SUPPLEMENTAL INFORMATION First Quarter 2017 Table of Contents - - PDF document

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Jul 29, 2023 139 likes •412 views

SUPPLEMENTAL INFORMATION First Quarter 2017 Table of Contents Page Summary and Corporate Information .

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SUPPLEMENTAL INFORMATION

First Quarter 2017

SLIDE 2

Page Summary and Corporate Information ……………………………………………………………………………………………………………………………. i, ii, iii Consolidated Statements of Income ……………………………………………………………………………………………………………………………………………. 1 Funds from Operations and Additional Information ……………………………………………………………………………………………………………….. 2 Consolidated Balance Sheets ……………………………………………………………………………………………………………………………………….. 3 Revenue Detail; Discontinued Operations Detail…………………………………………………………………………………………………………………………………….. 4 Capitalization and Debt-to-EBITDA…………………………………………………………………………………………………………………………………………………………….. 5 Mortgages and Notes Payable Summary ………………………………………………………………………………………………………………………………. 6 Mortgages and Notes Payable Detail …………………………………………………………………………………………………………………………………. 7 Portfolio Summary …………………………………………………………………………………………………………………………………………………. 8, 9, 10 Occupancy Trends ………………………………………………………………………………………………………………………………………………………… 11 Office Leasing Statistics...…………………………………………………………………………………………………………………………………………. 12 Office Leasing Statistics and Rental Rate Comparisons by Market …………………………………………………………………………………………………………………………….. 13 Office Lease Expirations ……………………………………………………………………………………………………………..……………………………………. 14 Office Lease Expirations by Market by Year ………………………………………………………………………………………………………………………… 15 Customer Diversification …………………………………………………………………………………………………………………………………………… 16 Same Property Performance ………………………………………………………………………………………………………………………………………. 17 Disposition Activity ………………………………………………………………………………………………………………………………………………… 18 Development Activity ……………………………………………………………………………………………………………………………….………………. 19 Land Held for Development ………………………………………………………………………………………………………………………………………… 20 Joint Venture Financial Information and Summary………………………………………………………………………………………………………………………… 21 The information within refers to all Highwoods Properties' wholly-owned entities unless noted otherwise. Wholly-owned entities include properties classified as both continuing operations and discontinued operations and exclude properties recorded on our Balance Sheet that relate to joint venture investments that are consolidated under GAAP. All financial information contained in this document is unaudited. In addition, certain matters presented in this supplemental, including estimates

f net operating income, pre-leasing commitments and the cost, timing and stabilization of announced development projects, are forward-looking

statements within the meaning of the federal securities laws. Although Highwoods believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved. Factors that could cause actual results to differ materially from Highwoods’ current expectations include, among others, general economic conditions, local real estate conditions, the timely development and lease-up of properties, and other risks listed at the end of our first quarter earnings release and detailed from time to time in the Company’s SEC reports. Highwoods assumes no obligation to update or supplement forward-looking statements that become untrue due to subsequent events. This supplemental also includes non-GAAP financial measures, such as funds from operations (FFO), earnings before interest, taxes, depreciation and amortization (EBITDA) and net operating income (NOI). Definitions of FFO, EBITDA and NOI and an explanation of management's view of the usefulness and risks of FFO, EBITDA and NOI can be found towards the end of our first quarter earnings release. COVER MARS Petcare Nashville, TN

TOC

SLIDE 3

Three Months Ended 3/31/17 3/31/16 Financial: Revenues 1/ 169,408 $ 164,859 $ Net operating income (NOI) 1/ 112,012 $ 107,279 $ Same property cash NOI growth 5.5% 3.7% Funds from operations per share 0.80 $ 0.82 $ Weighted average common shares outstanding, diluted 104,661 99,357 Balance Sheet: Leverage (includes preferred stock) based on gross book assets 36.2% 38.4% Debt-to-EBITDA 5.05x 5.43x Debt plus preferred stock-to-EBITDA 5.12x 5.51x Unencumbered NOI % 92.8% 91.0% Credit facility availability 344,000 $ 217,000 $ Operations: Quarter end occupancy 92.7% 92.7% Office square feet leased 715 902 Office GAAP rent growth 2/ 16.6% 9.7% Average office cash rental rate per square foot for in-place leases 24.40 $ 23.38 $ Three Months Ended 3/31/17 Capital Activity: Building dispositions 13,000 $ Development pipeline 548,780 $ Pipeline pre-leased percent 72.6%

1/ Includes continuing operations only. 2/ GAAP rent growth is calculated by comparing average cash rent psf over the term (GAAP rent) of the new lease to the average cash rent psf over the term related to the previous lease in the same space. Adjustments are made if and to the extent necessary to illustrate the current and prior deal on a consistent gross lease basis.

Summary (amounts in thousands, except percentages, ratios, and per share amounts)

SLIDE 4

Board of Directors Division Officers

Chuck Anderson Jim Bacchetta Gene Anderson Vice President, Atlanta Carlos Evans Rick Dehnert Ed Fritsch Vice President, Greensboro David Hartzell, Ph.D. Steve Garrity Sherry Kellett Vice President, Orlando Temple Sloan, Jr., Chair Steve Guinn Vice President, Memphis

Corporate Officers

Skip Hill Vice President, Raleigh Dan Clemmens Walton Makepeace Vice President, Chief Accounting Officer Vice President, Richmond Hugh Esleeck Brian Reames Vice President, Treasurer Senior Vice President, Nashville Ed Fritsch Andy Wisniewski President, Chief Executive Officer Vice President, Pittsburgh Ted Klinck Dan Woodward Executive Vice President, Chief Operating and Vice President, Tampa Investment Officer Carman Liuzzo Senior Vice President, Investments Brendan Maiorana Senior Vice President, Finance and Investor Relations Art McCann Vice President, Chief Information Officer Jeff Miller Executive Vice President, General Counsel and Secretary Mark Mulhern Executive Vice President, Chief Financial Officer Randy Roberson Senior Vice President, Development Mike Starchville Senior Vice President, Asset Management

Corporate Information

SLIDE 5

Research Coverage Corporate Headquarters

Highwoods Properties, Inc. Bank of America/Merrill Lynch Morgan Stanley 3100 Smoketree Court, Suite 600 Jamie Feldman Sumit Sharma Raleigh, NC 27604 646-855-5808 212-761-7567 919-872-4924 BTIG Oppenheimer & Co.

Stock Exchange

Tom Catherwood Steve Manaker NYSE: HIW 212-738-6140 212-667-5950

Investor Relations

Capital One Securities RW Baird Brendan Maiorana Tom Lesnick David Rodgers Senior Vice President, Finance and Investor Relations 571-633-8191 216-737-7341 Phone: 919-431-1529 Ryan Wineman Fax: 919-431-1439 571-633-8414 Stifel Nicolaus Brendan.Maiorana@highwoods.com John Guinee http://www.highwoods.com/ Citigroup Global Markets 443-224-1307 Michael Bilerman Erin Aslakson

Information Request

212-816-1383 443-224-1350 To request a Supplemental Package or Annual Report Emmanuel Korchman

r to be added to our e-mail distribution list, please contact

212-816-1382 SunTrust Robinson Humphrey Investor Relations. Michael Lewis D.A. Davidson & Co. 212-319-5659 Barry Oxford

The Company

212-240-9871 Highwoods Properties, headquartered in Raleigh, is a publicly traded (NYSE:HIW) real estate investment trust (“REIT”) and Green Street Advisors a member of the S&P MidCap 400 Index. The Company is a Jed Reagan fully-integrated office REIT that owns, develops, acquires, leases and 949-640-8780 manages properties primarily in the best business districts (BBDs)

f Atlanta, Greensboro, Memphis, Nashville, Orlando, Pittsburgh,

Jefferies & Company, Inc. Raleigh, Richmond and Tampa. For more information about Jonathan Petersen Highwoods Properties, please visit our website at: 212-284-1705 www.highwoods.com.

Corporate Information

iii

SLIDE 6

3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Rental and other revenues 169,408 $ 167,646 $ 166,269 $ 166,860 $ 164,859 $ Operating expenses: Rental property and other expenses 57,396 57,370 58,620 57,515 57,580 Depreciation and amortization 56,145 58,406 52,923 55,317 53,494 General and administrative 11,490 8,826 9,863 8,327 11,137 Total operating expenses 125,031 124,602 121,406 121,159 122,211 Interest expense: Contractual 17,023 17,031 17,722 18,674 19,715 Amortization of debt issuance costs 840 861 844 811 990 17,863 17,892 18,566 19,485 20,705 Other income: Interest and other income 684 454 833 534 517 684 454 833 534 517 Income from continuing operations before disposition of investment properties and activity in unconsolidated affiliates 27,198 25,606 27,130 26,750 22,460 Gains on disposition of property 5,332 647 3,902 5,861 4,397 Equity in earnings of unconsolidated affiliates 955 783 2,808 917 1,285 Income from continuing operations 33,485 27,036 33,840 33,528 28,142 Discontinued operations: Income from discontinued operations

4,097

Net gains on disposition of discontinued operations

414,496
418,593

Net income 33,485 27,036 33,840 33,528 446,735 Net (income) attributable to noncontrolling interests in the Operating Partnership (888) (720) (926) (939) (13,011) Net (income) attributable to noncontrolling interests in consolidated affiliates (300) (312) (319) (314) (308) Dividends on Preferred Stock (623) (624) (624) (627) (626) Net income available for common stockholders 31,674 $ 25,380 $ 31,971 $ 31,648 $ 432,790 $ Earnings per Common Share – basic: Income from continuing operations available for common stockholders 0.31 $ 0.25 $ 0.32 $ 0.32 $ 0.27 $ Income from discontinued operations available for common stockholders

4.22

Net income available for common stockholders 0.31 $ 0.25 $ 0.32 $ 0.32 $ 4.49 $ Weighted average Common Shares outstanding - basic 101,738 100,733 98,973 97,648 96,373 Earnings per Common Share - diluted: Income from continuing operations available for common stockholders 0.31 $ 0.25 $ 0.32 $ 0.32 $ 0.27 $ Income from discontinued operations available for common stockholders

4.22

Net income available for common stockholders 0.31 $ 0.25 $ 0.32 $ 0.32 $ 4.49 $ Weighted average Common Shares outstanding - diluted 104,661 103,640 101,939 100,628 99,357 Dividends declared per Common Share 0.440 $ 1.225 $ 0.425 $ 0.425 $ 0.425 $ Net income available for common stockholders: Income from continuing operations available for common stockholders 31,674 $ 25,380 $ 31,971 $ 31,648 $ 26,462 $ Income from discontinued operations available for common stockholders

406,328

Net income available for common stockholders 31,674 $ 25,380 $ 31,971 $ 31,648 $ 432,790 $ Three Months Ended

Consolidated Statements of Income (amounts in thousands, except per share amounts)

SLIDE 7

Three Months Ended 3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Funds from operations: Net income 33,485 $ 27,036 $ 33,840 $ 33,528 $ 446,735 $ Net (income) attributable to noncontrolling interests in consolidated affiliates (300) (312) (319) (314) (308) Depreciation and amortization of real estate assets 55,475 57,753 52,303 54,680 52,797 (Gains) on disposition of depreciable properties (5,332)

(5,861)

(3,054) Unconsolidated affiliates: Depreciation and amortization of real estate assets 662 751 736 749 742 (Gains) on disposition of depreciable properties

(1,842)
(331)

Discontinued operations: (Gains) on disposition of depreciable properties

(414,496)

Funds from operations 83,990 85,228 84,718 82,782 82,085 Dividends on Preferred Stock (623) (624) (624) (627) (626) Funds from operations available for common stockholders 83,367 $ 84,604 $ 84,094 $ 82,155 $ 81,459 $ Funds from operations available for common stockholders per share 0.80 $ 0.82 $ 0.82 $ 0.82 $ 0.82 $ Weighted average shares outstanding 104,661 103,640 101,939 100,628 99,357 Additional information: 1/ 2/ Property acquisition costs

751 $

Straight-line rental income (6,118) (5,328) (5,140) (6,786) (6,592) Straight-line rental write-offs related to termination fees

210

Amortization of lease incentives 397 405 273 390 711 Depreciation of non-real estate assets 543 525 495 514 567 Ground lease straight-line rent expense 101 101 105 95 97 Share-based compensation expense 3,783 839 862 994 3,556 Amortization of debt issuance costs 840 861 844 811 990 Amortization of accumulated other comprehensive (income)/loss (17) 80 80 79 79 Amortization of above/(below) market leases and other adjustments (407) (802) (693) (1,678) (602) Non-incremental revenue generating capital expenditures incurred: 3/ Building improvements (6,365) (16,900) (12,549) (7,173) (3,580) 2nd generation tenant improvements (11,935) (13,920) (14,078) (10,931) (12,576) 2nd generation lease commissions (3,056) (6,130) (7,028) (5,429) (4,006) Common dividends and unit distributions paid (46,166) (43,837) (43,177) (42,622) (42,113) 1/ Includes those properties classified as discontinued operations. 2/ Increase or (decrease) to cash flows. 3/ Excludes capital expenditures (a) incurred within 12 months prior to the disposition date for buildings sold, (b) related to first generation leases and leases with respect to vacant space in acquired buildings, (c) building improvements that are recoverable from future operating cost savings, (d) building improvements that constitute part of the total investment cost disclosed in connection with an acquisition and (e) property re-developments.

Funds from Operations and Additional Information (amounts in thousands, except per share amounts)

SLIDE 8

3/31/17 12/31/16 Assets: Real estate assets, at cost: Land 474,661 $ 474,375 $ Buildings and tenant improvements 4,326,570 4,313,373 Development in-process 327,446 279,602 Land held for development 84,056 77,355 5,212,733 5,144,705 Less-accumulated depreciation (1,166,865) (1,134,103) Net real estate assets 4,045,868 4,010,602 Cash and cash equivalents 4,918 49,490 Restricted cash 29,241 29,141 Accounts receivable, net of allowance of $491 and $624, respectively 15,814 17,372 Mortgages and notes receivable, net of allowance of $96 and $105, respectively 7,787 8,833 Accrued straight-line rents receivable, net of allowance of $242 and $692, respectively 178,872 172,829 Investments in and advances to unconsolidated affiliates 14,822 18,846 Deferred leasing costs, net of accumulated amortization of $142,148 and $140,081, respectively 210,141 213,500 Prepaid expenses and other assets, net of accumulated amortization of $20,695 and $19,904, respectively 41,353 40,437 Total Assets 4,548,816 $ 4,561,050 $ Liabilities, Noncontrolling Interests in the Operating Partnership and Equity: Mortgages and notes payable, net 2,042,486 $ 1,948,047 $ Accounts payable, accrued expenses and other liabilities 207,144 313,885 Total Liabilities 2,249,630 2,261,932 Commitments and contingencies Noncontrolling interests in the Operating Partnership 139,367 144,802 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), 28,905 and 28,920 shares issued and outstanding, respectively 28,905 28,920 Common Stock, $.01 par value, 200,000,000 authorized shares; 102,018,119 and 101,665,554 shares issued and outstanding, respectively 1,020 1,017 Additional paid-in capital 2,868,869 2,850,881 Distributions in excess of net income available for common stockholders (762,655) (749,412) Accumulated other comprehensive income 5,885 4,949 Total Stockholders' Equity 2,142,024 2,136,355 Noncontrolling interests in consolidated affiliates 17,795 17,961 Total Equity 2,159,819 2,154,316 Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity 4,548,816 $ 4,561,050 $

Consolidated Balance Sheets (dollars in thousands)

SLIDE 9

Three Months Ended 3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Continuing Operations Revenue Detail: Rental and other revenues Contractual rents, net 143,529 $ 144,109 $ 140,943 $ 138,958 $ 137,232 $ Straight-line rental income, net 6,118 5,328 5,140 6,786 6,655 Cost recovery income, net 12,750 10,930 12,539 12,672 12,589 Lease termination fees 16 3 350 20 1,938 Other miscellaneous operating revenues 6,995 7,276 7,297 8,424 6,445 169,408 $ 167,646 $ 166,269 $ 166,860 $ 164,859 $ Discontinued Operations: Rental and other revenues

8,484 $ Operating expenses: Rental property and other expenses

3,334

General and administrative

1,388

Total operating expenses

4,722

Interest expense

Other income

Income from discontinued operations

4,097

Net gains on disposition of discontinued operations

414,496

Total income from discontinued operations

418,593 $

Revenue Detail; Discontinued Operations Detail (dollars in thousands)

SLIDE 10

3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Mortgages and Notes Payable (see pages 6 & 7): 2,042,486 $ 1,948,047 $ 1,901,066 $ 2,082,207 $ 2,100,937 $ Preferred Stock (at liquidation value): Series A 8 5/8% Cumulative Redeemable 28,905 $ 28,920 $ 28,920 $ 28,935 $ 29,030 $ Common Shares and Units Outstanding: Common stock outstanding 102,018 101,666 100,204 98,571 97,392 Noncontrolling interest partnership units 2,837 2,839 2,840 2,867 2,900 Total Common Shares and Units outstanding 104,855 104,505 103,044 101,438 100,292 Stock price at period end 49.13 $ 51.01 $ 52.12 $ 52.80 $ 47.81 $ Market value of common equity 5,151,526 $ 5,330,800 $ 5,370,653 $ 5,355,926 $ 4,794,961 $ Total capitalization 7,222,917 $ 7,307,767 $ 7,300,639 $ 7,467,068 $ 6,924,928 $ Debt-to-EBITDA: Net income 33,485 $ 27,036 $ 33,840 $ 33,528 $ 446,735 $ Interest expense 17,863 17,892 18,566 19,485 20,705 Depreciation and amortization 56,145 58,406 52,923 55,317 53,494 Equity in earnings of unconsolidated affiliates (955) (783) (2,808) (917) (1,285) Income from discontinued operations

(4,097)

Gains on disposition of property (5,332) (647) (3,902) (5,861) (418,893) EBITDA 101,206 $ 101,904 $ 98,619 $ 101,552 $ 96,659 $ Annualized EBITDA 1/ 404,824 $ 407,616 $ 394,476 $ 406,208 $ 386,636 $ Mortgages and notes payable, net (Debt) 2,042,486 $ 1,948,047 $ 1,901,066 $ 2,082,207 $ 2,100,937 $ Preferred stock 28,905 28,920 28,920 28,935 29,030 Debt plus preferred stock 2,071,391 $ 1,976,967 $ 1,929,986 $ 2,111,142 $ 2,129,967 $ Debt-to-EBITDA 2/ 5.05x 4.78x 4.82x 5.13x 5.43x Debt plus preferred stock-to-EBITDA 3/ 5.12x 4.85x 4.89x 5.20x 5.51x 1/ Annualized EBITDA is EBITDA multiplied by four. 2/ Debt at quarter-end divided by annualized EBITDA. 3/ Debt plus preferred stock at quarter-end divided by annualized EBITDA.

Capitalization and Debt-to-EBITDA (dollars, shares and units in thousands)

SLIDE 11

Balances Outstanding: 3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Secured: Conventional fixed rate 127,358 $ 128,204 $ 129,013 $ 130,001 $ 174,475 $ Unsecured - Fixed: Fixed rate bonds and notes 1,042,692 1,126,145 1,125,942 1,125,739 1,125,536 Bank term loan 1/ 225,000 225,000 225,000 225,000 225,000 Unsecured - fixed total 1,267,692 1,351,145 1,350,942 1,350,739 1,350,536 Unsecured - Floating: Bank term loan 200,000 200,000 200,000 200,000 200,000 Bank term loan 125,000 125,000 125,000 125,000 125,000 Bank term loan 200,000 150,000 75,000

Credit facility 2/

131,000

28,000

283,000 258,000 Unsecured - floating total 656,000 475,000 428,000 608,000 583,000 Unsecured total 1,923,692 1,826,145 1,778,942 1,958,739 1,933,536 Total 2,051,050 $ 1,954,349 $ 1,907,955 $ 2,088,740 $ 2,108,011 $ Total Net of Debt Issuance Costs 2,042,486 $ 1,948,047 $ 1,901,066 $ 2,082,207 $ 2,100,937 $ End of Period Weighted Average Interest Rates: Secured: Conventional fixed rate 4.35% 4.35% 4.35% 4.35% 5.14% Unsecured - Fixed: Fixed rate bonds 4.37% 5.03% 5.03% 5.03% 5.03% Bank term loan 1/ 2.78% 2.78% 2.78% 2.78% 2.78% Unsecured - fixed total 4.09% 4.66% 4.66% 4.66% 4.66% Unsecured - Floating: Bank term loan 1.98% 1.82% 1.72% 1.66% 1.64% Bank term loan 1.99% 1.77% 1.62% 1.55% 1.54% Bank term loan 1.89% 1.72% 1.62%

Credit facility 2/

1.99%

1.62%

1.55% 1.54% Unsecured - floating total 1.96% 1.77% 1.67% 1.59% 1.57% Unsecured total 3.36% 3.91% 3.94% 3.70% 3.73% Weighted Average 3.42% 3.94% 3.97% 3.74% 3.84% Maturity Schedule 1/ The interest rate on this loan is based on one-month LIBOR plus a spread based on the company's credit rating. Swap agreements effectively fix one-month LIBOR until January 2019. 2/ Maturity date assumes exercise of two six-month extension options. 3/ All periods exclude annual principal amortization.

Mortgages and Notes Payable Summary (dollars in thousands)

100 150 200 250 300 350 400 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total Debt (in millions)

Secured Debt 3/ Unsecured Debt

Weighted Average Maturity = 4.2 years $

SLIDE 12

Undepreciated Secured Loans Loan Book Value of Effective Maturity Balance Real Estate & Related Lender Rate Date 3/31/17 Assets Secured Wells Fargo Bank, N.A. 4.22% Nov-17 108,325 $ 237,339 $ Wells Fargo Bank, N.A. 5.36% Jul-17 19,033 22,300 4.35% 127,358 259,639 $ Unsecured Bonds Bonds 3.36% Jun-21 298,180 Bonds 1/ 3.78% Mar-27 296,034 Bonds 3.75% Jan-23 248,478 Bonds 7.50% Apr-18 200,000 4.37% 1,042,692 Unsecured Loans Bank term loan 2/ 2.78% Jun-20 225,000 Bank term loan 3/ 1.98% Jan-19 200,000 Bank term loan 3/ 1.89% Jan-22 200,000 Credit facility 3/ 4/ 1.99% Jan-19 131,000 Bank term loan 3/ 1.99% Jun-20 125,000 2.17% 881,000 Total Debt 3.42% 2,051,050 $ Total Net of Debt Issuance Costs 2,042,486 $ Secured and Unsecured Debt Fixed and Variable Rate Debt 1/ Rate includes the impact of the swaps that were settled for $7.3 million upon issuance of the bonds. 2/ This loan maturing June 2020 is swapped to an effective fixed rate of 2.78% until January 2019, including the current spread based on the company's credit rating. 3/ Floating rate loans based on one-month LIBOR. 4/ Maturity date assumes exercise of two six-month extension options.

Mortgages and Notes Payable Detail (dollars in thousands)

Secured 6.2% Unsecured 93.8% Variable 32.0% Fixed 68.0%

Bond Covenants as of March 31, 2017 Overall indebtedness (<60%) 38.6% Secured indebtedness (<40%) 2.4% Income available for debt service (>1.5x) 5.51x Total unencumbered assets to unsecured debt (>200%) 261.6% Agency Rating Outlook Affirmed S&P BBB Stable 4/27/16 Moody's Baa2 Stable 1/6/17

SLIDE 13

3/31/17 12/31/16 9/30/16 6/30/16 3/31/16

Total In-Service

Rentable Square Feet Office 27,292,000 27,002,000 27,080,000 26,836,000 26,922,000 Industrial 2,413,000 2,413,000 2,413,000 2,413,000 2,413,000 Retail 59,000 59,000 59,000 59,000 59,000 Total 29,764,000 29,474,000 29,552,000 29,308,000 29,394,000 Occupancy Office 92.4% 92.9% 92.2% 92.0% 92.2% Industrial 96.7% 95.6% 98.4% 98.4% 98.3% Retail 100.0% 100.0% 93.0% 93.0% 96.4% Total 92.7% 93.1% 92.7% 92.5% 92.7%

Same Property:

Rentable Square Feet Office 26,505,000 26,505,000 26,505,000 26,505,000 26,505,000 Industrial 2,413,000 2,413,000 2,413,000 2,413,000 2,413,000 Retail 59,000 59,000 59,000 59,000 59,000 Total 28,977,000 28,977,000 28,977,000 28,977,000 28,977,000 Occupancy Office 92.6% 93.0% 92.6% 92.0% 92.2% Industrial 96.7% 95.6% 98.4% 98.4% 98.3% Retail 100.0% 100.0% 93.0% 93.0% 96.4% Total 92.9% 93.3% 93.1% 92.6% 92.8% Rentable Square Feet and Occupancy Trend: Total In-Service Office Only

Portfolio Summary

85% 87% 89% 91% 93% 95% 20 21 22 23 24 25 26 27 28 3/31/16 6/30/16 9/30/16 12/31/16 3/31/17 Occupancy Square Feet in Millions Rentable Square Feet Occupancy

SLIDE 14

Rentable Percentage of Annualized Cash Revenue 1/ Market Square Feet Occupancy Office Industrial Retail Total Atlanta 5,239,000 92.0% 18.9%

18.9%

Raleigh 5,262,000 92.5% 18.0%

18.0%

Nashville 3,581,000 94.2% 14.3%

0.2%

14.5% Tampa 3,822,000 92.0% 13.6%

13.6%

Pittsburgh 2,162,000 94.4% 8.6%

8.6%

Memphis 2,148,000 89.6% 7.5%

0.1%

7.6% Orlando 1,977,000 87.7% 7.3%

7.3%

Richmond 1,942,000 95.0% 5.9%

5.9%

Greensboro 3,564,000 95.6% 3.5% 1.9%

5.4%

Kansas City 67,000 95.6% 0.2%

0.2%

Total 29,764,000 92.7% 97.8% 1.9% 0.3% 100.0%

Annualized Cash Revenue by Market 1/ 1/ Annualized Cash Revenue is March 2017 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Portfolio Summary

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Atlanta Raleigh Nashville Tampa Pittsburgh Memphis Orlando Richmond Greensboro Kansas City

SLIDE 15

Percentage Percentage

f Segment
f Total

Annualized Annualized Rentable Cash Cash Market Square Feet Occupancy Revenue 1/ Revenue 1/ Office Atlanta 5,239,000 92.0% 19.3% 18.9% Raleigh 5,262,000 92.5% 18.4% 18.0% Nashville 3,540,000 94.2% 14.6% 14.3% Tampa 3,822,000 92.0% 13.9% 13.6% Pittsburgh 2,162,000 94.4% 8.8% 8.6% Memphis 2,130,000 89.5% 7.6% 7.5% Orlando 1,977,000 87.7% 7.5% 7.3% Richmond 1,942,000 95.0% 6.1% 5.9% Greensboro 1,151,000 93.4% 3.6% 3.5% Kansas City 67,000 95.6% 0.2% 0.2% 27,292,000 92.4% 100.0% 97.8% Industrial Greensboro 2,413,000 96.7% 100.0% 1.9% 2,413,000 96.7% 100.0% 1.9% Retail Nashville 41,000 100.0% 68.7% 0.2% Memphis 18,000 100.0% 31.3% 0.1% 59,000 100.0% 100.0% 0.3% Office Segment: Annualized Cash Revenue by Market 1/

1/ Annualized Cash Revenue is March 2017 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Portfolio Summary

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20% Atlanta Raleigh Nashville Tampa Pittsburgh Memphis Orlando Richmond Greensboro Kansas City

SLIDE 16

Market Measurement 3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Atlanta Rentable Square Feet 5,239,000 5,239,000 5,317,000 5,317,000 5,317,000 Occupancy 92.0% 92.1% 91.7% 91.2% 92.1% Current Properties 1/ 92.0% 92.1% 92.4% 91.9% 92.8% Greensboro Rentable Square Feet 3,564,000 3,564,000 3,564,000 3,564,000 3,564,000 Occupancy 95.6% 94.8% 96.5% 96.7% 96.6% Current Properties 1/ 95.6% 94.8% 96.5% 96.7% 96.6% Kansas City Rentable Square Feet 67,000 67,000 67,000 67,000 150,000 Occupancy 95.6% 95.6% 95.6% 95.6% 98.0% Current Properties 1/ 95.6% 95.6% 95.6% 95.6% 95.6% Memphis Rentable Square Feet 2,148,000 2,226,000 2,226,000 2,226,000 2,226,000 Occupancy 89.6% 89.9% 90.9% 91.5% 90.7% Current Properties 1/ 89.6% 89.5% 90.6% 91.1% 90.4% Nashville Rentable Square Feet 3,581,000 3,379,000 3,379,000 3,379,000 3,379,000 Occupancy 94.2% 99.6% 99.5% 99.0% 99.6% Current Properties 1/ 94.8% 99.6% 99.5% 99.0% 99.6% Orlando Rentable Square Feet 1,977,000 1,977,000 1,977,000 1,977,000 1,978,000 Occupancy 87.7% 88.2% 87.0% 87.5% 85.9% Current Properties 1/ 87.7% 88.2% 87.0% 87.5% 85.9% Pittsburgh Rentable Square Feet 2,162,000 2,162,000 2,162,000 2,162,000 2,162,000 Occupancy 94.4% 93.8% 92.2% 91.6% 91.4% Current Properties 1/ 94.4% 93.8% 92.2% 91.6% 91.4% Raleigh Rentable Square Feet 5,262,000 5,096,000 5,096,000 4,852,000 4,852,000 Occupancy 92.5% 92.7% 90.8% 91.9% 93.0% Current Properties 1/ 93.8% 94.0% 92.1% 91.9% 93.0% Richmond Rentable Square Feet 1,942,000 1,942,000 1,942,000 1,942,000 1,941,000 Occupancy 95.0% 94.6% 94.2% 92.9% 93.6% Current Properties 1/ 95.0% 94.6% 94.2% 92.9% 93.6% Tampa Rentable Square Feet 3,822,000 3,822,000 3,822,000 3,822,000 3,825,000 Occupancy 92.0% 90.9% 90.8% 88.9% 88.3% Current Properties 1/ 92.0% 90.9% 90.8% 88.9% 88.3% Total Rentable Square Feet 29,764,000 29,474,000 29,552,000 29,308,000 29,394,000 Occupancy 92.7% 93.1% 92.7% 92.5% 92.7% Current Properties 1/ 93.0% 93.3% 93.1% 92.6% 92.8%

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

Occupancy Trends

SLIDE 17

Leasing Statistics

Three Months Ended Five Quarter 3/31/17 12/31/16 9/30/16 6/30/16 3/31/16 Average Leasing Activity: Square footage of Renewal Deals 509,122 460,308 594,326 661,722 694,258 583,947 Square footage of New Deals (Relets) 205,984 1/ 266,025 1/ 273,067 1/ 245,193 1/ 207,880 239,630 Rentable square footage leased 715,106 726,333 867,393 906,915 902,138 823,577 Renewed square footage (% of total) 71.2% 63.4% 68.5% 73.0% 77.0% 70.9% New Leases square footage (% of total) 28.8% 36.6% 31.5% 27.0% 23.0% 29.1% Number of lease transactions (signed leases) 112 105 99 131 119 113 Weighted average per rentable square foot

ver the lease term:

Base rent 27.60 $ 27.52 $ 27.31 $ 25.14 $ 24.42 $ 26.40 $ Rent concessions (0.33) (0.56) (0.39) (0.57) (0.63) (0.50) GAAP rent 27.27 26.96 26.92 24.57 23.79 25.90 Tenant improvements (2.50) (2.89) (2.86) (2.44) (2.05) (2.55) Leasing commissions 2/ (0.66) (0.96) (0.84) (0.74) (0.53) (0.75) Effective rent after capex 24.11 23.11 23.22 21.39 21.21 22.60 Expense stop (8.83) (9.11) (8.61) (8.42) (6.67) (8.33) Effective rent after capex and opex 15.28 $ 14.00 $ 14.61 $ 12.97 $ 14.54 $ 14.27 $ Square feet weighted average term in years 5.0 6.0 7.0 5.4 6.5 6.0 Dollar weighted average term in years 5.3 6.2 7.2 5.6 6.5 6.2 Capital Expenditures Related to Above Leasing Activity: Tenant Improvements: Total dollars committed under signed leases 11,106,993 $ 14,808,837 $ 20,521,494 $ 13,738,272 $ 13,050,044 $ 14,645,128 $ Rentable square feet 715,106 726,333 867,393 906,915 902,138 823,577 Per rentable square foot 15.53 $ 20.39 $ 23.66 $ 15.15 $ 14.47 $ 17.78 $ Leasing Commissions: Total dollars committed under signed leases 2/ 2,694,254 $ 4,961,541 $ 5,827,656 $ 4,219,120 $ 2,876,029 $ 4,115,720 $ Rentable square feet 715,106 726,333 867,393 906,915 902,138 823,577 Per rentable square foot 3.77 $ 6.83 $ 6.72 $ 4.65 $ 3.19 $ 5.00 $ Total: Total dollars committed under signed leases 13,801,247 $ 19,770,378 $ 26,349,150 $ 17,957,392 $ 15,926,073 $ 18,760,848 $ Rentable square feet 715,106 726,333 867,393 906,915 902,138 823,577 Per rentable square foot 19.30 $ 27.22 $ 30.38 $ 19.80 $ 17.65 $ 22.78 $ 1/ Expected occupancy as follows: 33,000 in Q1 '17; 102,000 in Q2 '17; 7,000 in Q3 '17; 62,000 in Q4 '17; and 3,000 in Q2 '19. 2/ Excludes internal leasing costs.

Office Leasing Statistics

SLIDE 18

For Three Months Ended March 31, 2017 Leasing Statistics Rentable Lease Square Feet Average TI's Commissions Rental Previous Percentage Leased Term Per SF Per SF 1/ Rate Rent Change Nashville 194,664 4.9 11.42 $ 4.06 $ 28.75 $ 24.70 $ 16.4% Orlando 97,307 7.6 27.55 3.30 33.26 27.57 20.6% Greensboro 96,935 4.9 10.46 3.47 20.79 19.15 8.6% Tampa 90,088 4.1 14.17 3.50 28.37 23.52 20.6% Raleigh 80,479 4.6 21.01 4.11 25.72 21.00 22.5% Atlanta 68,523 5.0 18.02 6.49 28.00 23.99 16.7% Richmond 44,336 5.1 15.41 2.02 22.84 19.72 15.8% Memphis 42,774 2.6 7.12 1.49 25.67 24.48 4.9% GAAP Rent Growth

715,106 5.0 15.53 $ 3.77 $ 27.27 $ 23.38 $ 16.6% Cash Rent Growth

715,106 5.0 15.53 $ 3.77 $ 26.40 $ 25.29 $ 4.4% Average Office Cash Rental Rates for All In-Place Leases as of:

1/ Excludes capitalized internal leasing costs, which totaled $698,000. 2/ GAAP rent growth is calculated by comparing average cash rent psf over the term (GAAP rent) of the new lease to the average cash rent psf

ver the term related to the previous lease in the same space. Adjustments are made if necessary to put both the current and prior deal on a

consistent gross lease basis. 3/ Cash rent growth is calculated by comparing beginning annualized cash rent psf (after rent concessions burn off) under the new lease to ending annualized cash rent psf (including recovery income and rent escalations) related to the previous lease in the same space. Adjustments are made if necessary to put both the current and prior deal on a consistent gross lease basis.

Office Leasing Statistics and Rental Rate Comparisons by Market

$21.35 $21.78 $22.70 $23.38 $24.40 $19 $20 $21 $22 $23 $24 $25 3/31/13 3/31/14 3/31/15 3/31/16 3/31/17

SLIDE 19

Occupied Percent of Percent of Rentable Occupied Annualized Average Annualized Square Feet Rentable Cash Rental Cash Year Expiring Square Feet Revenue 1/ Rate Revenue 1/ 2017 2/ 1,685,621 6.7% 44,681 $ 26.51 $ 7.3% 2018 2,731,704 10.8% 66,891 24.49 10.9% 2019 3,541,383 14.0% 87,645 24.75 14.2% 2020 2,894,775 11.5% 77,729 26.85 12.6% 2021 2,804,132 11.1% 65,390 23.32 10.6% 2022 1,877,216 7.4% 43,438 23.14 7.1% 2023 1,682,622 6.7% 40,081 23.82 6.5% 2024 1,714,474 6.8% 44,430 25.91 7.2% 2025 1,002,826 4.0% 28,212 28.13 4.6% 2026 1,254,142 5.0% 29,736 23.71 4.8% 2027 and thereafter 4,018,296 16.0% 86,835 21.61 14.2% 25,207,191 100.0% 615,068 $ 24.40 $ 100.0% Percent of Total Annualized Cash Revenue Expiring by Year 1/ Annualized Cash Revenue is March 2017 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12. 2/ Includes 83,000 square feet of leases that are on a month to month basis, which constitute 0.3% of total annualized revenue. Note: 2017 and beyond expirations that have been renewed are reflected above based on the renewal expiration date. Expirations include leases related to completed not stabilized development properties and exclude leases related to developments in-process.

Office Lease Expirations (dollars in thousands)

0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%

2017 2/ 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 and thereafter

SLIDE 20

2017 1/ 2018 2019 2020 Thereafter Atlanta RSF 447,625 327,501 705,848 605,336 2,732,165 % of Total RSF 1.8% 1.3% 2.7% 2.4% 10.8% Annualized Cash Revenue 2/ 12,292 $ 8,405 $ 18,191 $ 16,374 $ 63,716 $ % of Total Annl Cash Rev 2.0% 1.4% 3.0% 2.7% 10.4% Greensboro RSF 139,599 189,106 115,493 129,581 501,768 % of Total RSF 0.6% 0.8% 0.5% 0.5% 2.1% Annualized Cash Revenue 2/ 2,842 $ 3,895 $ 2,858 $ 2,482 $ 9,766 $ % of Total Annl Cash Rev 0.5% 0.6% 0.5% 0.4% 1.6% Kansas City RSF 45,032 2,448 5,423 11,560 % of Total RSF 0.2% 0.0% 0.0% 0.0% 0.0% Annualized Cash Revenue 2/ 1,041 $ 62 $ 133 $

267 $ % of Total Annl Cash Rev 0.2% 0.0% 0.0% 0.0% 0.0% Memphis RSF 109,255 267,746 347,275 204,540 978,439 % of Total RSF 0.4% 1.1% 1.4% 0.8% 3.9% Annualized Cash Revenue 2/ 2,578 $ 6,448 $ 8,177 $ 5,371 $ 24,340 $ % of Total Annl Cash Rev 0.4% 1.0% 1.3% 0.9% 4.0% Nashville RSF 124,383 349,496 475,757 457,531 1,927,025 % of Total RSF 0.5% 1.4% 1.9% 1.8% 7.7% Annualized Cash Revenue 2/ 3,276 $ 8,855 $ 12,312 $ 11,738 $ 53,567 $ % of Total Annl Cash Rev 0.5% 1.4% 1.9% 1.9% 8.6% Orlando RSF 182,532 255,946 262,688 199,183 832,723 % of Total RSF 0.7% 1.0% 1.0% 0.8% 3.4% Annualized Cash Revenue 2/ 7,139 $ 6,528 $ 6,535 $ 5,041 $ 20,704 $ % of Total Annl Cash Rev 1.2% 1.1% 1.1% 0.8% 3.3% Pittsburgh RSF 74,330 80,876 118,030 73,293 1,694,754 % of Total RSF 0.3% 0.3% 0.5% 0.3% 6.6% Annualized Cash Revenue 2/ 2,150 $ 2,285 $ 2,986 $ 4,459 $ 42,104 $ % of Total Annl Cash Rev 0.3% 0.4% 0.5% 0.7% 7.0% Raleigh RSF 121,060 700,141 751,550 352,440 2,943,797 % of Total RSF 0.5% 2.7% 3.0% 1.4% 11.7% Annualized Cash Revenue 2/ 2,521 $ 14,723 $ 17,930 $ 9,515 $ 68,701 $ % of Total Annl Cash Rev 0.4% 2.5% 2.9% 1.5% 11.1% Richmond RSF 259,958 215,764 204,355 196,155 969,381 % of Total RSF 1.0% 0.9% 0.8% 0.8% 3.9% Annualized Cash Revenue 2/ 6,219 $ 4,457 $ 4,406 $ 4,197 $ 17,944 $ % of Total Annl Cash Rev 1.0% 0.7% 0.7% 0.7% 3.0% Tampa RSF 181,847 342,680 554,964 676,716 1,762,096 % of Total RSF 0.7% 1.3% 2.2% 2.7% 6.9% Annualized Cash Revenue 2/ 4,623 $ 11,233 $ 14,117 $ 18,552 $ 37,013 $ % of Total Annl Cash Rev 0.8% 1.8% 2.3% 3.0% 6.0% Total RSF 1,685,621 2,731,704 3,541,383 2,894,775 14,353,708 % of Total RSF 6.7% 10.8% 14.0% 11.5% 57.0% Annualized Cash Revenue 2/ 44,681 $ 66,891 $ 87,645 $ 77,729 $ 338,122 $ % of Total Annl Cash Rev 7.3% 10.9% 14.2% 12.6% 55.0% 1/ Includes 83,000 square feet of leases that are on a month to month basis, which constitute 0.3% of total annualized revenue. 2/ Annualized Cash Revenue is March 2017 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Office Lease Expirations by Market by Year (dollars in thousands)

SLIDE 21

Percent of Average Rentable Annualized Annualized Remaining Square Cash Cash Lease Top 20 Customers Feet Revenue 1/ Revenue 1/ Term in Years Federal Government 1,417,971 34,440 $ 5.44% 4.2 Metropolitan Life Insurance 661,060 16,650 2.63% 10.0 PPG Industries 356,215 9,731 1.54% 14.1 EQT Corporation 319,269 7,531 1.19% 7.5 Healthways 263,598 7,038 1.11% 5.9 International Paper 278,444 6,789 1.07% 11.7 Bass, Berry & Sims 198,966 6,466 1.02% 7.8 State of Georgia 318,506 6,240 0.99% 3.9 Willis Towers Watson 239,506 6,237 0.98% 4.9 American General Life 173,834 5,777 0.91% 9.8 Aon 190,683 5,622 0.89% 2.6 Novelis 168,949 5,602 0.88% 7.4 Marsh USA 168,394 5,520 0.87% 5.0 Vanderbilt University 251,415 5,324 0.84% 3.5 PNC Bank 187,076 5,322 0.84% 9.7 Syniverse Technologies 218,678 4,896 0.77% 9.6 Lifepoint Corporate Services 202,991 4,708 0.74% 12.0 Morgan Stanley 144,616 4,667 0.74% 2.6 Laser Spine Institute 176,089 4,651 0.73% 15.5 AT&T 197,826 4,595 0.73% 2.3 6,134,086 157,806 $ 24.91% 7.2

Percent of Annualized Revenue by Industry

1/ Annualized Cash Revenue is March 2017 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12.

Customer Diversification (dollars in thousands)

Professional, Scientific, and Technical Services 25.4% Health Care and Social Assistance 13.8% Finance/Banking 13.8% Insurance 9.1% Manufacturing 7.0% Government/Public Administration 6.7% Real Estate Rental and Leasing 4.6% Administrative and Support Services 3.9% Educational Services 2.9% Telecommunication 2.6% Information 2.5% Accommodation and Food Services 1.7% Transportation and Warehousing 1.6% Energy 1.5% Other Services (except Public Administration) 1.4% Wholesale Trade 0.9% Retail Trade 0.6%

SLIDE 22

Three months ended March 31, Dollar Percentage 2017 2016 Change B/(W) Change B/(W) Rental revenues 1/ 157,891 $ 153,426 $ 4,465 $ 2.9% Operating expenses (55,620) (56,461) 841 1.5% Cash NOI 1/ 102,271 96,965 5,306 5.5% Lease termination fees 2/ 16 1,938 (1,922) (99.2%) Cash NOI with Term Fees 3/ 102,287 98,903 3,384 3.4% Straight-line rent and other non-cash adjustments 2/ 4/ 4,583 5,491 (908) (16.5%) GAAP NOI 106,870 $ 104,394 $ 2,476 $ 2.4% Average occupancy 92.7% 92.6% 0.1% Rentable square feet 28,977,000 28,977,000 First Quarter: 2017 vs 2016 GAAP NOI Occupancy Percentage Percentage Market Change Change Atlanta 3.8% (1.1%) Greensboro 5.3% (0.3%) Kansas City (8.1%) 0.0% Memphis (0.5%) (0.9%) Nashville (4.5%) (5.6%) Orlando 12.8% 2.3% Pittsburgh 0.4% 1.6% Raleigh 0.6% 1.8% Richmond 8.1% 1.7% Tampa 4.6% 3.6% 2.4% 0.1%

1/ Excludes straight-line rents, lease termination fees, adjustments related to amortization of acquired above and below market leases and amortization of lease incentives. 2/ Straight-line rent write-offs related to lease terminations are reflected here as a reduction of lease termination fees. 3/ Excludes straight-line rents, adjustments related to amortization of acquired above and below market leases and amortization of lease incentives. 4/ Includes adjustments related to amortization of acquired above and below market leases and amortization of lease incentives.

Same Property Performance (dollars in thousands)

SLIDE 23

Three Months Ended 3/31/17 Occupancy 1/ 100.0% Square feet 78,000 Gross sales price $13,000 ThyssenKrupp Market Memphis Property type Office Number of properties 1 Date sold February 22, 2017 Occupancy 1/ 100.0% Square feet 78,000 Gross sales price $13,000 1/ As of last reported quarter-end occupancy prior to date of disposition.

Disposition Activity (dollars In thousands)

SLIDE 24

Rentable Anticipated Investment Estimated Estimated Square Total As Of Pre Completion Stabilization Office In-Process Market Feet Investment 1/ 3/31/17 1/ Leased % Date Date Riverwood 200 Atlanta 299,000 107,000 $ 86,667 $ 79.3% 2Q 17 2Q 19 Seven Springs II Nashville 131,000 38,100 28,125 52.3% 2Q 17 3Q 18 Bridgestone Americas 2/ 3/ Nashville 514,000 200,000 173,536 100.0% 3Q 17 3Q 17 5000 CentreGreen Raleigh 166,500 40,850 22,051 26.0% 3Q 17 3Q 19 Virignia Urology 4/ Richmond 87,000 29,140 1,980 100.0% 3Q 18 3Q 18 751 Corporate Center 4/ Raleigh 89,700 21,850 1,803 35.3% 4Q 18 4Q 20 Mars Petcare - Ovation 5/ Nashville 223,700 96,200 8,587 100.0% 3Q 19 3Q 19 1,510,900 533,140 $ 322,749 $ 79.8% Industrial In-Process Enterprise IV Greensboro 128,000 8,040 $ 1,753 $ 62.5% 1Q 18 4Q 18 Industrial Completed Not Stabilized 6/ Enterprise V Greensboro 131,200 7,600 $ 6,491 $ 0.0% 2Q 16 2Q 17 Total Pipeline 1,770,100 548,780 $ 330,993 $ 72.6% Placed in Service GlenLake V Raleigh 166,000 37,000 $ 37,000 $ 95.5% Seven Springs West Nashville 203,000 59,000 56,852 91.3% 369,000 96,000 $ 93,852 $ 93.2% MARS Petcare HQ in Nashville 1/ Includes deferred lease commissions, which are not classified as development in-process on our consolidated balance sheet. 2/ Includes 7,000 square feet of amenity retail space. 3/ This project is scheduled to deliver in Q3 '17. We are required to commence recording straight-line rental income due to early possession by the customer starting in Q2 '17. 4/ Recorded on our consolidated balance sheet in land held for development, not development in-process. 5/ Includes the portion of land and land infrastructure costs within Ovation associated with the Mars Petcare site. 6/ "Completed not stabilzed" properties are recorded on our consolidated balance sheet in the land and building and tenant improvement accounts, not development in-process.

Development Activity(dollars in thousands)

SLIDE 25

Market Acres Office Industrial Nashville 2/ 68 1,382,000

Raleigh 3/

42 1,186,000

Tampa

37 813,000

Greensboro

30 240,000 220,500 Richmond 4/ 5/ 13 200,000

Memphis

10 145,000

Orlando

2 410,000

Atlanta

1 175,000

Core total

203 4,551,000 220,500 Non-core total 196 Total 399 Cost Basis 1/ 2/ 3/ 4/ 5/ 102,217 $ The 399 acres of Development Land has an estimated market value of between $110 to $115 million.

1/ Represents approximately $1.0 billion in total development. 2/ Includes 54 acres and approximately 1.2 million square feet currently classified as development in-process on our consolidated balance sheet. 3/ Excludes 10 acres to be used to develop a 90 thousand square foot, 35.3% pre-leased build-to-suit office building that is currently classified as land held for development on our consolidated balance sheet. 4/ Excludes 8 acres to be used to develop a 87 thousand square foot, 100% pre-leased build-to-suit medical office building that is currently classified as land held for development on our consolidated balance sheet. 5/ Excludes 13 acres of development land owned by a 50% consolidated joint venture with a total cost basis of $3.3 million.

Square Footage Buildout of Core Development Land 1/

Land Held for Development (dollars in thousands)

SLIDE 26

Unconsolidated Joint Venture Financial Information:

Joint Venture Own % Revenue NOI Highwoods DLF Forum, LLC 25.0% 3,512 $ 2,381 $ Plaza Colonnade, Tenant-in-Common 50.0% 3,123 2,066 Kessinger/Hunter & Company, LC 26.5% 1,510 453 Highwoods DLF 98/29, LLC 22.8% 1,320 806 Highwoods DLF 97/26 DLF 99/32, LP 42.9% 382 288 Total 9,847 $ 5,994 $ Total Total Joint Venture Own % Assets Debt Liabilities Highwoods DLF Forum, LLC 25.0% 93,515 $ 71,353 $ 73,157 $ Plaza Colonnade, Tenant-in-Common 50.0% 58,023 64,270 66,959 Kessinger/Hunter & Company, LC 26.5% 2,786

Highwoods DLF 98/29, LLC 22.8% 28,088

1,931

Highwoods DLF 97/26 DLF 99/32, LP 42.9% 14,158

2,806

Total 196,570 $ 135,623 $ 145,479 $

Summary of Joint Ventures:

Percentage of Joint Venture Annualized Rentable Cash Market Square Feet Occupancy Revenue 1/ 2/

Kansas City

292,000 99.5% 38.2%

Raleigh

635,000 94.3% 28.5%

Richmond 3/

345,000 100.0% 19.0%

Orlando

306,000 100.0% 14.3%

Total

1,578,000 97.6% 100.0% 1/ Annualized Cash Revenue is March 2017 cash rental revenue (base rent plus operating expense pass through revenue excluding straight-line rental income) multiplied by 12. 2/ Annualized Cash Revenue is based on Highwoods' share only. 3/ This joint venture is consolidated. Venture's Books Three Months Ended March 31, 2017 Venture's Books As of March 31, 2017

Unconsolidated Joint Ventures Income Year Ended 12/31/14 (dollars in thousands) Unconsolidated Joint Ventures Income Six Months Ended Joint Venture Financial Information and Summary (dollars in thousands)