 90k square foot, 35.3% pre-leased build-to-suit office building that is currently classified
as land held for development on our consolidated balance sheet.
4/ Includes 33 acres and approximately 460k square feet currently classified as development in-process on our consolidated balance sheet.
5/ Excludes 8 acres to be used to develop an 87k square foot, 100% pre-leased build-to-suit medical office building that is currently classified
as land held for development on our consolidated balance sheet.
6/ Excludes 13 acres of development land owned by a 50% consolidated joint venture with a total cost basis of $3.3 million.
Square Footage Buildout of Core
Development Land 1/
Land Held for Development (dollars in thousands)
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Joint Venture Own % Revenue NOI Revenue NOI
Highwoods DLF Forum, LLC 25.0% 3,500$ 2,351$ 14,492$ 9,776$
Plaza Colonnade, Tenant-in-Common 50.0% 3,236 2,018 12,705 8,346
Kessinger/Hunter & Company, LC 26.5% 1,557 384 6,254 1,895
Highwoods DLF 98/29, LLC 22.8% 1,328 749 5,388 3,172
Highwoods DLF 97/26 DLF 99/32, LP 42.9% 376 250 944 525
Total 9,997$ 5,752$ 39,783$ 23,714$
Total Total
Joint Venture Own % Assets Debt Liabilities
Highwoods DLF Forum, LLC 25.0% 94,374$ 71,299$ 74,255$
Plaza Colonnade, Tenant-in-Common 50.0% 59,142 51,261 52,521
Kessinger/Hunter & Company, LC 26.5% 4,245 - 542
Highwoods DLF 98/29, LLC 22.8% 27,764 - 1,926
Highwoods DLF 97/26 DLF 99/32, LP 42.9% 14,047 - 2,828
Total 199,572$ 122,560$ 132,072$
1/ Excludes joint ventures sold during the year.
Venture's Books
Three Months Ended December 31, 2016 Year Ended December 31, 2016
Venture's Books
As of December 31, 2016
Unconsolidated Joint Ventures Income Year Ended 12/31/14 (dollars in thousands)Unconsolidated Joint Ventures Income Six Months Ended Unconsolidated Joint Venture Financial Information 1/ (dollars in thousands)
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Summary:
Percentage of
Joint Venture
Annualized
Rentable Cash
Market Square Feet Occupancy Revenue 2/ 3/
Kansas City 292,000 99.5% 39.3%
Raleigh 635,000 93.5% 29.8%
Richmond 345,000 100.0% 21.1%
Orlando 306,000 100.0% 9.8%
Total 1,578,000 97.3% 100.0%
Dispositions Activity:
1/ Highwoods' in-service joint venture portfolio consists solely of office properties, including 345,000 square feet of properties in
Richmond owned by a joint venture that is consolidated.
2/ Annualized Cash Revenue is December 2016 cash rental revenue (base rent plus operating expense pass through revenue excluding
straight-line rental income) multiplied by 12.
3/ Annualized Cash Revenue is based on Highwoods' share only.
4/ Gross sales price includes Highwoods' share only.
Joint Ventures Summary and Dispositions Activity 1/ (dollars in thousands)
Date Square Gross Sales
Name Own % Market Sold Footage Occupancy Price 4/
First quarter 2016:
Concourse 50.0% Greensboro 3/3/16 118,000 36.8% 5,500$
Third quarter 2016:
Plaza West 12.5% Kansas City 7/18/16 262,000 91.4% 4,086$
2016 totals: 380,000 74.4% 9,586$
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