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 ~~September~~March 3031, ~~2024~~2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from [ ] to [ ]

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)

150 Fayetteville Street, Suite 1400

Raleigh, NC 27601

(Address of principal executive offices) (Zip Code)

919-872-4924

(Registrants’ telephone number, including area code)

___________________

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, $.01 par value, of Highwoods Properties, Inc.	HIW	New York Stock Exchange

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 ☒ No ☐ Highwoods Realty Limited Partnership Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).

Highwoods Properties, Inc. Yes ☒ No ☐ Highwoods Realty Limited Partnership Yes ☒ No ☐

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

Highwoods Properties, Inc.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

Highwoods Realty Limited Partnership

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Highwoods Properties, Inc. ☐ Highwoods Realty Limited Partnership ☐

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

Highwoods Properties, Inc. Yes ☐ No ☒ Highwoods Realty Limited Partnership Yes ☐ No ☒

The Company had ~~106~~107,~~020~~810,~~426~~610 shares of Common Stock outstanding as of ~~October~~April 1522, ~~2024~~2025.

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.

Except as otherwise noted, all property-level operational information presented herein includes in-service wholly owned properties and in-service properties owned by consolidated and unconsolidated joint ventures (at our share). Development projects are not considered in-service properties until such projects are completed and stabilized. Stabilization occurs at the ~~beginning of the first quarter after the~~ earlier of: (1) the projected stabilization date; or (2) the date on which a project's occupancy generally exceeds 93%.

Certain information contained herein is presented as of ~~October~~April 1522, ~~2024~~2025, 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 ~~September~~March 3031, ~~2024~~2025 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;

•Note 1011 to Consolidated Financial Statements - 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 ~~SEPTEMBER~~MARCH 3031, ~~2024~~2025

TABLE OF CONTENTS

			Page
PART I - FINANCIAL INFORMATION
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)			3
HIGHWOODS PROPERTIES, INC.:
Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023			3
Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024			3
Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 2023			4
Consolidated Statements of Income for the Three Months Ended March 31, 2025 and 2024			4
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023			5
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 2024			5
Consolidated Statements of Equity for the Three and Nine Months Ended September 30, 2024 and 2023			6
Consolidated Statements of Equity for the Three Months Ended March 31, 2025 and 2024			6
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023			8
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024			7
HIGHWOODS REALTY LIMITED PARTNERSHIP:
Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023			10
Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024			9
Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2024 and 2023			11
Consolidated Statements of Income for the Three Months Ended March 31, 2025 and 2024			10
Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2024 and 2023			12
Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2025 and 2024			11
Consolidated Statements of Capital for the Three and Nine Months Ended September 30, 2024 and 2023			13
Consolidated Statements of Capital for the Three Months Ended March 31, 2025 and 2024			12
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2024 and 2023			15
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024			13
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS			1715
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			29
Disclosure Regarding Forward-Looking Statements			29
Executive Summary			30
Results of Operations			33
Liquidity and Capital Resources			3635
Critical Accounting Estimates			3938
Non-GAAP Information			3938
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK			4241
ITEM 4. CONTROLS AND PROCEDURES			4241
PART II - OTHER INFORMATION
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS			4342
ITEM 6. EXHIBITS			4342

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

HIGHWOODS PROPERTIES, INC.

Consolidated Balance Sheets

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

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Assets:
Real estate assets, at cost:
Land	$	~~533~~573,~~361~~607	$	~~540~~570,~~050~~286
Buildings and tenant improvements	5,~~939~~898,~~774~~670		5,~~960~~826,~~895~~603
Development in-process	—		8,918
Land held for development	232,644		221,048
Land held for development	221,548		227,058
	6,704,921		6,617,937
	6,694,683		6,736,921
Less-accumulated depreciation	(1,799,642)		(1,796,586)
Less-accumulated depreciation	(1,823,875)		(1,743,390)
Net real estate assets	4,905,279		4,821,351
Net real estate assets	4,870,808		4,993,531
Real estate and other assets, net, held for sale	—		55,409
Cash and cash equivalents	2320,~~650~~107		2522,~~123~~412
Restricted cash	1019,~~283~~407		611,~~446~~265
Accounts receivable	2628,~~088~~795		28,~~094~~287
Mortgages and notes receivable	116,~~084~~241		411,~~795~~064
Accrued straight-line rents receivable	~~315~~311,~~068~~704		~~310~~308,~~649~~853
Investments in and advances to unconsolidated affiliates	~~482~~492,~~693~~090		~~343~~485,~~241~~726
Deferred leasing costs, net of accumulated amortization of $172,702 and $175,697, respectively	213,409		225,924
Deferred leasing costs, net of accumulated amortization of $161,824 and $170,312, respectively	224,425		209,967
Prepaid expenses and other assets, net of accumulated depreciation of $19,596 and $22,142, respectively	74,827		65,125
Prepaid expenses and other assets, net of accumulated depreciation of $21,845 and $20,626, respectively	67,188		75,021
Total Assets	$	6,~~027~~075,~~910~~236	$	6,~~002~~029,~~928~~355
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
Mortgages and notes payable, net	$	3,~~295~~338,~~521~~492	$	3,~~213~~293,~~206~~559
Accounts payable, accrued expenses and other liabilities	~~295~~257,~~191~~963		~~302~~304,~~180~~551
Total Liabilities	3,~~590~~596,~~712~~455		3,~~515~~598,~~386~~110
Commitments and contingencies
Noncontrolling interests in the Operating Partnership	7263,~~094~~759		4965,~~520~~791
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), 28,811 shares issued and outstanding	28,811		28,811
Common Stock, $.01 par value, 200,000,000 authorized shares;
106,020,426 and 105,710,315 shares issued and outstanding, respectively	1,060		1,057
107,810,629 and 107,623,777 shares issued and outstanding, respectively	1,078		1,076
Additional paid-in capital	3,~~086~~150,~~411~~235		3,~~103~~144,~~446~~130
Distributions in excess of net income available for common stockholders	(~~753~~766,~~404~~979)		(~~698~~810,~~020~~608)
Accumulated other comprehensive loss	(2,~~184~~308)		(12,~~997~~246)
Total Stockholders’ Equity	2,~~360~~410,~~694~~837		2,~~433~~361,~~297~~163
Noncontrolling interests in consolidated affiliates	4,~~410~~185		4,~~725~~291
Total Equity	2,~~365~~415,~~104~~022		2,~~438~~365,~~022~~454
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity	$	6,~~027~~075,~~910~~236	$	6,~~002~~029,~~928~~355

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Income

(Unaudited and in thousands, except per share amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Rental and other revenues	$	~~204,323~~	$	~~207,095~~	$	~~620~~200,~~336~~383	$	~~627~~211,~~138~~275
Operating expenses:
Rental property and other expenses	~~65,706~~		~~67,193~~		~~200~~65,~~700~~034		~~199~~70,~~231~~435
Depreciation and amortization	~~79,116~~		~~74,765~~		~~226~~71,~~532~~405		~~220~~73,~~416~~671
General and administrative	~~9,898~~		~~8,873~~		3112,~~754~~457		3012,~~668~~499
Total operating expenses	~~154,720~~		~~150,831~~		~~458~~148,~~986~~896		~~450~~156,~~315~~605
Interest expense	~~37,472~~		~~34,247~~		~~109~~36,~~928~~642		~~101~~36,~~408~~552
Other income	~~1,872~~		~~754~~		101,~~559~~625		31,~~082~~232
Gains on disposition of property	~~350~~		—		4282,~~581~~215		197,~~818~~209
Gain on deconsolidation of affiliate	—		—		—		11,778
Equity in earnings of unconsolidated affiliates					1,315		654
Equity in earnings of unconsolidated affiliates	1,116		400		2,890		1,902
Net income					100,000		27,213
Net income	15,469		23,171		107,452		111,995
Net (income) attributable to noncontrolling interests in the Operating Partnership					(1,956)		(533)
Net (income) attributable to noncontrolling interests in the Operating Partnership	(297)		(453)		(2,111)		(2,386)
Net loss attributable to noncontrolling interests in consolidated affiliates					26		5
Net loss attributable to noncontrolling interests in consolidated affiliates	8		5		15		488
Dividends on Preferred Stock					(621)		(621)
Dividends on Preferred Stock	(622)		(622)		(1,864)		(1,864)
Net income available for common stockholders					$	97,449	$	26,064
Net income available for common stockholders	$	14,558	$	22,101	$	103,492	$	108,233
Earnings per Common Share – basic:
Net income available for common stockholders	$	~~0.14~~	$	~~0.21~~	$	0.9891	$	10.0325
Weighted average Common Shares outstanding – basic	~~106,010~~		~~105,671~~		~~105~~107,~~937~~683		105,~~473~~804
Earnings per Common Share – diluted:
Net income available for common stockholders	$	~~0.14~~	$	~~0.21~~	$	0.9891	$	10.0325
Weighted average Common Shares outstanding – diluted	~~108,161~~		~~107,832~~		~~108~~109,~~089~~834		107,~~762~~958

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Comprehensive income:

Net income

~~15,469~~

~~23,171~~

~~107~~100,~~452~~000

~~111~~27,~~995~~213

Other comprehensive loss:

Amortization of cash flow hedges

~~(63)~~

~~(74)~~

(~~187~~62)

(~~223~~62)

Total other comprehensive loss

~~(63)~~

~~(74)~~

(~~187~~62)

(~~223~~62)

Total comprehensive income

~~15,406~~

~~23,097~~

~~107~~99,~~265~~938

~~111~~27,~~772~~151

Less-comprehensive (income) attributable to noncontrolling interests

~~(289)~~

~~(448)~~

(21,~~096~~930)

(~~1,898~~528)

Comprehensive income attributable to common stockholders

~~15,117~~

~~22,649~~

~~105~~98,~~169~~008

~~109~~26,~~874~~623

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Equity

(Unaudited and in thousands, except share amounts)

	Three Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	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 as of June 30, 2024	106,010,262	$	1,060	$	28,811	$	3,101,381	$	(2,121)	$	4,618	$	(714,956)	$	2,418,793
Balance at December 31, 2024	107,623,777	$	1,076	$	28,811	$	3,144,130	$	(2,246)	$	4,291	$	(810,608)	$	2,365,454
Issuances of Common Stock, net of issuance costs and tax withholdings	10(55,~~164~~036)	—		—		~~342~~(1,762)		—		—		—		~~342~~(1,762)
Dividends on Common Stock ($0.50 per share)		—		—		—		—		—		(53,~~006~~820)		(53,~~006~~820)
Dividends on Preferred Stock ($21.5625 per share)		—		—		—		—		—		(~~622~~621)		(~~622~~621)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—		~~(16~~2,~~355)~~902		—		—		—		~~(16~~2,~~355)~~902
Distributions to noncontrolling interests in consolidated affiliates		—		—		—		—		(~~200~~80)		—		(~~200~~80)
Share-based compensation expense, net of forfeitures	—	—		—		1,043		—		—		—		1,043
Issuances of restricted stock	241,888	—		—		—		—		—		—		—
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—		—		—		(297)		(297)
Share-based compensation expense, net of forfeitures	—	2		—		4,965		—		—		—		4,967
Net loss attributable to noncontrolling interests in consolidated affiliates		—		—		—		—		(8)		8		—
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—		—		—		(1,956)		(1,956)
Net loss attributable to noncontrolling interests in consolidated affiliates		—		—		—		—		(26)		26		—
Comprehensive income:
Net income		—		—		—		—		—		15100,~~469~~000		15100,~~469~~000
Other comprehensive loss		—		—		—		(6362)		—		—		(6362)
Total comprehensive income														1599,~~406~~938
Balance as of September 30, 2024	106,020,426	$	1,060	$	28,811	$	3,086,411	$	(2,184)	$	4,410	$	(753,404)	$	2,365,104
Balance as of March 31, 2025	107,810,629	$	1,078	$	28,811	$	3,150,235	$	(2,308)	$	4,185	$	(766,979)	$	2,415,022

	Nine Months Ended September 30, 2024
	Three Months Ended March 31, 2024
	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, 2023	105,710,315	$	1,057	$	28,811	$	3,103,446	$	(1,997)	$	4,725	$	(698,020)	$	2,438,022
Issuances of Common Stock, net of issuance costs and tax withholdings	(1944,~~806~~396)	—		—		(~~343~~1,064)		—		—		—		(~~343~~1,064)
Conversions of Common Units to Common Stock	5,385					132								132
Dividends on Common Stock ($1.50 per share)		—		—		—		—		—		(158,876)		(158,876)
Dividends on Common Stock ($0.50 per share)		—		—		—		—		—		(52,871)		(52,871)
Dividends on Preferred Stock ($64.6875 per share)		—		—		—		—		—		(1,864)		(1,864)
Dividends on Preferred Stock ($21.5625 per share)		—		—		—		—		—		(621)		(621)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—		(237,~~822~~479)		—		—		—		(237,~~822~~479)
Distributions to noncontrolling interests in consolidated affiliates		—		—		—		—		(300)		—		(300)
Issuances of restricted stock	324,320	—		—		—		—		—		—		—
Issuances of restricted stock	324,532	—		—		—		—		—		—		—
Share-based compensation expense, net of forfeitures	—	3		—		4,830		—		—		—		4,833
Share-based compensation expense, net of forfeitures	—	3		—		6,998		—		—		—		7,001
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—		—		—		(533)		(533)
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—		—		—		(2,111)		(2,111)
Net loss attributable to noncontrolling interests in consolidated affiliates		—		—		—		—		(5)		5		—
Net loss attributable to noncontrolling interests in consolidated affiliates		—		—		—		—		(15)		15		—
Comprehensive income:
Net income		—		—		—		—		—		~~107~~27,~~452~~213		~~107~~27,~~452~~213
Other comprehensive loss		—		—		—		(~~187~~62)		—		—		(~~187~~62)
Total comprehensive income														~~107~~27,~~265~~151
Balance as of September 30, 2024	106,020,426	$	1,060	$	28,811	$	3,086,411	$	(2,184)	$	4,410	$	(753,404)	$	2,365,104
Balance as of March 31, 2024	105,995,624	$	1,060	$	28,811	$	3,099,865	$	(2,059)	$	4,720	$	(724,827)	$	2,407,570

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Equity - Continued

(Unaudited and in thousands, except share amounts)

	Three Months Ended September 30, 2023
	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 as of June 30, 2023	105,472,213	$	1,055	$	28,811	$	3,095,272	$	(1,360)	$	4,471	$	(652,436)	$	2,475,813
Issuances of Common Stock, net of issuance costs and tax withholdings	17,521	2		—		359		—		—		—		361
Conversions of Common Units to Common Stock	193,907					4,795								4,795
Dividends on Common Stock ($0.50 per share)		—		—		—		—		—		(52,836)		(52,836)
Dividends on Preferred Stock ($21.5625 per share)		—		—		—		—		—		(622)		(622)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—		6,334		—		—		—		6,334
Issuances of restricted stock	9,620	—		—		—		—		—		—		—
Share-based compensation expense, net of forfeitures	—	—		—		833		—		—		—		833
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—		—		—		(453)		(453)
Net loss attributable to noncontrolling interests in consolidated affiliates		—		—		—		—		(5)		5		—
Comprehensive income:
Net income		—		—		—		—		—		23,171		23,171
Other comprehensive loss		—		—		—		(74)		—		—		(74)
Total comprehensive income														23,097
Balance as of September 30, 2023	105,693,261	$	1,057	$	28,811	$	3,107,593	$	(1,434)	$	4,466	$	(683,171)	$	2,457,322

	Nine Months Ended September 30, 2023
	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, 2022	105,210,858	$	1,052	$	28,821	$	3,081,330	$	(1,211)	$	22,235	$	(633,227)	$	2,499,000
Issuances of Common Stock, net of issuance costs and tax withholdings	10,010	2		—		(204)		—		—		—		(202)
Conversions of Common Units to Common Stock	193,907					4,795								4,795
Dividends on Common Stock ($1.50 per share)		—		—		—		—		—		(158,177)		(158,177)
Dividends on Preferred Stock ($64.6875 per share)		—		—		—		—		—		(1,864)		(1,864)
Adjustment of noncontrolling interests in the Operating Partnership to fair value		—		—		15,521		—		—		—		15,521
Issuances of restricted stock	282,453	—		—		—		—		—		—		—
Redemptions/repurchases of Preferred Stock		—		(10)		—		—		—		—		(10)
Share-based compensation expense, net of forfeitures	(3,967)	3		—		6,151		—		—		—		6,154
Net (income) attributable to noncontrolling interests in the Operating Partnership		—		—		—		—		—		(2,386)		(2,386)
Net loss attributable to noncontrolling interests in consolidated affiliates		—		—		—		—		(488)		488		—
Deconsolidation of affiliate		—		—		—		—		(17,281)		—		(17,281)
Comprehensive income:
Net income		—		—		—		—		—		111,995		111,995
Other comprehensive loss		—		—		—		(223)		—		—		(223)
Total comprehensive income														111,772
Balance as of September 30, 2023	105,693,261	$	1,057	$	28,811	$	3,107,593	$	(1,434)	$	4,466	$	(683,171)	$	2,457,322

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Operating activities:
Net income	$	~~107~~100,~~452~~000	$	~~111~~27,~~995~~213
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	~~226~~71,~~532~~405		~~220~~73,~~416~~671
Amortization of lease incentives and acquisition-related intangible assets and liabilities	~~866~~491		~~712~~351
Share-based compensation expense	74,~~001~~967		64,~~154~~833
Net credit losses/(reversals) on operating lease receivables	~~1,831~~556		~~1,850~~(140)
Accrued interest on mortgages and notes receivable	(~~321~~178)		(~~750~~125)
Amortization of debt issuance costs	41,~~214~~404		31,~~645~~381
Amortization of cash flow hedges	(~~187~~62)		(~~223~~62)
Amortization of mortgages and notes payable fair value adjustments	8428		~~(257)~~28
Losses on debt extinguishment	~~173~~—		—173
Net gains on disposition of property	(4282,~~581~~215)		(197,~~818~~209)
Gain on deconsolidation of affiliate	—		(11,778)
Equity in earnings of unconsolidated affiliates	(1,315)		(654)
Equity in earnings of unconsolidated affiliates	(2,890)		(1,902)
Distributions of earnings from unconsolidated affiliates	1,942		977
Distributions of earnings from unconsolidated affiliates	4,282		1,153
Changes in operating assets and liabilities:
Accounts receivable	1,~~162~~587		1(3,~~182~~651)
Prepaid expenses and other assets	(~~961~~2,092)		(42,~~376~~116)
Accrued straight-line rents receivable	(73,~~735~~144)		(203,~~196~~218)
Accounts payable, accrued expenses and other liabilities	~~936~~(47,050)		(319,~~636~~042)
Net cash provided by operating activities	~~299~~46,~~858~~324		~~284~~72,~~171~~410
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired	—(137,828)		~~(18,544)~~—
Investments in development in-process	~~(4,149)~~—		(262,~~179~~558)
Investments in tenant improvements and deferred leasing costs	(~~102~~25,~~791~~304)		(6829,~~625~~088)
Investments in building improvements	(2711,~~827~~038)		(558,~~155~~989)
Net proceeds from disposition of real estate assets	81137,~~659~~779		5116,~~538~~249
Distributions of capital from unconsolidated affiliates	~~6,254~~941		~~3,864~~963
Investments in mortgages and notes receivable	(61,~~229~~577)		(96,~~763~~229)
Repayments of mortgages and notes receivable	476,320		~~200~~16
Investments in and advances to unconsolidated affiliates	(~~147~~8,~~452~~191)		(~~100~~30,~~052~~869)
Repayments of preferred equity from unconsolidated affiliates	—		80,000
Changes in earnest money deposits	10,000		—
Changes in earnest money deposits	—		15,500
Changes in other investing activities	1,689		(1,180)
Changes in other investing activities	(4,475)		(3,751)
Net cash used in investing activities	(27,209)		(61,685)
Net cash used in investing activities	(204,963)		(130,967)
Financing activities:
Dividends on Common Stock	(~~158~~53,~~876~~820)		(~~158~~52,~~177~~871)
Redemptions/repurchases of Preferred Stock	—		(10)
Redemptions of Common Units	(10)		—
Redemptions of Common Units	—		(163)
Dividends on Preferred Stock	(621)		(621)
Dividends on Preferred Stock	(1,864)		(1,864)
Distributions to noncontrolling interests in the Operating Partnership	(1,076)		(1,076)
Distributions to noncontrolling interests in the Operating Partnership	(3,227)		(3,432)
Distributions to noncontrolling interests in consolidated affiliates	(80)		—
Distributions to noncontrolling interests in consolidated affiliates	(300)		—
Proceeds from the issuance of Common Stock	411		363
Proceeds from the issuance of Common Stock	1,094		1,349
Costs paid for the issuance of Common Stock	(164)		—
Costs paid for the issuance of Common Stock	—		(226)
Repurchase of shares related to tax withholdings	(2,009)		(1,427)
Repurchase of shares related to tax withholdings	(1,437)		(1,325)
Borrowings on revolving credit facility	185,000		75,000
Borrowings on revolving credit facility	228,000		219,000
Repayments of revolving credit facility	(139,000)		(25,000)
Repayments of revolving credit facility	(143,000)		(400,000)
Repayments of mortgages and notes payable	(1,909)		(1,727)
Borrowings on mortgages and notes payable	—		200,000
Payments for debt issuance costs and other financing activities	—		(7,648)
Repayments of mortgages and notes payable	(5,238)		(5,018)
Net cash used in financing activities	(13,278)		(15,007)
Payments for debt issuance costs and other financing activities	(7,683)		(2,347)
Net increase/(decrease) in cash and cash equivalents and restricted cash	$	5,837	$	(4,282)
Net cash used in financing activities	(92,531)		(152,213)
Net increase in cash and cash equivalents and restricted cash	$	2,364	$	991

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS PROPERTIES, INC.

Consolidated Statements of Cash Flows – Continued

(Unaudited and in thousands)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Net increase in cash and cash equivalents and restricted cash	$	2,364	$	991
Net increase/(decrease) in cash and cash equivalents and restricted cash	$	5,837	$	(4,282)
Cash from deconsolidation of affiliate	—		(6,386)
Cash and cash equivalents and restricted cash at beginning of the period	33,677		31,569
Cash and cash equivalents and restricted cash at beginning of the period	31,569		26,105
Cash and cash equivalents and restricted cash at end of the period	$	39,514	$	27,287
Cash and cash equivalents and restricted cash at end of the period	$	33,933	$	20,710

Reconciliation of cash and cash equivalents and restricted cash:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Cash and cash equivalents at end of the period	$	2320,~~650~~107	$	16,~~901~~422
Restricted cash at end of the period	1019,~~283~~407		310,~~809~~865
Cash and cash equivalents and restricted cash at end of the period	$	3339,~~933~~514	$	2027,~~710~~287

Supplemental disclosure of cash flow information:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Cash paid for interest, net of amounts capitalized	$	~~112~~50,~~667~~530	$	~~105~~36,~~342~~772

Supplemental disclosure of non-cash investing and financing activities:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Conversions of Common Units to Common Stock	~~132~~$	—	~~4,795~~$	132
Changes in accrued capital expenditures (1)	~~(4,273)~~$	(4,059)	~~17,275~~$	5,734
Write-off of fully depreciated real estate assets	~~79,956~~$	34,243	~~54,489~~$	19,549
Write-off of fully amortized leasing costs	~~37,032~~$	18,674	~~25,605~~$	4,691
Write-off of fully amortized debt issuance costs	~~4,083~~$	—	—$	4,083
Adjustment of noncontrolling interests in the Operating Partnership to fair value	~~23,822~~$	(2,902)	~~(15,521)~~$	7,479

__________

(1)Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities as of ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were $5148.38 million and $7061.73 million, respectively.

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Balance Sheets

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

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Assets:
Real estate assets, at cost:
Land	$	~~533~~573,~~361~~607	$	~~540~~570,~~050~~286
Buildings and tenant improvements	5,~~939~~898,~~774~~670		5,~~960~~826,~~895~~603
Development in-process	—		8,918
Land held for development	232,644		221,048
Land held for development	221,548		227,058
	6,704,921		6,617,937
	6,694,683		6,736,921
Less-accumulated depreciation	(1,799,642)		(1,796,586)
Less-accumulated depreciation	(1,823,875)		(1,743,390)
Net real estate assets	4,905,279		4,821,351
Net real estate assets	4,870,808		4,993,531
Real estate and other assets, net, held for sale	—		55,409
Cash and cash equivalents	2320,~~650~~107		2522,~~123~~412
Restricted cash	1019,~~283~~407		611,~~446~~265
Accounts receivable	2628,~~088~~795		28,~~094~~287
Mortgages and notes receivable	116,~~084~~241		411,~~795~~064
Accrued straight-line rents receivable	~~315~~311,~~068~~704		~~310~~308,~~649~~853
Investments in and advances to unconsolidated affiliates	~~482~~492,~~693~~090		~~343~~485,~~241~~726
Deferred leasing costs, net of accumulated amortization of $172,702 and $175,697, respectively	213,409		225,924
Deferred leasing costs, net of accumulated amortization of $161,824 and $170,312, respectively	224,425		209,967
Prepaid expenses and other assets, net of accumulated depreciation of $19,596 and $22,142, respectively	74,827		65,125
Prepaid expenses and other assets, net of accumulated depreciation of $21,845 and $20,626, respectively	67,188		75,021
Total Assets	$	6,~~027~~075,~~910~~236	$	6,~~002~~029,~~928~~355
Liabilities, Redeemable Operating Partnership Units and Capital:
Mortgages and notes payable, net	$	3,~~295~~338,~~521~~492	$	3,~~213~~293,~~206~~559
Accounts payable, accrued expenses and other liabilities	~~295~~257,~~191~~963		~~302~~304,~~180~~551
Total Liabilities	3,~~590~~596,~~712~~455		3,~~515~~598,~~386~~110
Commitments and contingencies
Redeemable Operating Partnership Units:
Common Units, 2,151,423 and 2,156,808 outstanding, respectively	72,094		49,520
Common Units, 2,151,097 and 2,151,423 outstanding, respectively	63,759		65,791
Series A Preferred Units (liquidation preference $1,000 per unit), 28,811 units issued and outstanding	28,811		28,811
Total Redeemable Operating Partnership Units	~~100~~92,~~905~~570		7894,~~331~~602
Capital:
Common Units:
General partner Common Units, 1,077,630 and 1,074,583 outstanding, respectively	23,340		24,064
General partner Common Units, 1,095,529 and 1,093,664 outstanding, respectively	23,842		23,345
Limited partner Common Units, 104,533,987 and 104,226,923 outstanding, respectively	2,310,727		2,382,419
Limited partner Common Units, 106,306,291 and 106,121,304 outstanding, respectively	2,360,492		2,311,253
Accumulated other comprehensive loss	(2,~~184~~308)		(12,~~997~~246)
Noncontrolling interests in consolidated affiliates	4,~~410~~185		4,~~725~~291
Total Capital	2,~~336~~386,~~293~~211		2,~~409~~336,~~211~~643
Total Liabilities, Redeemable Operating Partnership Units and Capital	$	6,~~027~~075,~~910~~236	$	6,~~002~~029,~~928~~355

See accompanying notes to consolidated financial statements.

109

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Income

(Unaudited and in thousands, except per unit amounts)

	Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Rental and other revenues	$	~~204,323~~	$	~~207,095~~	$	~~620~~200,~~336~~383	$	~~627~~211,~~138~~275
Operating expenses:
Rental property and other expenses	~~65,706~~		~~67,193~~		~~200~~65,~~700~~034		~~199~~70,~~231~~435
Depreciation and amortization	~~79,116~~		~~74,765~~		~~226~~71,~~532~~405		~~220~~73,~~416~~671
General and administrative	~~9,898~~		~~8,873~~		3112,~~754~~457		3012,~~668~~499
Total operating expenses	~~154,720~~		~~150,831~~		~~458~~148,~~986~~896		~~450~~156,~~315~~605
Interest expense	~~37,472~~		~~34,247~~		~~109~~36,~~928~~642		~~101~~36,~~408~~552
Other income	~~1,872~~		~~754~~		101,~~559~~625		31,~~082~~232
Gains on disposition of property	~~350~~		—		4282,~~581~~215		197,~~818~~209
Gain on deconsolidation of affiliate	—		—		—		11,778
Equity in earnings of unconsolidated affiliates					1,315		654
Equity in earnings of unconsolidated affiliates	1,116		400		2,890		1,902
Net income					100,000		27,213
Net income	15,469		23,171		107,452		111,995
Net loss attributable to noncontrolling interests in consolidated affiliates					26		5
Net loss attributable to noncontrolling interests in consolidated affiliates	8		5		15		488
Distributions on Preferred Units					(621)		(621)
Distributions on Preferred Units	(622)		(622)		(1,864)		(1,864)
Net income available for common unitholders					$	99,405	$	26,597
Net income available for common unitholders	$	14,855	$	22,554	$	105,603	$	110,619
Earnings per Common Unit – basic:
Net income available for common unitholders	$	~~0.14~~	$	~~0.21~~	$	0.9891	$	10.0325
Weighted average Common Units outstanding – basic	~~107,752~~		~~107,423~~		~~107~~109,~~680~~425		107,~~353~~549
Earnings per Common Unit – diluted:
Net income available for common unitholders	$	~~0.14~~	$	~~0.21~~	$	0.9891	$	10.0325
Weighted average Common Units outstanding – diluted	~~107,752~~		~~107,423~~		~~107~~109,~~680~~425		107,~~353~~549

See accompanying notes to consolidated financial statements.

1110

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Comprehensive Income

(Unaudited and in thousands)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Comprehensive income:

Net income

~~15,469~~

~~23,171~~

~~107~~100,~~452~~000

~~111~~27,~~995~~213

Other comprehensive loss:

Amortization of cash flow hedges

~~(63)~~

~~(74)~~

(~~187~~62)

(~~223~~62)

Total other comprehensive loss

~~(63)~~

~~(74)~~

(~~187~~62)

(~~223~~62)

Total comprehensive income

~~15,406~~

~~23,097~~

~~107~~99,~~265~~938

~~111~~27,~~772~~151

Net loss attributable to noncontrolling interests in consolidated affiliates

1526

~~488~~5

Comprehensive income attributable to common unitholders

~~15,414~~

~~23,102~~

~~107~~99,~~280~~964

~~112~~27,~~260~~156

See accompanying notes to consolidated financial statements.

1211

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Capital

(Unaudited and in thousands)

	Three Months Ended September 30, 2024
	Three Months Ended March 31, 2025
	Common Units				Accumulated Other Comprehensive Loss		Noncontrolling Interests in Consolidated Affiliates		Total
	General Partners’ Capital		Limited Partners’ Capital
Balance as of June 30, 2024	$	23,875	$	2,363,610	$	(2,121)	$	4,618	2,389,982
Balance at December 31, 2024	$	23,345	$	2,311,253	$	(2,246)	$	4,291	$	2,336,643
Issuances of Common Units, net of issuance costs and tax withholdings	4(18)		~~338~~(1,744)		—		—		~~342~~(1,762)
Distributions on Common Units ($0.50 per unit)	(539)		(53,338)		—		—		(53,877)
Redemptions of Common Units	—		(10)		—		—		(10)
Distributions on Preferred Units ($21.5625 per unit)	(7)		(615)		—		—		(622)
Distributions on Common Units ($0.50 per unit)	(547)		(54,144)		—		—		(54,691)
Share-based compensation expense, net of forfeitures	10		1,033		—		—		1,043
Distributions on Preferred Units ($21.5625 per unit)	(6)		(615)		—		—		(621)
Distributions to noncontrolling interests in consolidated affiliates	—		—		—		(200)		(200)
Share-based compensation expense, net of forfeitures	50		4,917		—		—		4,967
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(158)		(15,623)		—		—		(15,781)
Distributions to noncontrolling interests in consolidated affiliates	—		—		—		(80)		(80)
Net loss attributable to noncontrolling interests in consolidated affiliates	—		8		—		(8)		—
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	18		1,809		—		—		1,827
Net loss attributable to noncontrolling interests in consolidated affiliates	—		26		—		(26)		—
Comprehensive income:
Net income	~~155~~1,000		1599,~~314~~000		—		—		15100,~~469~~000
Other comprehensive loss	—		—		(6362)		—		(6362)
Total comprehensive income									1599,~~406~~938
Balance as of September 30, 2024	23,340		2,310,727		(2,184)		4,410		$	2,336,293
Balance as of March 31, 2025	$	23,842	$	2,360,492	$	(2,308)	$	4,185	$	2,386,211

	Nine Months Ended September 30, 2024
	Three Months Ended March 31, 2024
	Common Units				Accumulated Other Comprehensive Loss		Noncontrolling Interests in Consolidated Affiliates		Total
	General Partners’ Capital		Limited Partners’ Capital
Balance at December 31, 2023	$	24,064	$	2,382,419	$	(1,997)	$	4,725	$	2,409,211
Issuances of Common Units, net of issuance costs and tax withholdings	(311)		(~~340~~1,053)		—		—		(~~343~~1,064)
Distributions on Common Units ($1.50 per unit)	(1,615)		(159,874)		—		—		(161,489)
Distributions on Common Units ($0.50 per unit)	(537)		(53,205)		—		—		(53,742)
Distributions on Preferred Units ($64.6875 per unit)	(19)		(1,845)		—		—		(1,864)
Distributions on Preferred Units ($21.5625 per unit)	(6)		(615)		—		—		(621)
Share-based compensation expense, net of forfeitures	7048		64,~~931~~785		—		—		74,~~001~~833
Distributions to noncontrolling interests in consolidated affiliates	—		—		—		(300)		(300)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(70)		(6,939)		—		—		(7,009)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	(232)		(22,956)		—		—		(23,188)
Net loss attributable to noncontrolling interests in consolidated affiliates	—		5				(5)		—
Net loss attributable to noncontrolling interests in consolidated affiliates	—		15		—		(15)		—
Comprehensive income:
Net income	~~1,075~~272		~~106~~26,~~377~~941		—		—		~~107~~27,~~452~~213
Other comprehensive loss	—		—		(~~187~~62)		—		(~~187~~62)
Total comprehensive income									~~107~~27,~~265~~151
Balance as of September 30, 2024	$	23,340	$	2,310,727	$	(2,184)	$	4,410	$	2,336,293
Balance as of March 31, 2024	$	23,760	$	2,352,338	$	(2,059)	$	4,720	$	2,378,759

See accompanying notes to consolidated financial statements.

1312

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Capital - Continued

(Unaudited and in thousands)

	Three Months Ended September 30, 2023
	Common Units				Accumulated Other Comprehensive Loss		Noncontrolling Interests in Consolidated Affiliates		Total
	General Partners’ Capital		Limited Partners’ Capital
Balance as of June 30, 2023	$	24,439	$	2,419,452	$	(1,360)	$	4,471	$	2,447,002
Issuances of Common Units, net of issuance costs and tax withholdings	4		357		—		—		361
Distributions on Common Units ($0.50 per unit)	(537)		(53,172)		—		—		(53,709)
Distributions on Preferred Units ($21.5625 per unit)	(7)		(615)		—		—		(622)
Share-based compensation expense, net of forfeitures	9		824		—		—		833
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	115		11,434		—		—		11,549
Net loss attributable to noncontrolling interests in consolidated affiliates	—		5		—		(5)		—
Comprehensive income:
Net income	232		22,939		—		—		23,171
Other comprehensive loss	—		—		(74)		—		(74)
Total comprehensive income									23,097
Balance as of September 30, 2023	$	24,255	$	2,401,224	$	(1,434)	$	4,466	$	2,428,511

	Nine Months Ended September 30, 2023
	Common Units				Accumulated Other Comprehensive Loss		Noncontrolling Interests in Consolidated Affiliates		Total
	General Partners’ Capital		Limited Partners’ Capital
Balance at December 31, 2022	$	24,492	$	2,424,663	$	(1,211)	$	22,235	$	2,470,179
Issuances of Common Units, net of issuance costs and tax withholdings	(2)		(200)		—		—		(202)
Redemptions of Common Units	(2)		(161)		—		—		(163)
Distributions on Common Units ($1.50 per unit)	(1,610)		(159,385)		—		—		(160,995)
Distributions on Preferred Units ($64.6875 per unit)	(19)		(1,845)		—		—		(1,864)
Share-based compensation expense, net of forfeitures	62		6,092		—		—		6,154
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner	209		20,702		—		—		20,911
Net loss attributable to noncontrolling interests in consolidated affiliates	5		483				(488)		—
Deconsolidation of affiliate	—		—		—		(17,281)		(17,281)
Comprehensive income:
Net income	1,120		110,875		—		—		111,995
Other comprehensive loss	—		—		(223)		—		(223)
Total comprehensive income									111,772
Balance as of September 30, 2023	$	24,255	$	2,401,224	$	(1,434)	$	4,466	$	2,428,511

See accompanying notes to consolidated financial statements.

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows

(Unaudited and in thousands)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Operating activities:
Net income	$	~~107~~100,~~452~~000	$	~~111~~27,~~995~~213
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	~~226~~71,~~532~~405		~~220~~73,~~416~~671
Amortization of lease incentives and acquisition-related intangible assets and liabilities	~~866~~491		~~712~~351
Share-based compensation expense	74,~~001~~967		64,~~154~~833
Net credit losses/(reversals) on operating lease receivables	~~1,831~~556		~~1,850~~(140)
Accrued interest on mortgages and notes receivable	(~~321~~178)		(~~750~~125)
Amortization of debt issuance costs	41,~~214~~404		31,~~645~~381
Amortization of cash flow hedges	(~~187~~62)		(~~223~~62)
Amortization of mortgages and notes payable fair value adjustments	8428		~~(257)~~28
Losses on debt extinguishment	~~173~~—		—173
Net gains on disposition of property	(4282,~~581~~215)		(197,~~818~~209)
Gain on deconsolidation of affiliate	—		(11,778)
Equity in earnings of unconsolidated affiliates	(1,315)		(654)
Equity in earnings of unconsolidated affiliates	(2,890)		(1,902)
Distributions of earnings from unconsolidated affiliates	1,942		977
Distributions of earnings from unconsolidated affiliates	4,282		1,153
Changes in operating assets and liabilities:
Accounts receivable	1,~~162~~587		1(3,~~182~~651)
Prepaid expenses and other assets	(~~961~~2,092)		(42,~~376~~116)
Accrued straight-line rents receivable	(73,~~735~~144)		(203,~~196~~218)
Accounts payable, accrued expenses and other liabilities	~~936~~(47,050)		(319,~~636~~042)
Net cash provided by operating activities	~~299~~46,~~858~~324		~~284~~72,~~171~~410
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired	—(137,828)		~~(18,544)~~—
Investments in development in-process	~~(4,149)~~—		(262,~~179~~558)
Investments in tenant improvements and deferred leasing costs	(~~102~~25,~~791~~304)		(6829,~~625~~088)
Investments in building improvements	(2711,~~827~~038)		(558,~~155~~989)
Net proceeds from disposition of real estate assets	81137,~~659~~779		5116,~~538~~249
Distributions of capital from unconsolidated affiliates	~~6,254~~941		~~3,864~~963
Investments in mortgages and notes receivable	(61,~~229~~577)		(96,~~763~~229)
Repayments of mortgages and notes receivable	476,320		~~200~~16
Investments in and advances to unconsolidated affiliates	(~~147~~8,~~452~~191)		(~~100~~30,~~052~~869)
Repayments of preferred equity from unconsolidated affiliates	—		80,000
Changes in earnest money deposits	10,000		—
Changes in earnest money deposits	—		15,500
Changes in other investing activities	1,689		(1,180)
Changes in other investing activities	(4,475)		(3,751)
Net cash used in investing activities	(27,209)		(61,685)
Net cash used in investing activities	(204,963)		(130,967)
Financing activities:
Distributions on Common Units	(~~161~~54,~~489~~691)		(~~160~~53,~~995~~742)
Redemptions/repurchases of Preferred Units	—		(10)
Redemptions of Common Units	(10)		—
Redemptions of Common Units	—		(163)
Distributions on Preferred Units	(621)		(621)
Dividends on Preferred Units	(1,864)		(1,864)
Distributions to noncontrolling interests in consolidated affiliates	(80)		—
Distributions to noncontrolling interests in consolidated affiliates	(300)		—
Proceeds from the issuance of Common Units	411		363
Proceeds from the issuance of Common Units	1,094		1,349
Costs paid for the issuance of Common Units	(164)		—
Costs paid for the issuance of Common Units	—		(226)
Repurchase of units related to tax withholdings	(2,009)		(1,427)
Repurchase of units related to tax withholdings	(1,437)		(1,325)
Borrowings on revolving credit facility	185,000		75,000
Borrowings on revolving credit facility	228,000		219,000
Repayments of revolving credit facility	(139,000)		(25,000)
Repayments of revolving credit facility	(143,000)		(400,000)
Repayments of mortgages and notes payable	(1,909)		(1,727)
Borrowings on mortgages and notes payable	—		200,000
Payments for debt issuance costs and other financing activities	(205)		(7,853)
Repayments of mortgages and notes payable	(5,238)		(5,018)
Net cash used in financing activities	(13,278)		(15,007)
Payments for debt issuance costs and other financing activities	(8,297)		(2,961)
Net increase/(decrease) in cash and cash equivalents and restricted cash	$	5,837	$	(4,282)
Net cash used in financing activities	(92,531)		(152,213)
Net increase in cash and cash equivalents and restricted cash	$	2,364	$	991

See accompanying notes to consolidated financial statements.

1513

Table of Contents

HIGHWOODS REALTY LIMITED PARTNERSHIP

Consolidated Statements of Cash Flows - Continued

(Unaudited and in thousands)

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Net increase in cash and cash equivalents and restricted cash	$	2,364	$	991
Net increase/(decrease) in cash and cash equivalents and restricted cash	$	5,837	$	(4,282)
Cash from deconsolidation of affiliate	—		(6,386)
Cash and cash equivalents and restricted cash at beginning of the period	33,677		31,569
Cash and cash equivalents and restricted cash at beginning of the period	31,569		26,105
Cash and cash equivalents and restricted cash at end of the period	$	39,514	$	27,287
Cash and cash equivalents and restricted cash at end of the period	$	33,933	$	20,710

Reconciliation of cash and cash equivalents and restricted cash:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Cash and cash equivalents at end of the period	$	2320,~~650~~107	$	16,~~901~~422
Restricted cash at end of the period	1019,~~283~~407		310,~~809~~865
Cash and cash equivalents and restricted cash at end of the period	$	3339,~~933~~514	$	2027,~~710~~287

Supplemental disclosure of cash flow information:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Cash paid for interest, net of amounts capitalized	$	~~112~~50,~~667~~530	$	~~105~~36,~~342~~772

Supplemental disclosure of non-cash investing and financing activities:

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023
	2025		2024
Changes in accrued capital expenditures (1)	~~(4,273)~~$	(4,059)	~~17,275~~$	5,734
Write-off of fully depreciated real estate assets	~~79,956~~$	34,243	~~54,489~~$	19,549
Write-off of fully amortized leasing costs	~~37,032~~$	18,674	~~25,605~~$	4,691
Write-off of fully amortized debt issuance costs	~~4,083~~$	—	—$	4,083
Adjustment of Redeemable Common Units to fair value	~~22,574~~$	(2,032)	~~(21,525)~~$	6,804

__________

See accompanying notes to consolidated financial statements.

1614

Table of Contents

HIGHWOODS PROPERTIES, INC.

HIGHWOODS REALTY LIMITED PARTNERSHIP

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2024~~2025

(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 office real estate investment trust (“REIT”) that owns, develops, acquires, leases and manages properties primarily in the best business districts of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. The Company conducts its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). As of ~~September~~March 3031, ~~2024~~2025, we owned or had an interest in 2827.04 million rentable square feet of in-service properties, 1.64 million rentable square feet of office properties under development and development land with approximately 54.29 million rentable square feet of potential office build out.

Capital Structure

The Company is the sole general partner of the Operating Partnership. As of ~~September~~March 3031, ~~2024~~2025, the Company owned all of the Preferred Units and ~~105~~107.64 million, or 98.0%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.2 million Common Units. During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, the Company redeemed ~~5,385~~326 Common Units for ~~a like number of shares of Common Stock~~cash.

~~During~~Under ~~2023,~~our weexisting ~~entered into separate~~ equity distribution agreements, ~~in which~~ the Company may offer and sell up to $300.0 million in aggregate gross sales price of shares of Common Stock. During ~~each of~~ the three ~~and nine~~ months ended ~~September~~March 3031, ~~2024~~2025, ~~the~~there ~~Company~~were ~~issued~~ no shares of Common Stock issued under ~~its~~these ~~equity distribution~~ agreements.

Basis of Presentation

Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

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. We consolidate joint venture investments, such as interests in partnerships and limited liability companies, when we control the major operating and financial policies of the investment through majority ownership, in our capacity as a general partner or managing member or through some other contractual right. In addition, we consolidate those entities deemed to be variable interest entities in which we are determined to be the primary beneficiary.

As of ~~September~~March 3031, ~~2024~~2025, we are involved with six entities we determined to be variable interest entities, one of which we are the primary beneficiary and is consolidated and five of which we are not the primary beneficiary and are not consolidated.

All intercompany transactions and accounts have been eliminated.

In the opinion of management, the unaudited interim Consolidated Financial Statements and accompanying unaudited consolidated financial information contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have condensed or 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 ~~2023~~2024 Annual Report on Form 10-K.

1715

Table of Contents

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 our Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.

Insurance

We are primarily self-insured for health care claims for participating employees. To limit our exposure to significant claims, we have stop-loss coverage on a per claim and annual aggregate basis. We use all relevant information to determine our liabilities for claims, including actuarial estimates of claim liabilities. When determining our liabilities, we include claims for incurred losses, even if they are unreported. As of ~~September~~March 3031, ~~2024~~2025, a reserve of $0.54 million was recorded to cover estimated reported and unreported claims.

Recently Issued Accounting Standards

The Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) that ~~provides~~requires ~~temporary~~enhanced ~~optional~~segment ~~expedients~~disclosures, ~~and~~primarily ~~exceptions~~regarding tosignificant ~~ease~~segment ~~the~~expenses. ~~financial~~We ~~reporting~~have ~~burdens~~adopted ~~related~~this toASU ~~the expected market transition from LIBOR~~ and ~~other~~applied ~~interbank~~the ~~offered~~new ~~rates~~requirements retrospectively to ~~alternative~~all ~~reference~~prior ~~rates,~~periods ~~such~~presented asin the ~~Secured~~financial ~~Overnight Financing Rate (“SOFR”)~~statements. ~~These~~Accordingly, ~~optional~~our ~~expedients~~segment ~~and~~disclosures ~~exceptions~~now ~~provide~~include ~~guidance~~rental onproperty ~~contract modifications~~ and ~~hedge~~other ~~accounting.~~expenses Wefor ~~have~~each ~~completed~~of ~~the transition to SOFR rates for~~ our ~~outstanding~~reportable ~~debt~~segments. ~~instruments~~See ~~with~~Note ~~no material impact to our Consolidated Financial Statements~~12.

The FASB issued an ASU that requires disaggregated disclosure of income statement expenses. Certain expense captions will ~~require~~be ~~enhanced~~disaggregated ~~segment~~into specified categories in disclosures, ~~primarily~~within ~~regarding~~the ~~significant~~Notes ~~segment~~to ~~expenses~~Consolidated Financial Statements. The ASU is required to be adopted instarting with our ~~2024~~2027 Annual Report ~~and~~on ~~applied~~Form ~~retrospectively to all prior periods presented in the financial statements~~10-K. We do not expect ~~such~~this adoption towill have a material effect on our ~~Notes to~~ Consolidated Financial Statements.

2. Leases

Operating Leases

We generally lease our office properties to lessees in exchange for fixed monthly payments that cover rent, property taxes, insurance and certain cost recoveries, primarily common area maintenance. ~~Office~~Our office properties that are under lease are primarily located in Atlanta, Charlotte, Dallas, Nashville, Orlando, ~~Pittsburgh,~~ Raleigh, Richmond and Tampa and are leased to a wide variety of lessees across many industries. Our leases are operating leases and mostly range from three to 10 years. We recognized rental and other revenues related to operating lease payments of $~~200~~196.75 million and $~~203~~207.8 million during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $609.5 million and $617.0 million during the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively. Included in these amounts were variable lease payments of $1716.09 million and $1722.75 million during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $56.1 million and $54.6 million during the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively.

1816

Table of Contents

3. Investments in and Advances to Affiliates

Unconsolidated Affiliates

- Granite Park Six JV, LLC/ GPI 23 Springs JV, LLC (“Granite Park Six ~~joint~~and ~~venture”/“~~23Springs joint ~~venture~~ventures”)

~~During~~We ~~2022,~~are wedeveloping ~~entered~~ the ~~Dallas~~Granite ~~market~~Park ~~through~~Six ~~the~~and ~~formation~~23Springs buildings in Dallas as part of two joint ventures with Granite Properties (“Granite”) ~~to develop Granite Park Six and 23Springs~~. We own a 50.0% interest in each of these two joint ventures. We determined that we have a variable interest in both the Granite Park Six and 23Springs joint ventures primarily because the entities were designed to pass along interest rate risk, equity price risk and operation risk to us and Granite as equity holders. The joint ventures were further determined to be variable interest entities as they require additional subordinated financial support in the form of loans because the initial equity investments provided by us and Granite were not sufficient to finance the planned investments and operations. We concluded that we do not have the power to direct matters that most significantly impact the activities of either entity and therefore do not qualify as the primary beneficiary. Accordingly, the entities are not consolidated.

WeAs ~~determined~~of ~~that~~March 31, we2025, ~~have~~our arisk ~~variable~~of ~~interest~~loss inwith ~~both~~respect ~~the~~to ~~Granite~~these ~~Park~~arrangements ~~Six~~was ~~and~~limited ~~23Springs~~to ~~joint ventures primarily because~~ the ~~entities~~carrying ~~were~~value ~~designed~~of toeach ~~pass~~investment ~~along~~balance. ~~interest~~Our ~~rate~~investment ~~risk,~~balances ~~equity~~were ~~price~~$76.4 million ~~risk~~ and ~~operation~~$102.9 million ~~risk~~as toof usMarch 31, ~~and~~2025 for the Granite asPark ~~equity~~Six ~~holders.~~and ~~The~~23Springs joint ventures, ~~were~~respectively. ~~further~~The ~~determined~~assets ~~to be variable interest entities as they require additional subordinated financial support in the form~~ of ~~loans because~~ the ~~initial equity investments provided by us and~~ Granite ~~were~~Park ~~not~~Six ~~sufficient to finance the planned investments~~ and ~~operations.~~23Springs Wejoint ~~concluded~~ventures ~~that~~can webe doused ~~not~~only ~~have the power~~ to ~~direct~~settle ~~matters~~obligations ~~that~~of ~~most significantly impact~~ the ~~activities~~respective ofjoint ~~either~~venture, ~~entity~~ and ~~therefore~~their docreditors ~~not~~have ~~qualify~~no asrecourse ~~the~~to ~~primary~~our ~~beneficiary.~~wholly ~~Accordingly,~~owned ~~the entities are not consolidated~~assets.

During the third quarter of 2024, the Granite Park Six joint venture paid down the outstanding $70.9 million balance with respect to a $115.0 million construction loan obtained in 2022. The loan, which matures in January 2026, has an interest rate of SOFR plus 394 basis points. In connection with this loan paydown, we and Granite each contributed $35.5 million to the joint venture. This reconsideration event did not change our initial conclusion that the Granite Park Six joint venture is a variable interest entity of which we are not the primary beneficiary. As such, the entity remains unconsolidated.

As of September 30, 2024, our risk of loss with respect to these arrangements was limited to the carrying value of each investment balance. Our investment balances were $76.9 million and $100.3 million as of September 30, 2024 for the Granite Park Six and 23Springs joint ventures, respectively. The assets of the Granite Park Six and 23Springs joint ventures can be used only to settle obligations of the respective joint venture, and their creditors have no recourse to our wholly owned assets.

- M+O JV, LLC (“McKinney & Olive joint venture”)

~~During~~We ~~2022,~~own wethe ~~expanded our Dallas market presence by acquiring~~ McKinney & Olive ~~through~~building ~~the~~in ~~formation~~Dallas as part of ~~another~~a joint venture with Granite in which we own a 50.0% interest. As part of the original acquisition of McKinney & Olive, the McKinney & Olive joint venture assumed a secured loan recorded at fair value of $137.0 million, with a stated interest rate of 4.5% and an effective interest rate of 5.3%. We determined that we have a variable interest in the McKinney & Olive joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us and Granite as equity holders. The McKinney & Olive joint venture was further determined to be a variable interest entity as it required additional subordinated financial support in the form of the secured mortgage loan because the initial equity investments by us and Granite were not sufficient to finance its planned investments and operations. The secured mortgage loan was subsequently paid in full at maturity during 2024. We concluded that we do not have the power to direct matters that most significantly impact the activities of the entity and therefore do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated.

WeAs ~~determined~~of ~~that~~March 31, we2025, ~~have~~our arisk ~~variable~~of ~~interest~~loss inwith ~~the~~respect ~~McKinney~~to &this ~~Olive~~arrangement ~~joint venture primarily because the entity~~ was ~~designed~~limited to ~~pass~~the ~~along~~carrying ~~interest~~value ~~rate~~of ~~risk,~~our ~~equity~~investment ~~price~~balance ~~risk~~of ~~and~~$183.3 ~~operation~~million. ~~risk~~The toassets usof ~~and~~the ~~Granite as equity holders. The~~ McKinney & Olive joint venture ~~was~~can ~~further determined to~~ be aused ~~variable~~only ~~interest~~to ~~entity~~settle asobligations ~~it requires additional subordinated financial support in the form~~ of ~~a loan because~~ the ~~initial~~joint ~~equity~~venture, ~~investments by us~~ and ~~Granite, including the additional preferred equity provided by us that was subsequently redeemed in full during 2023, were not sufficient to finance~~ its ~~planned~~creditors ~~investments and operations. We concluded that we do not~~ have ~~the~~no ~~power~~recourse to ~~direct~~our ~~matters~~wholly ~~that~~owned ~~most significantly impact the activities of the entity and therefore do not qualify as the primary beneficiary~~assets. ~~Accordingly, the entity is not consolidated.~~

During the third quarter of 2024, the McKinney & Olive joint venture paid off at maturity the remaining $134.3 million balance on a secured mortgage loan with a stated interest rate of 4.5% and an effective interest rate of 5.3%. In connection with this loan payoff, we and Granite each contributed $62.1 million to the joint venture. This reconsideration event did not change our initial conclusion that the McKinney & Olive joint venture is a variable interest entity of which we are not the primary beneficiary. As such, the entity remains unconsolidated.

As of September 30, 2024, our risk of loss with respect to this arrangement was limited to the carrying value of our investment balance of $184.3 million. The assets of the McKinney & Olive joint venture can be used only to settle obligations of the joint venture, and its creditors have no recourse to our wholly owned assets.

- Midtown East Tampa, LLC (“Midtown East joint venture”)

~~During~~We ~~2022,~~own ~~we formed~~ the Midtown East ~~joint~~building ~~venture~~ in Tampa as part of a joint venture with The Bromley Companies (“Bromley”). Wein which we own a 50.0% interest. We determined that we have a variable interest in ~~this~~the Midtown East joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us as both a debt and equity holder and to Bromley as an equity holder. The Midtown East joint venture was further determined to be a variable interest entity as it requires additional subordinated financial support in the form of a loan because the initial equity investments provided by us and Bromley were not sufficient to finance its planned investments and operations. We concluded that we do not have the power to direct matters that most significantly impact the activities of the entity and therefore do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated.

WeAs ~~determined~~of ~~that~~March 31, we2025, ~~have~~our arisk ~~variable~~of ~~interest~~loss inwith respect to this arrangement was $39.0 million, which consists of the ~~Midtown~~$13.9 million ~~East~~carrying value of our investment balance plus the $25.1 million outstanding balance of the loan we have provided to the joint venture. ~~primarily~~The ~~because~~outstanding balance on the ~~entity~~loan ~~was~~is ~~designed~~recorded in investments in and advances to ~~pass~~unconsolidated ~~along~~affiliates ~~interest~~on ~~rate~~our ~~risk,~~Consolidated ~~equity~~Balance ~~price~~Sheets. ~~risk~~The ~~and~~assets ~~operation~~of ~~risk~~the Midtown East joint venture can be used only to ussettle asobligations ~~both~~of athe ~~debt~~joint venture, and ~~equity~~its ~~holder~~creditors ~~and~~have no recourse to ~~Bromley~~our aswholly anowned assets.

1917

Table of Contents

equity holder. The Midtown East joint venture was further determined to be a variable interest entity as it requires additional subordinated financial support in the form of a loan because the initial equity investments provided by us and Bromley were not sufficient to finance its planned investments and operations. We concluded that we do not have the power to direct matters that most significantly impact the activities of the entity and therefore do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated.

As of September 30, 2024, our risk of loss with respect to this arrangement was $31.9 million, which consists of the $14.0 million carrying value of our investment balance plus the $17.9 million outstanding balance of the loan we have provided to the joint venture. The outstanding balance on the loan is recorded in investments in and advances to unconsolidated affiliates on our Consolidated Balance Sheets. The assets of the Midtown East joint venture can be used only to settle obligations of the joint venture, and its creditors have no recourse to our wholly owned assets.

- Brand/HRLP 2827 Peachtree LLC (“2827 Peachtree joint venture”)

~~During~~We ~~2021,~~own ~~we formed~~ the 2827 Peachtree ~~joint~~building ~~venture~~ in Atlanta as part of a joint venture with Brand Properties, LLC (“Brand”). Wein which we own a 50.0% interest. We determined that we have a variable interest in ~~this~~the 2827 Peachtree joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us as both a debt and equity holder and to Brand as an equity holder. The 2827 Peachtree joint venture was further determined to be a variable interest entity as it requires additional subordinated financial support in the form of a loan because the initial equity investments provided by us and Brand were not sufficient to finance its planned investments and operations. We concluded that we do not have the power to direct matters that most significantly impact the activities of the entity and therefore do not qualify as the primary beneficiary. Accordingly, the entity is not consolidated.

WeAs ~~determined~~of ~~that~~March 31, we2025, ~~have~~our arisk ~~variable~~of ~~interest~~loss inwith ~~the~~respect ~~2827~~to ~~Peachtree~~this ~~joint~~arrangement ~~venture primarily because the entity~~ was ~~designed~~$60.7 million, towhich ~~pass~~consists ~~along~~of ~~interest~~the ~~rate~~$12.4 million ~~risk,~~carrying ~~equity~~value ~~price~~of ~~risk~~our ~~and~~investment ~~operation~~balance ~~risk~~plus tothe us$48.3 million asoutstanding ~~both~~balance aof ~~debt~~the ~~and~~loan ~~equity~~we ~~holder~~have ~~and~~provided to ~~Brand~~the asjoint ~~an equity holder~~venture. The ~~2827~~outstanding ~~Peachtree~~balance ~~joint~~on ~~venture was further determined to be a variable interest entity as it requires additional subordinated financial support in~~ the ~~form of a~~ loan ~~because~~is ~~the~~recorded ~~initial~~in ~~equity~~ investments ~~provided~~in ~~by us~~ and ~~Brand~~advances ~~were not sufficient~~ to ~~finance~~unconsolidated ~~its~~affiliates ~~planned~~on ~~investments~~our ~~and~~Consolidated ~~operations~~Balance Sheets. WeThe ~~concluded~~assets ~~that~~of ~~we do not have~~ the ~~power~~2827 toPeachtree ~~direct~~joint ~~matters~~venture ~~that~~can ~~most~~be ~~significantly~~used ~~impact~~only ~~the~~to ~~activities~~settle obligations of the ~~entity~~joint venture, and ~~therefore~~its docreditors ~~not~~have ~~qualify~~no asrecourse ~~the~~to ~~primary~~our ~~beneficiary.~~wholly ~~Accordingly,~~owned ~~the entity is not consolidated~~assets.

As of September 30, 2024, our risk of loss with respect to this arrangement was $60.8 million, which consists of the $12.9 million carrying value of our investment balance plus the $47.9 million outstanding balance of the loan we have provided to the joint venture. The outstanding balance on the loan is recorded in investments in and advances to unconsolidated affiliates on our Consolidated Balance Sheets. The assets of the 2827 Peachtree joint venture can be used only to settle obligations of the joint venture, and its creditors have no recourse to our wholly owned assets.

Consolidated Affiliate

- HRLP MTW, LLC (“Midtown West joint venture”)

InWe ~~2019,~~own ~~we formed~~ the Midtown West ~~joint~~building ~~venture~~ in Tampa as part of a joint venture with Bromley. Wein which we own an 80.0% interest. We determined that we have a variable interest in ~~this~~the Midtown West joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us and Bromley as equity holders. The Midtown West joint venture was further determined to be a variable interest entity as it requires additional subordinated financial support in the form of a loan because the initial equity investments provided by us and Bromley were not sufficient to finance its planned investments and operations. We, as the majority owner and managing member and through our control rights as set forth in the joint venture’s governance documents, were determined to be the primary beneficiary as we have both the power to direct the activities that most significantly affect the entity (primarily lease rates, property operations and capital expenditures) and significant economic exposure through our equity investment. As such, the Midtown West joint venture is consolidated and all intercompany transactions and accounts are eliminated.

We determined that we have a variable interest in the Midtown West joint venture primarily because the entity was designed to pass along interest rate risk, equity price risk and operation risk to us and Bromley as equity holders. The Midtown West joint venture was further determined to be a variable interest entity as it requires additional subordinated financial support in the form of a loan because the initial equity investments provided by us and Bromley were not sufficient to finance its planned investments and operations. We, as the majority owner and managing member and through our control rights as set forth in the joint venture’s governance documents, were determined to be the primary beneficiary as we have both the power to direct the activities that most significantly affect the entity (primarily lease rates, property operations and capital expenditures) and significant economic exposure through our equity investment. As such, the Midtown West joint venture is consolidated and all intercompany transactions and accounts are eliminated.

Table of Contents

The following table sets forth the assets and liabilities of the Midtown West joint venture included on our Consolidated Balance Sheets:

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Net real estate assets	$	5857,~~907~~943	$	6058,~~410~~443
Cash and cash equivalents	$	1,~~935~~517	$	1,~~096~~530
Restricted cash	$	—	$	2,260
Accrued straight-line rents receivable	$	5,318	$	5,192
Accrued straight-line rents receivable	$	5,192	$	5,041
Deferred leasing costs, net	$	2,508	$	2,596
Deferred leasing costs, net	$	2,532	$	2,783
Prepaid expenses and other assets, net	$	183	$	104
Prepaid expenses and other assets, net	$	119	$	124
Mortgages and notes payable, net	$	44,261	$	44,325
Mortgages and notes payable, net	$	44,318	$	44,192
Accounts payable, accrued expenses and other liabilities	$	1,502	$	1,297
Accounts payable, accrued expenses and other liabilities	$	1,453	$	2,872

The assets of the Midtown West joint venture can be used only to settle obligations of the joint venture, and its creditors have no recourse to our wholly owned assets.

Table of Contents

4. Real Estate Assets

Acquisitions

During the first quarter of 2025, we acquired Advance Auto Parts Tower, a 346,000 square foot office building in Raleigh, for a total purchase price, including capitalized acquisition costs, of $137.9 million. The assets acquired and liabilities assumed were recorded at fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.

Dispositions

During the ~~third~~first quarter of ~~2024~~2025, we ~~completed~~sold ~~our~~three ~~exit~~buildings ~~from~~in ~~the~~Tampa ~~Greensboro~~and ~~market by selling our last remaining~~ land ~~parcel~~in Pittsburgh for aan aggregate sales price of $4146.53 million and recorded aaggregate ~~gain~~net gains on disposition of property of $082.42 million.

During the second quarter of 2024, we sold seven buildings in Raleigh for a sales price of $62.5 million and recorded a gain on disposition of property of $35.0 million.

During the first quarter of 2024, we sold two buildings in Raleigh for an aggregate sales price of $16.9 million and recorded aggregate gains on disposition of property of $7.2 million.

Table of Contents

5. 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:

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Assets:
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets)	$	386,~~111~~249	$	~~401~~380,~~621~~279
Less accumulated amortization	(~~172~~161,~~702~~824)		(~~175~~170,~~697~~312)
	$	~~213~~224,~~409~~425	$	~~225~~209,~~924~~967
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities	$	3731,~~491~~178	$	5037,~~842~~482
Less accumulated amortization	(2015,~~449~~744)		(3021,~~416~~296)
	$	1715,~~042~~434	$	2016,~~426~~186

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

	Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization)	$	~~11,370~~	$	~~10,696~~	$	309,~~999~~004	$	329,~~409~~645
Amortization of lease incentives (in rental and other revenues)	$	~~643~~	$	~~655~~	$	~~1,886~~645	$	~~1,983~~693
Amortization of acquisition-related intangible assets (in rental and other revenues)	$	768	$	823	$	2,364	$	2,523
Amortization of acquisition-related above market lease intangible assets (in rental and other revenues)					$	598	$	802
Amortization of acquisition-related below market lease liabilities (in rental and other revenues)	$	~~(1,110)~~	$	~~(1,260)~~	$	(~~3,384~~752)	$	(31,~~794~~144)

Table of Contents

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

	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 Above Market Lease Intangible Assets (in Rental and Other Revenues)		Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
October 1 through December 31, 2024	$	9,864	$	624	$	702	$	(856)
April 1 through December 31, 2025	$	28,253	$	1,766	$	1,833	$	(1,973)
2025	34,339		2,194		2,210		(2,727)
2026	33,590		2,120		2,161		(2,431)
2026	30,020		2,002		1,861		(2,431)
2027	29,328		1,884		1,680		(2,062)
2027	26,277		1,768		1,520		(2,062)
2028	25,322		1,675		1,544		(1,649)
2028	22,315		1,518		1,404		(1,648)
2029	22,549		1,388		1,432		(1,377)
Thereafter	6559,~~764~~894		4,~~840~~426		43,~~187~~580		(75,~~318~~942)
	$	~~188~~198,~~579~~936	$	1213,~~946~~259	$	1112,~~884~~230	$	(1715,~~042~~434)
Weighted average remaining amortization periods as of September 30, 2024 (in years)	7.2		7.7		6.9		8.1
Weighted average remaining amortization periods as of March 31, 2025 (in years)	7.3		7.8		6.9		7.9

22The following table sets forth the intangible assets acquired as a result of the acquisition of Advance Auto Parts Tower in the first quarter of 2025:


	Acquisition-Related Above Market Lease Intangible Assets (amortized in Rental and Other Revenues)		Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization)
Amount recorded at acquisition	$	1,656	$	16,445
Weighted average remaining amortization periods as of March 31, 2025 (in years)	8.3		8.0

Table of Contents

6. Mortgages and Notes Payable

The following table sets forth our mortgages and notes payable:

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Secured indebtedness	$	~~714~~709,~~383~~901	$	~~720~~712,~~752~~186
Unsecured indebtedness	2,~~596~~642,~~409~~220		2,~~510~~595,~~193~~815
Less-unamortized debt issuance costs	(1513,~~271~~629)		(1714,~~739~~442)
Total mortgages and notes payable, net	$	3,~~295~~338,~~521~~492	$	3,~~213~~293,~~206~~559

As of ~~September~~March 3031, ~~2024~~2025, our secured mortgage loans were collateralized by real estate assets with an undepreciated book value of $1,~~243~~233.16 million.

Our $750.0 million unsecured revolving credit facility ~~was modified during the first quarter of 2024 and~~ is ~~now~~ scheduled to mature in January 2028 (but can be extended for two additional six-month periods at our option assuming no defaults have occurred). The interest rate on our revolving credit facility is SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 85 basis points, based on current credit ratings. 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. WeThe incurred $7.7 million of debt issuance costs during the first quarter of 2024, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility, and recorded $0.2 million of loss on debt extinguishment. During the second quarter of 2024, we modified the revolving credit facility to provide that the interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. There was $~~105~~150.0 million and $98145.0 million outstanding under our revolving credit facility as of ~~September~~March 3031, ~~2024~~2025 and ~~October~~April 1522, ~~2024~~2025, respectively. As of both ~~September~~March 3031, ~~2024~~2025 and ~~October~~April 1522, ~~2024~~2025, we had $0.1 million of outstanding letters of credit, which reduce the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility as of ~~September~~March 3031, ~~2024~~2025 and ~~October~~April 1522, ~~2024~~2025 was $~~644~~599.9 million and $~~651~~604.9 million, respectively.

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

We have considered our short-term liquidity needs within one year from ~~October~~April 2229, ~~2024~~2025 (the date of issuance of the quarterly financial statements) and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs. Importantly, we have no scheduled debt maturities during such one-year period. We have concluded it is probable we will meet these short-term liquidity requirements through a combination of the following:

•available cash and cash equivalents;

•cash flows from operating activities;

•issuance of debt securities by the Operating Partnership;

•issuance of secured debt;

•bank term loans;

•borrowings under our revolving credit facility;

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

•the disposition of non-core assets.

2321

Table of Contents

7. Noncontrolling Interests

Noncontrolling Interests in Consolidated Affiliates

As of ~~September~~March 3031, ~~2024~~2025, our noncontrolling interest in consolidated affiliates relates to our joint venture partner's 20.0% interest in the Midtown West joint venture. 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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Beginning noncontrolling interests in the Operating Partnership

~~56,518~~

~~56,206~~

4965,~~520~~791

6549,~~977~~520

Adjustment of noncontrolling interests in the Operating Partnership to fair value

~~16,355~~

~~(6,334)~~

23(2,~~822~~902)

~~(15~~7,~~521)~~479

Conversions of Common Units to Common Stock

—

~~(4,795)~~

~~(132)~~—

(~~4,795~~132)

Redemptions of Common Units

—

—(10)

~~(163)~~—

Net income attributable to noncontrolling interests in the Operating Partnership

~~297~~

~~453~~

21,~~111~~956

~~2,386~~533

Distributions to noncontrolling interests in the Operating Partnership

~~(1,076)~~

~~(1,078)~~

(31,~~227~~076)

(31,~~432~~076)

Total noncontrolling interests in the Operating Partnership

~~72,094~~

~~44,452~~

7263,~~094~~759

4456,~~452~~324

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 September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Net income available for common stockholders	$	~~14,558~~	$	~~22,101~~	$	~~103~~97,~~492~~449	$	~~108~~26,~~233~~064
Increase in additional paid in capital from conversions of Common Units to Common Stock	—		~~4,795~~		~~132~~—		~~4,795~~132
Redemptions of Common Units	—		—		—10		~~163~~—
Change from net income available for common stockholders and transfers from noncontrolling interests	$	~~14,558~~	$	~~26,896~~	$	~~103~~97,~~624~~459	$	~~113~~26,~~191~~196

8. Disclosure About Fair Value of Financial Instruments

The following summarizes the 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 asset is our investment in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan. 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 our mortgages and notes receivable. Our Level 2 liabilities include the fair value of our mortgages and notes payable and any interest rate swaps.

The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach, which uses 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 any 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 interest rates (forward curves) derived from

2422

Table of Contents

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 interest rates (forward curves) derived from observed market interest rate curves. In addition, credit valuation adjustments are considered 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 any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers’ opinions of value and/or the terms of definitive sales contracts. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.

The following table sets forth our assets and liabilities and the Company’s noncontrolling interests in the Operating Partnership that are measured or disclosed 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 as of September 30, 2024:

Fair Value as of March 31, 2025:

Assets:

Mortgages and notes receivable, at fair value (1)

116,~~084~~241

—

116,~~084~~241

—

Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)

21,~~403~~513

—

Total Assets

137,~~487~~754

21,~~403~~513

116,~~084~~241

—

Noncontrolling Interests in the Operating Partnership

7263,~~094~~759

—

Liabilities:

Mortgages and notes payable, net, at fair value (1)

3,~~157~~177,~~141~~593

—

3,~~157~~177,~~141~~593

—

Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)

21,~~403~~513

—

Total Liabilities

3,~~159~~179,~~544~~106

21,~~403~~513

3,~~157~~177,~~141~~593

—

Fair Value as of December 31, 2023:
Fair Value as of December 31, 2024:
Assets:
Mortgages and notes receivable, at fair value (1)	$	411,~~795~~064	$	—	$	411,~~795~~064	$	—
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets)	2,~~294~~295		2,~~294~~295		—		—
Total Assets	$	7,089	$	2,294	$	4,795
Impaired real estate assets	26,740		—		—		26,740
Noncontrolling Interests in the Operating Partnership	$	49,520	$	49,520	$	—
Total Assets	$	40,099	$	2,295	$	11,064	$	26,740
Noncontrolling Interests in the Operating Partnership	$	65,791	$	65,791	$	—	$	—
Liabilities:
Mortgages and notes payable, net, at fair value (1)	$	23,~~927~~097,~~330~~323	$	—	$	23,~~927~~097,~~330~~323	$	—
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities)	2,~~294~~295		2,~~294~~295		—		—
Total Liabilities	$	23,~~929~~099,~~624~~618	$	2,~~294~~295	$	23,~~927~~097,~~330~~323	$	—

__________

(1) Amounts are not recorded at fair value on our Consolidated Balance Sheets as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024.

2523

Table of Contents

9. Share-Based Payments

During the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025, the Company granted ~~181~~125,~~540~~036 shares of time-based restricted stock and ~~142~~116,~~992~~852 shares of total return-based restricted stock with weighted average grant date fair values per share of $2429.4513 and $2530.2241, respectively. We recorded share-based compensation expense of $15.0 million and $04.8 million during the three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023, respectively, and $7.0 million and $6.2 million during the nine months ended September 30,~~ 2024 ~~and 2023~~, respectively. As of ~~September~~March 3031, ~~2024~~2025, there was $56.13 million of total unrecognized share-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.16 years.

10. ~~Earnings~~Real ~~Per~~Estate ~~Share~~ and ~~Per~~Other ~~Unit~~Assets Held For Sale

The following table sets forth our assets held for sale, which are considered non-core:


	March 31, 2025		December 31, 2024
Assets:
Land	$	—	$	6,232
Buildings and tenant improvements	—		98,081


Less-accumulated depreciation	—		(58,511)
Net real estate assets	—		45,802
Accrued straight-line rents receivable	—		6,581
Deferred leasing costs, net	—		2,784
Prepaid expenses and other assets, net	—		242
Real estate and other assets, net, held for sale	$	—	$	55,409

Table of Contents

11. 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 September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

2024

2023

2024

2023

2025

2024

Earnings per Common Share - basic:

Numerator:

Net income

~~15,469~~

~~23,171~~

~~107~~100,~~452~~000

~~111~~27,~~995~~213

Net (income) attributable to noncontrolling interests in the Operating Partnership

~~(297)~~

~~(453)~~

(21,~~111~~956)

(~~2,386~~533)

Net loss attributable to noncontrolling interests in consolidated affiliates

1526

~~488~~5

Dividends on Preferred Stock

~~(622)~~

(~~1,864~~621)

Net income available for common stockholders

~~14,558~~

~~22,101~~

~~103~~97,~~492~~449

~~108~~26,~~233~~064

Denominator:

Denominator for basic earnings per Common Share – weighted average shares (1)

~~106,010~~

~~105,671~~

~~105~~107,~~937~~683

105,~~473~~804

Net income available for common stockholders

~~0.14~~

~~0.21~~

0.9891

10.0325

Earnings per Common Share - diluted:

Numerator:

Net income

~~15,469~~

~~23,171~~

~~107~~100,~~452~~000

~~111~~27,~~995~~213

Net loss attributable to noncontrolling interests in consolidated affiliates

1526

~~488~~5

Dividends on Preferred Stock

~~(622)~~

(~~1,864~~621)

Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership

~~14,855~~

~~22,554~~

~~105~~99,~~603~~405

~~110~~26,~~619~~597

Denominator:

Denominator for basic earnings per Common Share – weighted average shares (1)

~~106,010~~

~~105,671~~

~~105~~107,~~937~~683

105,~~473~~804

Add:

Noncontrolling interests Common Units

~~2,151~~

~~2,161~~

2,~~152~~151

2,~~289~~154

Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions

~~108,161~~

~~107,832~~

~~108~~109,~~089~~834

107,~~762~~958

Net income available for common stockholders

~~0.14~~

~~0.21~~

0.9891

10.0325

__________

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

2625

Table of Contents

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

	Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Earnings per Common Unit - basic:
Numerator:
Net income	$	~~15,469~~	$	~~23,171~~	$	~~107~~100,~~452~~000	$	~~111~~27,~~995~~213
Net loss attributable to noncontrolling interests in consolidated affiliates	8		5		1526		~~488~~5
Distributions on Preferred Units	~~(622)~~		~~(622)~~		(~~1,864~~621)		(~~1,864~~621)
Net income available for common unitholders	$	~~14,855~~	$	~~22,554~~	$	~~105~~99,~~603~~405	$	~~110~~26,~~619~~597
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1)	~~107,752~~		~~107,423~~		~~107~~109,~~680~~425		107,~~353~~549
Net income available for common unitholders	$	~~0.14~~	$	~~0.21~~	$	0.9891	$	10.0325
Earnings per Common Unit - diluted:
Numerator:
Net income	$	~~15,469~~	$	~~23,171~~	$	~~107~~100,~~452~~000	$	~~111~~27,~~995~~213
Net loss attributable to noncontrolling interests in consolidated affiliates	8		5		1526		~~488~~5
Distributions on Preferred Units	~~(622)~~		~~(622)~~		(~~1,864~~621)		(~~1,864~~621)
Net income available for common unitholders	$	~~14,855~~	$	~~22,554~~	$	~~105~~99,~~603~~405	$	~~110~~26,~~619~~597
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1)	~~107,752~~		~~107,423~~		~~107~~109,~~680~~425		107,~~353~~549
Net income available for common unitholders	$	~~0.14~~	$	~~0.21~~	$	0.9891	$	10.0325

__________

(1)Includes all unvested restricted stock where distributions on such restricted stock are non-forfeitable.

12. Segment Information

Our principal business is the operation, acquisition and development of rental office properties. We evaluate our business by geographic location, which is why our primary geographic locations are included as reportable segments below. The operating results by geographic grouping are regularly reviewed by our chief operating decision maker for assessing performance and other purposes. Our chief executive officer is our chief operating decision maker. There are no material inter-segment transactions.

Our accounting policies of the segments are the same as those used in our Consolidated Financial Statements. All operations are within the United States.

Table of Contents

The following tables summarize rental and other revenues, rental property and other expenses and net operating income for each of our reportable segments. Net operating income is the primary industry property-level performance metric used by our chief operating decision maker and is defined as rental and other revenues less rental property and other expenses. Our chief operating decision maker uses net operating income to help assess segment performance and decide how to allocate resources accordingly.


	Three Months Ended March 31,
		2025		2024
Rental and other revenues:
Atlanta		$	35,594	$	36,443
Charlotte		22,056		21,717
Nashville		39,544		45,038
Orlando		14,296		14,776
Raleigh		44,494		45,178
Richmond		9,178		9,001
Tampa		22,712		24,579
Rental and other revenues for reportable segments		187,874		196,732
Other		12,509		14,543
Total rental and other revenues		200,383		211,275


Rental property and other expenses:

Atlanta	14,368	13,823
Charlotte	5,841	5,789
Nashville	11,357	13,732
Orlando	5,542	5,608
Raleigh	11,733	13,092
Richmond	3,003	2,684
Tampa	8,609	9,091
Rental property and other expenses for reportable segments	60,453	63,819
Other	4,581	6,616
Total rental property and other expenses	65,034	70,435


Net operating income:
Atlanta	21,226		22,620
Charlotte	16,215		15,928
Nashville	28,187		31,306
Orlando	8,754		9,168
Raleigh	32,761		32,086
Richmond	6,175		6,317
Tampa	14,103		15,488
Net operating income for reportable segments	127,421		132,913
Other	7,928		7,927
Total net operating income	$	135,349	$	140,840

Table of Contents

11. Segment Information


	Three Months Ended March 31,
		2025		2024
Reconciliation to net income:
Depreciation and amortization		$	(71,405)	$	(73,671)

General and administrative expenses		(12,457)		(12,499)
Interest expense		(36,642)		(36,552)
Other income		1,625		1,232
Gains on disposition of property		82,215		7,209

Equity in earnings of unconsolidated affiliates		1,315		654
Net income		$	100,000	$	27,213

~~The following tables summarize rental and other revenues and net operating income for our office properties~~13. Subsequent Net operating income is the primary industry property-level performance metric used by our chief operating decision maker and is defined as rental and other revenues less rental property and other expenses.Events

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Rental and Other Revenues:
Atlanta	$	36,742	$	35,666	$	109,799	$	107,991
Charlotte	22,010		21,079		65,991		63,452
Nashville	40,903		42,884		126,458		130,084
Orlando	14,312		14,356		43,892		43,300
Raleigh	43,042		45,354		130,848		136,933
Richmond	8,754		8,746		26,816		27,103
Tampa	23,948		25,000		72,963		75,344
Other	14,612		14,010		43,569		42,931
Total Rental and Other Revenues	$	204,323	$	207,095	$	620,336	$	627,138

On April 23, 2025, the Company declared a cash dividend of $0.50 per share of Common Stock, which is payable on June 10, 2025 to stockholders of record as of May 19, 2025.

Net Operating Income:
Atlanta	$	22,268	$	21,796	$	67,950	$	68,289
Charlotte	15,936		16,388		47,974		47,719
Nashville	30,657		31,389		92,448		95,530
Orlando	8,850		8,734		26,840		26,358
Raleigh	31,692		32,523		95,537		99,799
Richmond	5,765		5,733		18,424		18,656
Tampa	15,309		15,574		46,131		47,614
Other	8,140		7,765		24,332		23,942
Total Net Operating Income	138,617		139,902		419,636		427,907
Reconciliation to net income:
Depreciation and amortization	(79,116)		(74,765)		(226,532)		(220,416)
General and administrative expenses	(9,898)		(8,873)		(31,754)		(30,668)
Interest expense	(37,472)		(34,247)		(109,928)		(101,408)
Other income	1,872		754		10,559		3,082
Gains on disposition of property	350		—		42,581		19,818
Gain on deconsolidation of affiliate	—		—		—		11,778
Equity in earnings of unconsolidated affiliates	1,116		400		2,890		1,902
Net income	$	15,469	$	23,171	$	107,452	$	111,995

12. Subsequent Events

On October 21, 2024, the Company declared a cash dividend of $0.50 per share of Common Stock, which is payable on December 10, 2024 to stockholders of record as of November 18, 2024.

Table of Contents

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

The Company is a fully integrated office real estate investment trust (“REIT”) that owns, develops, acquires, leases and manages properties primarily in the best business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. The Company conducts its activities through the Operating Partnership. The Operating Partnership is managed by the Company, its sole general partner. 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 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 important factors that could cause our actual results to differ materially from those contained in any forward-looking statement, including the following:

•the financial condition of our customers could deteriorate;

•our assumptions regarding potential losses related to customer financial difficulties could prove incorrect;

•counterparties under our debt instruments, particularly our revolving credit facility, may attempt to avoid their obligations thereunder, which, if successful, would reduce our available liquidity;

•we may not be able to lease or re-lease 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 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 in our existing markets could result in an excessive supply relative to customer demand;

•our markets may suffer declines in economic and/or office employment growth;

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

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

•natural disasters and climate change could have an adverse impact on our cash flow and 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 “Item 1A. Risk Factors” set forth ~~herein and~~ in our ~~2023~~2024 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.

Table of Contents

Executive Summary

WeOur ~~are~~vision is to be a leader in the ~~work-placemaking~~evolution ~~business.~~of Wecommercial ~~believe~~real ~~that~~estate byfor ~~creating~~the benefit of our customers, our communities and those who invest with us. Our mission is to create environments and experiences ~~where~~that ~~the~~inspire ~~best~~our teammates and ~~brightest~~our ~~can~~customers to achieve more together. ~~what~~We ~~they~~are ~~cannot~~in ~~apart~~the work-placemaking business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates and, in turn, our ~~stakeholders~~shareholders. By creating and operating commute-worthy places, we support the growth and success of our customers and contribute to the vitality of our communities. Our simple strategy is to own and operate high-quality workplaces in the BBDs within our footprint, maintain a strong balance sheet to be opportunistic throughout economic cycles, employ a talented and dedicated team and communicate transparently with all stakeholders. We focus on owning and managing buildings in the most dynamic and vibrant BBDs. BBDs are highly-energized and amenitized workplace locations that enhance our customers’ ability to attract and retain talent. They are both urban and suburban. Providing the most talent-supportive workplace options in these environments is core to our work-placemaking strategy.

Our investment ~~strategy~~thesis is to generate attractive and sustainable returns over the long term for our stockholders by developing, acquiring and owning a portfolio of high-quality, differentiated office buildings in the BBDs of our core markets. A core component of this strategy is to continuously strengthen the financial and operational performance, resiliency and long-term growth prospects of our existing in-service portfolio and recycle those properties that no longer meet our criteria.

Revenues

Our operating results depend heavily on successfully leasing and operating the office space in our portfolio. Economic growth and office employment levels in our core markets are important factors, among others, 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 or negative 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. Another 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 concentrate our leasing efforts on renewing existing leases prior to expiration. For more information regarding our lease expirations, see “Item 2. Properties - Lease Expirations” and “Item 1A. Risk Factors – Risks Related to our Operations. The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term” in our 2023 Annual Report on Form 10-K. Occupancy in our office portfolio decreased from 88.9% as of December 31, 2023 to 88.0% as of September 30, 2024. We expect average occupancy in our office portfolio to range from 86.0% to 87.0% for the remainder of 2024.

~~Whether~~The orkey ~~not~~components affecting our rental ~~revenue~~and ~~tracks~~other revenues are average occupancy, ~~proportionally~~rental ~~depends~~rates, ~~upon~~cost ~~whether~~recovery ~~GAAP~~income, ~~rents~~new ~~under~~developments ~~signed~~placed ~~new~~in service, acquisitions and ~~renewal~~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. ~~are~~Average ~~higher~~occupancy generally declines during times of slower or ~~lower~~negative ~~than~~economic ~~the~~growth, ~~GAAP~~when ~~rents~~new ~~under~~vacancies ~~expiring~~tend ~~leases~~to outpace our ability to lease space. ~~Annualized~~Asset acquisitions, dispositions and new developments placed in service directly impact our rental revenues ~~from~~and ~~second~~could ~~generation~~impact ~~leases~~our ~~expiring~~average ~~during~~occupancy, ~~any~~depending ~~particular~~upon ~~year~~the occupancy rate of the properties that are ~~typically~~acquired, ~~less~~sold ~~than~~or ~~15%~~placed in service. Another indicator of ~~our~~the ~~total~~predictability ~~annual~~of ~~rental~~future revenues is the expected lease expirations of our portfolio. ~~The~~As ~~following~~a ~~table~~result, ~~sets~~in ~~forth~~addition to seeking to increase our average occupancy by leasing current vacant space, we also concentrate our leasing efforts on renewing existing leases prior to expiration. For more information regarding ~~second~~our ~~generation~~lease ~~office~~expirations, ~~leases~~see ~~signed~~“Item ~~during~~2. ~~the~~Properties ~~third~~– ~~quarter~~Lease ofExpirations” ~~2024~~and ~~(we~~“Item ~~define~~1A. ~~second~~Risk ~~generation~~Factors ~~office~~– ~~leases~~Risks asRelated ~~leases~~to ~~with~~our ~~new~~Operations. ~~customers~~The continued social acceptance, desirability and ~~renewals~~perceived ofeconomic ~~existing~~benefits ~~customers~~of inwork-from-home ~~both~~arrangements ~~consolidated~~could materially and ~~unconsolidated~~negatively impact the future demand for office space ~~that~~over ~~has~~the ~~been~~long-term” ~~previously~~in ~~occupied~~our ~~and~~2024 ~~leases~~Annual ~~with~~Report ~~respect~~on Form 10-K. Occupancy in our office portfolio decreased from 87.1% as of December 31, 2024 to ~~vacant~~85.5% ~~space~~as of March 31, 2025. We expect average occupancy in ~~acquired~~our ~~buildings):~~office portfolio to range from 85.0% to 86.0% for the remainder of 2025.

	New		Renewal		All Office
Leased space (in rentable square feet)	499,898		375,168		875,066
Average term (in years - rentable square foot weighted)	12.4		5.1		9.3
Base rents (per rentable square foot) (1)	$	42.21	$	35.17	$	39.20
Rent concessions (per rentable square foot) (1)	(1.91)		(1.51)		(1.74)
GAAP rents (per rentable square foot) (1)	$	40.30	$	33.66	$	37.46
Tenant improvements (per rentable square foot) (1)	$	6.36	$	4.55	$	5.59
Leasing commissions (per rentable square foot) (1)	$	1.34	$	0.98	$	1.19

Whether or not our rental revenue tracks average occupancy proportionally depends upon whether GAAP rents under signed new and renewal leases are higher or lower than the GAAP rents under expiring leases. Annualized rental revenues from second generation leases expiring during any particular year are typically less than 15% of our total annual rental revenues. The following table sets forth information regarding second generation office leases signed during the first quarter of 2025 (we define second generation office leases as leases with new customers and renewals of existing customers in both consolidated and unconsolidated office space that has been previously occupied and leases with respect to vacant space in acquired buildings):



	New		Renewal		All Office
Leased space (in rentable square feet)	243,772		447,799		691,571
Average term (in years - rentable square foot weighted)	6.1		4.7		5.2
Base rents (per rentable square foot) (1)	$	31.83	$	40.18	$	37.24
Rent concessions (per rentable square foot) (1)	(1.73)		(1.16)		(1.36)
GAAP rents (per rentable square foot) (1)	$	30.10	$	39.02	$	35.88
Tenant improvements (per rentable square foot) (1)	$	3.48	$	4.06	$	3.86
Leasing commissions (per rentable square foot) (1)	$	0.68	$	0.93	$	0.84

__________

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

Annual combined GAAP rents for new and renewal leases signed in the third quarter were $37.46 per rentable square foot, 22.4% higher compared to previous leases in the same office spaces.

Table of Contents

WeAnnual ~~strive~~combined toGAAP ~~maintain~~rents afor ~~diverse,~~new ~~stable~~ and ~~creditworthy~~renewal ~~customer~~leases ~~base.~~signed Wein ~~have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with~~ the ~~Company’s~~first ~~Board~~quarter ofwere ~~Directors~~$35.88 Asper ofrentable ~~September 30,~~square ~~2024~~foot, ~~only Bank of America (3~~12.78%) ~~and~~higher ~~Asurion~~compared ~~(3.5%)~~to ~~accounted~~previous ~~for~~leases ~~more~~in ~~than~~the 3%same ofoffice ~~our annualized GAAP revenues~~spaces.

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. As of March 31, 2025, only Bank of America (3.9%) and Asurion (3.6%) accounted for more than 3% of our annualized GAAP revenues.

Expenses

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 and usage levels, such as janitorial services and utilities, and expenses that do not vary based on occupancy and usage levels, 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, develop or sell assets, since our properties and related building and tenant improvement assets are depreciated on a straight-line basis over fixed lives. General and administrative expenses primarily consist of management and employee salaries and benefits, corporate overhead and short and long-term incentive compensation.

Net Operating Income

Whether or not we record increasing net operating income (“NOI”) in our same property portfolio typically depends upon our ability to garner higher rental revenues, whether from higher average occupancy, higher GAAP rents per rentable square foot or higher cost recovery income, that exceed any corresponding growth in operating expenses. Consolidated same property NOI was $03.41 million, or 02.3%, ~~higher~~lower in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024 due to a decrease of $0.6.1 million in same property ~~expenses~~revenue offset by a decrease of $03.20 million in same property ~~revenue~~expenses. We expect same property NOI to be lower for the remainder of 2025 as compared to 2024 primarily due to lower anticipated average occupancy and an anticipated increase in same property expenses.

In addition to the effect of consolidated same property NOI, whether or not NOI increases typically depends upon whether the NOI from our acquired properties and ~~recently~~development ~~completed~~properties ~~development~~placed ~~projects~~in service exceeds the NOI from property dispositions. NOI was $15.35 million, or 03.9%, lower in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024 primarily due to lower consolidated same property NOI and lost NOI from property dispositions, partially offset by NOI from the acquisition of Advance Auto Parts Tower in Raleigh and recently completed development projects ~~and~~in ~~higher~~Raleigh ~~consolidated~~and ~~same~~Charlotte. ~~property~~We expect NOI to be lower for the remainder of 2025 as compared to 2024 for similar reasons.

Cash Flows

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

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 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 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. 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.

For a discussion regarding dividends and distributions, see “Liquidity and Capital Resources - Dividends and Distributions.”

Liquidity and Capital Resources

We continue to maintain a conservative and flexible balance sheet and believe we have ample liquidity to fund our operations and growth prospects. As of October 15, 2024, we had approximately $18 million of existing cash and $98.0 million drawn on our $750.0 million revolving credit facility, which is scheduled to mature in January 2028 (but which can be extended

Table of Contents

~~for~~For ~~two~~a ~~additional~~discussion ~~six-month~~regarding ~~periods~~dividends atand ~~our option). As of September 30~~distributions, ~~2024,~~see ~~our~~“Liquidity ~~leverage ratio, as measured by the ratio of our mortgages~~ and ~~notes~~Capital ~~payable~~Resources ~~and~~- ~~outstanding~~Dividends ~~preferred stock to the undepreciated book value of our assets, was 42.3%,~~ and ~~there were 108~~Distributions.~~2 million diluted shares of Common Stock outstanding.~~”

Liquidity and Capital Resources

We continue to maintain a conservative and flexible balance sheet and believe we have ample liquidity to fund our operations and growth prospects. As of April 22, 2025, we had approximately $18 million of existing cash and $145.0 million drawn on our $750.0 million revolving credit facility, which is scheduled to mature in January 2028 (but which can be extended for two additional six-month periods at our option). As of March 31, 2025, our leverage ratio, as measured by the ratio of our mortgages and notes payable and outstanding preferred stock to the undepreciated book value of our assets, was 42.8%, and there were 110.0 million diluted shares of Common Stock outstanding.

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 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 our customers’ specific needs. We anticipate that our available cash and cash equivalents and cash provided by operating activities and planned financing activities, including borrowings under our revolving credit facility, will be adequate to meet our short-term liquidity requirements. We use our revolving credit facility for working capital purposes, 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.

We generally believe existing cash and rental and other revenues will continue to be sufficient to fund our short-term liquidity needs such as funding operating and general and administrative expenses, paying interest expense, maintaining our existing quarterly dividend and funding existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions.

Our long-term liquidity uses generally consist of the retirement or refinancing of debt upon maturity, funding of building improvements, new building developments (including our proportionate share of joint venture developments) and land infrastructure projects and funding acquisitions of buildings and development land (including our proportionate share of joint venture acquisitions). Additionally, we may, from time to time, retire outstanding equity and/or 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 flows from operating activities;

•issuance of debt securities by the Operating Partnership;

•issuance of secured debt;

•bank term loans;

•borrowings under our revolving credit facility;

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

•the disposition of non-core assets.

We have no debt scheduled to mature prior to May 2026. We generally believe we will be able to satisfy future obligations with existing cash, borrowings under our revolving credit facility, new bank term loans, issuance of other unsecured debt, mortgage debt and/or proceeds from the sale of additional non-core assets.

Investment Activity

As noted above, a key tenet of our strategic plan is to continuously upgrade the quality of our office portfolio through acquisitions, dispositions and development. We generally seek to acquire and develop office buildings 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 NOI for any such period exceeds the actual cost of capital used to finance the acquisition or development. Additionally, given the length of construction cycles, development projects are not placed in service until several years after commencement in some cases. Sales of non-core assets could result in lower per share net income or FFO in any given period in the event the return on the resulting use of proceeds does not exceed the capitalization rate on the sold properties.

Table of Contents

given period depends upon a number of factors, including whether the NOI for any such period exceeds the actual cost of capital used to finance the acquisition or development. Additionally, given the length of construction cycles, development projects are not placed in service until several years after commencement in some cases. Sales of non-core assets could result in lower per share net income or FFO in any given period in the event the return on the resulting use of proceeds does not exceed the capitalization rate on the sold properties.

Results of Operations

Three Months Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024

Rental and Other Revenues

Rental and other revenues were $210.89 million, or 15.32%, lower in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024 primarily due to ~~lost~~lower ~~revenue~~consolidated ~~from~~same property ~~dispositions~~revenues and ~~lower~~lost ~~consolidated~~revenue ~~same~~from property ~~revenues~~dispositions, which decreased rental and other revenues by $36.51 million and $04.27 million, respectively. ~~This decrease was partially offset by recently completed development projects, which increased rental and other revenues by $0.8 million.~~ Same property rental and other revenues were lower primarily due to a decrease in average occupancy, and lower cost recoveries ~~and higher credit losses~~, partially offset by higher average GAAP rents per rentable square foot and higher ~~parking~~termination fee income. These decreases were partially offset by revenue from the acquisition of Advance Auto Parts Tower in Raleigh and recently completed development projects in Raleigh and Charlotte, which increased rental and other revenues by $0.6 million and $0.4 million, respectively. We expect rental and other revenues to be lower for the remainder of 2025 as compared to 2024 for similar reasons.

Operating Expenses

Rental property and other expenses were $1.5.4 million, or 27.27%, lower in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024 primarily due to lower consolidated same property ~~dispositions~~operating expenses and ~~lower~~lost ~~consolidated~~expenses ~~same~~from property ~~expenses~~dispositions, which decreased operating expenses by $1.3.0 million and $01.69 million, respectively. ~~These~~Same ~~decreases~~property operating expenses were lower primarily due to lower property taxes, partially offset by ahigher $0utilities, contract services and repairs and maintenance.2 ~~million~~We ~~increase~~expect inrental ~~operating~~property and other expenses ~~from~~to ~~recently~~be ~~completed~~relatively ~~development~~consistent ~~projects.~~for ~~Same~~the remainder of 2025 as compared to 2024 as higher anticipated same property operating expenses, ~~were~~expenses ~~lower~~from ~~primarily~~the ~~due~~acquisition toof ~~lower~~Advance ~~taxes,~~Auto ~~partially~~Parts ~~offset~~Tower byin ~~higher~~Raleigh ~~contract~~and ~~services,~~expenses ~~utilities,~~from ~~and~~recently ~~repairs~~completed development projects in Raleigh and ~~maintenance.~~Charlotte are expected to be offset by lower expenses from property dispositions.

Depreciation and amortization expense was $42.43 million, or 53.81%, ~~higher~~lower in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024 primarily due to ~~accelerated~~property ~~depreciation~~dispositions. ~~and~~We ~~amortization~~expect ofdepreciation ~~tenant improvements~~ and ~~deferred~~amortization ~~leasing~~to ~~costs~~be ~~associated~~lower ~~with~~for the ~~cancellation~~remainder of a2025 ~~lease~~as ~~with~~compared ato ~~backfill~~2024 ~~customer~~primarily ~~for~~due ~~110,000~~to ~~square~~property ~~feet~~dispositions inand ~~the~~lower ~~former~~same ~~Tivity~~property ~~building~~lease inrelated ~~Nashville~~depreciation ~~that~~and ~~was~~amortization, ~~originally~~partially ~~scheduled~~offset toby ~~commence in~~ the ~~third~~acquisition ~~quarter~~ of ~~2024. This~~Advance ~~increase~~Auto ~~was~~Parts ~~partially~~Tower ~~offset~~in ~~by property dispositions~~Raleigh.

General and administrative expenses were less than $1.0.1 million, or 110.63%, ~~higher~~lower in the ~~third~~first quarter of 2025 as compared to 2024. We expect general and administrative expenses to be lower for the remainder of 2025 as compared to ~~2023~~2024 ~~primarily~~due to lower incentive compensation and lower predevelopment cost write-offs. 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 ~~gains~~service oneligibility ~~deferred~~requirements ~~compensation~~under our retirement plan. ~~investments~~Long-term ~~(which~~equity isincentive ~~fully~~compensation ~~offset~~awards byare atypically ~~corresponding~~issued ~~increase~~during inthe ~~other~~first ~~income)~~quarter of each year.

Interest Expense

Interest expense was $30.21 million, or 90.42%, higher in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024. ~~primarily~~We ~~due~~expect interest expense to be higher ~~average~~for ~~interest~~the ~~rates,~~remainder of 2025 as compared to 2024 primarily due to higher average debt balances and lower capitalized interest., partially offset by lower average interest rates.

Other Income

Other income was $10.14 million higher in the ~~third~~first quarter of ~~2024~~2025 as compared to ~~2023~~2024 primarily due to higher interest income from seller financing and loans provided to the 2827 Peachtree and Midtown East joint ventures ~~and gains on deferred compensation plan investments (which is fully offset by a corresponding increase in general and administrative expenses)~~.

Gains on Disposition of Property

Gains on disposition of property were $0.4 million higher in the third quarter of 2024 as compared to 2023.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $0.7 million higher in the third quarter of 2024 as compared to 2023 primarily due to lower interest expense from our McKinney and Olive joint venture due to the payoff of a mortgage loan in the third quarter of 2024 and higher income from our 2827 Peachtree joint venture, which was completed in the third quarter of 2023.

Earnings Per Common Share - Diluted

Diluted earnings per common share was $0.07 lower in the third quarter of 2024 as compared to 2023 due to a decrease in net income for the reasons discussed above.

Table of Contents

Nine Months Ended September 30, 2024 and 2023

Rental and Other Revenues

Rental and other revenues were $6.8 million, or 1.1%, lower in the nine months ended September 30, 2024 as compared to 2023 primarily due to lost revenue from property dispositions, which decreased rental and other revenues by $10.7 million. This decrease was partially offset by higher consolidated same property revenues and recently completed development projects, which increased rental and other revenues by $2.5 million and $2.2 million, respectively. Same property rental and other revenues were higher primarily due to higher average GAAP rents per rentable square foot, higher cost recoveries and higher parking income, partially offset by a decrease in average occupancy.

Operating Expenses

Rental property and other expenses were $1.5 million, or 0.7%, higher in the nine months ended September 30, 2024 as compared to 2023 primarily due to $5.3 million of higher consolidated same property operating expenses, partially offset by a $3.5 million decrease in operating expenses from property dispositions. Same property operating expenses were higher primarily due to higher contract services, utilities, property insurance and repairs and maintenance, partially offset by lower taxes.

Depreciation and amortization expense was $6.1 million, or 2.8%, higher in the nine months ended September 30, 2024 as compared to 2023 primarily due to accelerated depreciation and amortization of tenant improvements and deferred leasing costs associated with the cancellation of a lease with a backfill customer for 110,000 square feet in the former Tivity building in Nashville that was originally scheduled to commence in the third quarter of 2024, higher consolidated same property lease related depreciation and amortization and recently completed development projects, partially offset by property dispositions.

General and administrative expenses were $1.1 million, or 3.5%, higher in the nine months ended September 30, 2024 as compared to 2023 primarily due to higher incentive compensation and gains on deferred compensation plan investments (which is fully offset by a corresponding increase in other income).

Interest Expense

Interest expense was $8.5 million, or 8.4%, higher in the nine months ended September 30, 2024 as compared to 2023 primarily due to higher average interest rates and higher average debt balances.

Other Income

Other income was $7.5 million higher in the nine months ended September 30, 2024 as compared to 2023 primarily due to a refund of $5.8 million in the aggregate of Tennessee franchise taxes paid for the 2020 through 2023 tax years. During the second quarter of 2024, the State of Tennessee modified the methodology for calculating franchise taxes. The modification lowers our annual franchise tax obligation and was allowed to be applied retrospectively back to 2020. We also earned higher interest income from seller financing and loans provided to the 2827 Peachtree and Midtown East joint ventures and recognized gains on deferred compensation plan investments (which is fully offset by a corresponding increase in general and administrative expenses).

Gains on Disposition of Property

Gains on disposition of property were $2275.80 million higher in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30,~~2025 ~~2024~~ as compared to ~~2023~~2024. The first quarter 2025 gain primarily related to building dispositions in Tampa. The first quarter 2024 gain related to building dispositions in Raleigh.

Gain on Deconsolidation of Affiliate

We recognized a gain on deconsolidation of $11.8 million in the nine months ended September 30, 2023 related to adjusting our retained interest in the Markel joint venture to fair value. We recorded no such gain on deconsolidation in the nine months ended September 30, 2024.

Equity in Earnings of Unconsolidated Affiliates

Equity in earnings of unconsolidated affiliates was $1.0.7 million higher in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30,~~2025 ~~2024~~ as compared to ~~2023~~2024 primarily due to lower interest expense from our McKinney & Olive joint venture due to the payoff of a mortgage loan in the third quarter of 2024. This increase was partially offset by a higher ~~income~~net loss from our ~~2827~~Granite ~~Peachtree~~Park Six joint venture, which owns a newly constructed building that was completed in the third quarter of 2023 but has not yet stabilized.

Earnings Per Common Share - Diluted

Diluted earnings per common share was $0.66 higher in the first quarter of 2025 as compared to 2024 due to an increase in net income for the reasons discussed above.

Table of Contents

quarter of 2023, and lower interest expense from our McKinney and Olive joint venture due to the payoff of a mortgage loan in the third quarter of 2024. These increases were partially offset by expenses on Granite Park Six, which was completed in the third quarter of 2023 but is not yet stabilized.

Earnings Per Common Share - Diluted

Diluted earnings per common share was $0.05 lower in the nine months ended September 30, 2024 as compared to 2023 due to a decrease in net income for the reasons discussed above.

Table of Contents

Liquidity and Capital Resources

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):

	Nine Months Ended September 30,
	Three Months Ended March 31,
	2024		2023		Change
	2025		2024		Change
Net cash provided by operating activities	$	~~299~~46,~~858~~324	$	~~284~~72,~~171~~410	$	15(26,~~687~~086)
Net cash used in investing activities	(~~204~~27,~~963~~209)		(~~130~~61,~~967~~685)		~~(73~~34,~~996)~~476
Net cash used in financing activities	(92,531)		(152,213)		59,682
Net cash provided used in financing activities	(13,278)		(15,007)		1,729
Total cash flows	$	25,~~364~~837	$	~~991~~(4,282)	$	110,~~373~~119

The change in net cash provided by operating activities in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30,~~2025 ~~2024~~ as compared to ~~2023~~2024 was primarily due to changes in operating assets and liabilities, lower occupancy and property dispositions. We expect net cash ~~from~~related ~~the~~to ~~operations~~operating ofactivities ~~consolidated~~to ~~same~~be ~~properties~~lower ~~and~~for ~~recently~~the ~~completed~~remainder ~~development~~of ~~projects~~2025 ~~and~~as ~~changes~~compared into ~~operating~~2024 ~~assets~~primarily due to lower anticipated occupancy and ~~liabilities~~property dispositions, partially offset by ~~property~~net ~~dispositions~~cash from the acquisition of Advance Auto Parts Tower in Raleigh and ~~higher~~recently ~~interest~~completed ~~expense~~development projects in Raleigh.

The change in net cash used in investing activities in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30,~~2025 ~~2024~~ as compared to ~~2023~~2024 was primarily due to ~~the~~lower ~~redemption~~investments ofin ~~our~~unconsolidated ~~short-term~~affiliates ~~preferred~~and ~~equity~~higher ~~investment~~net inproceeds ~~the~~from ~~McKinney~~dispositions. ~~and~~These ~~Olive~~decreases ~~joint~~were ~~venture~~partially inoffset ~~2023,~~by ~~contributions to~~ the ~~McKinney~~acquisition ~~and~~of ~~Olive~~Advance ~~joint~~Auto ~~venture~~Parts Tower in ~~2024~~2025. toWe ~~pay~~expect ~~off~~uses aof ~~mortgage~~cash ~~loan,~~for ~~contributions~~investing toactivities for the ~~Granite~~remainder ~~Park~~of ~~Six~~2025 ~~joint~~to ~~venture~~be inprimarily ~~2024~~driven toby ~~pay~~whether ~~down~~we aacquire ~~construction~~or ~~loan~~commence ~~and~~development ~~higher~~of ~~investments~~additional inoffice ~~tenant~~buildings ~~improvements~~in ~~and~~the ~~deferred~~BBDs ~~leasing~~of ~~costs~~our ~~in 2024~~markets. ~~These~~We ~~changes~~expect ~~were~~these ~~partially~~uses ~~offset~~of bycash ~~higher~~for ~~net~~investing ~~proceeds~~activities ~~from~~will ~~disposition~~be ~~activity~~partially ~~and~~offset ~~lower~~by ~~investments~~proceeds infrom ~~building~~property ~~improvements~~dispositions ~~and development~~ in ~~process~~2025.

~~The~~There was a minimal change in net cash used in financing activities in the ~~nine~~first ~~months~~quarter ~~ended~~of ~~September 30,~~2025 ~~2024~~ as compared to ~~2023~~2024. ~~was~~Assuming ~~primarily~~the ~~due~~net effect of our acquisition, disposition and development activity in 2025 results in an increase to ~~higher~~our ~~net~~assets, we would expect outstanding debt ~~borrowings.~~and/or Common Stock balances to increase.

Capitalization

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

	September 30,2024		December 31,2023
	March 31,2025		December 31,2024
Mortgages and notes payable, net, at recorded book value	$	3,~~295~~338,~~521~~492	$	3,~~213~~293,~~206~~559
Preferred Stock, at liquidation value	$	28,811	$	28,811
Common Stock outstanding	~~106~~107,~~020~~811		~~105~~107,~~710~~624
Common Units outstanding (not owned by the Company)	2,151		2,~~157~~151
Per share stock price at period end	$	3329.5164	$	2230.9658
Market value of Common Stock and Common Units	$	3,~~624~~259,~~810~~274	$	23,~~476~~356,~~626~~920
Total capitalization	$	6,~~949~~626,~~142~~577	$	56,~~718~~679,~~643~~290

As of ~~September~~March 3031, ~~2024~~2025, our mortgages and notes payable and outstanding preferred stock represented 4750.8% of our total capitalization and 42.38% of the undepreciated book value of our assets. See also “Executive Summary - Liquidity and Capital Resources.”

Our mortgages and notes payable as of ~~September~~March 3031, ~~2024~~2025 consisted of $~~714~~709.49 million of secured indebtedness with a weighted average interest rate of 4.43% and $2,~~596~~642.42 million of unsecured indebtedness with a weighted average interest rate of 4.5547%. The secured indebtedness was collateralized by real estate assets with an undepreciated book value of $1,~~243~~233.16 million. As of ~~September~~March 3031, ~~2024~~2025, $~~455~~500.0 million of our debt bears interest at floating rates.

3635

Table of Contents

Investment Activity

In the normal course of business, we regularly evaluate potential acquisitions. As a result, from time to time, we may have one or more potential acquisitions under consideration that are in varying stages of evaluation, negotiation or due diligence, including potential acquisitions that are subject to non-binding letters of intent or enforceable contracts. Consummation of any transaction is subject to a number of contingencies, including the satisfaction of customary closing conditions. No assurances can be provided that we will acquire any properties in the future. See “Item 1A. Risk Factors - Risks Related to our Capital Recycling Activity - Recent and future acquisitions and development properties may fail to perform in accordance with our expectations and may require renovation and development costs exceeding our estimates” in our ~~2023~~2024 Annual Report on Form 10-K.

During the ~~third~~first quarter of ~~2024~~2025, we ~~completed~~acquired ~~our~~Advance ~~exit~~Auto ~~from~~Parts ~~the~~Tower, ~~Greensboro~~a ~~market~~346,000 bysquare ~~selling~~foot ~~our~~office ~~last~~building ~~remaining~~in ~~land~~Raleigh, ~~parcel~~ for a ~~sales~~total purchase price, including capitalized acquisition costs, of $4137.59 million. The assets acquired and liabilities assumed were recorded aat ~~gain~~fair value as determined by management based on ~~disposition~~information ofavailable ~~property~~at ofthe ~~$0.4~~acquisition ~~million~~date and on current assumptions as to future operations.

~~We have a 50% interest in the McKinney & Olive joint venture.~~ During the ~~third~~first quarter of ~~2024~~2025, ~~the~~we ~~McKinney~~sold &three ~~Olive~~buildings ~~joint~~in ~~venture~~Tampa ~~paid~~and ~~off~~land atin ~~maturity~~Pittsburgh ~~the~~for ~~remaining $134.3 million balance on a secured mortgage loan with a stated interest rate of 4.5% and~~ an ~~effective~~aggregate ~~interest~~sales ~~rate~~price of 5$146.3%. Inmillion ~~connection~~and ~~with~~recorded ~~this~~aggregate ~~loan~~net ~~payoff,~~gains weon ~~and~~disposition ~~Granite~~of ~~each~~property ~~contributed~~of $6282.~~1 million~~2 ~~to the joint venture~~million.

WeThe ~~have~~following atable ~~50%~~summarizes ~~interest~~our in-process ~~the~~development ~~Granite~~activity ~~Park~~as ~~Six joint venture. During the third quarter~~ of ~~2024~~March 31, ~~the~~2025: Granite Park Six joint venture paid down the outstanding $70.9 million balance with respect to a $115 million construction loan obtained in 2022. The loan, which matures in January 2026, has an interest rate of SOFR plus 394 basis points. In connection with this loan paydown, we and Granite each contributed $35.5 million to the joint venture.

As of September 30, 2024, we were developing 0.8 million rentable square feet of office properties. The following table summarizes these announced and in-process office developments:


Property	Market	Own %		Consolidated (Y/N)	Rentable Square Feet	Anticipated Total Investment (1)		Investment as of March 31, 2025		Pre Leased %		Estimated Completion	Estimated Stabilization
						($ in thousands)





GlenLake Two Retail (2)	Raleigh	100.0	%	Y	8,600	$	8,100	$	1,452	100.0	%	1Q 26	1Q 26





					8,600	$	8,100	$	1,452	100.0	%

Property	Market	Own %		Consolidated (Y/N)	Rentable Square Feet	Anticipated Total Investment (1)		Investment As Of September 30, 2024		Pre Leased %		Estimated Completion	Estimated Stabilization
						($ in thousands)
23Springs	Dallas	50.0	%	N	642,000	$	460,000	$	269,383	59.6	%	1Q 25	1Q 28
Midtown East	Tampa	50.0	%	N	143,000	83,000		49,606		34.5		1Q 25	2Q 26
GlenLake Two Retail (2)	Raleigh	100.0	%	Y	8,600	8,100		997		100.0		1Q 26	1Q 26
					793,600	$	551,100	$	319,986	55.5	%

__________

(1)Includes estimated lease up costs for tenant improvements and lease commissions until the property has reached stabilization.

(2)~~Recorded~~Will be recorded in development-in-process on our ~~consolidated~~Consolidated ~~balance~~Balance ~~sheet~~Sheets asonce ~~land~~we ~~held~~begin ~~for~~construction ~~development,~~on ~~not~~the ~~development-in-process~~project.

Financing Activity

~~During~~We ~~2023,~~have ~~we entered into separate~~ equity distribution agreements with each of Wells Fargo Securities, LLC, BofA Securities, Inc., BTIG, LLC, Jefferies LLC, J.P. Morgan Securities LLC, ~~Regions Securities LLC,~~ TD Securities (USA) LLC and Truist Securities, Inc. ~~Under~~pursuant ~~the~~to ~~terms~~which of the ~~equity distribution agreements, the~~ Company may offer and sell up to $300.0 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 (“~~NYSE”) 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 (which may include block trades). During the ~~third~~first quarter of ~~2024~~2025, there were no shares of common stock issued under these agreements.

Our $750.0 million unsecured revolving credit facility ~~was modified during the first quarter of 2024 and~~ is ~~now~~ scheduled to mature in January 2028 (but can be extended for two additional six-month periods at our option assuming no defaults have occurred). The interest rate on our revolving credit facility is SOFR plus a related spread adjustment of 10 basis points and a borrowing spread of 85 basis points, based on current credit ratings. 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. WeThe ~~incurred~~interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. There was $7150.70 million and $145.0 million outstanding under our revolving credit facility as of ~~debt~~March 31, ~~issuance~~2025 ~~costs~~and ~~during~~April 22, ~~the~~2025, ~~first~~respectively. ~~quarter~~As of ~~2024~~both March 31, ~~which~~2025 ~~will~~and beApril 22, ~~amortized~~2025, ~~along~~we ~~with~~had ~~certain~~$0.1 ~~existing~~million ~~unamortized~~of ~~debt~~outstanding ~~issuance~~letters ~~costs~~of ~~over~~credit, which reduce the ~~remaining~~availability ~~term~~on our revolving credit facility. As a result, the unused capacity of our ~~new~~ revolving credit facility as of March 31, 2025 and April 22, 2025 was $599.9 million and $604.9 million, respectively.

Table of Contents

recorded $0.2 million of loss on debt extinguishment. During the second quarter of 2024, we modified the revolving credit facility to provide that the interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. There was $105.0 million and $98.0 million outstanding under our revolving credit facility as of September 30, 2024 and October 15, 2024, respectively. As of both September 30, 2024 and October 15, 2024, we had $0.1 million of outstanding letters of credit, which reduce the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility as of September 30, 2024 and October 15, 2024 was $644.9 million and $651.9 million, respectively.

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 provide any assurances that we will continue to be in compliance.

Table of Contents

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 our revolving credit facility, the lenders having at least 51.0% of the total commitments under our 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. In addition, certain of our unsecured debt agreements contain cross-default provisions giving the unsecured lenders the right to declare a default if we are in default under more than $35.0 million with respect to other loans in some circumstances.

The indenture that governs the Operating Partnership’s 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 any series of notes 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.

Dividends and Distributions

To maintain its qualification as a REIT, the Company must pay dividends to stockholders that are at least 90.0% of its annual REIT taxable income, excluding net capital gains. The partnership agreement requires the Operating Partnership to distribute at least enough cash for the Company to be able to pay such dividends. The Company’s REIT taxable income, as determined by the federal tax laws, does not equal its net income under accounting principles generally accepted in the United States of America (“GAAP”). In addition, although capital gains are not required to be distributed to maintain REIT status, capital gains, if any, are subject to federal and state income tax unless such gains are distributed to stockholders.

Cash dividends and distributions reduce the amount of cash that would otherwise be available for other business purposes, including funding debt maturities, reducing debt or future growth initiatives. The amount of future distributions that will be made is at the discretion of the Company’s Board of Directors. For a discussion of the factors that will affect such cash flows and, accordingly, influence the decisions of the Company’s Board of Directors regarding dividends and distributions, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Dividends and Distributions” in our ~~2023~~2024 Annual Report on Form 10-K.

On ~~October~~April 2123, ~~2024~~2025, the Company declared a cash dividend of $0.50 per share of Common Stock, which is payable on ~~December~~ June 10, ~~2024~~2025 to stockholders of record as of ~~November~~May 1819, ~~2024~~2025.

During the ~~third~~first quarter of ~~2024~~2025, the Company declared and paid a cash dividend of $0.50 per share of Common Stock.

Current and Future Cash Needs

We anticipate that our available cash and cash equivalents, cash flows from operating activities and other available financing sources, including the issuance of debt securities by the Operating Partnership, the issuance of secured debt, bank term loans, borrowings under our revolving credit facility, the issuance of equity securities by the Company or the Operating Partnership and the disposition of non-core assets, will be adequate to meet our short-term liquidity requirements. We generally believe existing cash and rental and other revenues will continue to be sufficient to fund operating and general and administrative expenses, interest expense, our existing quarterly dividend and existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions.

38We had $20.1 million of cash and cash equivalents as of March 31, 2025. The unused capacity of our revolving credit facility as of March 31, 2025 and April 22, 2025 was $599.9 million and $604.9 million, respectively.

Table of Contents

administrative expenses, interest expense, our existing quarterly dividend and existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions.

We had $23.7 million of cash and cash equivalents as of September 30, 2024. The unused capacity of our revolving credit facility as of September 30, 2024 and October 15, 2024 was $644.9 million and $651.9 million, respectively.

We have a currently effective automatic shelf registration statement on Form S-3 with the SEC pursuant to which, at any time and from time to time, in one or more offerings on an as-needed basis, the Company may sell an indefinite amount of common stock, preferred stock and depositary shares and the Operating Partnership may sell an indefinite amount of debt securities, subject to our ability to effect offerings on satisfactory terms based on prevailing market conditions.

From time to time, the Company enters into equity distribution agreements with a variety of firms pursuant to which the Company may offer and sell shares of common stock 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 NYSE 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 (which may include block trades).37

~~During~~Table ~~the remainder~~ of 2024, we expect to sell up to $150 million of properties no longer considered to be core assets due to location, age, quality and/or overall strategic fit. We can make no assurance, however, that we will sell any additional non-core assets or, if we do, what the timing or terms of any such sale will be.Contents

The Company from time to time enters into equity distribution agreements with a variety of firms pursuant to which the Company may offer and sell shares of common stock 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 NYSE 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 (which may include block trades).

During the remainder of 2025, we expect to sell up to $150 million of properties no longer considered to be core assets due to location, age, quality and/or overall strategic fit. We can make no assurance, however, that we will sell any additional non-core assets or, if we do, what the timing or terms of any such sale will be.

See also “Executive Summary - Liquidity and Capital Resources.”

Critical Accounting Estimates

There were no changes made by management to the critical accounting policies in the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025. 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 ~~2023~~2024 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 metrics that 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, management believes 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, including 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.

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, or plus net loss, attributable to noncontrolling interests in consolidated affiliates;

Table of Contents

•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 joint venture investments (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.

Table of Contents

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 September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Funds from operations:
Net income	$	~~15,469~~	$	~~23,171~~	$	~~107~~100,~~452~~000	$	~~111~~27,~~995~~213
Net loss attributable to noncontrolling interests in consolidated affiliates	8		5		1526		~~488~~5
Depreciation and amortization of real estate assets	~~78,421~~		~~74,048~~		~~224~~70,~~460~~727		~~218~~72,~~423~~983
(Gains) on disposition of depreciable properties	—		—		(42,231)		(19,368)
Gains on disposition of depreciable properties					(82,337)		(7,209)
(Gain) on deconsolidation of affiliate	—		—		—		(11,778)
Unconsolidated affiliates:
Depreciation and amortization of real estate assets	~~3,806~~		~~3,209~~		113,~~148~~891		83,~~655~~581
Funds from operations	~~97,704~~		~~100,433~~		~~300~~92,~~844~~307		~~308~~96,~~415~~573
Dividends on Preferred Stock	~~(622)~~		~~(622)~~		(~~1,864~~621)		(~~1,864~~621)
Funds from operations available for common stockholders	$	~~97,082~~	$	~~99,811~~	$	~~298~~91,~~980~~686	$	~~306~~95,~~551~~952
Funds from operations available for common stockholders per share	$	~~0.90~~	$	~~0.93~~	$	20.7783	$	20.8489
Weighted average shares outstanding (1)	~~108,161~~		~~107,832~~		~~108~~109,~~089~~834		107,~~762~~958

__________

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

In addition, the Company believes 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 less rental property and other expenses. The Company defines cash NOI as NOI less lease termination fees, straight-line rent, amortization of lease incentives and amortization of acquired above and below market leases. Other REITs may use different methodologies to calculate NOI, same property NOI and cash NOI.

In previous periods, our same property portfolio consisted only of wholly owned in-service properties. Beginning in 2024, we updated our same property portfolio to include our share of in-service joint venture properties. As of ~~September~~March 3031, ~~2024~~2025, our same property portfolio consisted of ~~153~~148 wholly owned and joint venture in-service properties encompassing 2726.3 million rentable square feet that were owned during the entirety of the periods presented (from January 1, ~~2023~~2024 to ~~September~~March 3031, ~~2024~~2025). As of December 31, ~~2023~~2024, our same property portfolio consisted of ~~154~~152 wholly owned and joint venture in-service properties encompassing 2627.62 million rentable square feet that were owned during the entirety of the periods presented (from January 1, ~~2022~~2023 to December 31, ~~2023~~2024). The change in our same property portfolio was due to the ~~addition~~removal of ~~six~~three ~~joint venture~~ properties encompassing 0.76 million rentable square feet, ~~one~~that ~~property~~were ~~acquired~~sold during ~~2022~~2025 and one property encompassing 0.43 million rentable square feet ~~and~~that ~~one~~was ~~newly~~taken ~~developed~~out ~~property~~of ~~placed in~~ service during ~~2022~~2025 ~~encompassing~~due ~~0.1~~to ~~million~~an ~~rentable~~anticipated ~~square~~change ~~feet,~~in ~~offset~~use byfrom ~~the~~a ~~removal~~for-lease ofoffice ~~nine~~building ~~properties~~to ~~that~~an ~~were~~alternative ~~sold~~use, ~~during~~such ~~2024~~as ~~encompassing 0~~multi-family.~~4 million rentable square feet.~~

4039

Table of Contents

The following table sets forth the Company’s NOI, same property NOI and same property cash NOI (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
			Three Months Ended March 31,
	2024		2023		2024		2023
					2025		2024
Net income	$	~~15,469~~	$	~~23,171~~	$	~~107~~100,~~452~~000	$	~~111~~27,~~995~~213
Equity in earnings of unconsolidated affiliates	~~(1,116)~~		~~(400)~~		(21,~~890~~315)		(~~1,902~~654)
Gain on deconsolidation of affiliate	—		—		—		(11,778)
Gains on disposition of property					(82,215)		(7,209)
Gains on disposition of property	(350)		—		(42,581)		(19,818)
Other income					(1,625)		(1,232)
Other income	(1,872)		(754)		(10,559)		(3,082)
Interest expense					36,642		36,552
Interest expense	37,472		34,247		109,928		101,408
General and administrative expenses					12,457		12,499
General and administrative expenses	9,898		8,873		31,754		30,668
Depreciation and amortization					71,405		73,671
Depreciation and amortization	79,116		74,765		226,532		220,416
Net operating income					135,349		140,840
Net operating income	138,617		139,902		419,636		427,907
Our share of unconsolidated joint venture same property net operating income					4,855		4,497
Our share of unconsolidated joint venture same property net operating income	4,772		4,607		13,949		14,022
Partner's share of consolidated joint venture same property net operating income					(259)		(280)
Partner's share of consolidated joint venture same property net operating income	(276)		(278)		(841)		(782)
Non same property and other net operating income					(1,633)		(4,003)
Non same property and other net operating (income)/loss	80		(1,578)		(872)		(6,487)
Same property net operating income					$	138,312	$	141,054
Same property net operating income	$	~~143,193~~	$	~~142,653~~	$	~~431~~138,~~872~~312	$	~~434~~141,~~660~~054
Same property net operating income	$	143,193	$	142,653	$	431,872	$	434,660
Lease termination fees, straight-line rent and other non-cash adjustments					(6,014)		(4,301)
Lease termination fees, straight-line rent and other non-cash adjustments	(2,669)		(5,403)		(10,323)		(21,319)
Same property cash net operating income					$	132,298	$	136,753
Same property cash net operating income	$	140,524	$	137,250	$	421,549	$	413,341

4140

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For information regarding our market risk as of December 31, ~~2023~~2024, see “Quantitative and Qualitative Disclosures About Market Risk” in our ~~2023~~2024 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, and that such information is accumulated and communicated to our management to allow for timely decisions regarding required disclosure. The Company’s CEO and CFO have concluded that the disclosure controls and procedures of the Company and the Operating Partnership were each effective as of ~~September~~March 3031, ~~2024~~2025.

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 ended ~~September~~March 3031, ~~2024~~2025 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 ended ~~September~~March 3031, ~~2024~~2025 that materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

4241

Table of Contents

PART II - OTHER INFORMATION

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

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 ~~third~~first quarter of ~~2024~~2025:

	Total Number of Shares Purchased	Weighted Average Price Paid per Share
July 1 to July 31	317	$	26.55
January 1 to January 31	—	$	—
August 1 to August 31	10	31.03
February 1 to February 28	—	—
September 1 to September 30	—	—
March 1 to March 31	68,965	29.13
Total	~~327~~68,965	$	2629.6913

ITEM 6. EXHIBITS


Exhibit Number			Description
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			Inline XBRL Instance Document (the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)
101.SCH			Inline XBRL Taxonomy Extension Schema Document
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB			Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document
104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

4342

Table of Contents

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/ Brendan C. Maiorana
			Brendan C. Maiorana
			Executive Vice President and Chief Financial Officer


Highwoods Realty Limited Partnership
By:			Highwoods Properties, Inc., its sole general partner
By:			/s/ Brendan C. Maiorana
			Brendan C. Maiorana
			Executive Vice President and Chief Financial Officer

Date: ~~October~~April 2229, ~~2024~~2025

4443

Filing Compare · HIGHWOODS PROPERTIES, INC.