Supplemental Operating Information for the Quarter ended Sept. 30, 2007

EX-99.2 3 dex992.htm SUPPLEMENTAL OPERATING INFORMATION FOR THE QUARTER ENDED SEPT. 30, 2007 Supplemental Operating Information for the Quarter ended Sept. 30, 2007

LOGO

Supplemental Information

September 30, 2007

Supplemental Information

Table of Contents

September 30, 2007


Schedule		Page
Corporate Information		i, ii and iii

Consolidated Statements of Income		1
Statement of Funds from Operations and Additional Information		2
Consolidated Balance Sheets		3
Estimated Net Asset Value		4
Components of Discontinued Operations		5
Capitalization		6
Long-Term Debt Summary		7
Long-Term Debt Detail		8
Portfolio Summary		9, 10 and 11
Occupancy Trends		12
Leasing Statistics		13, 14 and 15
Leasing Statistics by Market		16
Rental Rate Comparisons by Market		17
Lease Expirations		18 and 19
Office Lease Expirations by Market by Quarter		20
Industrial Lease Expirations by Market by Quarter		21
Office Lease Expirations by Market by Year		22
Industrial Lease Expirations by Market by Year		23
Customer Diversification		24
Same Property Performance		25
Acquisition Activity		26
Disposition Activity		27
Development Activity		28
Development Land		29
Unconsolidated Joint Ventures Assets, Debt and Liabilities		30
Unconsolidated Joint Ventures Income (Three Months)		31
Unconsolidated Joint Ventures Income (Nine Months)		32
Joint Ventures Long-Term Debt Detail		33
Joint Ventures Portfolio Summary		34
Joint Ventures Lease Expirations		35
Joint Venture Acquisition and Disposition Activity		36
Joint Ventures Development		37

The information within refers to all Highwoods Properties’ wholly-owned entities, except pages 30 to 37, unless noted otherwise. Wholly-owned entities include properties classified as both continuing operations and discontinued operations.

All financial information contained in this document is “unaudited.” In addition, certain matters discussed in this supplemental, including estimates of net operating income, pre-leasing commitments and the cost, timing and stabilization of announced development projects, are forward-looking statements within the meaning of the federal securities laws. Although Highwoods believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from Highwoods’ current expectations include general economic conditions, local real estate conditions, the timely development and lease-up of properties, and the other risks detailed from time to time in the Company’s SEC reports.


Highwoods Properties, Inc.

Summary


Amounts in thousands, except per share amounts and ratios
	*Three Months Ended*
	09/30/07			06/30/07			03/31/07			12/31/06			09/30/06
Shares and units:
Common shares outstanding at end of period		57,158			57,131			56,711			56,211			55,635
Common units outstanding at end of period		4,059			4,062			4,115			4,733			5,014
Weighted average common shares outstanding - basic		56,628			56,460			56,040			55,740			54,470
Weighted average common shares outstanding - diluted		61,396			61,562			61,900			62,365			61,457

Share price:
At end of period	$	36.67		$	37.50		$	39.49		$	40.76		$	37.21
High close during period		39.01			43.84			46.95			41.31			38.15
Low close during period		32.09			37.50			37.99			36.40			35.39

Financial information:
Land sale gains	$	225		$	969		$	15,835		$	6,974		$	2,103
Land impairment		(789	)		—			—			—			—
Lease termination income		259			1,477			41			618			249
Straight line rental income		908			890			1,572			2,401			2,006
Capitalized interest		2,742			2,365			2,147			1,770			1,701
Impairments on depreciable properties		(384	)		—			—			—			(2,600	)
Gains on sales of depreciable properties		8,064			1,475			20,651			10,925			3,712
Gain from property insurance settlement		—			—			4,128			—			—

Total debt/ total assets 1/		56.2	%		55.3	%		53.4	%		52.7	%		52.9	%
Total debt/ total market capitalization 1/		40.7	%		39.4	%		36.9	%		35.9	%		37.9	%

Funds from operations per share - diluted	$	0.59		$	0.58		$	0.91		$	0.71		$	0.53

Funds from operations per share - diluted, excluding certain items 2/	$	0.61		$	0.60		$	0.91		$	0.71		$	0.59

Wholly - owned property information:

In-Service rentable square feet:
Office		19,003			19,194			19,154			19,244			19,507
Industrial		5,942			6,280			6,280			6,281			6,605
Retail		1,318			1,317			1,326			1,327			1,431

Total		26,263			26,791			26,760			26,852			27,543

In-Service occupancy:
Office		89.7	%		88.5	%		89.3	%		89.0	%		88.1	%
Industrial		91.4	%		90.8	%		91.9	%		91.7	%		91.8	%
Retail		94.4	%		94.8	%		95.4	%		95.7	%		96.2	%

Total		90.4	%		90.0	%		89.4	%		88.1	%		87.7	%

1/	Includes financing obligations.

2/	Excludes impairments on depreciable assets, losses on debt extinguishments and preferred stock redemption/repurchase charges.


Highwoods Properties, Inc.		i

Corporate Information


Board of Directors		Research Coverage

Thomas W. Adler		Credit Suisse - North America
Gene H. Anderson		John Stewart - 212-538-3183
Kay N. Callison
Edward J. Fritsch		Deutsche Banc Securities
Lawrence S. Kaplan		Lou Taylor - 212-469-4912
Sherry A. Kellett
L. Glenn Orr Jr.		Friedman, Billings, Ramsey & Co., Inc.
O. Temple Sloan Jr., Chairman		Wilkes Graham - 703-312-9737

Corporate Officers		Green Street Advisors
		Cedric Lachance - 949-640-8780
Edward J. Fritsch
President, Chief Executive Officer and Director		Morgan Stanley
		David Cohen - 212-761-8564
Michael E. Harris
Executive Vice President and Chief Operating Officer		Smith Barney Citigroup
		Jonathan Litt - 212-816-0231
Terry L. Stevens
Senior Vice President, Chief Financial Officer		Stifel Nicolaus
		John Guinee - 410-454-5520
Daniel L. Clemmens
Vice President, Chief Accounting Officer		UBS Securities
		Jamie Feldman - 212-713-4932
S. Hugh Esleeck
Treasurer		Wachovia Securities
		Chris Haley - 443-263-6773
Julie M. Kelly
Vice President, Internal Audit and Compliance

Carman J. Liuzzo
Vice President, Investments

David J. Matthes
Corporate Vice President, Leasing

Art H. McCann
Chief Information Officer

Jeffrey D. Miller
Vice President, General Counsel and Secretary

Kevin E. Penn
Vice President, Strategy

Tabitha N. Zane
Vice President, Investor Relations and Corporate Communications


Highwoods Properties, Inc.		ii

Corporate Information


Divisional Officers		Corporate Headquarters
		Highwoods Properties, Inc. 3100 Smoketree Court, Suite 600 Raleigh, NC 27604 919-872-4924
Atlanta/Piedmont Triad
Gene H. Anderson - Senior Vice President

Atlanta, GA
James V. Bacchetta, Vice President		Stock Exchange
		NYSE Trading Symbol: HIW
Piedmont Triad, NC
Gene H. Anderson, Senior Vice President		Investor Relations Contact
		Tabitha Zane Vice President, Investor Relations and Corporate Communications Phone: 919-431-1529 Fax: 919-431-1439 E-mail: tabitha.zane@highwoods.com
Orlando/Tampa
Michael F. Beale - Senior Vice President

Orlando, FL
Michael F. Beale, Senior Vice President
		Information Request
Tampa, FL		To request a standard Investor Relations package, Annual Report or to be added to our e-mail or fax list, please contact the Corporate Communications/IR Specialist at: Phone: 919-431-1529 Email: HIW-IR@highwoods.com
Daniel E. Woodward, Vice President

Raleigh
Raleigh, NC
Thomas “Skip” Hill, Vice President
		The Company
Richmond		Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered and self-managed equity real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. As of September 30, 2007, the Company owned or had an interest in 378 in-service office, industrial and retail properties encompassing approximately 33.6 million square feet. Highwoods also owned 648 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our website at www.highwoods.com.
Richmond, VA
Paul W. Kreckman, Vice President

Nashville/Memphis/Columbia/Greenville
W. Brian Reames - Senior Vice President

Nashville, TN; Columbia, SC; and Greenville, SC
W. Brian Reames, Senior Vice President

Memphis, TN
Steven L. Guinn, Vice President

Kansas City
Kansas City, MO
Barrett Brady, Senior Vice President


Highwoods Properties, Inc.		iii

Consolidated Statements of Income


*Amounts in thousands, except per share amounts*
	*Nine Months Ended*						*Three Months Ended*
	09/30/07			09/30/06			09/30/07			06/30/07			03/31/07			12/31/06			09/30/06
Rental and other revenues	$	325,384		$	305,853		$	110,166		$	107,481		$	107,737		$	107,497		$	103,395

Operating expenses:
Rental property and other expenses		117,530			111,511			39,958			38,845			38,727			41,029			38,895
Depreciation and amortization		92,275			84,000			32,517			30,265			29,493			29,927			28,168
Impairment of assets held for use		789			—			789			—			—			—			—
General and administrative		31,428			26,298			9,649			10,868			10,911			11,011			8,546

Total operating expenses		242,022			221,809			82,913			79,978			79,131			81,967			75,609

Interest expense:
Contractual		69,514			71,855			23,728			23,097			22,689			22,374			23,809
Amortization of deferred financing costs		1,791			1,883			616			609			566			492			557
Financing obligations		2,968			3,190			981			995			992			972			850

		74,273			76,928			25,325			24,701			24,247			23,838			25,216

Other income/(expense):
Interest and other income		5,105			4,287			1,471			2,118			1,516			2,707			1,174
Settlement of tenant bankruptcy claim		—			—			—			—			—			1,581			—
Loss on debt extinguishments		—			(467	)		—			—			—			(27	)		—

		5,105			3,820			1,471			2,118			1,516			4,261			1,174

Income before disposition of property, insurance gain, minority interest and equity in earnings of unconsolidated affiliates		14,194			10,936			3,399			4,920			5,875			5,953			3,744
Gains on disposition of property, net		20,372			8,295			1,288			2,341			16,743			7,862			2,977
Gain from property insurance settlement		4,128			—			—			—			4,128			—			—
Minority interest		(3,324	)		(1,276	)		(307	)		(414	)		(2,603	)		(1,055	)		(445	)
Equity in earnings of unconsolidated affiliates		12,930			5,349			1,207			2,006			9,717			1,492			1,342

Income from continuing operations		48,300			23,304			5,587			8,853			33,860			14,252			7,618
Discontinued operations:
Income/(loss) from discontinued operations, net of minority interest		981			1,386			205			340			436			944			(1,304	)
Net gains on sales of discontinued operations, net of minority interest		24,533			4,638			6,175			96			18,262			9,220			2,595
Release of FASB FIN 48 tax liability		1,473			—			1,473			—			—			—			—

		26,987			6,024			7,853			436			18,698			10,164			1,291

Net income		75,287			29,328			13,440			9,289			52,558			24,416			8,909
Dividends on preferred stock		(10,639	)		(12,950	)		(2,680	)		(3,846	)		(4,113	)		(4,113	)		(4,113	)
Excess of preferred stock redemption cost over carrying value		(2,285	)		(1,803	)		(842	)		(1,443	)		—			—			—

Net income available for common stockholders	$	62,363		$	14,575		$	9,918		$	4,000		$	48,445		$	20,303		$	4,796

Net income per common share - diluted:
Income from continuing operations	$	0.62		$	0.15		$	0.04		$	0.06		$	0.52		$	0.18		$	0.07
Income from discontinued operations		0.47			0.11			0.13			0.01			0.33			0.17			0.02

Net income	$	1.09		$	0.26		$	0.17		$	0.07		$	0.85		$	0.35		$	0.09

Weighted average common shares outstanding - diluted		61,611			60,786			61,396			61,562			61,900			62,365			61,457



Dividends declared and paid per common share	$	1.275		$	1.275		$	0.425		$	0.425		$	0.425		$	0.425		$	0.425


Highwoods Properties, Inc.		1

Statement of Funds from Operations

and Additional Information


*Amounts in thousands, except per share amounts*
	*Nine Months Ended*						*Three Months Ended*
	09/30/07			09/30/06			09/30/07			06/30/07			03/31/07			12/31/06			09/30/06
Funds from operations:
Net income	$	75,287		$	29,328		$	13,440		$	9,289		$	52,558		$	24,416		$	8,909
Dividends to preferred stockholders		(10,639	)		(12,950	)		(2,680	)		(3,846	)		(4,113	)		(4,113	)		(4,113	)
Excess of preferred stock redemption cost over carrying value		(2,285	)		(1,803	)		(842	)		(1,443	)		—			—			—

Net income available for common stockholders		62,363			14,575			9,918			4,000			48,445			20,303			4,796
Add/(deduct):
Depreciation and amortization of real estate assets		90,433			81,661			31,920			29,657			28,856			29,179			27,407
(Gains) on disposition of depreciable properties		(3,343	)		(3,226	)		(1,063	)		(1,372	)		(908	)		(888	)		(874	)
Minority interest from the Operating Partnership in income from operations		2,806			830			137			246			2,423			896			328
Unconsolidated affiliates:
Depreciation and amortization of real estate assets		8,851			8,143			3,107			2,878			2,866			3,048			2,790
(Gains) on disposition of depreciable properties		(7,158	)		—			—			—			(7,158	)		—			—
Discontinued operations:
Depreciation and amortization of real estate assets		682			3,655			147			282			253			739			1,109
(Gains) on disposition of depreciable properties		(26,847	)		(5,045	)		(7,001	)		(103	)		(19,743	)		(10,037	)		(2,838	)
Release of FASB FIN 48 tax liability		(1,473	)		—			(1,473	)		—			—			—			—
Minority interest from the Operating Partnership in income from discontinued operations		2,005			552			457			32			1,516			900			120

Funds from operations	$	128,319		$	101,145		$	36,149		$	35,620		$	56,550		$	44,140		$	32,838

Funds from operations per share - diluted
Net income available for common stockholders	$	1.09		$	0.26		$	0.17		$	0.07		$	0.85		$	0.35		$	0.09
Add/(deduct):
Depreciation and amortization of real estate assets		1.47			1.34			0.52			0.48			0.47			0.47			0.45
(Gains) on disposition of depreciable properties		(0.05	)		(0.05	)		(0.02	)		(0.02	)		(0.01	)		(0.01	)		(0.01	)
Unconsolidated affiliates:
Depreciation and amortization of real estate assets		0.14			0.13			0.05			0.05			0.04			0.05			0.04
(Gains) on disposition of depreciable properties		(0.12	)		—			—			—			(0.12	)		—			—
Discontinued operations:
Depreciation and amortization of real estate assets		0.01			0.06			—			—			—			0.01			0.01
(Gains) on disposition of depreciable properties		(0.44	)		(0.08	)		(0.11	)		—			(0.32	)		(0.16	)		(0.05	)
Release of FASB FIN 48 tax liability		(0.02	)		—			(0.02	)		—			—			—			—

Funds from operations	$	2.08		$	1.66		$	0.59		$	0.58		$	0.91		$	0.71		$	0.53

Weighted average shares outstanding - diluted		61,611			60,786			61,396			61,562			61,900			62,365			61,457

Additional information: 1/
Funds from operations, excluding certain items 2/	$	130,988		$	106,739		$	37,375		$	37,063		$	56,550		$	44,167		$	36,162



Funds from operations per share, excluding certain items 2/	$	2.13		$	1.76		$	0.61		$	0.60		$	0.91		$	0.71		$	0.59

Straight line rental income	$	(3,370	)
Amortization of lease incentives		719
Depreciation of non-real estate assets		1,339
Ground lease straight line rent		141
Amortization of stock-based compensation		3,814
Amortization of deferred financing costs		1,791
Amortization of accumulated other comprehensive loss		431
Harborview non-cash FMV charge		402
Cash portion of preferred stock repurchase charge		(248	)

Non-incremental revenue generating capital expenditures paid: 3/
Building improvements		(14,203	)
2nd generation tenant improvements		(31,001	)
2nd generation lease commissions		(11,129	)
Common dividends and unit distributions paid		(77,717	)

1/	Increase or (decrease) to cash flows.

2/	Excludes impairments on depreciable assets, losses on debt extinguisments and preferred stock redemption/repurchase charges.

3/	Excludes capital expenditures paid for buildings sold prior to September 30, 2007.


Highwoods Properties, Inc.		2

Consolidated Balance Sheets


*Dollars in thousands*
	09/30/07			12/31/06
Assets:
Real estate assets, at cost:
Land	$	353,659		$	345,548
Buildings and tenant improvements		2,663,378			2,573,032
Development in process		134,088			101,899
Land held for development		111,384			111,517

		3,262,509			3,131,996
Less-accumulated depreciation		(638,265	)		(588,307	)

Net real estate assets		2,624,244			2,543,689
Real estate and other assets, net, held for sale		3,200			35,446
Cash and cash equivalents		20,344			16,690
Restricted cash		8,213			2,027
Accounts receivable, net		27,263			23,347
Notes receivable, net		5,430			7,871
Accrued straight-line rents receivable, net		71,328			68,364
Investment in unconsolidated affiliates		57,970			60,359
Deferred financing and leasing costs, net		71,178			66,352
Prepaid expenses and other assets		23,475			20,708

Total Assets	$	2,912,645		$	2,844,853

Liabilities, Minority Interest and Stockholders’ Equity:
Mortgages and notes payable	$	1,601,474		$	1,465,129
Accounts payable, accrued expenses and other liabilities		173,438			156,737
Financing obligations		34,919			35,530

Total Liabilities		1,809,831			1,657,396
Minority interest		70,716			79,726
Stockholders’ Equity:
Preferred stock		135,437			197,445
Common stock		572			562
Additional paid-in capital		1,446,609			1,449,337
Distributions in excess of net earnings		(549,436	)		(538,098	)
Accumulated other comprehensive loss		(1,084	)		(1,515	)

Total Stockholders’ Equity		1,032,098			1,107,731

Total Liabilities, Minority Interest and Stockholders’ Equity	$	2,912,645		$	2,844,853


Highwoods Properties, Inc.		3

Estimated Net Asset Value Ranges

As Released on February 14, 2007—See Note Below


*Dollars in thousands, except per share amounts*

Note: The following table sets forth information that was reported in our Supplemental issued February 14, 2007 and has not been updated to reflect facts or circumstances or changes in financial and operating assumptions that may have occurred subsequent to such date. This information is based on a range of estimated capitalization rates and projected net operating income, among other things, and is not intended to be an asset-by-asset or enterprise valuation.

NOI Cap Rates:
Office		6.50	%		6.75	%		7.00	%
Retail		5.25	%		5.50	%		5.75	%
Industrial/Other		6.75	%		7.00	%		7.25	%

Weighted average		6.36	%		6.61	%		6.86	%

Wholly-Owned Properties Projected Net Operating Income 1/
Office	$	209,693		$	209,693		$	209,693
Retail		27,764			27,764			27,764
Industrial/Other		22,038			22,038			22,038

Total Net Operating Income	$	259,495		$	259,495		$	259,495

Wholly-Owned Properties Capitalized Value
Office	$	3,226,046		$	3,106,563		$	2,995,614
Retail		528,838			504,800			482,852
Industrial/Other		326,489			314,829			303,972

Total capitalized value - wholly owned properties	$	4,081,373		$	3,926,192		$	3,782,439

Highwoods’ Share of Joint Ventures (Includes Consolidated JVs)
Net operating income - projected	$	34,608		$	34,608		$	34,608
Capitalization rates		6.50	%		6.75	%		7.00	%

Capitalized value - joint venture interests	$	532,431		$	512,711		$	494,400



Total In-Service Property Value	$	4,613,804		$	4,438,903		$	4,276,839

Value of Other income
Development, leasing and management fees	$	6,061		$	6,061		$	6,061
Capitalization rate		20	%		20	%		20	%

Value of other income	$	30,306		$	30,306		$	30,306

Add Other assets:
Development pipeline investment at 135% of cost 2/	$	204,555		$	204,555		$	204,555
Low occupancy assets at NBV 3/		80,478			80,478			80,478
Property held for sale at net sales price		68,801			68,801			68,801
Land held for development at market value		139,009			139,009			139,009
Cash and cash equivalents		14,388			14,388			14,388
Restricted cash		1,764			1,764			1,764
Accounts receivable, net		23,200			23,200			23,200
Notes receivable and prepaid expenses		25,035			25,035			25,035

Other assets total	$	557,229		$	557,229		$	557,229



Gross Value of Assets	$	5,201,339		$	5,026,438		$	4,864,374

Deductions:
Total liabilities	$	157,709		$	157,709		$	157,709
Mortgages and notes payable, at estimated fair value		1,445,554			1,445,554			1,445,554
Preferred stock, at redemption value		197,445			197,445			197,445
Highwoods’ share of joint ventures liabilities		281,565			281,565			281,565

Estimated Net Asset Value	$	3,119,065		$	2,944,164		$	2,782,100

Estimated diluted common shares and operating units for 2007		62,600			62,600			62,600

Estimated Net Asset Value Per Share	$	49.83		$	47.03		$	44.44

1/	NOI excludes straight line income, lease termination fee income, NOI related to completed not stabilized developments, and NOI on certain low occupancy assets.

2/	Represents average increase in value based on projected development yields on cost compared to projected market valuations.

3/	Consolidated Properties NOI is adjusted to eliminate the net NOI for certain low occupancy properties for which a NOI capitalization approach is not appropriate. For those low occupancy assets, their net book value (after depreciation) is added as an estimate of their current valuation.


Highwoods Properties, Inc.		4

Components of Discontinued Operations


*Dollars in thousands*
	*Nine Months Ended*						*Three Months Ended*
	09/30/07			09/30/06			09/30/07			06/30/07			03/31/07			12/31/06			09/30/06
Rental and other revenues	$	2,951		$	13,307		$	699		$	1,005		$	1,247		$	3,117		$	4,454
Operating expenses:
Rental property and other expenses		1,225			5,031			334			359			532			1,275			1,838
Depreciation and amortization		682			3,655			147			282			253			739			1,109
Impairment of assets hed for use		—			2,600			—			—			—			—			2,600
General and administrative		—			75			—			—			—			12			75

Total operating expenses		1,907			11,361			481			641			785			2,026			5,622

Interest expense		—			482			—			—			—			78			277
Other income		12			67			2			1			9			14			18

Income/(loss) before minority interest and gains on sales of discontinued operations		1,056			1,531			220			365			471			1,027			(1,427	)
Minority interest in discontinued operations		(75	)		(145	)		(15	)		(25	)		(35	)		(83	)		123

Income/(loss) from discontinued operations before gains on sales of discontinued operations		981			1,386			205			340			436			944			(1,304	)

Net gains on sales of discontinued operations		26,463			5,045			6,617			103			19,743			10,037			2,838
Minority interest in discontinued operations		(1,930	)		(407	)		(442	)		(7	)		(1,481	)		(817	)		(243	)

Net gains on sales of discontinued operations, net of minority interest		24,533			4,638			6,175			96			18,262			9,220			2,595

Net income from discontinued operations before release of FASB FIN 48 tax liability		25,514			6,024			6,380			436			18,698			10,164			1,291

Release of FASB FIN 48 tax liability		1,473			—			1,473			—			—			—			—

Net income from discontinued operations	$	26,987		$	6,024		$	7,853		$	436		$	18,698		$	10,164		$	1,291


Highwoods Properties, Inc.		5

Capitalization


*Dollars, shares, and units in thousands*
	09/30/07		06/30/07		03/31/07		12/31/06		09/30/06
Long-Term Debt (see pages 7 & 8):	$	1,601,474	$	1,557,571	$	1,487,509	$	1,465,129	$	1,461,105

Financing Obligations:	$	34,919	$	35,683	$	35,529	$	35,530	$	36,098

Preferred Stock (at liquidation value):
Series A 8 5/8% Perpetual Preferred Stock	$	82,937	$	104,945	$	104,945	$	104,945	$	104,945
Series B 8% Perpetual Preferred Stock		52,500		52,500		92,500		92,500		92,500

Total preferred stock	$	135,437	$	157,445	$	197,445	$	197,445	$	197,445

Common Shares and Units Outstanding:
Common stock outstanding		57,158		57,131		56,711		56,211		55,635
Minority interest partnership units		4,059		4,062		4,115		4,733		5,014

Total common shares and units outstanding		61,217		61,193		60,826		60,944		60,649

Stock price at period end	$	36.67	$	37.50	$	39.49	$	40.76	$	37.21

Market value of common equity	$	2,244,827	$	2,294,738	$	2,402,019	$	2,484,077	$	2,256,749

Total market capitalization with debt and obligations	$	4,016,657	$	4,045,437	$	4,122,502	$	4,182,181	$	3,951,397

See pages 30 to 37 for information regarding Highwoods’ Joint Ventures.


Highwoods Properties, Inc.		6

Long-Term Debt Summary


*Dollars in thousands*
	09/30/07			06/30/07			03/31/07			12/31/06			09/30/06
Balances Outstanding:

Secured:
Conventional fixed rate 1/	$	657,408		$	659,741		$	662,036		$	730,732		$	691,662
Variable rate debt		11,920			1,014			13,688			10,897			12,943

Secured total		669,328			660,755			675,724			741,629			704,605

Unsecured:
Fixed rate bonds and notes		748,846			748,816			748,785			350,000			460,000
Credit facility		183,300			148,000			63,000			373,500			296,500

Unsecured total		932,146			896,816			811,785			723,500			756,500

Total	$	1,601,474		$	1,557,571		$	1,487,509		$	1,465,129		$	1,461,105


End of Period Weighted Average Interest Rates:

Secured:
Conventional fixed rate		6.63	%		6.63	%		6.63	%		6.78	%		6.92	%
Variable rate debt		7.02	%		7.11	%		6.55	%		6.55	%		5.93	%

Secured total		6.64	%		6.63	%		6.63	%		6.78	%		6.91	%

Unsecured:
Fixed rate bonds		6.61	%		6.61	%		6.61	%		7.48	%		7.37	%
Credit facility		6.32	%		6.12	%		6.12	%		6.14	%		6.22	%

Unsecured total		6.56	%		6.53	%		6.57	%		6.79	%		6.92	%

Average		6.59	%		6.57	%		6.60	%		6.78	%		6.91	%

Maturity Schedule:


	*Future Maturities of Debt*				Total Debt 2/		Average Interest Rate
Year	Secured Debt 2/		Unsecured Debt		Total Debt 2/		Average Interest Rate
2007	$	—	$	—	$	—	—
2008		—		100,000		100,000	7.13	%
2009		137,774		233,300		371,074	7.12	%
2010		11,920		—		11,920	6.82	%
2011		—		—		—	—
2012		212,800		—		212,800	6.94	%
2013		269,255		—		269,255	5.90	%
2014		37,579		—		37,579	5.79	%
2015		—		—		—	—
2016		—		—		—	—
Thereafter		—		598,846		598,846	6.40	%

Total maturities	$	669,328	$	932,146	$	1,601,474	6.59	%

Weighted average maturity = 6.2 years

1/	Includes a $22.8 million loan related to a consolidated 20% owned joint venture (Harborview) and $37.8 million in loans at September 30, 2007 related to a consolidated 50% joint venture (Markel).

2/	All periods exclude annual principal amortization.


Highwoods Properties, Inc.		7

Long-Term Debt Detail


*Dollars in thousands*
Secured Loans Lender	Rate		Maturity Date	Loan Balance 09/30/07		Undepreciated Book Value of Assets Secured
Northwestern Mutual	7.05	%	Jan-12	$	190,000	$	295,890
Northwestern Mutual	6.03	%	Mar-13		136,165		158,402
Massachusetts Mutual Life Ins. Co. 1/	5.68	%	Dec-13		121,558		211,962
Monumental Life Ins. Co. 2/	7.77	%	Nov-09		80,978		201,036
Monumental Life Ins. Co. 2/	7.87	%	Nov-09		51,100
Metropolitan Life Ins. Co. 3/	6.06	%	Oct-12		22,800		38,953
Principal Life Insurance Company 4/	5.79	%	Jan-14		11,520		14,888
Principal Life Insurance Company 4/	5.79	%	Jan-14		11,520		18,781
Massachusetts Mutual Life Ins. Co. 1/	6.48	%	Dec-13		10,735
Principal Life Insurance Company 4/	5.74	%	Jan-14		9,085		14,282
Wells Fargo 5/	6.89	%	May-10		6,721		8,226
Principal Life Insurance Company 4/	5.89	%	Jan-14		5,454		7,514
Lutheran Brotherhood	6.75	%	Apr-09		3,717		8,020
Wells Fargo 5/ 6/	7.56	%	May-10		2,741		3,359
Wells Fargo 5/	6.79	%	May-10		2,458		6,035
Security Life of Denver	8.85	%	Aug-09		1,979		9,384
American United Life	9.00	%	Jun-13		797		3,321

	6.64	%			669,328	$	1,000,053


Unsecured Bonds
Bonds	7.13	%	Feb-08		100,000
Bonds	8.13	%	Jan-09		50,000
Bonds	5.85	%	Mar-17		398,846
Bonds	7.50	%	Apr-18		200,000

	6.61	%			748,846

Unsecured Loans
Credit facility 5/ 7/ 8/	6.32	%	May-09		183,300

Total Debt	6.59	%		$	1,601,474

1/	These two loans are secured by the same assets.

2/	These two loans are secured by the same assets.

3/	Loan relates to a consolidated 20% owned joint venture (Harborview).

4/	Loans relate to a consolidated 50% owned joint venture (Markel).

5/	Floating rate loan based on one month libor.

6/	This loan was paid off on October, 10, 2007.

7/	Maturity date excludes one-year extension option.

8/	In August, 2007, Company entered into a $50 million swap locking in a fixed rate of 4.7025% for a one year period.


Highwoods Properties, Inc.		8

Portfolio Summary - Wholly-Owned Properties Only 1/


*(Rentable Square Feet)*
	09/30/07		06/30/07		03/31/07		12/31/06		09/30/06
Office Industrial & Retail
In-Service:
Office 2/	19,003,000		19,194,000		19,154,000		19,244,000		19,507,000
Industrial	5,942,000		6,280,000		6,280,000		6,281,000		6,605,000
Retail 3/	1,318,000		1,317,000		1,326,000		1,327,000		1,431,000

Total 4/	26,263,000		26,791,000		26,760,000		26,852,000		27,543,000

Development Completed - Not Stabilized:
Office 2/	867,000		560,000		600,000		504,000		311,000
Industrial	681,000		681,000		418,000		418,000		—
Retail	—		—		—		—		—

Total	1,548,000		1,241,000		1,018,000		922,000		311,000

Development - In Process:
Office 2/	1,233,000		1,387,000		1,166,000		1,357,000		1,405,000
Industrial	120,000		120,000		383,000		383,000		681,000
Retail	30,000		—		—		—		—

Total	1,383,000		1,507,000		1,549,000		1,740,000		2,086,000

Total:
Office 2/	21,103,000		21,141,000		20,920,000		21,105,000		21,223,000
Industrial	6,743,000		7,081,000		7,081,000		7,082,000		7,286,000
Retail 3/	1,348,000		1,317,000		1,326,000		1,327,000		1,431,000

Total 4/	29,194,000		29,539,000		29,327,000		29,514,000		29,940,000

Same Property
Office 2/	18,719,000		18,719,000		18,719,000		18,719,000		18,719,000
Industrial	5,942,000		5,942,000		5,942,000		5,942,000		5,942,000
Retail	1,295,000		1,295,000		1,295,000		1,295,000		1,295,000

Total	25,956,000		25,956,000		25,956,000		25,956,000		25,956,000

Percent Leased/Pre-Leased:
In-Service:
Office	89.7	%	88.5	%	89.3	%	89.0	%	88.1	%
Industrial	91.4	%	90.8	%	91.9	%	91.7	%	91.8	%
Retail	94.4	%	94.8	%	95.4	%	95.7	%	96.2	%

Total	90.4	%	89.3	%	90.2	%	90.0	%	89.4	%

Development Completed - Not Stabilized:
Office	75.9	%	69.9	%	62.8	%	62.8	%	52.3	%
Industrial	78.2	%	61.0	%	44.0	%	44.0	%	—
Retail	—		—		—		—		—

Total	76.9	%	65.0	%	55.1	%	54.3	%	52.3	%

Development - In Process:
Office	71.2	%	72.5	%	55.0	%	55.3	%	58.4	%
Industrial	100.0	%	0.0	%	50.1	%	0.0	%	27.0	%
Retail	100.0	%	—		—		—		—

Total	74.3	%	66.7	%	53.8	%	43.1	%	48.2	%

Same Property
Office	89.8	%	88.7	%	89.2	%	89.2	%	88.4	%
Industrial	91.4	%	91.7	%	92.8	%	92.9	%	92.4	%
Retail	94.3	%	94.7	%	95.2	%	95.6	%	96.1	%

Total	90.4	%	89.7	%	90.3	%	90.4	%	89.7	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Substantially all of our Office properties are located in suburban markets.

3/	Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City Retail properties.

4/	Excludes for sale residential units and minor for rent apartment buildings.


Highwoods Properties, Inc.		9

Portfolio Summary

(Continued)


*As of September 30, 2007*
Summary by Location, Wholly-Owned Properties Only 1/:
Market	Rentable Square Feet		Occupancy		Percentage of Annualized Cash Revenue 2/
Market	Rentable Square Feet		Occupancy		Office		Industrial		Retail		Total
Raleigh 3/	3,553,000		88.1	%	14.9	%	—		—		14.9	%
Atlanta	5,199,000		92.8	%	10.1	%	3.8	%	—		13.9	%
Kansas City	2,216,000	4/	89.3	%	4.4	%	0.0	%	9.5	%	13.9	%
Tampa	2,418,000		95.6	%	13.4	%	—		—		13.4	%
Nashville	2,875,000		92.5	%	13.3	%	—		—		13.3	%
Piedmont Triad 5/	5,234,000		86.1	%	6.8	%	3.7	%	—		10.5	%
Richmond	2,024,000		91.8	%	8.9	%	—		—		8.9	%
Memphis	1,276,000		92.5	%	5.7	%	—		—		5.7	%
Greenville	897,000		87.7	%	3.4	%	—		—		3.4	%
Orlando	218,000		99.4	%	1.3	%	—		—		1.3	%
Columbia	253,000		82.5	%	0.5	%	—		—		0.5	%
Other	100,000		69.6	%	0.3	%	—		—		0.3	%

Total	26,263,000		90.4	%	83.0	%	7.5	%	9.5	%	100.0	%

Summary by Location, Including Joint Venture Properties:


Market	Rentable Square Feet		Percentage of Annualized Cash Revenue 2/ 6/
Market	Rentable Square Feet		Occupancy		Office		Industrial		Retail		Multi-Family		Total
Atlanta	6,034,000		93.3	%	10.4	%	3.3	%	—		—		13.7	%
Raleigh	3,731,000		88.7	%	13.4	%	—		—		—		13.4	%
Kansas City	2,934,000	4/	87.3	%	4.8	%	0.0	%	8.4	%	—		13.2	%
Tampa	2,623,000		95.9	%	12.1	%	—		—		—		12.1	%
Nashville	2,875,000		92.5	%	11.7	%	—		—		—		11.7	%
Piedmont Triad	5,598,000		86.8	%	6.4	%	3.2	%	—		—		9.6	%
Richmond	2,437,000		93.1	%	8.4	%	—		—		—		8.4	%
Memphis	1,276,000		92.5	%	5.1	%	—		—		—		5.1	%
Orlando	2,071,000		91.7	%	4.6	%	—		—		—		4.6	%
Des Moines	2,474,000		92.9	%	3.4	%	0.5	%	0.1	%	0.4	%	4.4	%
Greenville	897,000		87.7	%	3.0	%	—		—		—		3.0	%
Columbia	253,000		82.5	%	0.4	%	—		—		—		0.4	%
Other	210,000		85.5	%	0.3	%	—		—		—		0.3	%
Charlotte	148,000		100.0	%	0.1	%	—		—		—		0.1	%

Total	33,561,000		90.9	%	84.1	%	7.0	%	8.5	%	0.4	%	100.0	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

3/	Raleigh Market encompasses Raleigh, Durham, Cary, and Research Triangle metropolitan area.

4/	Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City Retail properties.

5/	Piedmont Triad Market encompasses Greensboro, Winston-Salem metropolitan area.

6/	Includes Highwoods’ share of Joint Venture Annualized Rental Revenue, see page 34.


Highwoods Properties, Inc.		10

Portfolio Summary - Wholly-Owned Properties Only

(Continued)


*As of September 30, 2007*
	Office Properties 1/					Industrial
Market	Rentable Square Feet	Occupancy		Percentage of Office Annualized Cash Revenue 2/		Rentable Square Feet	Occupancy		Percentage of Industrial Annualized Cash Revenue 2/
Raleigh	3,553,000	88.1	%	18.0	%	—	—		—
Tampa	2,418,000	95.6	%	16.2	%	—	—		—
Nashville	2,875,000	92.5	%	16.0	%	—	—		—
Atlanta	2,380,000	90.3	%	12.2	%	2,819,000	94.9	%	50.5	%
Richmond	2,024,000	91.8	%	10.7	%	—	—		—
Piedmont Triad	2,115,000	82.7	%	8.2	%	3,119,000	88.4	%	49.4	%
Memphis	1,276,000	92.5	%	6.9	%	—	—		—
Kansas City	894,000	81.9	%	5.3	%	4,000	46.5	%	0.1	%
Greenville	897,000	87.7	%	4.1	%	—	—		—
Orlando	218,000	99.4	%	1.5	%	—	—		—
Columbia	253,000	82.5	%	0.6	%	—	—		—
Other	100,000	69.6	%	0.3	%	—	—		—

	19,003,000	89.7	%	100.0	%	5,942,000	91.4	%	100.0	%


	Retail
Market	Rentable Square Feet	Occupancy		Percentage of Retail Annualized Cash Revenue 2/
Kansas City 3/	1,318,000	94.4	%	100.0	%

	1,318,000	94.4	%	100.0	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

3/	Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City Retail properties.


Highwoods Properties, Inc.		11

Occupancy Trends - Office, Industrial and Retail Properties 1/


Market	Measurement	09/30/07		06/30/07		03/31/07		12/31/06		09/30/06
Atlanta	Rentable Square Feet	5,199,000		5,514,000		5,514,000		5,515,000		5,584,000
	Occupancy	92.8	%	92.9	%	92.7	%	94.0	%	92.4	%
	Current Properties 2/	92.8	%	92.7	%	92.3	%	94.1	%	92.4	%

Columbia	Rentable Square Feet	253,000		253,000		253,000		252,000		252,000
	Occupancy	82.5	%	72.0	%	71.0	%	48.7	%	49.4	%
	Current Properties 2/	82.5	%	72.0	%	71.0	%	48.5	%	49.2	%

Greenville	Rentable Square Feet	897,000		1,109,000		1,109,000		1,109,000		1,109,000
	Occupancy	87.7	%	76.3	%	77.2	%	75.3	%	75.0	%
	Current Properties 2/	87.7	%	84.0	%	85.1	%	82.7	%	82.3	%

Kansas City 3/	Rentable Square Feet	2,216,000		2,215,000		2,224,000		2,224,000		2,329,000
	Occupancy	89.3	%	89.5	%	89.9	%	90.1	%	90.7	%
	Current Properties 2/	89.3	%	89.5	%	89.9	%	90.0	%	90.4	%

Memphis	Rentable Square Feet	1,276,000		1,276,000		1,276,000		1,197,000		1,197,000
	Occupancy	92.5	%	92.7	%	92.8	%	91.8	%	91.9	%
	Current Properties 2/	92.1	%	92.2	%	92.3	%	91.8	%	91.9	%

Nashville	Rentable Square Feet	2,875,000		2,875,000		2,875,000		2,876,000		2,875,000
	Occupancy	92.5	%	90.9	%	92.4	%	91.6	%	92.8	%
	Current Properties 2/	92.5	%	90.9	%	92.4	%	91.6	%	92.8	%

Orlando	Rentable Square Feet	218,000		218,000		218,000		218,000		218,000
	Occupancy	99.4	%	98.9	%	98.9	%	100.0	%	100.0	%
	Current Properties 2/	99.4	%	98.9	%	98.9	%	100.0	%	100.0	%

Piedmont Triad	Rentable Square Feet	5,234,000		5,235,000		5,195,000		5,195,000		5,589,000
	Occupancy	86.1	%	85.7	%	88.3	%	88.7	%	89.9	%
	Current Properties 2/	86.7	%	86.4	%	88.4	%	88.7	%	89.5	%

Raleigh	Rentable Square Feet	3,553,000		3,554,000		3,554,000		3,810,000		3,812,000
	Occupancy	88.1	%	86.5	%	86.6	%	86.1	%	82.6	%
	Current Properties 2/	88.1	%	86.5	%	86.6	%	86.6	%	82.8	%

Richmond	Rentable Square Feet	2,024,000		2,024,000		2,024,000		2,024,000		1,954,000
	Occupancy	91.8	%	90.0	%	89.8	%	89.8	%	88.6	%
	Current Properties 2/	91.5	%	89.7	%	89.4	%	89.5	%	88.6	%

Tampa	Rentable Square Feet	2,418,000		2,418,000		2,418,000		2,332,000		2,524,000
	Occupancy	95.6	%	96.5	%	98.2	%	97.7	%	96.0	%
	Current Properties 2/	95.4	%	96.4	%	98.1	%	97.7	%	96.8	%

Total 4/	Rentable Square Feet	26,163,000		26,691,000		26,660,000		26,752,000		27,443,000
	Occupancy	90.4	%	89.3	%	90.2	%	90.0	%	89.4	%

	Current Properties 2/	90.5	%	89.8	%	90.4	%	90.5	%	89.8	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Only includes properties that were owned and in-service for all periods shown.

3/	Excludes 430,000 square feet of basement space in the Country Club Plaza and other Kansas City Retail properties.

4/	Excludes a 100,000 square foot building located in South Florida.


Highwoods Properties, Inc.		12

Leasing Statistics

Office Portfolio 1/


	Three Months Ended
	9/30/07 2/			6/30/07 3/			3/31/07 4/			12/31/06 5/			9/30/06 6/			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		121			166			130			137			140			139
Rentable square footage leased		1,125,050			865,958			726,080			868,941			915,289			900,264
Square footage of Renewal Deals		720,127			590,542			451,125			601,796			681,640			609,046
Renewed square footage (% of total)		64.0	%		68.2	%		62.1	%		69.3	%		74.5	%		67.7	%
New Leases square footage (% of total)		36.0	%		31.8	%		37.9	%		30.7	%		25.5	%		32.3	%
Weighted average per rentable square foot over the lease term:
Base rent	$	19.32		$	20.13		$	18.25		$	19.72		$	19.23		$	19.33
Tenant improvements		(0.93	)		(2.00	)		(1.70	)		(1.77	)		(1.56	)		(1.59	)
Leasing commissions 7/		(0.51	)		(0.63	)		(0.59	)		(0.56	)		(0.46	)		(0.55	)
Rent concessions		(0.40	)		(0.21	)		(0.06	)		(0.22	)		(0.11	)		(0.20	)

Effective rent		17.48			17.29			15.90			17.17			17.10			16.99
Expense stop		(6.31	)		(6.04	)		(5.06	)		(5.45	)		(5.04	)		(5.58	)

Equivalent effective net rent	$	11.17		$	11.25		$	10.84		$	11.72		$	12.06		$	11.41

Weighted average term in years		4.6			4.5			5.0			5.2			4.5			4.8

Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	6,513,821		$	8,589,754		$	7,604,253		$	9,392,949		$	7,994,295		$	8,019,015
Rentable square feet		1,125,050			865,958			726,080			868,941			915,289			900,264

Per rentable square foot	$	5.79		$	9.92		$	10.47		$	10.81		$	8.73		$	8.91

Leasing Commissions:
Total dollars committed under signed leases 7/	$	2,747,213		$	2,303,936		$	2,107,213		$	2,256,508		$	2,144,582		$	2,311,890
Rentable square feet		1,125,050			865,958			726,080			868,941			915,289			900,264

Per rentable square foot	$	2.44		$	2.66		$	2.90		$	2.60		$	2.34		$	2.57

Total:
Total dollars committed under signed leases	$	9,261,034		$	10,893,690		$	9,711,466		$	11,649,457		$	10,138,877		$	10,330,905
Rentable square feet		1,125,050			865,958			726,080			868,941			915,289			900,264

Per rentable square foot	$	8.23		$	12.58		$	13.38		$	13.41		$	11.08		$	11.48

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Includes 94K square feet of leases that start in 2009 or later.

3/	Includes 213K square feet of leases that start in 2009 or later.

4/	Includes 98K square feet of leases that start in 2009 or later.

5/	Includes 17K square feet of leases that start in 2009 or later.

6/	Includes 179K square feet of leases that start in 2008 or later.

7/	Excludes a full allocation of internal leasing costs.


Highwoods Properties, Inc.		13

Leasing Statistics

Industrial Portfolio


	Three Months Ended
	9/30/07			6/30/07 1/			3/31/07			12/31/06			9/30/06			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		8			18			14			17			23			16
Rentable square footage leased		115,617			575,033			188,562			539,939			485,936			381,017
Square footage of Renewal Deals		73,793			489,312			175,579			315,423			237,061			258,234
Renewed square footage (% of total)		63.8	%		85.1	%		93.1	%		58.4	%		48.8	%		67.8	%
New Leases square footage (% of total)		36.2	%		14.9	%		6.9	%		41.6	%		51.2	%		32.2	%

Weighted average per rentable square foot over the lease term:
Base rent	$	7.53		$	3.82		$	4.63		$	3.81		$	4.13		$	4.78
Tenant improvements		(0.71	)		(0.23	)		(0.20	)		(0.45	)		(0.31	)		(0.38	)
Leasing commissions 2/		(0.14	)		(0.06	)		(0.04	)		(0.14	)		(0.09	)		(0.09	)
Rent concessions		(0.10	)		(0.05	)		(0.02	)		(0.05	)		(0.11	)		(0.07	)

Effective rent		6.58			3.48			4.37			3.17			3.62			4.24
Expense stop		(1.04	)		(0.19	)		(0.24	)		(0.08	)		(0.17	)		(0.34	)

Equivalent effective net rent	$	5.54		$	3.29		$	4.13		$	3.09		$	3.45		$	3.90

Weighted average term in years		4.3			2.3			2.5			5.2			3.8			3.6

Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	424,840		$	528,135		$	142,102		$	1,323,790		$	732,593		$	630,292
Rentable square feet		115,617			575,033			188,562			539,939			485,936			381,017

Per rentable square foot	$	3.67		$	0.92		$	0.75		$	2.45		$	1.51		$	1.65

Leasing Commissions:
Total dollars committed under signed leases 2/	$	74,106		$	142,246		$	23,647		$	433,927		$	109,087		$	156,602
Rentable square feet		115,617			575,033			188,562			539,939			485,936			381,017

Per rentable square foot	$	0.64		$	0.25		$	0.13		$	0.80		$	0.22		$	0.41

Total:
Total dollars committed under signed leases	$	498,945		$	670,380		$	165,749		$	1,757,717		$	841,680		$	786,894
Rentable square feet		115,617			575,033			188,562			539,939			485,936			381,017

Per rentable square foot	$	4.32		$	1.17		$	0.88		$	3.26		$	1.73		$	2.07

1/	Includes 5K square feet of leases that start in 2008 or later.

2/	Excludes a full allocation of internal leasing costs.


Highwoods Properties, Inc.		14

Leasing Statistics

Retail Portfolio


	Three Months Ended
	9/30/07			6/30/07			3/31/07 1/			12/31/06			9/30/06			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		8			8			9			8			8			8
Rentable square footage leased		24,629			14,721			41,357			23,748			26,472			26,185
Square footage of Renewal Deals		18,097			7,072			39,171			9,855			17,179			18,275
Renewed square footage (% of total)		73.5	%		48.0	%		94.7	%		41.5	%		64.9	%		69.8	%
New Leases square footage (% of total)		26.5	%		52.0	%		5.3	%		58.5	%		35.1	%		30.2	%
Weighted average per rentable square foot over the lease term:
Base rent	$	24.06		$	33.29		$	23.23		$	18.27		$	24.75		$	24.72
Tenant improvements		(1.17	)		(2.57	)		(0.12	)		(0.08	)		(1.40	)		(1.07	)
Leasing commissions 2/		(0.46	)		(1.25	)		(0.24	)		(0.41	)		(0.61	)		(0.59	)
Rent concessions		0.00			0.00			0.00			(0.20	)		0.00			(0.04	)

Effective rent		22.43			29.47			22.87			17.58			22.74			23.02
Expense stop		0.00			0.00			0.00			0.00			0.00			0.00

Equivalent effective net rent	$	22.43		$	29.47		$	22.87		$	17.58		$	22.74		$	23.02

Weighted average term in years		6.1			7.0			4.2			8.6			5.2			6.2

Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	260,407		$	335,337		$	27,507		$	15,000		$	288,272		$	185,304
Rentable square feet		24,629			14,721			41,357			23,748			26,472			26,185

Per rentable square foot	$	10.57		$	22.78		$	0.67		$	0.63		$	10.89		$	7.08

Leasing Commissions:
Total dollars committed under signed leases 2/	$	17,601		$	83,077		$	1,981		$	1,981		$	46,048		$	30,138
Rentable square feet		24,629			14,721			41,357			23,748			26,472			26,185

Per rentable square foot	$	0.71		$	5.64		$	0.05		$	0.08		$	1.74		$	1.15

Total:
Total dollars committed under signed leases	$	278,008		$	418,414		$	29,488		$	16,981		$	334,320		$	215,442
Rentable square feet		24,629			14,721			41,357			23,748			26,472			26,185

Per rentable square foot	$	11.29		$	28.42		$	0.71		$	0.72		$	12.63		$	8.23

1/	Includes 17K square feet of leases that start in 2009 or later.

2/	Excludes a full allocation of internal leasing costs.


Highwoods Properties, Inc.		15

Leasing Statistics by Market

For the Three Months Ended As of 9/30/07


Office Portfolio 1/ Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/
Atlanta	383,316	3.7	$	16.29	$	1.09	$	2.93
Nashville	254,504	4.1		20.08		3.96		2.23
Raleigh	186,672	5.1		20.40		7.89		2.28
Richmond	96,962	6.6		18.94		16.82		1.79
Piedmont Triad	55,420	5.0		17.12		2.03		0.68
Greenville	37,208	4.9		16.23		15.50		4.77
Tampa	32,628	4.8		25.75		7.34		1.59
Kansas City	31,730	4.4		18.61		5.70		2.76
Memphis	24,661	4.6		23.41		11.27		2.13
Other	19,560	9.2		34.11		29.43		0.17
Orlando	2,389	5.0		25.48		10.00		0.00

	1,125,050	4.6	$	18.92	$	5.79	$	2.44


Industrial Portfolio Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/
Atlanta	62,976	3.8	$	5.53	$	1.30	$	0.15
Piedmont Triad	52,641	4.8		9.69		6.51		1.19

	115,617	4.3	$	7.43	$	3.67	$	0.64


Retail Portfolio Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF
Kansas City	24,629	6.1	$	24.06	$	10.57	$	0.71

	24,629	6.1	$	24.06	$	10.57	$	0.71

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Lease commissions per square foot excludes capitalized internal leasing costs.


Highwoods Properties, Inc.		16

Rental Rate Comparisons by Market

For the Three Months Ended As of 9/30/07


Office Portfolio 1/ Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Atlanta	383,316	$	16.29	$	19.38	-15.9	%
Nashville	254,504		20.08		16.39	22.5	%
Raleigh	186,672		20.40		19.67	3.7	%
Richmond	96,962		18.94		17.69	7.1	%
Piedmont Triad	55,420		17.12		15.32	11.7	%
Greenville	37,208		16.23		14.02	15.8	%
Tampa	32,628		25.75		21.68	18.8	%
Kansas City	31,730		18.61		17.85	4.2	%
Memphis	24,661		23.41		20.24	15.7	%
Other	19,560		34.11		26.25	29.9	%
Orlando	2,389		25.48		23.20	9.8	%

GAAP Rent Growth	1,125,050	$	18.92	$	18.37	3.0	%



Cash Rent Growth	1,125,050	$	18.53	$	19.62	-5.6	%


Industrial Portfolio Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Atlanta	62,976	$	5.53	$	5.13	7.7	%
Piedmont Triad	52,641		9.69		9.65	0.5	%

GAAP Rent Growth	115,617	$	7.43	$	7.19	3.3	%



Cash Rent Growth	115,617	$	7.59	$	8.13	-6.7	%


Retail Portfolio Market	Rentable Square Feet Leased	Current Rent		Previous Rent 2/		Percentage Change Rent
Kansas City	24,629	$	24.06	$	21.33	12.8	%

GAAP Rent Growth	24,629	$	24.06	$	21.33	12.8	%



Cash Rent Growth	24,629	$	24.10	$	23.30	3.5	%


Average Cash Rental Rates for All In Place Leases at: 1/ 3/

Type	9/30/07			9/30/06			9/30/05			9/30/04			9/30/03
Office	$	19.32		$	18.32		$	17.76		$	17.64		$	17.48
Industrial		5.20			5.06			4.98			4.69			4.60
Retail 2/		30.97			28.14			27.36			26.01			23.34

Weighted average rate	$	16.56		$	15.60		$	15.27		$	14.80		$	14.13



Annual % growth rate		6.2	%		2.2	%		3.2	%		4.7	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Excludes percentage rent.

3/	Average cash rental rates represent September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12 and divided by the related leased square feet.


Highwoods Properties, Inc.		17

Lease Expirations

September 30, 2007


*Dollars in thousands*
Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Cash Revenue 1/		Average Rental Rate		Percent of Annualized Cash Revenue 1/
Office: 2/
2007 /3	218,997	1.3	%	$	4,638	$	21.18	1.4	%
2008	2,038,585	11.7	%		39,251		19.25	11.6	%
2009	2,633,477	15.1	%		51,566		19.58	15.3	%
2010	2,425,315	13.9	%		50,273		20.73	14.9	%
2011	2,847,865	16.2	%		54,291		19.06	16.0	%
2012	2,222,089	12.7	%		43,929		19.77	13.0	%
2013	1,087,243	6.2	%		20,470		18.83	6.1	%
2014	817,091	4.7	%		16,137		19.75	4.8	%
2015	817,107	4.7	%		16,158		19.77	4.8	%
2016	729,773	4.2	%		13,383		18.34	4.0	%
2017 and thereafter	1,624,143	9.3	%		27,206		16.75	8.1	%

	17,461,685	100.0	%	$	337,302	$	19.32	100.0	%

Industrial:
2007 /4	69,674	1.2	%	$	307	$	4.41	1.0	%
2008	953,656	16.4	%		5,555		5.82	18.4	%
2009	1,114,782	19.2	%		5,859		5.26	19.4	%
2010	861,012	14.8	%		4,530		5.26	15.0	%
2011	631,548	10.9	%		3,401		5.39	11.3	%
2012	421,419	7.3	%		2,300		5.46	7.6	%
2013	210,052	3.6	%		1,241		5.91	4.1	%
2014	414,465	7.1	%		1,698		4.10	5.6	%
2015	233,882	4.0	%		878		3.75	2.9	%
2016	264,597	4.6	%		976		3.69	3.2	%
2017 and thereafter	634,240	10.9	%		3,480		5.49	11.5	%

	5,809,327	100.0	%	$	30,225	$	5.20	100.0	%

1/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

2/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

3/	Includes 51,000 square feet of leases that are on a month to month basis or 0.3% of total annualized revenue.

4/	Includes 59,000 square feet of leases that are on a month to month basis or 0.0% of total annualized revenue.

Note:

2007 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.


Highwoods Properties, Inc.		18

Lease Expirations

September 30, 2007

(Continued)


*Dollars in thousands*
Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Cash Revenue 1/		Average Rental Rate		Percent of Annualized Cash Revenue 1/
Retail:
2007 2/	19,238	1.5	%	$	561	$	29.16	1.5	%
2008	101,057	8.1	%		2,864		28.34	7.4	%
2009	138,904	11.2	%		3,966		28.55	10.3	%
2010	95,283	7.7	%		3,712		38.96	9.6	%
2011	75,164	6.0	%		2,233		29.71	5.8	%
2012	158,079	12.7	%		4,815		30.46	12.5	%
2013	64,443	5.2	%		2,627		40.76	6.8	%
2014	92,969	7.5	%		1,891		20.34	4.9	%
2015	127,995	10.3	%		4,174		32.61	10.8	%
2016	65,526	5.3	%		2,641		40.30	6.9	%
2017 and thereafter	305,193	24.5	%		9,035		29.60	23.5	%

	1,243,851	100.0	%	$	38,519	$	30.97	100.0	%

Total:
2007 3/ 4/	307,909	1.3	%	$	5,506	$	17.88	1.4	%
2008	3,093,298	12.6	%		47,670		15.41	11.7	%
2009	3,887,163	15.8	%		61,391		15.79	15.0	%
2010	3,381,610	13.8	%		58,515		17.30	14.4	%
2011	3,554,577	14.5	%		59,925		16.86	14.8	%
2012	2,801,587	11.4	%		51,044		18.22	12.6	%
2013	1,361,738	5.6	%		24,338		17.87	6.0	%
2014	1,324,525	5.4	%		19,726		14.89	4.9	%
2015	1,178,984	4.8	%		21,210		17.99	5.2	%
2016	1,059,896	4.3	%		17,000		16.04	4.2	%
2017 and thereafter	2,563,576	10.5	%		39,721		15.49	9.8	%

	24,514,863	100.0	%	$	406,046	$	16.56	100.0	%

1/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

2/	Includes 10,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue.

3/	Includes 120,000 square feet of leases that are on a month to month basis or 0.4% of total annualized revenue.

4/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

Note:

2007 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.


Highwoods Properties, Inc.		19

Office Lease Expirations by Market by Quarter 1/


*Dollars in thousands*
			*Three Months Ended*
			12/31/07 2/			03/31/08			06/30/08			09/30/08			Total
Atlanta	RSF			18,237			351,241			2,191			148,215			519,884
	% of Total Office RSF			0.1	%		2.0	%		0.0	%		0.8	%		3.0	%
	Annualized Cash Revenue	3/	$	182		$	5,786		$	51		$	2,833		$	8,852
	% of Total Office Annl Cash Rev			0.1	%		1.7	%		0.0	%		0.8	%		2.6	%

Columbia	RSF			3,258			0			0			0			3,258
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Cash Revenue	3/	$	61		$	—		$	—		$	—		$	61
	% of Total Office Annl Cash Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

Greenville	RSF			120			37,994			2,322			19,763			60,199
	% of Total Office RSF			0.0	%		0.2	%		0.0	%		0.1	%		0.3	%
	Annualized Cash Revenue	3/	$	2		$	706		$	42		$	383		$	1,133
	% of Total Office Annl Cash Rev			0.0	%		0.2	%		0.0	%		0.1	%		0.3	%

Kansas City	RSF			30,556			14,601			11,395			21,413			77,965
	% of Total Office RSF			0.2	%		0.1	%		0.1	%		0.1	%		0.4	%
	Annualized Cash Revenue	3/	$	725		$	285		$	220		$	478		$	1,708
	% of Total Office Annl Cash Rev			0.2	%		0.1	%		0.1	%		0.1	%		0.5	%

Memphis	RSF			8,542			52,005			28,037			15,681			104,265
	% of Total Office RSF			0.0	%		0.3	%		0.2	%		0.1	%		0.6	%
	Annualized Cash Revenue	3/	$	94		$	1,117		$	577		$	312		$	2,100
	% of Total Office Annl Cash Rev			0.0	%		0.3	%		0.2	%		0.1	%		0.6	%

Nashville	RSF			32,252			39,742			39,047			49,070			160,111
	% of Total Office RSF			0.2	%		0.2	%		0.2	%		0.3	%		0.9	%
	Annualized Cash Revenue	3/	$	771		$	822		$	772		$	970		$	3,335
	% of Total Office Annl Cash Rev			0.2	%		0.2	%		0.2	%		0.3	%		1.0	%

Orlando	RSF			6,340			3,610			0			0			9,950
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.1	%
	Annualized Cash Revenue	3/	$	171		$	96		$	—		$	—		$	267
	% of Total Office Annl Cash Rev			0.1	%		0.0	%		0.0	%		0.0	%		0.1	%

Piedmont Triad	RSF			24,243			134,765			29,565			24,642			213,215
	% of Total Office RSF			0.1	%		0.8	%		0.2	%		0.1	%		1.2	%
	Annualized Cash Revenue	3/	$	388		$	2,298		$	407		$	494		$	3,587
	% of Total Office Annl Cash Rev			0.1	%		0.7	%		0.1	%		0.1	%		1.1	%

Raleigh	RSF			30,012			162,978			50,103			203,736			446,829
	% of Total Office RSF			0.1	%		0.9	%		0.3	%		1.2	%		2.5	%
	Annualized Cash Revenue	3/	$	597		$	2,765		$	963		$	4,627		$	8,952
	% of Total Office Annl Cash Rev			0.2	%		0.8	%		0.3	%		1.4	%		2.7	%

Richmond	RSF			45,803			102,141			43,186			93,806			284,936
	% of Total Office RSF			0.3	%		0.6	%		0.2	%		0.5	%		1.6	%
	Annualized Cash Revenue	3/	$	992		$	2,067		$	840		$	1,836		$	5,735
	% of Total Office Annl Cash Rev			0.3	%		0.6	%		0.2	%		0.5	%		1.7	%

Tampa	RSF			18,539			16,515			38,985			52,640			126,679
	% of Total Office RSF			0.1	%		0.1	%		0.2	%		0.3	%		0.7	%
	Annualized Cash Revenue	3/	$	604		$	437		$	940		$	1,080		$	3,061
	% of Total Office Annl Cash Rev			0.2	%		0.1	%		0.3	%		0.3	%		0.9	%

Other	RSF			1,095			1,351			4,432			3,936			10,814
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.1	%
	Annualized Cash Revenue	3/	$	53		$	36		$	117		$	124		$	330
	% of Total Office Annl Cash Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.1	%

Total	RSF			218,997			916,943			249,263			632,902			2,018,105
	% of Total Office RSF			1.2	%		5.3	%		1.4	%		3.6	%		11.5	%
	Annualized Cash Revenue	3/	$	4,640		$	16,415		$	4,929		$	13,137		$	39,121
	% of Total Office Annl Cash Rev			1.4	%		4.9	%		1.5	%		3.9	%		11.6	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Includes 51,000 square feet of leases that are on a month to month basis or 0.3% of total annualized revenue.

3/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.


Highwoods Properties, Inc.		20

Industrial Lease Expirations by Market by Quarter


*Dollars in thousands*
			*Three Months Ended*
			09/30/07 1/			12/31/07			03/31/08			06/30/08			Total
Atlanta	RSF			0			134,043			223,335			115,423			472,801
	% of Total Industrial RSF			0.0	%		2.3	%		3.8	%		2.0	%		8.1	%
	Annualized Cash Revenue	2/	$	1		$	621		$	1,242		$	658		$	2,522
	% of Total Industrial Annl Cash Rev			0.1	%		2.1	%		4.1	%		2.2	%		8.4	%

Kansas City	RSF			0			0			0			0			0
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Cash Revenue	2/	$	—		$	—		$	—		$	—		$	—
	% of Total Industrial Annl Cash Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%

Piedmont Triad	RSF			69,674			382,794			13,092			5,209			470,769
	% of Total Industrial RSF			1.2	%		6.6	%		0.2	%		0.1	%		8.1	%
	Annualized Cash Revenue	2/	$	307		$	2,283		$	194		$	56		$	2,840
	% of Total Industrial Annl Cash Rev			1.0	%		7.6	%		0.6	%		0.2	%		9.4	%

Total	RSF			69,674			516,837			236,427			120,632			943,570
	% of Total Industrial RSF			1.2	%		8.9	%		4.1	%		2.1	%		16.2	%
	Annualized Cash Revenue	2/	$	308		$	2,904		$	1,436		$	714		$	5,362
	% of Total Industrial Annl Cash Rev			1.1	%		9.6	%		4.8	%		2.4	%		17.8	%

1/	Includes 59,000 square feet of leases that are on a month to month basis or 0.0% of total annualized revenue.

2/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.


Highwoods Properties, Inc.		21

Office Lease Expirations by Market by Year 1/


*Dollars in thousands*
			2007 2/			2008			2009			2010			Thereafter
Atlanta	RSF			18,237			539,579			339,100			89,634			1,162,635
	% of Total Office RSF			0.1	%		3.1	%		1.9	%		0.5	%		6.7	%
	Annualized Cash Revenue	3/	$	182		$	9,443		$	5,823		$	1,701		$	23,956
	% of Total Office Annl Cash Rev			0.1	%		2.8	%		1.7	%		0.5	%		7.1	%

Columbia	RSF			3,258			21,107			8,409			6,475			169,515
	% of Total Office RSF			0.0	%		0.1	%		0.0	%		0.0	%		1.0	%
	Annualized Cash Revenue	3/	$	61		$	273		$	132		$	106		$	1,465
	% of Total Office Annl Cash Rev			0.0	%		0.1	%		0.0	%		0.0	%		0.4	%

Greenville	RSF			120			60,079			60,122			54,914			611,223
	% of Total Office RSF			0.0	%		0.3	%		0.3	%		0.3	%		3.5	%
	Annualized Cash Revenue	3/	$	2		$	1,132		$	1,027		$	923		$	10,614
	% of Total Office Annl Cash Rev			0.0	%		0.3	%		0.3	%		0.3	%		3.1	%

Kansas City	RSF			30,556			76,048			127,377			123,860			404,417
	% of Total Office RSF			0.2	%		0.4	%		0.7	%		0.7	%		2.3	%
	Annualized Cash Revenue	3/	$	725		$	1,567		$	2,568		$	3,230		$	9,637
	% of Total Office Annl Cash Rev			0.2	%		0.5	%		0.8	%		1.0	%		2.9	%

Memphis	RSF			8,542			125,443			171,604			210,614			664,077
	% of Total Office RSF			0.0	%		0.7	%		1.0	%		1.2	%		3.8	%
	Annualized Cash Revenue	3/	$	94		$	2,671		$	3,391		$	4,344		$	12,814
	% of Total Office Annl Cash Rev			0.0	%		0.8	%		1.0	%		1.3	%		3.8	%

Nashville	RSF			32,252			167,592			674,195			488,651			1,422,218
	% of Total Office RSF			0.2	%		1.0	%		3.9	%		2.8	%		8.1	%
	Annualized Cash Revenue	3/	$	771		$	3,473		$	13,197		$	9,749		$	26,653
	% of Total Office Annl Cash Rev			0.2	%		1.0	%		3.9	%		2.9	%		7.9	%

Orlando	RSF			6,340			3,610			11,482			79,163			131,756
	% of Total Office RSF			0.0	%		0.0	%		0.1	%		0.5	%		0.8	%
	Annualized Cash Revenue	3/	$	171		$	96		$	265		$	1,808		$	2,836
	% of Total Office Annl Cash Rev			0.1	%		0.0	%		0.1	%		0.5	%		0.8	%

Piedmont Triad	RSF			24,243			203,513			137,457			218,845			1,165,083
	% of Total Office RSF			0.1	%		1.2	%		0.8	%		1.3	%		6.7	%
	Annualized Cash Revenue	3/	$	388		$	3,434		$	2,214		$	3,419		$	18,280
	% of Total Office Annl Cash Rev			0.1	%		1.0	%		0.7	%		1.0	%		5.4	%

Raleigh	RSF			30,012			462,297			499,143			363,638			1,890,666
	% of Total Office RSF			0.2	%		2.6	%		2.9	%		2.1	%		10.8	%
	Annualized Cash Revenue	3/	$	596		$	9,193		$	10,161		$	6,803		$	34,050
	% of Total Office Annl Cash Rev			0.2	%		2.7	%		3.0	%		2.0	%		10.1	%

Richmond	RSF			45,803			248,015			203,606			243,523			1,220,384
	% of Total Office RSF			0.3	%		1.4	%		1.2	%		1.4	%		7.0	%
	Annualized Cash Revenue	3/	$	992		$	4,903		$	3,906		$	4,537		$	21,883
	% of Total Office Annl Cash Rev			0.3	%		1.5	%		1.2	%		1.3	%		6.5	%

Tampa	RSF			18,539			121,583			394,197			515,017			1,282,440
	% of Total Office RSF			0.1	%		0.7	%		2.3	%		2.9	%		7.3	%
	Annualized Cash Revenue	3/	$	604		$	2,787		$	8,754		$	13,617		$	28,782
	% of Total Office Annl Cash Rev			0.2	%		0.8	%		2.6	%		4.0	%		8.5	%

Other	RSF			1,095			9,719			6,785			30,981			20,897
	% of Total Office RSF			0.0	%		0.1	%		0.0	%		0.2	%		0.1	%
	Annualized Cash Revenue	3/	$	53		$	278		$	130		$	36		$	604
	% of Total Office Annl Cash Rev			0.0	%		0.1	%		0.0	%		0.0	%		0.2	%

Total	RSF			218,997			2,038,585			2,633,477			2,425,315			10,145,311
	% of Total Office RSF			1.3	%		11.7	%		15.1	%		13.9	%		58.1	%
	Annualized Cash Revenue	3/	$	4,639		$	39,250		$	51,568		$	50,273		$	191,574
	% of Total Office Annl Cash Rev			1.4	%		11.6	%		15.2	%		14.9	%		56.9	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Includes 51,000 square feet of leases that are on a month to month basis or 0.3% of total annualized revenue.

3/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.


Highwoods Properties, Inc.		22

Industrial Lease Expirations by Market by Year


*Dollars in thousands*
			2007 1/			2008			2009			2010			Thereafter
Atlanta	RSF			0			472,801			320,555			316,221			1,758,786
	% of Total Industrial RSF			0.0	%		8.1	%		5.5	%		5.4	%		30.3	%
	Annualized Cash Revenue	2/	$	—		$	2,520		$	2,068		$	1,814		$	8,885
	% of Total Industrial Annl Cash Rev			0.0	%		8.3	%		6.8	%		6.0	%		29.4	%

Kansas City	RSF			0			0			1,756			0			0
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Cash Revenue	2/	$	—		$	—		$	20		$	—		$	—
	% of Total Industrial Annl Cash Rev			0.0	%		0.0	%		0.1	%		0.0	%		0.0	%

Piedmont Triad	RSF			69,674			480,855			792,471			544,791			1,051,417
	% of Total Industrial RSF			1.2	%		8.3	%		13.6	%		9.4	%		18.1	%
	Annualized Cash Revenue	2/	$	307		$	3,034		$	3,770		$	2,717		$	5,091
	% of Total Industrial Annl Cash Rev			1.0	%		10.0	%		12.5	%		9.0	%		16.8	%

Total	RSF			69,674			953,656			1,114,782			861,012			2,810,203
	% of Total Industrial RSF			1.2	%		16.4	%		19.2	%		14.8	%		48.4	%
	Annualized Cash Revenue	2/	$	307		$	5,554		$	5,858		$	4,531		$	13,976
	% of Total Industrial Annl Cash Rev			1.0	%		18.4	%		19.4	%		15.0	%		46.2	%

1/	Includes 59,000 square feet of leases that are on a month to month basis or 0.0% of total annualized revenue.

2/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.


Highwoods Properties, Inc.		23

Customer Diversification 1/

September 30, 2007


*Dollars in thousands*
Top 20 Customers

Customer	RSF	Annualized Cash Revenue 2/		Percent of Annualized Cash Revenue 2/		Average Remaining Lease Term in Years
Federal Government	1,506,152	$	27,765	6.84	%	8.0
AT&T	656,905		13,112	3.23	%	1.4
Price Waterhouse Coopers	358,611		9,714	2.39	%	2.6
State of Georgia	367,986		7,664	1.89	%	2.7
T-Mobile USA	207,517		5,578	1.37	%	6.2
Metropolitan Life Insurance	262,586		5,040	1.24	%	9.2
Lockton Companies	156,255		4,089	1.01	%	7.4
Volvo	278,940		3,942	0.97	%	2.8
Syniverse Technologies	198,750		3,869	0.95	%	9.1
Northern Telecom	246,000		3,651	0.90	%	0.4
SCI Services 3/	162,784		3,605	0.89	%	9.8
Fluor Enterprises	185,600		3,321	0.82	%	4.3
BB&T	209,237		3,247	0.80	%	4.8
US Airways	182,775		3,139	0.77	%	3.9
Jacobs Engineering Group	181,794		2,899	0.71	%	8.0
Vanderbilt University	144,161		2,633	0.65	%	8.0
Lifepoint Corporate Services	129,217		2,548	0.63	%	3.7
Talecris Biotherapeutics	127,981		2,436	0.60	%	4.3
Icon Clinical Research	110,909		2,417	0.60	%	5.9
Wachovia	107,487		2,224	0.55	%	2.6

	5,781,647	$	112,893	27.81	%	5.4


By Industry
Category	Percent of Annualized Cash Revenue 2/
Professional, Scientific, and Technical Services	20.5	%
Finance/Banking	9.9	%
Insurance	9.3	%
Government/Public Administration	9.1	%
Retail Trade	7.6	%
Telecommunication	6.9	%
Manufacturing	6.5	%
Wholesale Trade	6.3	%
Health Care and Social Assistance	5.6	%
Real Estate Rental and Leasing	3.8	%
Administrative and Support Services	2.9	%
Accommodation and Food Services	2.9	%
Information	2.8	%
Transportation and Warehousing	2.5	%
Other Services (except Public Administration)	2.1	%
Educational Services	1.3	%

	100.0	%

1/	Excludes properties recorded on our Balance Sheet that relate to 50% or less owned joint ventures properties that are consolidated under GAAP.

2/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

3/	Morgan Stanley acquired SCI Services (Saxon Capital, Inc.) on December 4, 2006.


Highwoods Properties, Inc.		24

Same Property Performance


*Dollars in thousands*
	Three months ended September 30,						Percentage Change
	2007			2006			Percentage Change
Rental revenues 1/	$	101,245		$	96,503		4.9	%
Operating expenses		(38,317	)		(36,828	)	-4.0	%

		62,928			59,675		5.5	%
Straight line rent		253			1,589		-84.1	%
Lease termination fees		251			219		14.6	%

Net operating income	$	63,432		$	61,483		3.2	%

Average occupancy		90.3	%		89.4	%	1.0	%

Rentable square feet		25,956,000			25,956,000


	Nine months ended September 30,						Percentage Change
	2007			2006			Percentage Change
Rental revenues 1/	$	298,865		$	284,827		4.9	%
Operating expenses		(112,044	)		(106,260	)	-5.4	%

		186,821			178,567		4.6	%
Straight line rent		1,222			5,686		-78.5	%
Lease termination fees		1,766			1,355		30.3	%

Net operating income	$	189,809		$	185,608		2.3	%

Average occupancy		90.1	%		88.7	%	1.5	%

Rentable square feet		25,956,000			25,956,000


	Third Quarter: 2007 vs 2006				September YTD: 2007 vs 2006
Market	NOI Percentage Change		Occupancy Percentage Change		NOI Percentage Change		Occupancy Percentage Change
Atlanta	3.0	%	1.1	%	3.7	%	1.5	%
Columbia	88.2	%	66.5	%	81.4	%	56.0	%
Greenville	13.2	%	8.3	%	8.2	%	6.6	%
Kansas City	5.3	%	-0.8	%	1.7	%	-0.5	%
Memphis	-2.1	%	1.2	%	1.3	%	1.9	%
Nashville	-2.7	%	-0.2	%	0.9	%	0.2	%
Orlando	-13.7	%	-1.4	%	-5.5	%	-1.8	%
Piedmont Triad	-3.5	%	-2.9	%	-7.7	%	-0.9	%
Raleigh	9.0	%	5.5	%	6.1	%	4.6	%
Richmond	11.4	%	2.6	%	1.9	%	0.1	%
Tampa	6.0	%	-1.1	%	7.6	%	2.6	%

	3.2	%	1.0	%	2.3	%	1.5	%

1/	Excludes straight line rents and lease termination fees.


Highwoods Properties, Inc.		25

Acquisition Activity


*Dollars in thousands*

Name	Market	Type	Date Acquired	Square Footage	Total Cost
First quarter 2007:
None

Second quarter 2007:
None

Third quarter 2007:
None


Highwoods Properties, Inc.		26

Disposition Activity


*Dollars in thousands*
Name	Market	Type 1/	Date Sold	Square Footage	Occupancy			Gross Sales Price
First quarter 2007:
1740-90 Century Center	Atlanta	O	01/17/07	69,000	N/A		2/	$	9,530
Red Oak	Raleigh	O	02/02/07	65,000	68.6	%
Laurel	Raleigh	O	02/02/07	40,000	85.2	%
Global Software	Raleigh	O	02/02/07	93,000	90.4	%
Magnolia	Raleigh	O	02/02/07	59,000	68.1	%

				257,000	79.0	%		$	30,416

First quarter totals				326,000	79.0	%		$	39,946

Second quarter 2007:
Colonial Shops	Kansas City	R	04/25/07	9,000	100.0	%		$	1,001

Second quarter totals				9,000	100.0	%		$	1,001

Third quarter 2007:
EKA Chemical	Atlanta	O	09/05/07	80,000	100.0	%		$	9,550
Oakbrook Summit	Atlanta	I	09/12/07	234,000	95.7	%		$	11,625
Patewood VII	Greenville	O	09/13/07	72,000	43.0	%
770 Pelham Road	Greenville	O	09/13/07	38,000	96.2	%

				110,000	61.4	%		$	11,600
Patewood Business Center	Greenville	I	09/17/07	103,000	25.4	%		$	4,050

Third quarter totals				527,000	75.4	%		$	36,825

2007 totals				862,000	77.0	%		$	77,772

1/	The letters “O”, “I”, and “R” represent Office, Industrial, and Retail respectively.

2/	This property was scheduled for demolition after its disposition. All tenants vacated this property and it was removed from Highwoods’ in-service portfolio prior to 12/31/06.


Highwoods Properties, Inc.		27

Development Activity


*Dollars in thousands*
In - Process Property	Market	Type 1/	Rentable Square Feet	Anticipated Total Investment		Investment @ 09/30/07			Pre Leased %		Estimated Completion Date		Estimated Stabilization Date
Office:
Dept. of Homeland Security	Atlanta	O	91,000	$	21,700	$	21,181		100	%	4Q 07		4Q 07
FAA	Atlanta	O	50,000		10,213		939		100	%	2Q 08		2Q 08
Jackson FBI	Jackson, MS	O	110,000		31,713		1,351		100	%	1Q 09		1Q 09
Comcast	Memphis	O	62,000		9,449		2,823		100	%	3Q 08		3Q 08
Healthways	Nashville	O	255,000		58,659		43,929		100	%	2Q 08		2Q 08
Cool Springs IV	Nashville	O	153,000		27,597		6,585		0	%	3Q 08		1Q 10
Centregreen V	Raleigh	O	98,000		15,662		7,445		51	%	1Q 08		3Q 09
Glenlake VI	Raleigh	O	122,000		24,448		12,862		57	%	1Q 08		3Q 09
RBC Plaza 2/	Raleigh	O	292,000		76,056		27,995		65	%	4Q 08		4Q 09

Total or Weighted Average			1,233,000	$	275,497	$	125,110		71	%

						$	Weighted	%	74	%

Industrial:
Enterprise III	Piedmont Triad	I	120,000		4,614		4,330		100	%	4Q 07		4Q 08

For Sale Development:
RBC Plaza Condominiums 3/ 4/	Raleigh	RC	139 Units	$	42,380	$	8,763		139 Contracts		4Q 08		2Q 09
hhgregg ^®	Piedmont Triad	R	30,000		5,125		2,210		100	%	2Q 08		2Q 08

			30,000		47,505		10,973		100	%

In-Process Total or Weighted Average 4/			1,383,000	$	327,616	$	140,413		74	%

						$	Weighted	%	75	%

Completed Not Stabilized 5/
Office:
Cordoba 6/	Kansas City	O	46,000	$	6,548	$	6,479		84	%	4Q 06		1Q 08
Cool Springs III	Nashville	O	153,000		22,661		22,026		95	%	2Q 06		4Q 07
Berkshire	Orlando	O	99,000		15,096		11,970		100	%	3Q 07		2Q 08
Glenlake IV	Raleigh	O	158,000		27,311		24,729		74	%	3Q 06		1Q 08
Stony Point IV	Richmond	O	107,000		13,125		12,980		96	%	4Q 06		4Q 07
North Shore Commons II	Richmond	O	96,000		14,855		11,818		17	%	1Q 07		2Q 08
Highwoods Baycenter I	Tampa	O	208,000		42,024		36,154		67	%	3Q 07		4Q 08

Total or Weighted Average			867,000	$	141,620	$	126,156		76	%

						$	Weighted	%	75	%

Industrial:
Newpoint V	Atlanta	I	263,000	$	12,947	$	11,953		88	%	2Q 07		2Q 08
Enterprise II	Piedmont Triad	I	418,000		15,137		14,388		72	%	4Q 06		4Q 08

			681,000	$	28,084	$	26,341		78	%
						$	Weighted	%	79	%



Completed Not Stabilized Total or Weighted Average			1,548,000	$	169,704	$	152,497		77	%

						$	Weighted	%	75	%



Grand Total or Weighted Average			2,931,000	$	497,320	$	292,910		76	%

						$	Weighted	%	75	%


Placed in Service Property	Market	Type 1/	In-Service Date	Rentable Square Feet		Investment @ 09/30/07			Pre Leased %		Occ %

3330 Healy Rd 6/	Piedmont Triad	O	6/1/2007		40,000	$	4,198		25	%	0	%
ThyssenKrupp	Memphis	O	1/10/2007		78,000		9,375		100	%	100	%
Highwoods Preserve VII	Tampa	O	2/1/2007		115,000		21,028		100	%	100	% 7/

Total or Weighted Average					233,000	$	34,601		87	%	83	%

						$	Weighted	%	91	%	88	%

1/	The Letters “O”, “I”, “R” and “RC” represent: Office, Industrial, Retail and For Sale Residential Condominiums, respectively.

2/	Includes ancillary retail space on the ground level of approximately 11,000 square feet.

3/	In January 2007 the Company executed a Joint Venture agreement for this development. The Company will have a 93% interest and will consolidate this Joint Venture. The investment amounts shown represent the Company’s 93% share.

4/	As of 9/30/07, all units are under contract. Condo units and reservations numbers are not part of In-Process Total or Weighted Average for SF & Pre-Leasing percentage.

5/	“Completed Not Stabilized” and Redevelopment properties are recorded in the Consolidated Balance Sheet in the Land and Building accounts, not Development-in-Process.

6/	Redevelopment property, the investment amounts shown include original Land and Building basis, in addition to the incremental redevelopment costs.

7/	29,000 sf is leased but will not be occupied until 4Q 08; this 29,000 sf is not included in our In-Service portfolio rentable sf until occupied.


Highwoods Properties, Inc.		28

Development Land

September 30, 2007


*Dollars in thousands*
Market	Usable Acres	Total Estimated Market Value
Atlanta	256	$	25,751
Raleigh	190		43,216
Greensboro	54		12,518
Baltimore	39		10,900
Richmond	33		7,935
Tampa	26		13,890
Nashville	16		5,285
Memphis	15		3,620
Orlando	15		13,900
Winston-Salem	3		1,500
Kansas City	1		2,100

Total 1/ 2/	648	$	140,615

1/	Developable square footage on core land holdings, which constitute 523 of the total 648 acres, is approximately 4.6 million of office space and 3.0 million of industrial space.

2/	Includes 6 acres ($2 million based on expected gross proceeds) included in property held for sale at September 30, 2007.


Highwoods Properties, Inc.		29

Unconsolidated Joint Ventures Assets, Debt and Liabilities

September 30, 2007


*Dollars in thousands*
				Venture’s Books
Joint Venture	Type 1/	Own %		Total Assets		Debt		Total Liabilities
Board of Trade Investment Co.	O	49.0	%	$	7,567	$	—	$	771
Dallas County Partners I, LP	O/ I	50.0	%		37,647		49,571		52,021
Dallas County Partners II, LP	O	50.0	%		14,795		17,080		18,215
Dallas County Partners III, LP	O	50.0	%		48		—		39
Fountain Three	O/I/R	50.0	%		29,278		33,106		34,819
RRHWoods , LLC	O/ M	50.0	%		88,905		80,742		84,121
Kessinger/Hunter, LLC	—	26.5	%		8,577		—		1,064
4600 Madison Associates, LP	O	12.5	%		18,777		13,784		14,485
Highwoods DLF 98/29, LP	O	22.8	%		152,924		76,022		81,333
Highwoods DLF 97/26 DLF 99/32, LP	O	42.9	%		104,223		56,046		59,821
Concourse Center Associates, LLC	O	50.0	%		13,537		8,967		9,166
Plaza Colonnade, LLC	O/R	50.0	%		73,815		67,016		68,709
Highwoods KC Glenridge Office, LP	O	40.0	%		22,614		16,500		17,174
Highwoods KC Glenridge Land, LP	O	40.0	%		773		—		91
Highwoods KC Orlando, LLC	O	40.0	%		207,891		142,595		150,986
Weston Lakeside, LLC	M	50.0	%		—		—		—

Total				$	781,371	$	561,429	$	592,815


				Highwoods’ Share of Joint Venture
Joint Venture	Type 1/	Own %		Total Assets		Debt		Total Liabilities
Board of Trade Investment Co.	O	49.00	%	$	3,708	$	—	$	378
Dallas County Partners I, LP	O/ I	50.00	%		18,824		24,786		26,011
Dallas County Partners II, LP	O	50.00	%		7,398		8,540		9,108
Dallas County Partners III, LP	O	50.00	%		24		—		20
Fountain Three	O/I/R	50.00	%		14,639		16,553		17,410
RRHWoods , LLC	O/ M	50.00	%		44,453		40,371		42,061
Kessinger/Hunter, LLC	—	26.50	%		2,273		—		282
4600 Madison Associates, LP	O	12.50	%		2,347		1,723		1,811
Highwoods DLF 98/29, LP	O	22.81	%		34,882		17,341		18,552
Highwoods DLF 97/26 DLF 99/32, LP	O	42.93	%		44,743		24,061		25,681
Concourse Center Associates, LLC	O	50.00	%		6,769		4,484		4,583
Plaza Colonnade, LLC	O/R	50.00	%		36,908		33,508		34,355
Highwoods KC Glenridge Office, LP	O	40.00	%		9,046		6,600		6,870
Highwoods KC Glenridge Land, LP	O	40.00	%		309		—		36
Highwoods KC Orlando, LLC	O	40.00	%		83,156		57,038		60,394
Weston Lakeside, LLC	M	50.00	%		—		—		—

Total 2/				$	309,479	$	235,005	$	247,552

1/	The letters “O”, “I”, “R”, and “M” represent Office, Industrial, Retail, and Multi-Family, respectively.

Highwoods’ share of equity from these tables will not equal Investments in Unconsolidated Affiliates on the Consolidated Balance Sheet due to various purchase accounting and related adjustments as well as negative investment balances reclassed to Liabilities, which are not reflected in the Joint Ventures’ stand-alone financial statements.


Highwoods Properties, Inc.		30

Unconsolidated Joint Ventures Income

For the Three Months Ended September 30, 2007


*Dollars in thousands*
			Venture’s Books
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Gain on Sale		Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	535	$	433	$	1	$	104	$	—	$	(3	)
Dallas County Partners I, LP	50.00	%		2,976		1,698		784		742		—		(248	)
Dallas County Partners II, LP	50.00	%		1,509		643		443		175		—		248
Dallas County Partners III, LP	50.00	%		48		56		—		1		—		(9	)
Fountain Three	50.00	%		1,696		872		558		398		—		(132	)
RRHWoods , LLC	50.00	%		4,283		2,229		1,062		1,053		—		(61	)
Kessinger/Hunter, LLC	26.50	%		1,552		1,285		—		158		—		109
4600 Madison Associates, LP	12.50	%		1,208		539		240		401		—		28
Highwoods DLF 98/29, LP	22.80	%		4,733		1,796		1,269		1,617		—		51
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		4,260		1,480		1,086		1,064		—		630
Concourse Center Associates, LLC	50.00	%		493		135		163		76		—		119
Plaza Colonnade, LLC	50.00	%		2,547		920		979		533		—		115
Highwoods KC Glenridge Office, LP	40.00	%		764		401		211		164		—		(12	)
Highwoods KC Glenridge Land, LP	40.00	%		—		27		—		—		—		(27	)
Highwoods KC Orlando, LLC	40.00	%		7,746		3,330		1,879		1,962		—		575
Weston Lakeside, LLC	50.00	%		—		—		—		—		—		—

Total			$	34,350	$	15,844	$	8,675	$	8,448	$	—	$	1,383


			Highwoods’ Share of Joint Venture
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Gain on Sale		Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	262	$	212	$	—	$	51	$	—	$	(1	)
Dallas County Partners I, LP	50.00	%		1,488		849		392		371		—		(124	)
Dallas County Partners II, LP	50.00	%		754		322		222		87		—		123
Dallas County Partners III, LP	50.00	%		24		28		—		—		—		(4	)
Fountain Three	50.00	%		848		436		279		199		—		(66	)
RRHWoods , LLC	50.00	%		2,142		1,114		531		526		—		(29	)
Kessinger/Hunter, LLC	26.50	%		411		341		—		42		—		28
4600 Madison Associates, LP	12.50	%		151		67		30		50		—		4
Highwoods DLF 98/29, LP	22.81	%		1,079		410		290		369		—		10
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		1,829		636		466		457		—		270
Concourse Center Associates, LLC	50.00	%		247		67		81		38		—		61
Plaza Colonnade, LLC	50.00	%		1,274		460		490		267		—		57
Highwoods KC Glenridge Office, LP	40.00	%		306		160		85		65		—		(4	)
Highwoods KC Glenridge Land, LP	40.00	%		—		11		—		—		—		(11	)
Highwoods KC Orlando, LLC	40.00	%		3,099		1,332		751		785		—		231
Weston Lakeside, LLC	50.00	%		—		—		—		—		—		—

Total 1/ 2/			$	13,914	$	6,445	$	3,617	$	3,307	$	—	$	545

Highwoods’ share of Depreciation and Amortization from these tables will not equal Depreciation and Amortization of Real Estate Assets for Unconsolidated Affiliates on the Statement of Funds from Operations due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.

2/	Highwoods’ share of Net Income from these tables will not equal Equity in Earnings of Unconsolidated Affiliates on the Consolidated Income Statement due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.


Highwoods Properties, Inc.		31

Unconsolidated Joint Ventures Income

For the Nine Months Ended September 30, 2007


*Dollars in thousands*
			Venture’s Books
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Gain on Sale		Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	1,726	$	1,322	$	5	$	298	$	—	$	101
Dallas County Partners I, LP	50.00	%		9,049		4,807		2,363		1,836		—		43
Dallas County Partners II, LP	50.00	%		4,622		2,019		1,359		524		—		720
Dallas County Partners III, LP	50.00	%		146		166		—		4		—		(24	)
Fountain Three	50.00	%		5,565		2,705		1,681		1,191		—		(12	)
RRHWoods , LLC	50.00	%		12,519		6,758		3,187		3,178		—		(604	)
Kessinger/Hunter, LLC	26.50	%		5,397		3,864		—		474		—		1,059
4600 Madison Associates, LP	12.50	%		3,618		1,680		732		1,270		—		(64	)
Highwoods DLF 98/29, LP	22.80	%		16,643		4,458		3,195		3,612		9,311		14,689
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		12,445		4,118		3,269		3,061		—		1,997
Concourse Center Associates, LLC	50.00	%		1,527		402		492		238		—		395
Plaza Colonnade, LLC	50.00	%		7,183		2,691		2,939		1,597		—		(44	)
Highwoods KC Glenridge Office, LP	40.00	%		2,732		1,243		617		481		—		391
Highwoods KC Glenridge Land, LP	40.00	%		—		34		—		—		—		(34	)
Highwoods KC Orlando, LLC	40.00	%		24,119		9,532		5,633		5,663		—		3,291
Weston Lakeside, LLC	50.00	%		222		201		193		329		11,310		10,809

Total			$	107,513	$	46,000	$	25,665	$	23,756	$	20,621	$	32,713


			Highwoods’ Share of Joint Venture
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Gain on Sale		Net Income/ (Loss)
Board of Trade Investment Co.	49.00	%	$	846	$	648	$	2	$	146	$	—	$	50
Dallas County Partners I, LP	50.00	%		4,525		2,404		1,182		918		—		21
Dallas County Partners II, LP	50.00	%		2,311		1,010		680		262		—		359
Dallas County Partners III, LP	50.00	%		73		83		—		2		—		(12	)
Fountain Three	50.00	%		2,783		1,353		841		596		—		(7	)
RRHWoods , LLC	50.00	%		6,260		3,379		1,594		1,589		—		(302	)
Kessinger/Hunter, LLC	26.50	%		1,430		1,024		—		126		—		280
4600 Madison Associates, LP	12.50	%		452		210		92		159		—		(9	)
Highwoods DLF 98/29, LP	22.81	%		3,796		1,017		729		824		2,124		3,350
Highwoods DLF 97/26 DLF 99/32, LP	42.93	%		5,343		1,768		1,403		1,314		—		858
Concourse Center Associates, LLC	50.00	%		764		201		246		119		—		198
Plaza Colonnade, LLC	50.00	%		3,592		1,346		1,470		799		—		(23	)
Highwoods KC Glenridge Office, LP	40.00	%		1,093		497		247		192		—		157
Highwoods KC Glenridge Land, LP	40.00	%		—		14		—		—		—		(14	)
Highwoods KC Orlando, LLC	40.00	%		9,648		3,813		2,253		2,265		—		1,317
Weston Lakeside, LLC 1/	50.00	%		111		101		97		165		5,034		4,782

Total 2/ 3/			$	43,027	$	18,868	$	10,836	$	9,476	$	7,158	$	11,005

1/	Highwoods’ share of Gain on Sale is less than 50% for Weston Lakeside, LLC due to the preferred return to Crosland as the developer.

3/	Highwoods’ share of Net Income from these tables will not equal Equity in Earnings of Unconsolidated Affiliates on the Consolidated Income Statement due to various purchase accounting and related adjustments, which are not reflected in the Joint Ventures’ stand-alone financial statements.


Highwoods Properties, Inc.		32

Joint Ventures Long-Term Debt Detail 1/


*Dollars in thousands*
Joint Venture	Own %		Lender	Interest Rate		Maturity Date	Loan Balance 09/30/07
Dallas County Partners I, LP	50.0	%	Massachusetts Mutual Life Ins. Co.	6.19	%	Aug-18	$	42,249
Dallas County Partners I, LP	50.0	%	Thrivent	8.45	%	Aug-10		1,596
Dallas County Partners I, LP	50.0	%	Regions	6.30	%	Jun-14		3,502
Dallas County Partners I, LP	50.0	%	Sun Life	5.92	%	Feb-16		1,052
Dallas County Partners I, LP	50.0	%	Bankers Trust	8.00	%	Jul-11		1,172

				6.31	%			49,571

Dallas County Partners II, LP	50.0	%	Principal Life Insurance Company	10.19	%	Jun-13		17,080

Fountain Three	50.0	%	Massachusetts Mutual Life Ins. Co.	6.19	%	Aug-18		16,864
Fountain Three	50.0	%	Thrivent	6.01	%	Oct-10		3,725
Fountain Three	50.0	%	Thrivent	6.01	%	Apr-09		3,725
Fountain Three	50.0	%	Lehman Brothers	8.02	%	Jul-09		3,505
Fountain Three	50.0	%	Thrivent	7.00	%	Sep-12		5,287

				6.47	%			33,106

RRHWoods, LLC	50.0	%	Industrial Revenue Bonds 2/	3.77	%	Nov-15		23,000
RRHWoods, LLC	50.0	%	Bank of America	6.80	%	Sep-12		26,553
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds 2/	3.77	%	Sep-15		6,000
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds 2/	3.81	%	Nov-15		5,500
RRHWoods, LLC	50.0	%	Massachusetts Mutual Life Ins. Co.	6.19	%	Aug-18		4,666
RRHWoods, LLC	50.0	%	Massachusetts Mutual Life Ins. Co.	5.85	%	Mar-16		7,489
RRHWoods, LLC	50.0	%	UNUM Life Insurance Company	5.67	%	Mar-17		4,032
RRHWoods, LLC	50.0	%	Regions	6.30	%	Jun-14		3,502

				5.31	%			80,742

Plaza Colonnade, LLC	50.0	%	Met Life	5.72	%	Jan-17		48,901
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	5.38	%	Mar-10		1,818
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	6.00	%	Mar-16		4,394
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	5.90	%	Mar-24		11,903

				5.76	%			67,016

4600 Madison Associates, LLC	12.5	%	State Farm	6.85	%	Apr-18		13,784
Highwoods DLF 98/29, LP	22.8	%	USG Annuity & Life Company	6.78	%	Apr-11		48,372
Highwoods DLF 98/29, LP	22.8	%	Goldman Sachs	6.11	%	Jul-17		27,650
Highwoods DLF 97/26 DLF 99/32, LP	42.9	%	Massachusetts Mutual Life Ins. Co.	7.66	%	May-12		56,046
Concourse Center Associates, LLC	50.0	%	Lincoln National Life Insurance Co.	6.95	%	Jul-10		8,967
Highwoods KC Orlando, LLC	40.0	%	Met Life	5.21	%	Jul-14		142,595
Highwoods KC Glenridge Office	40.0	%	Wachovia	4.84	%	Jun-14		16,500

				6.07	%			313,914

				6.09	%		$	561,429



Highwoods’ share of the above							$	235,005

1/	Excludes loans related to two “consolidated” joint ventures.

2/	Floating rate loan based on market rates.


Highwoods Properties, Inc.		33

Joint Ventures Portfolio Summary


*As of September 30, 2007*
Summary by Location:
				Percentage of Annualized Cash Revenue Highwoods’ Share Only 1/
Market	Rentable Square Feet	Occupancy		Office		Industrial		Retail		Multi-Family		Total
Des Moines 2/	2,474,000	92.9	%	28.2	%	4.1	%	1.0	%	3.3	%	36.6	%
Orlando	1,853,000	90.8	%	29.5	%	—		—		—		29.5	%
Atlanta	835,000	96.4	%	12.8	%	—		—		—		12.8	%
Kansas City	718,000	81.2	%	8.2	%	—		—		—		8.2	%
Richmond	413,000	100.0	%	4.9	%	—		—		—		4.9	%
Piedmont Triad	364,000	96.9	%	3.4	%	—		—		—		3.4	%
Tampa	205,000	98.8	%	1.9	%	—		—		—		1.9	%
Raleigh	178,000	100.0	%	1.5	%	—		—		—		1.5	%
Charlotte	148,000	100.0	%	0.7	%	—		—		—		0.7	%
Other	110,000	100.0	%	0.5	%	—		—		—		0.5	%

Total 3/	7,298,000	92.8	%	91.6	%	4.1	%	1.0	%	3.3	%	100.0	%

1/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

2/	Excludes 418 apartment units and related occupancy percentage of 98.1%.

3/	Includes 618,000 square feet of properties in joint ventures that are consolidated.


Highwoods Properties, Inc.		34

Joint Ventures Lease Expirations

September 30, 2007


*Dollars in thousands*
Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Cash Revenue 1/		Average Rental Rate		Percent of Annualized Cash Revenue 1/
Total
2007	223,746	3.3	%	$	4,372	$	19.54	3.3	%
2008	1,222,332	18.1	%		22,335		18.27	16.7	%
2009	662,588	9.8	%		13,795		20.82	10.4	%
2010	720,750	10.6	%		13,329		18.49	10.0	%
2011	936,561	13.8	%		19,485		20.80	14.6	%
2012	541,105	8.0	%		11,519		21.29	8.7	%
2013	1,012,896	15.0	%		18,651		18.41	14.0	%
2014	406,766	6.0	%		9,282		22.82	7.0	%
2015	611,874	9.0	%		10,674		17.44	8.0	%
2016	76,970	1.1	%		975		12.67	0.7	%
2017 and thereafter	360,963	5.3	%		8,744		24.22	6.6	%

	6,776,551	100.0	%	$	133,161	$	19.65	100.0	%

1/	Annualized Cash Revenue is September, 2007 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.


Highwoods Properties, Inc.		35

Joint Venture Acquisition and Disposition Activity


*Dollars in thousands*

Acquisitions
Name	Market	Type 1/	Date Acquired	Square Footage	Total Cost 2/
First quarter 2007:
None

Second quarter 2007:
Eola Park Centre	Orlando	O	05/21/07	167,000	$	8,958

Second quarter totals				167,000	$	8,958

Third quarter 2007:
None

2007 totals				167,000	$	8,958

Dispositions

Name

Market

Type 1/

Date

Sold

Square
Footage

Occupancy

Gross Sales
Price 2/

First quarter 2007:

Weston Lakeside 3/

Raleigh

02/22/07

322 Units

N/A

22,500

3404 North Duke Street 4/

Raleigh

03/12/07

67,000

100.0

4020 North Roxboro Road 4/

Raleigh

03/12/07

42,000

100.0

4101 North Roxboro Road 4/

Raleigh

03/12/07

56,000

100.0

Fairfield I 4/

Raleigh

03/12/07

51,000

100.0

Fairfield II 4/

Raleigh

03/12/07

60,000

96.9

276,000

99.3

7,801

First quarter totals

276,000

99.3

30,301

Second quarter 2007:

None

Third quarter 2007:

None

2007 totals

276,000

99.3

30,301

1/	The letters “O” and “M” represent Office and Multi-Family, respectively.

2/	Reflects Highwoods pro-rata share only.

3/	The Weston Lakeside properties were owned by a 50% owned joint venture.

4/	These properties were 22.81% owned properties through the DLF 98/29 joint venture.


Highwoods Properties, Inc.		36

Joint Venture Development Activity


*Dollars in thousands*
Completed Not Stabilized
Property	% Ownership		Market	Rentable Square Feet	Anticipated Total Investment		Investment @ 09/30/07		Pre- Leasing		Estimated Completion Date	Estimated Stabilization Date
Brickstone	50	%	Des Moines	31,000	$	5,149	$	4,665	60	%	4Q 06	4Q 07

Completed Not Stabilized Total					$	5,149	$	4,665



Highwoods’ Share of the above					$	2,575	$	2,333


Highwoods Properties, Inc.		37