HIGHWOODS PROPERTIES, INC.
Consolidated Balance Sheets
(Unaudited and in thousands, except share and per share data)
June 30, 2026 December 31, 2025
Assets:
Real estate assets, at cost:
Land $ 607,720 $ 609,177
Buildings and tenant improvements 6,216,948 6,144,697
Development in-process — 6,248
Land held for development 197,227 214,149
7,021,895 6,974,271
Less-accumulated depreciation (1,905,507) (1,902,276)
Net real estate assets 5,116,388 5,071,995
Real estate and other assets, net, held for sale 53,900 23,201
Cash and cash equivalents 145,377 27,358
Restricted cash 20,653 15,691
Accounts receivable 31,548 28,263
Mortgages and notes receivable 12,228 12,228
Accrued straight-line rents receivable 304,951 318,024
Investments in and advances to unconsolidated affiliates 446,928 471,580
Deferred leasing costs, net of accumulated amortization of $174,584 and $169,972, respectively 278,222 244,258
Prepaid expenses and other assets, net of accumulated depreciation of $27,411 and $25,144, respectively 61,456 61,240
Total Assets $ 6,471,651 $ 6,273,838
Liabilities, Noncontrolling Interests in the Operating Partnership and Equity:
Mortgages and notes payable, net $ 3,515,608 $ 3,554,178
Accounts payable, accrued expenses and other liabilities 305,713 284,006
Total Liabilities 3,821,321 3,838,184
Commitments and contingencies
Noncontrolling interests in the Operating Partnership 60,840 52,777
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), 26,631 and 26,691 shares issued and outstanding, respectively 26,631 26,691
Common Stock, $.01 par value, 200,000,000 authorized shares;
110,306,211 and 109,905,241 shares issued and outstanding, respectively 1,103 1,099
Additional paid-in capital 3,221,689 3,223,767
Distributions in excess of net income available for common stockholders (855,358) (870,083)
Accumulated other comprehensive loss (2,625) (2,494)
Total Stockholders’ Equity 2,391,440 2,378,980
Noncontrolling interests in consolidated affiliates 198,050 3,897
Total Equity 2,589,490 2,382,877
Total Liabilities, Noncontrolling Interests in the Operating Partnership and Equity $ 6,471,651 $ 6,273,838
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
Consolidated Statements of Income
(Unaudited and in thousands, except per share amounts)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Rental and other revenues $ 216,379 $ 200,600 $ 430,413 $ 400,983
Operating expenses:
Rental property and other expenses 70,155 63,655 141,273 128,689
Depreciation and amortization 79,054 74,679 156,591 146,084
General and administrative 9,897 10,319 23,331 22,776
Total operating expenses 159,106 148,653 321,195 297,549
Interest expense 41,694 37,665 83,390 74,307
Other income 2,568 4,629 5,736 6,254
Gains on disposition of property 79,024 — 95,987 82,215
Equity in earnings/(losses) of unconsolidated affiliates (414) 310 2,571 1,625
Net income 96,757 19,221 130,122 119,221
Net (income) attributable to noncontrolling interests in the Operating Partnership (1,716) (365) (2,295) (2,321)
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Dividends on Preferred Stock (574) (586) (1,148) (1,207)
Net income available for common stockholders $ 93,474 $ 18,270 $ 124,837 $ 115,719
Earnings per Common Share – basic:
Net income available for common stockholders $ 0.85 $ 0.17 $ 1.13 $ 1.07
Weighted average Common Shares outstanding – basic 110,284 107,825 110,162 107,754
Earnings per Common Share – diluted:
Net income available for common stockholders $ 0.85 $ 0.17 $ 1.13 $ 1.07
Weighted average Common Shares outstanding – diluted 112,301 109,976 112,182 109,905
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
Consolidated Statements of Comprehensive Income
(Unaudited and in thousands)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Comprehensive income:
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
Other comprehensive loss:
Amortization of cash flow hedges (68) (62) (131) (124)
Total other comprehensive loss (68) (62) (131) (124)
Total comprehensive income 96,689 19,159 129,991 119,097
Less-comprehensive (income) attributable to noncontrolling interests (2,709) (365) (4,137) (2,295)
Comprehensive income attributable to common stockholders $ 93,980 $ 18,794 $ 125,854 $ 116,802
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
Consolidated Statements of Equity
(Unaudited and in thousands, except share amounts)
Three Months Ended June 30, 2026
Number of Common Shares Common Stock Series A Cumulative Redeemable Preferred Shares Additional Paid-In Capital Accumulated Other Compre-hensive Loss Non-controlling Interests in Consolidated Affiliates Distributions in Excess of Net Income Available for Common Stockholders Total
Balance as of March 31, 2026 110,272,697 $ 1,103 $ 26,631 $ 3,237,704 $ (2,557) $ 201,654 $ (893,681) $ 2,570,854
Issuances of Common Stock, net of issuance costs and tax withholdings 12,118 — — (22) — — — (22)
Dividends on Common Stock ($0.50 per share) — — — — — (55,151) (55,151)
Dividends on Preferred Stock ($21.5625 per share) — — — — — (574) (574)
Adjustment of noncontrolling interests in the Operating Partnership to fair value — — (16,943) — — — (16,943)
Distributions to noncontrolling interests in consolidated affiliates — — — — (4,597) — (4,597)
Issuances of restricted stock 21,396 — — — — — — —
Share-based compensation expense, net of forfeitures — — — 950 — — — 950
Net (income) attributable to noncontrolling interests in the Operating Partnership — — — — — (1,716) (1,716)
Net (income) attributable to noncontrolling interests in consolidated affiliates — — — — 993 (993) —
Comprehensive income:
Net income — — — — — 96,757 96,757
Other comprehensive loss — — — (68) — — (68)
Total comprehensive income 96,689
Balance as of June 30, 2026 110,306,211 $ 1,103 $ 26,631 $ 3,221,689 $ (2,625) $ 198,050 $ (855,358) $ 2,589,490
Six Months Ended June 30, 2026
Number of Common Shares Common Stock Series A Cumulative Redeemable Preferred Shares Additional Paid-In Capital Accumulated Other Compre-hensive Loss Non-controlling Interests in Consolidated Affiliates Distributions in Excess of Net Income Available for Common Stockholders Total
Balance at December 31, 2025 109,905,241 $ 1,099 $ 26,691 $ 3,223,767 $ (2,494) $ 3,897 $ (870,083) $ 2,382,877
Issuances of Common Stock, net of issuance costs and tax withholdings (57,139) — — (1,665) — — — (1,665)
Conversions of Common Units to Common Stock 25,855 700 700
Dividends on Common Stock ($1.00 per share) — — — — — (110,112) (110,112)
Dividends on Preferred Stock ($43.1250 per share) — — — — — (1,148) (1,148)
Adjustment of noncontrolling interests in the Operating Partnership to fair value — — (8,509) — — — (8,509)
Distributions to noncontrolling interests in consolidated affiliates — — — — (4,891) — (4,891)
Contributions from noncontrolling interests in consolidated affiliates — — — — 197,202 — 197,202
Issuances of restricted stock 432,254 — — — — — — —
Redemptions/repurchases of Preferred Stock — (60) (60)
Share-based compensation expense, net of forfeitures — 4 — 7,396 — — — 7,400
Net (income) attributable to noncontrolling interests in the Operating Partnership — — — — — (2,295) (2,295)
Net (income) attributable to noncontrolling interests in consolidated affiliates — — — — 1,842 (1,842) —
Comprehensive income:
Net income — — — — — 130,122 130,122
Other comprehensive loss — — — (131) — — (131)
Total comprehensive income 129,991
Balance as of June 30, 2026 110,306,211 $ 1,103 $ 26,631 $ 3,221,689 $ (2,625) $ 198,050 $ (855,358) $ 2,589,490
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
Consolidated Statements of Equity - Continued
(Unaudited and in thousands, except share amounts)
Three Months Ended June 30, 2025
Number of Common Shares Common Stock Series A Cumulative Redeemable Preferred Shares Additional Paid-In Capital Accumulated Other Compre-hensive Loss Non-controlling Interests in Consolidated Affiliates Distributions in Excess of Net Income Available for Common Stockholders Total
Balance as of March 31, 2025 107,810,629 $ 1,078 $ 28,811 $ 3,150,235 $ (2,308) $ 4,185 $ (766,979) $ 2,415,022
Issuances of Common Stock, net of issuance costs and tax withholdings 56,494 — — 1,620 — — — 1,620
Dividends on Common Stock ($0.50 per share) — — — — — (53,918) (53,918)
Dividends on Preferred Stock ($21.5625 per share) — — — — — (586) (586)
Adjustment of noncontrolling interests in the Operating Partnership to fair value — — (3,829) — — — (3,829)
Distributions to noncontrolling interests in consolidated affiliates — — — — (80) — (80)
Issuances of restricted stock 19,792 — — — — — — —
Redemptions/repurchases of Preferred Stock (2,095) (2,095)
Share-based compensation expense, net of forfeitures — 1 — 1,309 — — — 1,310
Net (income) attributable to noncontrolling interests in the Operating Partnership — — — — — (365) (365)
Comprehensive income:
Net income — — — — — 19,221 19,221
Other comprehensive loss — — — (62) — — (62)
Total comprehensive income 19,159
Balance as of June 30, 2025 107,886,915 $ 1,079 $ 26,716 $ 3,149,335 $ (2,370) $ 4,105 $ (802,627) $ 2,376,238
Six Months Ended June 30, 2025
Number of Common Shares Common Stock Series A Cumulative Redeemable Preferred Shares Additional Paid-In Capital Accumulated Other Compre-hensive Loss Non-controlling Interests in Consolidated Affiliates Distributions in Excess of Net Income Available for Common Stockholders Total
Balance at December 31, 2024 107,623,777 $ 1,076 $ 28,811 $ 3,144,130 $ (2,246) $ 4,291 $ (810,608) $ 2,365,454
Issuances of Common Stock, net of issuance costs and tax withholdings 1,458 — — (142) — — — (142)
Dividends on Common Stock ($1.00 per share) — — — — — (107,738) (107,738)
Dividends on Preferred Stock ($43.1250 per share) — — — — — (1,207) (1,207)
Adjustment of noncontrolling interests in the Operating Partnership to fair value — — (927) — — — (927)
Distributions to noncontrolling interests in consolidated affiliates — — — — (160) — (160)
Issuances of restricted stock 261,680 — — — — — — —
Redemptions/repurchases of Preferred Stock — (2,095) (2,095)
Share-based compensation expense, net of forfeitures — 3 — 6,274 — — — 6,277
Net (income) attributable to noncontrolling interests in the Operating Partnership — — — — — (2,321) (2,321)
Net loss attributable to noncontrolling interests in consolidated affiliates — — — — (26) 26 —
Comprehensive income:
Net income — — — — — 119,221 119,221
Other comprehensive loss — — — (124) — — (124)
Total comprehensive income 119,097
Balance as of June 30, 2025 107,886,915 $ 1,079 $ 26,716 $ 3,149,335 $ (2,370) $ 4,105 $ (802,627) $ 2,376,238
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
Consolidated Statements of Cash Flows
(Unaudited and in thousands)
Six Months Ended June 30,
2026 2025
Operating activities:
Net income $ 130,122 $ 119,221
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 156,591 146,084
Amortization of lease incentives and acquisition-related intangible assets and liabilities 1,648 1,122
Share-based compensation expense 7,400 6,277
Net credit losses on operating lease receivables 1,857 139
Accrued interest on mortgages and notes receivable (816) (496)
Amortization of debt issuance costs 3,081 2,821
Amortization of cash flow hedges (131) (124)
Amortization of mortgages and notes payable fair value adjustments 175 56
Losses on debt extinguishment 60 —
Net gains on disposition of property (95,987) (82,215)
Equity in earnings of unconsolidated affiliates (2,571) (1,625)
Distributions of earnings from unconsolidated affiliates 4,104 3,516
Changes in operating assets and liabilities:
Accounts receivable 710 2,841
Prepaid expenses and other assets 260 (4,904)
Accrued straight-line rents receivable (16,769) (6,004)
Accounts payable, accrued expenses and other liabilities (1,658) (23,854)
Net cash provided by operating activities 188,076 162,855
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired (309,838) (137,828)
Investments in development in-process (1,731) (593)
Investments in tenant improvements and deferred leasing costs (84,601) (61,919)
Investments in building improvements (26,785) (21,551)
Net proceeds from disposition of real estate assets 297,533 137,779
Distributions of capital from unconsolidated affiliates 55,948 3,742
Investments in mortgages and notes receivable — (1,577)
Repayments of mortgages and notes receivable — 6,333
Investments in and advances to unconsolidated affiliates (33,646) (16,681)
Changes in earnest money deposits — 10,000
Changes in other investing activities 1,422 139
Net cash used in investing activities (101,698) (82,156)
Financing activities:
Dividends on Common Stock (110,112) (107,738)
Redemptions/repurchases of Preferred Stock (60) (2,095)
Redemptions of Common Units (24) (10)
Dividends on Preferred Stock (1,148) (1,207)
Distributions to noncontrolling interests in the Operating Partnership (2,017) (2,151)
Distributions to noncontrolling interests in consolidated affiliates (4,891) (160)
Contributions from noncontrolling interests in consolidated affiliates 197,202 —
Proceeds from the issuance of Common Stock 655 2,191
Costs paid for the issuance of Common Stock (455) (324)
Repurchase of shares related to tax withholdings (1,865) (2,009)
Borrowings on revolving credit facility 203,000 237,000
Repayments of revolving credit facility (228,000) (194,000)
Borrowings on mortgages and notes payable 20,000 —
Repayments of mortgages and notes payable (34,396) (3,865)
Payments for debt issuance costs and other financing activities (1,286) —
Net cash provided by/(used in) financing activities 36,603 (74,368)
Net increase in cash and cash equivalents and restricted cash $ 122,981 $ 6,331
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
Consolidated Statements of Cash Flows – Continued
(Unaudited and in thousands)
Six Months Ended June 30,
2026 2025
Net increase in cash and cash equivalents and restricted cash $ 122,981 $ 6,331
Cash and cash equivalents and restricted cash at beginning of the period 43,049 33,677
Cash and cash equivalents and restricted cash at end of the period $ 166,030 $ 40,008
Reconciliation of cash and cash equivalents and restricted cash:
Six Months Ended June 30,
2026 2025
Cash and cash equivalents at end of the period $ 145,377 $ 21,193
Restricted cash at end of the period 20,653 18,815
Cash and cash equivalents and restricted cash at end of the period $ 166,030 $ 40,008
Supplemental disclosure of cash flow information:
Six Months Ended June 30,
2026 2025
Cash paid for interest, net of amounts capitalized $ 71,069 $ 71,400
Supplemental disclosure of non-cash investing and financing activities:
Six Months Ended June 30,
2026 2025
Conversions of Common Units to Common Stock $ 700 $ —
Changes in accrued capital expenditures (1) $ 19,084 $ (2,218)
Write-off of fully depreciated real estate assets $ 44,862 $ 54,439
Write-off of fully amortized leasing costs $ 15,376 $ 25,199
Write-off of fully amortized debt issuance costs $ 1,097 $ —
Adjustment of noncontrolling interests in the Operating Partnership to fair value $ 8,509 $ 927
__________
(1)Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities as of June 30, 2026 and 2025 were $64.1 million and $50.7 million, respectively.
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Balance Sheets
(Unaudited and in thousands, except unit and per unit data)
June 30, 2026 December 31, 2025
Assets:
Real estate assets, at cost:
Land $ 607,720 $ 609,177
Buildings and tenant improvements 6,216,948 6,144,697
Development in-process — 6,248
Land held for development 197,227 214,149
7,021,895 6,974,271
Less-accumulated depreciation (1,905,507) (1,902,276)
Net real estate assets 5,116,388 5,071,995
Real estate and other assets, net, held for sale 53,900 23,201
Cash and cash equivalents 145,377 27,358
Restricted cash 20,653 15,691
Accounts receivable 31,548 28,263
Mortgages and notes receivable 12,228 12,228
Accrued straight-line rents receivable 304,951 318,024
Investments in and advances to unconsolidated affiliates 446,928 471,580
Deferred leasing costs, net of accumulated amortization of $174,584 and $169,972, respectively 278,222 244,258
Prepaid expenses and other assets, net of accumulated depreciation of $27,411 and $25,144, respectively 61,456 61,240
Total Assets $ 6,471,651 $ 6,273,838
Liabilities, Redeemable Operating Partnership Units and Capital:
Mortgages and notes payable, net $ 3,515,608 $ 3,554,178
Accounts payable, accrued expenses and other liabilities 305,713 284,006
Total Liabilities 3,821,321 3,838,184
Commitments and contingencies
Redeemable Operating Partnership Units:
Common Units, 2,017,248 and 2,044,053 outstanding, respectively 60,840 52,777
Series A Preferred Units (liquidation preference $1,000 per unit), 26,631 and 26,691 units issued and outstanding, respectively 26,631 26,691
Total Redeemable Operating Partnership Units 87,471 79,468
Capital:
Common Units:
General partner Common Units, 1,119,147 and 1,115,405 outstanding, respectively 23,674 23,547
Limited partner Common Units, 108,778,255 and 108,381,027 outstanding, respectively 2,343,760 2,331,236
Accumulated other comprehensive loss (2,625) (2,494)
Noncontrolling interests in consolidated affiliates 198,050 3,897
Total Capital 2,562,859 2,356,186
Total Liabilities, Redeemable Operating Partnership Units and Capital $ 6,471,651 $ 6,273,838
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Statements of Income
(Unaudited and in thousands, except per unit amounts)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Rental and other revenues $ 216,379 $ 200,600 $ 430,413 $ 400,983
Operating expenses:
Rental property and other expenses 70,155 63,655 141,273 128,689
Depreciation and amortization 79,054 74,679 156,591 146,084
General and administrative 9,897 10,319 23,331 22,776
Total operating expenses 159,106 148,653 321,195 297,549
Interest expense 41,694 37,665 83,390 74,307
Other income 2,568 4,629 5,736 6,254
Gains on disposition of property 79,024 — 95,987 82,215
Equity in earnings/(losses) of unconsolidated affiliates (414) 310 2,571 1,625
Net income 96,757 19,221 130,122 119,221
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Distributions on Preferred Units (574) (586) (1,148) (1,207)
Net income available for common unitholders $ 95,190 $ 18,635 $ 127,132 $ 118,040
Earnings per Common Unit – basic:
Net income available for common unitholders $ 0.85 $ 0.17 $ 1.14 $ 1.08
Weighted average Common Units outstanding – basic 111,892 109,567 111,773 109,496
Earnings per Common Unit – diluted:
Net income available for common unitholders $ 0.85 $ 0.17 $ 1.14 $ 1.08
Weighted average Common Units outstanding – diluted 111,892 109,567 111,773 109,496
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Statements of Comprehensive Income
(Unaudited and in thousands)
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Comprehensive income:
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
Other comprehensive loss:
Amortization of cash flow hedges (68) (62) (131) (124)
Total other comprehensive loss (68) (62) (131) (124)
Total comprehensive income 96,689 19,159 129,991 119,097
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Comprehensive income attributable to common unitholders $ 95,696 $ 19,159 $ 128,149 $ 119,123
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Statements of Capital
(Unaudited and in thousands)
Three Months Ended June 30, 2026
Common Units Accumulated Other Comprehensive Loss Noncontrolling Interests in Consolidated Affiliates Total
General Partners’ Capital Limited Partners’ Capital
Balance as of March 31, 2026 $ 23,452 $ 2,321,674 $ (2,557) $ 201,654 2,544,223
Issuances of Common Units, net of issuance costs and tax withholdings (1) (21) — — (22)
Distributions on Common Units ($0.50 per unit) (559) (55,396) — — (55,955)
Distributions on Preferred Units ($21.5625 per unit) (5) (569) — — (574)
Share-based compensation expense, net of forfeitures 9 941 — — 950
Distributions to noncontrolling interests in consolidated affiliates — — — (4,597) (4,597)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner (179) (17,676) — — (17,855)
Net (income) attributable to noncontrolling interests in consolidated affiliates (10) (983) — 993 —
Comprehensive income:
Net income 967 95,790 — — 96,757
Other comprehensive loss — — (68) — (68)
Total comprehensive income 96,689
Balance as of June 30, 2026 23,674 2,343,760 (2,625) 198,050 $ 2,562,859
Six Months Ended June 30, 2026
Common Units Accumulated Other Comprehensive Loss Noncontrolling Interests in Consolidated Affiliates Total
General Partners’ Capital Limited Partners’ Capital
Balance at December 31, 2025 $ 23,547 $ 2,331,236 $ (2,494) $ 3,897 $ 2,356,186
Issuances of Common Units, net of issuance costs and tax withholdings (17) (1,648) — — (1,665)
Redemptions of Common Units — (24) — — (24)
Distributions on Common Units ($1.00 per unit) (1,117) (110,603) — — (111,720)
Distributions on Preferred Units ($43.1250 per unit) (11) (1,137) — — (1,148)
Share-based compensation expense, net of forfeitures 74 7,326 — — 7,400
Distributions to noncontrolling interests in consolidated affiliates — — — (4,891) (4,891)
Contributions from noncontrolling interests in consolidated affiliates — — — 197,202 197,202
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner (85) (8,387) — — (8,472)
Net (income) attributable to noncontrolling interests in consolidated affiliates (18) (1,824) — 1,842 —
Comprehensive income:
Net income 1,301 128,821 — — 130,122
Other comprehensive loss — — (131) — (131)
Total comprehensive income 129,991
Balance as of June 30, 2026 $ 23,674 $ 2,343,760 $ (2,625) $ 198,050 $ 2,562,859
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Statements of Capital - Continued
(Unaudited and in thousands)
Three Months Ended June 30, 2025
Common Units Accumulated Other Comprehensive Loss Noncontrolling Interests in Consolidated Affiliates Total
General Partners’ Capital Limited Partners’ Capital
Balance as of March 31, 2025 $ 23,842 $ 2,360,492 $ (2,308) $ 4,185 $ 2,386,211
Issuances of Common Units, net of issuance costs and tax withholdings 17 1,603 — — 1,620
Distributions on Common Units ($0.50 per unit) (548) (54,241) — — (54,789)
Distributions on Preferred Units ($21.5625 per unit) (6) (580) — — (586)
Share-based compensation expense, net of forfeitures 13 1,297 — — 1,310
Distributions to noncontrolling interests in consolidated affiliates — — — (80) (80)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner (33) (3,290) — — (3,323)
Comprehensive income:
Net income 192 19,029 — — 19,221
Other comprehensive loss — — (62) — (62)
Total comprehensive income 19,159
Balance as of June 30, 2025 $ 23,477 $ 2,324,310 $ (2,370) $ 4,105 $ 2,349,522
Six Months Ended June 30, 2025
Common Units Accumulated Other Comprehensive Loss Noncontrolling Interests in Consolidated Affiliates Total
General Partners’ Capital Limited Partners’ Capital
Balance at December 31, 2024 $ 23,345 $ 2,311,253 $ (2,246) $ 4,291 $ 2,336,643
Issuances of Common Units, net of issuance costs and tax withholdings (1) (141) — — (142)
Redemptions of Common Units — (10) — — (10)
Distributions on Common Units ($1.00 per unit) (1,095) (108,385) — — (109,480)
Distributions on Preferred Units ($43.1250 per unit) (12) (1,195) — — (1,207)
Share-based compensation expense, net of forfeitures 63 6,214 — — 6,277
Distributions to noncontrolling interests in consolidated affiliates — — — (160) (160)
Adjustment of Redeemable Common Units to fair value and contributions/distributions from/to the General Partner (15) (1,481) — — (1,496)
Net loss attributable to noncontrolling interests in consolidated affiliates — 26 (26) —
Comprehensive income:
Net income 1,192 118,029 — — 119,221
Other comprehensive loss — — (124) — (124)
Total comprehensive income 119,097
Balance as of June 30, 2025 $ 23,477 $ 2,324,310 $ (2,370) $ 4,105 $ 2,349,522
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows
(Unaudited and in thousands)
Six Months Ended June 30,
2026 2025
Operating activities:
Net income $ 130,122 $ 119,221
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 156,591 146,084
Amortization of lease incentives and acquisition-related intangible assets and liabilities 1,648 1,122
Share-based compensation expense 7,400 6,277
Net credit losses on operating lease receivables 1,857 139
Accrued interest on mortgages and notes receivable (816) (496)
Amortization of debt issuance costs 3,081 2,821
Amortization of cash flow hedges (131) (124)
Amortization of mortgages and notes payable fair value adjustments 175 56
Losses on debt extinguishment 60 —
Net gains on disposition of property (95,987) (82,215)
Equity in earnings of unconsolidated affiliates (2,571) (1,625)
Distributions of earnings from unconsolidated affiliates 4,104 3,516
Changes in operating assets and liabilities:
Accounts receivable 710 2,841
Prepaid expenses and other assets 260 (4,904)
Accrued straight-line rents receivable (16,769) (6,004)
Accounts payable, accrued expenses and other liabilities (1,658) (23,854)
Net cash provided by operating activities 188,076 162,855
Investing activities:
Investments in acquired real estate and related intangible assets, net of cash acquired (309,838) (137,828)
Investments in development in-process (1,731) (593)
Investments in tenant improvements and deferred leasing costs (84,601) (61,919)
Investments in building improvements (26,785) (21,551)
Net proceeds from disposition of real estate assets 297,533 137,779
Distributions of capital from unconsolidated affiliates 55,948 3,742
Investments in mortgages and notes receivable — (1,577)
Repayments of mortgages and notes receivable — 6,333
Investments in and advances to unconsolidated affiliates (33,646) (16,681)
Changes in earnest money deposits — 10,000
Changes in other investing activities 1,422 139
Net cash used in investing activities (101,698) (82,156)
Financing activities:
Distributions on Common Units (111,720) (109,480)
Redemptions/repurchases of Preferred Units (60) (2,095)
Redemptions of Common Units (24) (10)
Distributions on Preferred Units (1,148) (1,207)
Distributions to noncontrolling interests in consolidated affiliates (4,891) (160)
Contributions from noncontrolling interests in consolidated affiliates 197,202 —
Proceeds from the issuance of Common Units 655 2,191
Costs paid for the issuance of Common Units (455) (324)
Repurchase of units related to tax withholdings (1,865) (2,009)
Borrowings on revolving credit facility 203,000 237,000
Repayments of revolving credit facility (228,000) (194,000)
Borrowings on mortgages and notes payable 20,000 —
Repayments of mortgages and notes payable (34,396) (3,865)
Payments for debt issuance costs and other financing activities (1,695) (409)
Net cash provided by/(used in) financing activities 36,603 (74,368)
Net increase in cash and cash equivalents and restricted cash $ 122,981 $ 6,331
See accompanying notes to consolidated financial statements.
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HIGHWOODS REALTY LIMITED PARTNERSHIP
Consolidated Statements of Cash Flows - Continued
(Unaudited and in thousands)
Six Months Ended June 30,
2026 2025
Net increase in cash and cash equivalents and restricted cash $ 122,981 $ 6,331
Cash and cash equivalents and restricted cash at beginning of the period 43,049 33,677
Cash and cash equivalents and restricted cash at end of the period $ 166,030 $ 40,008
Reconciliation of cash and cash equivalents and restricted cash:
Six Months Ended June 30,
2026 2025
Cash and cash equivalents at end of the period $ 145,377 $ 21,193
Restricted cash at end of the period 20,653 18,815
Cash and cash equivalents and restricted cash at end of the period $ 166,030 $ 40,008
Supplemental disclosure of cash flow information:
Six Months Ended June 30,
2026 2025
Cash paid for interest, net of amounts capitalized $ 71,069 $ 71,400
Supplemental disclosure of non-cash investing and financing activities:
Six Months Ended June 30,
2026 2025
Changes in accrued capital expenditures (1) $ 19,084 $ (2,218)
Write-off of fully depreciated real estate assets $ 44,862 $ 54,439
Write-off of fully amortized leasing costs $ 15,376 $ 25,199
Write-off of fully amortized debt issuance costs $ 1,097 $ —
Adjustment of Redeemable Common Units to fair value $ 8,063 $ 1,087
__________
(1)Accrued capital expenditures included in accounts payable, accrued expenses and other liabilities as of June 30, 2026 and 2025 were $64.1 million and $50.7 million, respectively.
See accompanying notes to consolidated financial statements.
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HIGHWOODS PROPERTIES, INC.
HIGHWOODS REALTY LIMITED PARTNERSHIP
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2026
(tabular dollar amounts in thousands, except per share and per unit data)
(Unaudited)
1. Description of Business and Significant Accounting Policies
Description of Business
Highwoods Properties, Inc. (the “Company”) is a fully integrated office real estate investment trust (“REIT”) that owns, develops, acquires, leases and manages properties primarily in the best business districts of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. The Company conducts its activities through Highwoods Realty Limited Partnership (the “Operating Partnership”). As of June 30, 2026, we owned or had an interest in 27.7 million rentable square feet of in-service properties, 0.6 million rentable square feet of office properties under development and development land with approximately 3.5 million rentable square feet of potential office build out.
Capital Structure
The Company is the sole general partner of the Operating Partnership. As of June 30, 2026, the Company owned all of the Preferred Units and 109.9 million, or 98.2%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.0 million Common Units. During the six months ended June 30, 2026, the Company redeemed 25,855 Common Units for a like number of shares of Common Stock and 950 Common Units for cash.
During the first quarter of 2026, we entered into separate equity distribution agreements pursuant to which the Company may offer and sell up to $300.0 million in aggregate gross sales price of shares of Common Stock, including on a forward basis under forward sale agreements. During the three and six months ended June 30, 2026, the Company issued no shares of Common Stock under its equity distribution agreements.
During the second quarter of 2026, we announced that the Company’s Board of Directors has authorized the repurchase of up to $250.0 million of outstanding shares of Common Stock under a new stock repurchase program. We anticipate funding any stock repurchases with proceeds from non-core asset sales, available cash and borrowings under our revolving credit facility. The Company may purchase shares of Common Stock from time to time in amounts and at prices determined by the Company in its discretion. Shares of Common Stock may be repurchased in the open market or in privately negotiated transactions (which may include block trades). If and when the Company repurchases Common Stock under this program, the Operating Partnership will repurchase an equal number of Common Units from the Company. The timing, manner, price and actual number of shares repurchased will be subject to a variety of factors, including price, market conditions, corporate and regulatory requirements, applicable SEC rules and other liquidity requirements and priorities. The Common Stock repurchase program does not have an expiration date, does not obligate the Company to repurchase any dollar amount or number of shares and may be suspended, modified or discontinued at any time without prior notice. During the three and six months ended June 30, 2026, the Company repurchased no shares of Common Stock under its stock repurchase program.
Basis of Presentation
Our Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
The Company’s Consolidated Financial Statements include the Operating Partnership, wholly owned subsidiaries and those entities in which the Company has the controlling interest. The Operating Partnership’s Consolidated Financial Statements include wholly owned subsidiaries and those entities in which the Operating Partnership has the controlling interest. We consolidate joint venture investments, such as interests in partnerships and limited liability companies, when we control the major operating and financial policies of the investment through majority ownership, in our capacity as a general partner or managing member or through some other contractual right. In addition, we consolidate those entities deemed to be variable interest entities in which we are determined to be the primary beneficiary.
As of June 30, 2026, we are involved with six entities we determined to be variable interest entities, three of which we are the primary beneficiary and are consolidated and three of which we are not the primary beneficiary and are not consolidated. In
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addition, during 2025, we acquired a building using a special purpose entity owned by a qualified intermediary to facilitate a potential Section 1031 reverse exchange under the Internal Revenue Code. To realize the tax deferral available under the Section 1031 exchange, we were required to complete the Section 1031 exchange, and take title to the to-be-exchanged building within 180 days of the acquisition date. We completed the exchange by acquiring 100% of the special purpose entity in May 2026.
All intercompany transactions and accounts have been eliminated.
In the opinion of management, the unaudited interim Consolidated Financial Statements and accompanying unaudited consolidated financial information contain all adjustments (including normal recurring accruals) necessary for a fair presentation of our financial position, results of operations and cash flows. We have condensed or omitted certain notes and other information from the interim Consolidated Financial Statements presented in this Quarterly Report as permitted by SEC rules and regulations. These Consolidated Financial Statements should be read in conjunction with our 2025 Annual Report on Form 10-K.
Use of Estimates
The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the amounts reported in our Consolidated Financial Statements and accompanying notes. Actual results could differ from those estimates.
Insurance
We are primarily self-insured for health care claims for participating employees. To limit our exposure to significant claims, we have stop-loss coverage on a per claim and annual aggregate basis. We use all relevant information to determine our liabilities for claims, including actuarial estimates of claim liabilities. When determining our liabilities, we include claims for incurred losses, even if they are unreported. As of June 30, 2026, a reserve of $0.4 million was recorded to cover estimated reported and unreported claims.
Recently Issued Accounting Standards
The Financial Accounting Standards Board (“FASB”) issued an accounting standards update (“ASU”) that requires disaggregated disclosure of income statement expenses. Certain expense captions will be disaggregated into specified categories in disclosures within the Notes to Consolidated Financial Statements. The ASU is required to be adopted starting with our 2027 Annual Report on Form 10-K. We do not expect this adoption will have a material effect on our Consolidated Financial Statements.
2. Leases
Operating Leases
We generally lease our office properties to lessees in exchange for fixed monthly payments that cover rent, property taxes, insurance and certain cost recoveries, primarily common area maintenance. Our office properties that are under lease are primarily located in Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa and are leased to a wide variety of lessees across many industries. Our leases are operating leases and mostly range from three to 10 years. We recognized rental and other revenues related to operating lease payments of $211.5 million and $222.1 million during the three months ended June 30, 2026 and 2025, respectively, and $421.3 million and $392.9 million during the six months ended June 30, 2026 and 2025, respectively. Included in these amounts were variable lease payments of $18.8 million and $16.7 million during the three months ended June 30, 2026 and 2025, respectively, and $36.9 million and $33.6 million during the six months ended June 30, 2026 and 2025, respectively.
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3. Investments in and Advances to Affiliates
We have interests in various real estate joint ventures that are evaluated for consolidation under the variable interest entity (“VIE”) model or the voting interest model, depending on the facts and circumstances of each joint venture. For our unconsolidated affiliates that are evaluated under the VIE model, we determined that we hold variable interests, but we are not the primary beneficiary because we do not have the power to direct the activities that most significantly impact the entities’ economic performance. Accordingly, these entities are not consolidated. For our unconsolidated affiliates that are evaluated under the voting interest model, we determined through evaluation of our voting rights that control does not rest with us. Accordingly, these entities are not consolidated. For our consolidated affiliates that are evaluated under the VIE model, we determined that we hold variable interests, and we are the primary beneficiary because we have the power to direct the activities that most significantly affect the entities’ economic performance. Accordingly, these entities are consolidated.
Unconsolidated Affiliates
Our unconsolidated joint ventures are accounted for under the equity method of accounting because we have the ability to exercise significant influence over the operating and financial policies of the entities. Our maximum exposure to loss from our unconsolidated VIEs is generally limited to the carrying value of our investments and any loans or other advances we have provided to the joint ventures. The assets of these unconsolidated VIEs may be used only to settle their own obligations, and their creditors have no recourse to our wholly owned assets.
The following table summarizes our unconsolidated affiliates as of June 30, 2026:
Unconsolidated Affiliate Location Ownership Interest VIE (Y/N) Carrying Value as of
June 30, 2026
Granite Park Six JV, LLC (1) Dallas 50.0% N $ 42,283
GPI 23Springs JV, LLC (2) Dallas 50.0% Y 107,588
M+O JV, LLC Dallas 50.0% N 180,459
Midtown East Tampa, LLC (3) Tampa 50.0% Y 50,452
Brand/HRLP 2827 Peachtree LLC (4) Atlanta 50.0% Y 61,829
Plaza Colonnade, Tenant-in-Common Kansas City 50.0% N 4,317
$ 446,928
__________
(1)During the second quarter of 2026, Granite Park Six JV, LLC (“Granite Park Six joint venture”) obtained a secured loan for up to $100.0 million with a maturity date of April 2028 (but can be extended for one additional year at the joint venture’s option assuming no defaults have occurred). In connection with this loan, the Granite Park Six joint venture obtained an interest rate hedge contract that effectively fixed the overall interest rate at 5.9%. As of June 30, 2026, $86.6 million was drawn on this loan. The joint venture used the net proceeds from the secured loan to redeem the preferred equity that we contributed during the first quarter of 2026 and distributed the remainder equally to us and our partner, Granite Properties (“Granite”). As a result of these reconsideration events, the Granite Park Six joint venture is no longer a VIE since it now has sufficient equity at risk. This joint venture is now evaluated under the voting interest model, and the entity remains unconsolidated.
(2)As of June 30, 2026, GPI 23Springs JV, LLC (“23Springs joint venture”) had $192.0 million outstanding under its construction loan, which matures in March 2027.
(3)As of June 30, 2026, Midtown East Tampa, LLC (“Midtown East joint venture”) had $43.7 million outstanding under the loan we previously provided to the joint venture. See Note 13.
(4)As of June 30, 2026, Brand/HRLP 2827 Peachtree LLC (“2827 Peachtree joint venture”) had $51.5 million outstanding under the loan we have provided to the joint venture.
Consolidated Affiliates
As of June 30, 2026, our consolidated VIEs consisted of the following: HRLP Bloc 83, L.P. (“Bloc 83 joint venture”) in Raleigh in which we own a 10.0% interest (but retain an option to increase our ownership interest to 50.0% in the future), Terraces JV, LLC (“Terraces joint venture”) in Dallas in which we own an 80.0% interest and HRLP MTW, LLC (“Midtown West joint venture”) in Tampa in which we own an 80.0% interest. The assets of these consolidated VIEs may be used only to settle their own obligations, and their creditors have no recourse to our wholly owned assets.
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During the first quarter of 2026, we acquired Bloc83, a two-building, 492,000 square foot mixed-use asset in CBD Raleigh, through the formation of the Bloc 83 joint venture with the North Carolina Investment Authority (“NCIA”). The joint venture’s planned total investment of $210.5 million, which includes planned near-term building improvements and transaction costs, has been or will be funded with $21.0 million of common equity contributed by us and $189.5 million of common equity contributed by the NCIA. The assets acquired and liabilities assumed were recorded at relative fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.
The following table sets forth the carrying value of the assets and liabilities of the Bloc 83 joint venture included on our Consolidated Balance Sheets:
June 30, 2026
Net real estate assets $ 173,158
Cash and cash equivalents $ 8,782
Restricted cash $ 5,388
Accounts receivable $ 267
Accrued straight-line rents receivable $ 546
Deferred leasing costs, net $ 28,111
Accounts payable, accrued expenses and other liabilities $ 9,405
During the first quarter of 2026, we expanded our Dallas market presence by acquiring The Terraces, a 173,000 square foot office building in the Preston Center BBD of Dallas, through the formation of the Terraces joint venture with Granite. The joint venture’s planned total investment of $109.3 million, which includes planned near-term building improvements and transaction costs, has been or will be funded with $64.3 million of preferred equity contributed by us, $36.0 million of common equity contributed by us and $9.0 million of common equity contributed by Granite. The preferred equity contributed by us is entitled to receive monthly distributions from available cash at a rate of 5.75%. The assets acquired and liabilities assumed were recorded at relative fair value as determined by management based on information available at the acquisition date and on current assumptions as to future operations.
The following table sets forth the carrying value of the assets and liabilities of the Terraces joint venture included on our Consolidated Balance Sheets:
June 30, 2026
Net real estate assets $ 93,661
Cash and cash equivalents $ 3,600
Accounts receivable $ 536
Accrued straight-line rents receivable $ 655
Deferred leasing costs, net $ 13,178
Accounts payable, accrued expenses and other liabilities $ 5,713
The following table sets forth the carrying value of the assets and liabilities of the Midtown West joint venture included on our Consolidated Balance Sheets:
June 30, 2026 December 31, 2025
Net real estate assets $ 55,302 $ 56,299
Cash and cash equivalents $ 1,936 $ 1,361
Accounts receivable $ 67 $ 203
Accrued straight-line rents receivable $ 5,165 $ 5,254
Deferred leasing costs, net $ 2,038 $ 2,211
Prepaid expenses and other assets, net $ 83 $ 124
Mortgages and notes payable, net $ 43,912 $ 44,059
Accounts payable, accrued expenses and other liabilities $ 1,355 $ 1,170
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4. Real Estate Assets
Dispositions
During the first quarter of 2026, we sold three buildings in Richmond for an aggregate sales price of $42.3 million and recorded aggregate gains on disposition of property of $17.0 million.
During the second quarter of 2026, we sold a building in Nashville and land in Richmond for an aggregate sales price of $259.0 million and recorded aggregate gains on disposition of property of $79.0 million.
5. Intangible Assets and Below Market Lease Liabilities
The following table sets forth total intangible assets and acquisition-related below market lease liabilities, net of accumulated amortization:
June 30, 2026 December 31, 2025
Assets:
Deferred leasing costs (including lease incentives and above market lease and in-place lease acquisition-related intangible assets) $ 452,806 $ 414,230
Less accumulated amortization (174,584) (169,972)
$ 278,222 $ 244,258
Liabilities (in accounts payable, accrued expenses and other liabilities):
Acquisition-related below market lease liabilities $ 35,959 $ 32,628
Less accumulated amortization (17,051) (17,102)
$ 18,908 $ 15,526
The following table sets forth amortization of intangible assets and below market lease liabilities:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Amortization of deferred leasing costs and acquisition-related intangible assets (in depreciation and amortization) $ 11,240 $ 9,070 $ 22,193 $ 18,074
Amortization of lease incentives (in rental and other revenues) $ 850 $ 660 $ 1,734 $ 1,305
Amortization of acquisition-related above market lease intangible assets (in rental and other revenues) $ 839 $ 636 $ 1,684 $ 1,234
Amortization of acquisition-related below market lease liabilities (in rental and other revenues) $ (886) $ (665) $ (1,770) $ (1,417)
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The following table sets forth scheduled future amortization of intangible assets and below market lease liabilities:
Amortization of Deferred Leasing Costs and Acquisition-Related Intangible Assets (in Depreciation and Amortization) Amortization of Lease Incentives (in Rental and Other Revenues) Amortization of Acquisition-Related Above Market Lease Intangible Assets (in Rental and Other Revenues) Amortization of Acquisition-Related Below Market Lease Liabilities (in Rental and Other Revenues)
July 1 through December 31, 2026 $ 23,859 $ 1,360 $ 1,676 $ (1,659)
2027 42,653 2,542 3,006 (3,080)
2028 37,698 2,388 2,811 (2,666)
2029 33,495 2,125 2,581 (2,289)
2030 29,427 1,789 2,255 (2,154)
Thereafter 76,365 5,087 7,105 (7,060)
$ 243,497 $ 15,291 $ 19,434 $ (18,908)
Weighted average remaining amortization periods as of June 30, 2026 (in years) 7.1 7.3 7.5 7.5
The following table sets forth the intangible assets acquired as a result of the acquisitions of Bloc83 in Raleigh and The Terraces in Dallas in the first quarter of 2026:
Acquisition-Related Above Market Lease Intangible Assets (amortized in Rental and Other Revenues) Acquisition-Related Intangible Assets (amortized in Depreciation and Amortization) Acquisition-Related Below Market Lease Liabilities (amortized in Rental and Other Revenues)
Amount recorded at acquisition $ 7,751 $ 37,190 $ (5,152)
Weighted average remaining amortization periods as of June 30, 2026 (in years) 8.0 6.7 6.5
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6. Mortgages and Notes Payable
The following table sets forth our mortgages and notes payable:
June 30, 2026 December 31, 2025
Secured indebtedness $ 699,176 $ 703,409
Unsecured indebtedness 2,831,736 2,866,745
Less-unamortized debt issuance costs (15,304) (15,976)
Total mortgages and notes payable, net $ 3,515,608 $ 3,554,178
As of June 30, 2026, our secured mortgage loans were collateralized by real estate assets with an undepreciated book value of $1,288.1 million.
Our $750.0 million unsecured revolving credit facility is scheduled to mature in January 2028 (but can be extended for two additional six-month periods at our option assuming no defaults have occurred). The interest rate on our revolving credit facility is SOFR plus 85 basis points, based on current credit ratings. The annual facility fee is 20 basis points. The interest rate and facility fee are based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. The interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. There were no amounts outstanding under our revolving credit facility as of June 30, 2026 and July 21, 2026, respectively. As of both June 30, 2026 and July 21, 2026, we had $0.1 million of outstanding letters of credit, which reduce the availability on our revolving credit facility. As a result, the unused capacity of our revolving credit facility was $749.9 million as of June 30, 2026 and July 21, 2026, respectively.
During the second quarter of 2026, we modified our $150.0 million unsecured bank term loan to extend the maturity date from May 2027 to June 2029. The term can be extended for two additional years at our option, assuming no defaults have occurred. The interest rate is SOFR plus 90 basis points, based on current credit ratings. The interest rate is based on the higher of the publicly announced ratings from Moody’s Investors Service or Standard & Poor’s Ratings Services. The interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions. We incurred $1.4 million of debt issuance costs, which are being amortized along with certain existing unamortized debt issuance costs over the remaining term of our modified term loan, and recorded $0.1 million of loss on debt extinguishment.
During the second quarter of 2026, we repurchased an aggregate of $11.0 million principal amount of unsecured notes due March 2027.
We are currently in compliance with financial covenants with respect to our consolidated debt.
We have considered our short-term liquidity needs within one year from July 28, 2026 (the date of issuance of the quarterly financial statements) and the adequacy of our estimated cash flows from operating activities and other available financing sources to meet these needs. In particular, we have given consideration to our scheduled debt maturities during such one-year period, which consists of $289.1 million principal amount of unsecured notes that are scheduled to mature in March 2027. We have concluded it is probable we will meet these short-term liquidity requirements through a combination of the following:
•available cash and cash equivalents;
•cash flows from operating activities;
•issuance of debt securities by the Operating Partnership;
•secured debt;
•bank term loans;
•borrowings under our revolving credit facility;
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•issuance of equity securities by the Company or the Operating Partnership; and
•the disposition of non-core assets.
7. Noncontrolling Interests
Noncontrolling Interests in Consolidated Affiliates
As of June 30, 2026, our noncontrolling interest in consolidated affiliates relates to our joint venture partners’ 20.0% interest in the Midtown West joint venture, 90.0% interest in the Bloc 83 joint venture and 20.0% interest in the Terraces joint venture. Each of our joint venture partners is an unrelated third party.
Noncontrolling Interests in the Operating Partnership
The following table sets forth the Company’s noncontrolling interests in the Operating Partnership:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Beginning noncontrolling interests in the Operating Partnership $ 43,189 $ 63,759 $ 52,777 $ 65,791
Adjustment of noncontrolling interests in the Operating Partnership to fair value 16,943 3,829 8,509 927
Conversions of Common Units to Common Stock — — (700) —
Redemptions of Common Units — — (24) (10)
Net income attributable to noncontrolling interests in the Operating Partnership 1,716 365 2,295 2,321
Distributions to noncontrolling interests in the Operating Partnership (1,008) (1,075) (2,017) (2,151)
Total noncontrolling interests in the Operating Partnership $ 60,840 $ 66,878 $ 60,840 $ 66,878
The following table sets forth net income available for common stockholders and transfers from the Company’s noncontrolling interests in the Operating Partnership:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Net income available for common stockholders $ 93,474 $ 18,270 $ 124,837 $ 115,719
Increase in additional paid in capital from conversions of Common Units to Common Stock — — 700 —
Redemptions of Common Units — — 24 10
Change from net income available for common stockholders and transfers from noncontrolling interests $ 93,474 $ 18,270 $ 125,561 $ 115,729
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8. Disclosure About Fair Value of Financial Instruments
The following summarizes the levels of inputs that we use to measure fair value.
Level 1. Quoted prices in active markets for identical assets or liabilities.
Our Level 1 asset is our investment in marketable securities that we use to pay benefits under our non-qualified deferred compensation plan. Our Level 1 liability is our non-qualified deferred compensation obligation. The Company’s Level 1 noncontrolling interests in the Operating Partnership relate to the ownership of Common Units by various individuals and entities other than the Company.
Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities.
Our Level 2 assets include the fair value of our mortgages and notes receivable. Our Level 2 liabilities include the fair value of our mortgages and notes payable and any interest rate swaps.
The fair value of mortgages and notes receivable and mortgages and notes payable is estimated by the income approach, which uses contractual cash flows and market-based interest rates to approximate the price that would be paid in an orderly transaction between market participants. The fair value of any interest rate swaps is determined using the market standard methodology of netting the discounted future fixed cash receipts and the discounted expected variable cash payments. The variable cash payments of interest rate swaps are based on the expectation of future interest rates (forward curves) derived from observed market interest rate curves. In addition, credit valuation adjustments are considered in the fair values to account for potential nonperformance risk, but were concluded to not be significant inputs to the calculation for the periods presented.
Level 3. Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Our Level 3 assets include any real estate assets recorded at fair value on a non-recurring basis as a result of our quarterly impairment analysis, which are valued using unobservable local and national industry market data such as comparable sales, appraisals, brokers’ opinions of value and/or the terms of definitive sales contracts. Significant increases or decreases in any valuation inputs in isolation would result in a significantly lower or higher fair value measurement.
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The following table sets forth our assets and liabilities and the Company’s noncontrolling interests in the Operating Partnership that are measured or disclosed at fair value within the fair value hierarchy:
Level 1 Level 2
Total Quoted Prices in Active Markets for Identical Assets or Liabilities Significant Observable Inputs
Fair Value as of June 30, 2026:
Assets:
Mortgages and notes receivable, at fair value (1) $ 12,228 $ — $ 12,228
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets) 849 849 —
Total Assets $ 13,077 $ 849 $ 12,228
Noncontrolling Interests in the Operating Partnership $ 60,840 $ 60,840 $ —
Liabilities:
Mortgages and notes payable, net, at fair value (1) $ 3,414,212 $ — $ 3,414,212
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities) 849 849 —
Total Liabilities $ 3,415,061 $ 849 $ 3,414,212
Fair Value as of December 31, 2025:
Assets:
Mortgages and notes receivable, at fair value (1) $ 12,228 $ — $ 12,228
Marketable securities of non-qualified deferred compensation plan (in prepaid expenses and other assets) 1,396 1,396 —
Total Assets $ 13,624 $ 1,396 $ 12,228
Noncontrolling Interests in the Operating Partnership $ 52,777 $ 52,777 $ —
Liabilities:
Mortgages and notes payable, net, at fair value (1) $ 3,471,003 $ — $ 3,471,003
Non-qualified deferred compensation obligation (in accounts payable, accrued expenses and other liabilities) 1,396 1,396 —
Total Liabilities $ 3,472,399 $ 1,396 $ 3,471,003
__________
(1) Amounts are not recorded at fair value on our Consolidated Balance Sheets as of June 30, 2026 and December 31, 2025.
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9. Share-Based Payments
During the six months ended June 30, 2026, the Company granted 271,458 shares of time-based restricted stock and 160,796 shares of total return-based restricted stock with weighted average grant date fair values per share of $22.80 and $24.02, respectively. We recorded share-based compensation expense of $1.0 million and $1.3 million during the three months ended June 30, 2026 and 2025, respectively, and $7.4 million and $6.3 million during the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026, there was $6.3 million of total unrecognized share-based compensation costs, which will be recognized over a weighted average remaining contractual term of 2.3 years.
10. Real Estate and Other Assets Held For Sale
The following table sets forth our assets held for sale, which are considered non-core:
June 30, 2026 December 31, 2025
Assets:
Land $ 9,374 $ 3,454
Buildings and tenant improvements 79,573 42,123
Less-accumulated depreciation (41,643) (25,468)
Net real estate assets 47,304 20,109
Accrued straight-line rents receivable 2,965 2,083
Deferred leasing costs, net 3,488 1,006
Prepaid expenses and other assets, net 143 3
Real estate and other assets, net, held for sale $ 53,900 $ 23,201
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11. Earnings Per Share and Per Unit
The following table sets forth the computation of basic and diluted earnings per share of the Company:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Earnings per Common Share - basic:
Numerator:
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
Net (income) attributable to noncontrolling interests in the Operating Partnership (1,716) (365) (2,295) (2,321)
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Dividends on Preferred Stock (574) (586) (1,148) (1,207)
Net income available for common stockholders $ 93,474 $ 18,270 $ 124,837 $ 115,719
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1) 110,284 107,825 110,162 107,754
Net income available for common stockholders $ 0.85 $ 0.17 $ 1.13 $ 1.07
Earnings per Common Share - diluted:
Numerator:
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Dividends on Preferred Stock (574) (586) (1,148) (1,207)
Net income available for common stockholders before net (income) attributable to noncontrolling interests in the Operating Partnership $ 95,190 $ 18,635 $ 127,132 $ 118,040
Denominator:
Denominator for basic earnings per Common Share – weighted average shares (1) 110,284 107,825 110,162 107,754
Add:
Noncontrolling interests Common Units 2,017 2,151 2,020 2,151
Denominator for diluted earnings per Common Share – adjusted weighted average shares and assumed conversions 112,301 109,976 112,182 109,905
Net income available for common stockholders $ 0.85 $ 0.17 $ 1.13 $ 1.07
__________
(1)Includes all unvested restricted stock where dividends on such restricted stock are non-forfeitable.
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The following table sets forth the computation of basic and diluted earnings per unit of the Operating Partnership:
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Earnings per Common Unit - basic:
Numerator:
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Distributions on Preferred Units (574) (586) (1,148) (1,207)
Net income available for common unitholders $ 95,190 $ 18,635 $ 127,132 $ 118,040
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1) 111,892 109,567 111,773 109,496
Net income available for common unitholders $ 0.85 $ 0.17 $ 1.14 $ 1.08
Earnings per Common Unit - diluted:
Numerator:
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
Net (income)/loss attributable to noncontrolling interests in consolidated affiliates (993) — (1,842) 26
Distributions on Preferred Units (574) (586) (1,148) (1,207)
Net income available for common unitholders $ 95,190 $ 18,635 $ 127,132 $ 118,040
Denominator:
Denominator for basic earnings per Common Unit – weighted average units (1) 111,892 109,567 111,773 109,496
Denominator for diluted earnings per Common Unit – adjusted weighted average units and assumed conversions 111,892 109,567 111,773 109,496
Net income available for common unitholders $ 0.85 $ 0.17 $ 1.14 $ 1.08
__________
(1)Includes all unvested restricted stock where distributions on such restricted stock are non-forfeitable.
12. Segment Information
Our principal business is the operation, acquisition and development of rental office properties. We evaluate our business by geographic location, which is why our primary geographic locations are included as reportable segments below. The operating results by geographic grouping are regularly reviewed by our chief operating decision maker for assessing performance and other purposes. Our chief executive officer is our chief operating decision maker. There are no material inter-segment transactions.
Our accounting policies of the segments are the same as those used in our Consolidated Financial Statements. All operations are within the United States.
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The following tables summarize rental and other revenues, rental property and other expenses and net operating income for each of our reportable segments. Net operating income is the primary industry property-level performance metric used by our chief operating decision maker and is defined as rental and other revenues less rental property and other expenses. Our chief operating decision maker uses net operating income to help assess segment performance and decide how to allocate resources accordingly.
Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Rental and other revenues:
Atlanta $ 36,403 $ 36,299 $ 72,917 $ 71,893
Charlotte 29,244 21,910 56,892 43,966
Dallas 3,367 — 6,024 —
Nashville 36,998 39,653 75,197 79,197
Orlando 14,660 14,544 29,201 28,840
Raleigh 52,529 44,815 104,133 89,309
Richmond 6,887 9,318 14,639 18,496
Tampa 23,747 21,174 46,123 43,886
Rental and other revenues for reportable segments 203,835 187,713 405,126 375,587
Other 12,544 12,887 25,287 25,396
Total rental and other revenues 216,379 200,600 430,413 400,983
Rental property and other expenses:
Atlanta 14,247 13,467 29,020 27,835
Charlotte 7,890 6,003 16,037 11,844
Dallas 1,163 — 1,996 —
Nashville 10,992 11,017 21,385 22,374
Orlando 5,669 5,495 10,776 11,037
Raleigh 13,724 11,628 27,921 23,361
Richmond 1,958 2,605 5,181 5,608
Tampa 8,616 7,846 16,815 16,455
Rental property and other expenses for reportable segments 64,259 58,061 129,131 118,514
Other 5,896 5,594 12,142 10,175
Total rental property and other expenses 70,155 63,655 141,273 128,689
Net operating income:
Atlanta 22,156 22,832 43,897 44,058
Charlotte 21,354 15,907 40,855 32,122
Dallas 2,204 — 4,028 —
Nashville 26,006 28,636 53,812 56,823
Orlando 8,991 9,049 18,425 17,803
Raleigh 38,805 33,187 76,212 65,948
Richmond 4,929 6,713 9,458 12,888
Tampa 15,131 13,328 29,308 27,431
Net operating income for reportable segments 139,576 129,652 275,995 257,073
Other 6,648 7,293 13,145 15,221
Total net operating income $ 146,224 $ 136,945 $ 289,140 $ 272,294
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Three Months Ended June 30, Six Months Ended June 30,
2026 2025 2026 2025
Reconciliation to net income:
Depreciation and amortization $ (79,054) $ (74,679) $ (156,591) $ (146,084)
General and administrative expenses (9,897) (10,319) (23,331) (22,776)
Interest expense (41,694) (37,665) (83,390) (74,307)
Other income 2,568 4,629 5,736 6,254
Gains on disposition of property 79,024 — 95,987 82,215
Equity in earnings/(losses) of unconsolidated affiliates (414) 310 2,571 1,625
Net income $ 96,757 $ 19,221 $ 130,122 $ 119,221
13. Subsequent Events
On July 22, 2026, the Company declared a cash dividend of $0.50 per share of Common Stock, which is payable on September 9, 2026 to stockholders of record as of August 17, 2026.
On July 7, 2026, the Midtown East joint venture obtained a two-tranche secured mortgage loan from a third party lender. The first tranche consists of a $44.8 million secured loan that was used to repay the $43.8 million balance on a secured construction loan that we previously provided the joint venture. The second tranche consists of a $10.9 million non-revolving line of credit. As of July 7, 2026, less than $0.1 million was drawn on the line of credit. Both tranches bear interest at SOFR plus 205 basis points and are scheduled to mature in July 2036. In connection with this loan, the Midtown East joint venture obtained interest rate hedge contracts that effectively fix the weighted average rate of both tranches at 6.3%.
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