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What changed in HIGHWOODS PROPERTIES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of HIGHWOODS PROPERTIES, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+209 added−206 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-11)

Top changes in HIGHWOODS PROPERTIES, INC.'s 2025 10-K

209 paragraphs added · 206 removed · 175 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

24 edited+1 added−3 removed45 unchanged
Biggest changeWe believe our culture makes the difference in this highly competitive, ever-changing commercial real estate industry. Owning and shaping our culture is the job of each teammate. Culture is not defined by words on a page. Rather, it is the collection of our behaviors, attitudes and actions.
Biggest changeOwning and shaping our culture is the job of each teammate. Culture is not defined by words on a page. Rather, it is the collection of our behaviors, attitudes and actions. Our employees bring their personal values, skills, experiences and knowledge to life through the lens of our core values.
Shared corporate services, such as 5 Table of Contents accounting, technology, development, engineering, customer experience, marketing, human resources, legal and tax, are primarily based in Raleigh. Our senior leadership team, led by our CEO, is based in Raleigh and oversees all of the Company’s operations. Fully-Integrated.
Shared corporate services, such as accounting, technology, 5 Table of Contents development, engineering, customer experience, marketing, human resources, legal and tax are primarily based in Raleigh. Our senior leadership team, led by our CEO, is based in Raleigh and oversees all of the Company’s operations. Fully-Integrated.
As a result, we operate division offices in Atlanta, Nashville, Orlando, Raleigh, Richmond and Tampa, which are led by seasoned real estate professionals with significant commercial real estate experience managing across multiple economic cycles. Over the long-term, we plan to open division offices in Charlotte and Dallas.
As a result, we operate division offices in Atlanta, Nashville, Orlando, Raleigh and Tampa, which are led by seasoned real estate professionals with significant commercial real estate experience managing across multiple economic cycles. Over the long-term, we plan to open division offices in Charlotte and Dallas.
These include, among other benefits: • Comprehensive health insurance coverage; • Attractive paid time off, including up to 25 vacation days (depending on tenure), two personal holidays, nine company-wide holidays, one volunteer day, six days of sick leave and parental leave for all new caregivers; • Competitive match on contributions to our 401(k) retirement savings plan, in which over 94% of our employees participate; and • 15% discount on purchasing Common Stock through our employee stock purchase plan, in which nearly 30% of our employees participate.
These include, among other benefits: • Comprehensive health insurance coverage; • Attractive paid time off, including up to 25 vacation days (depending on tenure), two personal holidays, nine company-wide holidays, one volunteer day, six days of sick leave and parental leave for all new caregivers; • Competitive match on contributions to our 401(k) retirement savings plan, in which over 93% of our employees participate; and • 15% discount on purchasing Common Stock through our employee stock purchase plan, in which nearly 30% of our employees participate.
In addition to this Annual Report, all quarterly and current reports, proxy statements, interactive data and other information are made available, without charge, on our website as soon as reasonably practicable after they are filed or furnished with the Securities and Exchange Commission (“SEC”). Information on our website is not considered part of this Annual Report.
In addition to this Annual Report, all quarterly and current reports, proxy statements and other information are made available, without charge, on our website as soon as reasonably practicable after they are filed or furnished with the Securities and Exchange Commission (“SEC”). Information on our website is not considered part of this Annual Report.
During 2024, the Company filed unqualified Section 303A certifications with the NYSE. The Company and the Operating Partnership have also filed the CEO and CFO certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits to this Annual Report.
During 2025, the Company filed unqualified Section 303A certifications with the NYSE. The Company and the Operating Partnership have also filed the CEO and CFO certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 as exhibits to this Annual Report.
When applicable, personnel salaries and related costs of such development employees are capitalized as a development expenditure. Approximately 3% of our employees are leasing professionals principally responsible for leasing our portfolio. When applicable, commissions and related costs of such leasing employees are capitalized as a leasing expenditure. Generally, all other employee costs are recorded as general and administrative expenses.
When applicable, personnel salaries and related costs of such development employees are capitalized as a development expenditure. Approximately 2% of our employees are leasing professionals principally responsible for leasing our portfolio. When applicable, commissions and related costs of such leasing employees are capitalized as a leasing expenditure. Generally, all other employee costs are recorded as general and administrative expenses.
Approximately 71% of our employees work in one of our division offices, most of which are directly involved in the management and maintenance of our portfolio. These include property managers, maintenance engineers and technicians, HVAC technicians and project managers.
Approximately 69% of our employees work in one of our division offices, most of which are directly involved in the management and maintenance of our portfolio. These include property managers, maintenance engineers and technicians, HVAC technicians and project managers.
To proactively combat the potential future shortage of skilled trade professionals, we have partnered with local trade schools in some of our markets to implement an apprenticeship program to encourage and incentivize younger workers to obtain the technical skills necessary to become a trade professional.
To proactively combat the potential future shortage of skilled trade professionals, we have partnered with local trade 6 Table of Contents schools in some of our markets to implement an apprenticeship program to encourage and incentivize younger workers to obtain the technical skills necessary to become a trade professional.
Approximately 20% to 40% of employees typically receive a discretionary bonus each year, which usually ranges from $500 to $2,000. Approximately 8% of our employees, including officers, are also eligible to receive long-term equity incentive compensation. Equity incentive awards provide such employees with an ownership interest in our company and a direct and demonstrable stake in our success.
Approximately 40% to 70% of employees typically receive a discretionary bonus each year, which usually ranges from $500 to $2,000. Approximately 9% of our employees, including officers, are also eligible to receive long-term equity incentive compensation. Equity incentive awards provide such employees with an ownership interest in our company and a direct and demonstrable stake in our success.
Through our efforts in providing internship and cooperative education opportunities for future real estate professionals, we have also identified a pool of talented professionals capable of filling future hiring needs. As of December 31, 2024, the average tenure of our employees was ten years and the average age was 49 years.
Through our efforts in providing internship and cooperative education opportunities for future real estate professionals, we have also identified a pool of talented professionals capable of filling future hiring needs. As of December 31, 2025, the average tenure of our employees was 10 years and the average age was 49 years.
In 2024, the total cost of our workforce, including salaries, commissions, bonuses, equity and non-equity incentive compensation and employee benefits, was approximately $61 million. We regularly conduct risk assessments of our human capital needs.
In 2025, the total cost of our workforce, including salaries, commissions, bonuses, equity and non-equity incentive compensation and employee benefits, was approximately $59 million. We regularly conduct risk assessments of our human capital needs.
Our Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HIW.” As of December 31, 2024, the Company owned all of the Preferred Units and 107.2 million, or 98.0%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.2 million Common Units.
Our Common Stock is traded on the New York Stock Exchange (“NYSE”) under the symbol “HIW.” As of December 31, 2025, the Company owned all of the Preferred Units and 109.5 million, or 98.2%, of the Common Units in the Operating Partnership. Limited partners owned the remaining 2.0 million Common Units.
Environmental Resiliency We are firmly committed to our intrinsic and societal responsibility to routinely minimize all environmental impacts resulting from the development and operation of our properties. Our plan is to continue minimizing our energy intensity, carbon emissions and water consumption and strive to mitigate pollution, ensure environmental compliance and create healthy and productive workspaces for our customers and communities.
Environmental Resiliency We are firmly committed to minimizing environmental impacts resulting from the development and operation of our properties. Our plan is to continue minimizing our energy intensity, carbon emissions and water consumption and strive to mitigate pollution, ensure environmental compliance and create healthy and productive workspaces for our customers and communities.
We strive to create a diverse and inclusive environment in an authentic and meaningful way. We are an equal opportunity employer, with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status.
Diversity and inclusion is a core value for our company. We strive to create a diverse and inclusive environment in an authentic and meaningful way. We are an equal opportunity employer, with all qualified applicants receiving consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, national origin, disability or protected veteran status.
Approximately 33% of our employees are highly specialized and skilled trade professionals, such as maintenance engineers and technicians and HVAC technicians. The average age of our trade professionals is 52 years, which is approximately five years older than the average age of the remainder of our employee 6 Table of Contents base.
Approximately 35% of our employees are highly specialized and skilled trade professionals, such as maintenance engineers and technicians and HVAC technicians. The average age of our trade professionals is 52 years, which is approximately five years older than the average age of the remainder of our employee base.
As of December 31, 2024, only Bank of America (3.8%) and Asurion (3.5%) accounted for more than 3% of our annualized GAAP revenues. Health and Safety.
As of December 31, 2025, only Bank of America (4.3%) and Asurion (3.5%) accounted for more than 3% of our annualized GAAP revenues. Health and Safety.
In addition to supporting the career growth of our employees, we also seek to grow as an employer. We periodically solicit feedback from our employees through the use of employee engagement surveys to monitor and improve employee satisfaction in order to retain and recruit a talented workforce.
In addition to supporting the career growth of our employees, we also seek to grow as an employer. We periodically solicit feedback from our employees through the use of employee engagement surveys to monitor and improve employee satisfaction in order to retain and recruit a talented workforce. We generally conduct an engagement survey every two years. Diversity and Inclusion.
Of the new employees hired during 2024, 57% were female and 39% were persons of color. 8 Table of Contents We have a robust diversity and inclusion program, called the “Heart of Highwoods,” with the overall goal of creating opportunities for all people in the commercial real estate industry, in the local communities in which we operate and among our own teammates at the Company.
We have a robust diversity and inclusion program, called the “Heart of Highwoods,” with the overall goal of creating opportunities for all people in the commercial real estate industry, in the local communities in which we operate and among our 8 Table of Contents own teammates at the Company.
As of both December 31, 2024 and December 31, 2023, we had approximately 350 full-time employees. Over the past three years, our average annual turnover rate was 16%, substantially lower than the average national industry turnover rate of 25% as reported by the Bureau of Labor Statistics. Our turnover rate was 14% for 2024.
We had 315 full-time employees as of December 31, 2025, 32 fewer than we had as of December 31, 2024. Over the past three years, our average annual turnover rate was 16%, substantially lower than the average national industry turnover rate of 22% as reported by the Bureau of Labor Statistics. Our turnover rate was 20% for 2025.
In 2024, the DIG focused its efforts on fostering Company-wide communication and inclusion, supporting our partnerships with local schools and programs that support students with limited economic resources and continuing to expand and diversify our vendor base. Core Values. Our core values serve as our foundation.
The DIG focuses its efforts on fostering Company-wide communication and inclusion, supporting our partnerships with local schools and programs that support students with limited economic resources and continuing to expand and diversify our vendor base. Core Values. Our core values serve as our foundation. We believe our culture makes the difference in this highly competitive, ever-changing commercial real estate industry.
Second, we are providing opportunities for our employees to volunteer within their communities through the recently added paid volunteer time off benefit and an additional paid holiday on Martin Luther King, Jr. Day, a national day of service.
Second, we are providing opportunities for our employees to volunteer within their communities through paid volunteer time off and an additional paid holiday on Martin Luther King, Jr. Day, a national day of service. Third, we have a diversity and inclusion group, called the “DIG,” made up of employees who advocate for diversity and inclusion throughout our company.
Our employees bring their personal values, skills, experiences and knowledge to life through the lens of our core values. Together, we use our mission and values to create a thriving workplace to support success for everyone and drive our culture and business forward.
Together, we use our mission and values to create a thriving workplace to support success for everyone and drive our culture and business forward.
As of December 31, 2024, 37% of our employees were female and 29% of our employees were persons of color.
As of December 31, 2025, 35% of our employees were female and 32% of our employees were persons of color. Of the new employees hired during 2025, 46% were female and 46% were persons of color.
Removed
During 2021, we surveyed all of our employees with respect to diversity and inclusion and many of our employees with respect to work environment satisfaction. We conducted an engagement survey in two of the last three years. Diversity and Inclusion. Diversity and inclusion is a core value for our company.
Added
First, we seek to provide opportunities to small and minority vendors to compete for work with our company, which also helps to expand our vendor base and ensure we are getting the most value, quality and benefit from the money we spend on products and services.
Removed
First, like all Federal government contractors, we have established goals and methods to be sure we are providing opportunities to small and minority vendors to compete for work with our company.
Removed
Third, we have a diversity and inclusion group, called the “DIG,” made up of employees who advocate for diversity and inclusion throughout our company.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

36 edited+5 added−4 removed148 unchanged
Biggest changeThe key components affecting our rental and other revenues are average occupancy, rental rates, cost recovery income, new developments placed in service, acquisitions and dispositions. Average occupancy generally increases during times of improving economic growth, as our ability to lease space outpaces vacancies that occur upon the expirations of existing leases.
Biggest changeEconomic growth and office employment levels in our core markets are important factors, among others, in predicting our future operating results. 9 Table of Contents The key components affecting our rental and other revenues are average occupancy, rental rates, cost recovery income, new developments placed in service, acquisitions and dispositions.
Our participation in joint ventures is subject to the risks that: • we could become engaged in a dispute with any of our joint venture partners that might affect our ability to develop or operate a property; • some of our joint ventures are subject to debt and the refinancing of such debt may require equity capital calls; 14 Table of Contents • our joint venture partners may default on their obligations necessitating that we fulfill their obligation ourselves; • our joint ventures may be unable to repay any amounts that we may loan to them; • we may need our joint venture partner’s approval to take certain actions and, therefore, we may be unable to cause a joint venture to implement decisions that we consider advisable; • our joint venture partners may have different objectives than we have regarding the appropriate timing and terms of any renovation, sale or refinancing of properties; • with respect to certain joint ventures, our joint venture partner has a right to sell its interest to us under certain circumstances for fair market value at various dates in the future; • with respect to certain joint ventures, our joint venture partner has a right to receive additional consideration from us or the joint venture under certain circumstances if and to the extent the internal rate of return on the applicable development project exceeds certain thresholds; • our joint venture partners may be structured differently than us for tax purposes, which could create conflicts of interest; and • we or our joint venture partners may have competing interests in our markets that could create conflicts of interest.
Our participation in joint ventures is subject to the risks that: • we could become engaged in a dispute with any of our joint venture partners that might affect our ability to develop or operate a property; • some of our joint ventures are subject to debt and the refinancing of such debt may require equity capital calls; • our joint venture partners may default on their obligations necessitating that we fulfill their obligation ourselves; • our joint ventures may be unable to repay any amounts that we may loan to them; • we may need our joint venture partner’s approval to take certain actions and, therefore, we may be unable to cause a joint venture to implement decisions that we consider advisable; • our joint venture partners may have different objectives than we have regarding the appropriate timing and terms of any renovation, sale or refinancing of properties; 14 Table of Contents • with respect to certain joint ventures, our joint venture partner has a right to sell its interest to us under certain circumstances for fair market value at various dates in the future; • with respect to certain joint ventures, our joint venture partner has a right to receive additional consideration from us or the joint venture under certain circumstances if and to the extent the internal rate of return on the applicable development project exceeds certain thresholds; • our joint venture partners may be structured differently than us for tax purposes, which could create conflicts of interest; and • we or our joint venture partners may have competing interests in our markets that could create conflicts of interest.
Making these loans subjects us to the following risks, each of which could have a material adverse effect on our cash flow, results of operations and/or financial condition: • the third party may be unable to make full and timely payments of interest and principal on the loan when due; • if a buyer to whom we provide seller financing does not manage the property well, or the property otherwise fails to meet financial projections, performs poorly or declines in value, then the buyer may not have the funds or ability to raise new debt with which to make required payments of interest and principal to us and, if the seller financing is non-recourse, our only remedy in the event of a default would be to foreclose on the asset; • if we loan funds to a joint venture, and the joint venture is unable to make required payments of interest or principal, or both, or there are disagreements with respect to the repayment of the loan or other matters, then we could have a resulting dispute with our partner, and such a dispute could harm our relationship with our partner and cause delays in developing or selling the property or the failure to properly manage the property; and • if we loan funds to a joint venture and the joint venture is unable to make required payments of interest and principal, or both, then we may exercise remedies available to us in the joint venture agreement that could allow us to increase our ownership interest or our control over major decisions, or both, which could result in an unconsolidated joint venture becoming consolidated with our financial statements; doing so could require us to reallocate the purchase price 16 Table of Contents among the various asset and liability components and this could result in material changes to our reported results of operations and financial condition.
Making these loans subjects us to the following risks, each of which could have a material adverse effect on our cash flow, results of operations and/or financial condition: • the third party may be unable to make full and timely payments of interest and principal on the loan when due; • if a buyer to whom we provide seller financing does not manage the property well, or the property otherwise fails to meet financial projections, performs poorly or declines in value, then the buyer may not have the funds or ability to raise new debt with which to make required payments of interest and principal to us and, if the seller financing is non-recourse, our only remedy in the event of a default would be to foreclose on the asset; • if we loan funds to a joint venture and the joint venture is unable to make required payments of interest or principal, or both, or there are disagreements with respect to the repayment of the loan or other matters, then we could have a resulting dispute with our partner, and such a dispute could harm our relationship with our partner and cause delays in developing or selling the property or the failure to properly manage the property; and • if we loan funds to a joint venture and the joint venture is unable to make required payments of interest or principal, or both, then we may exercise remedies available to us in the joint venture agreement that could allow us to increase our ownership interest or our control over major decisions, or both, which could result in an unconsolidated joint venture becoming consolidated with our financial statements; doing so could require us to reallocate the purchase price among the various asset and liability components and this could result in material changes to our reported results of operations and financial condition.
We face possible tax audits. Because we are organized and qualify as a REIT, we are generally not subject to federal income taxes. We are, however, subject to federal, state and local taxes in certain instances. In the normal course of business, certain entities through which we own real estate have undergone tax audits.
Because we are organized and qualify as a REIT, we are generally not subject to federal income taxes. We are, however, subject to federal, state and local taxes in certain instances. In the normal course of business, certain entities through which we own real estate have undergone tax audits.
Risks associated with development and re-development activities include: • the unavailability of favorable financing; • construction costs exceeding original estimates; • construction and lease-up delays resulting in increased debt service expense and construction costs; and • lower than anticipated occupancy rates and rents causing a property to be unprofitable or less profitable than originally estimated.
Risks associated with development and re-development activities include: • the unavailability of favorable financing; • construction costs exceeding original estimates; 13 Table of Contents • construction and lease-up delays resulting in increased debt service expense and construction costs; and • lower than anticipated occupancy rates and rents causing a property to be unprofitable or less profitable than originally estimated.
Although we make efforts to maintain the security and integrity of these types of IT networks and related systems and have implemented various measures to manage the risk of a cybersecurity incident, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Although we make efforts to maintain the security and integrity of these types of IT networks and 12 Table of Contents related systems and have implemented various measures to manage the risk of a cybersecurity incident, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging.
Moreover, owners of office properties 13 Table of Contents may be reluctant to sell, resulting in fewer acquisition opportunities. As a result of such increased competition and limited opportunities, we may be unable to acquire additional properties or the purchase price of such properties may be significantly elevated, which would reduce our expected return from making any such acquisitions.
Moreover, owners of office properties may be reluctant to sell, resulting in fewer acquisition opportunities. As a result of such increased competition and limited opportunities, we may be unable to acquire additional properties or the purchase price of such properties may be significantly elevated, which would reduce our expected return from making any such acquisitions.
However, we cannot assure you that this bylaw provision will not be amended or repealed at any point in the future. • Maryland unsolicited takeover statute. Under Maryland law, the Company’s Board of Directors could adopt various anti-takeover provisions without the consent of stockholders.
However, we cannot assure you that this bylaw provision will not be amended or repealed at any point in the future. 19 Table of Contents • Maryland unsolicited takeover statute. Under Maryland law, the Company’s Board of Directors could adopt various anti-takeover provisions without the consent of stockholders.
As of December 31, 2024, we owned 1.2 million square feet of office space located on various land parcels that we lease on a long-term basis.
As of December 31, 2025, we owned 1.2 million square feet of office space located on various land parcels that we lease on a long-term basis.
Difficulties or delays in renewing leases with large customers or re-leasing space vacated by large customers could materially impact our results of operations. Our 20 largest customers account for a meaningful portion of our revenues. See 10 Table of Contents “Item 2. Properties - Customers” and “Item 2.
Difficulties or delays in renewing leases with large customers or re-leasing space vacated by large customers could materially impact our results of operations. Our 20 largest customers account for a meaningful portion of our revenues. See “Item 2. Properties - Customers” and “Item 2.
See “Item 2. Properties – Customers.” While most are firm term leases that do not permit the Federal government to terminate the lease prior to the stated lease expiration date, we can provide no assurances that the Federal government will not seek to terminate any of these leases.
Properties – Customers.” While most are firm term leases that do not permit the Federal government to terminate the lease prior to the stated lease expiration date, we can provide no assurances that the Federal government will not seek to terminate any of these leases.
If such alternative capital were unavailable, we may not be able to make new investments and could have difficulty repaying other debt. Increases in interest rates would increase our interest expense. As of December 31, 2024, we had $454.0 million of variable rate debt outstanding not protected by interest rate hedge contracts.
If such alternative capital were unavailable, we may not be able to make new investments and could have difficulty repaying other debt. Increases in interest rates would increase our interest expense. As of December 31, 2025, we had $375.0 million of variable rate debt outstanding not protected by interest rate hedge contracts.
Further issuances of equity securities may adversely affect the market price of our Common Stock and may be dilutive to current stockholders . The sales of a substantial number of Common Shares, or the perception that such sales could occur, could adversely affect the market price of our Common Stock.
Further issuances of equity securities may adversely affect the market price of our Common Stock and may be dilutive to current stockholders . The sales of a substantial number of Common Shares, or the perception that such sales could 18 Table of Contents occur, could adversely affect the market price of our Common Stock.
The Company’s charter contains a provision exempting the Company from the Maryland business combination statute. However, we cannot assure you that this charter provision will not be amended or repealed at any point in the future. 19 Table of Contents • Control share acquisitions.
The Company’s charter contains a provision exempting the Company from the Maryland business combination statute. However, we cannot assure you that this charter provision will not be amended or repealed at any point in the future. • Control share acquisitions.
While we intend to operate in a manner that will allow the Company to continue to qualify as a REIT, we cannot provide any assurances that the Company will remain qualified as such in the future, which could have particularly adverse consequences to the Company’s stockholders.
While we intend to operate in a manner that will allow the Company to continue to qualify as a REIT, we cannot provide any assurances that the Company will remain qualified as such in the future, which could have particularly adverse consequences to the Company’s 16 Table of Contents stockholders.
We may not be able to repay, refinance or extend any or all of our debt at maturity or upon any acceleration. If any refinancing is done at higher interest rates, the increased interest expense would adversely affect our cash flow and ability to pay distributions.
We generally do not intend to reserve funds to retire existing debt upon maturity. We may not be able to repay, refinance or extend any or all of our debt at maturity or upon any acceleration. If any refinancing is done at higher interest rates, the increased interest expense would adversely affect our cash flow and ability to pay distributions.
The more favorable rates applicable to regular 17 Table of Contents corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock.
The more favorable rates applicable to regular corporate qualified dividends could cause investors who are taxed at individual rates to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our stock. We face possible tax audits.
In addition, there are various local, state and federal fire, health, life-safety and similar regulations with which we may be required to comply and that may subject us to liability in the form of fines or damages for noncompliance.
In addition, there are various local, state and federal fire, health, life-safety and similar regulations with which we may be required to comply and that may subject us to liability in the form of fines or damages for noncompliance. Any expenditures, fines or damages we must pay would adversely affect our results of operations.
To the extent that our customers exercise early termination rights, our results of operations will be adversely affected, and we can provide no assurances that we will be able to generate an equivalent amount of net effective rent by leasing the vacated space to others. As part of ongoing efforts to reduce waste, the U.S.
To the extent that our customers exercise early 10 Table of Contents termination rights, our results of operations will be adversely affected, and we can provide no assurances that we will be able to generate an equivalent amount of net effective rent by leasing the vacated space to others.
In addition, certain of our unsecured debt agreements contain cross-default provisions giving the unsecured lenders the right to declare a default if we are in default under more than $35.0 million with respect to other loans in some circumstances.
In addition, certain of our unsecured debt agreements contain cross-default provisions giving the unsecured lenders the right to declare a default if we are in default under more than $35.0 million with respect to other loans in some circumstances. Unwaived defaults under our debt agreements could materially and adversely affect our financial condition and results of operations.
Under various federal, state and local environmental laws and regulations, a current or previous property owner or operator may be liable for the cost to remove or remediate hazardous or toxic substances on such property. These costs could be significant.
Discovery of previously undetected environmentally hazardous conditions may adversely affect our financial condition and results of operations . Under various federal, state and local environmental laws and regulations, a current or previous property owner or operator may be liable for the cost to remove or remediate hazardous or toxic substances on such property. These costs could be significant.
If our credit ratings are downgraded or other negative action is taken, we could be required, among other things, to pay additional interest and fees on outstanding borrowings under our revolving credit facility and bank term loans. We generally do not intend to reserve funds to retire existing debt upon maturity.
We cannot assure you that our credit ratings will not be downgraded. If our credit ratings are downgraded or other negative action is taken, we could be required, among other things, to pay additional interest and fees on outstanding borrowings under our revolving credit facility and bank term loans.
Any such refinancing could also impose tighter financial ratios and other covenants that restrict our ability to take actions that could otherwise be in our best interest, such as funding new development activity, making opportunistic acquisitions, repurchasing our securities or paying distributions. If we do not meet our mortgage financing obligations, any properties securing such indebtedness could be foreclosed on.
Any such refinancing could 15 Table of Contents also impose tighter financial ratios and other covenants that restrict our ability to take actions that could otherwise be in our best interest, such as funding new development activity, making opportunistic acquisitions, repurchasing our securities or paying distributions.
While tax deficiency notices from the jurisdictions conducting previous audits have not been material, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations.
While tax deficiency notices from the jurisdictions conducting previous audits have not been material, there can be no assurance that future audits will not occur with increased frequency or that the ultimate result of such audits will not have a material adverse effect on our results of operations. 17 Table of Contents Risks Related to an Investment in our Securities The price of our Common Stock is volatile and may decline.
Risks Related to our Operations The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term . The COVID-19 pandemic had, and another pandemic in the future could have, repercussions across regional and global economies and financial markets.
Risks Related to our Operations The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term . The COVID-19 pandemic had a disruptive effect on economic activity, including the use of and demand for office space.
These agencies’ ratings are based on a number of factors, some of which are not within our control. In addition to factors specific to our financial strength and performance, the rating agencies also consider conditions affecting REITs generally. We cannot assure you that our credit ratings will not be downgraded.
Further, we obtain credit ratings from Moody’s Investors Service and Standard and Poor’s Rating Services based on their evaluation of our creditworthiness. These agencies’ ratings are based on a number of factors, some of which are not within our control. In addition to factors specific to our financial strength and performance, the rating agencies also consider conditions affecting REITs generally.
Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances. The cost of defending against claims of liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could adversely affect our financial condition and results of operations.
The cost of defending against claims of liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could adversely affect our financial condition and results of operations.
Risks Related to an Investment in our Securities The price of our Common Stock is volatile and may decline. A number of factors may adversely influence the public market price of our Common Stock.
A number of factors may adversely influence the public market price of our Common Stock.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Dividends and Distributions.” Changes in our future dividend payout level could have a material effect on the market price of our Common Stock. 18 Table of Contents Cash distributions reduce the amount of cash that would otherwise be available for other business purposes, including paying off debt, reinvesting in our existing portfolio or funding future growth initiatives.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Dividends and Distributions.” Changes in our future dividend payout level could have a material effect on the market price of our Common Stock.
Occupancy in our office portfolio decreased from 88.9% as of December 31, 2023 to 87.1% as of December 31, 2024. For additional information regarding our average occupancy and rental rate trends over the past five years, see “Item 2.
For additional information regarding our average occupancy and rental rate trends over the past five years, see “Item 2.
The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements initially prompted by the pandemic could materially and negatively impact future demand for office space over the long-term. 9 Table of Contents Adverse economic conditions in our markets that negatively impact the demand for office space, such as high unemployment, may result in lower occupancy and rental rates for our portfolio, which would adversely affect our results of operations .
The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements initially prompted by the pandemic could materially and negatively impact future demand for office space over the long-term.
Our failure to comply with these laws could subject us to fines and penalties, cause us to be in default of our leases and other contracts with the Federal government and bar us from entering into future leases and other contracts with the Federal government. 12 Table of Contents We face risks associated with security breaches through cyber attacks, cyber intrusions, ransomware or otherwise, as well as other significant disruptions of our information technology (“IT”) networks and related systems.
Our failure to comply with these laws could subject us to fines and penalties, cause us to be in default of our leases and other contracts with the Federal government and bar us from entering into future leases and other contracts with the Federal government.
Average occupancy generally declines during times of slower or negative economic growth when new vacancies tend to outpace our ability to lease space. In addition, the timing of changes in occupancy levels tends to lag the timing of changes in overall economic activity and employment levels.
Average occupancy generally increases during times of improving economic growth, as our ability to lease space outpaces vacancies that occur upon the expirations of existing leases. Average occupancy generally declines during times of slower or negative economic growth when new vacancies tend to outpace our ability to lease space.
We depend on our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt upon maturity. Our ability to borrow under the revolving credit facility also allows us to quickly capitalize on opportunities at short-term interest rates.
Our ability to borrow under the revolving credit facility also allows us to quickly capitalize on opportunities at short-term interest rates.
For the Company to maintain its qualification as a REIT, it must annually distribute to its stockholders at least 90% of REIT taxable income, excluding net capital gains.
Cash distributions reduce the amount of cash that would otherwise be available for other business purposes, including paying off debt, reinvesting in our existing portfolio or funding future growth initiatives. For the Company to maintain its qualification as a REIT, it must annually distribute to its stockholders at least 90% of REIT taxable income, excluding net capital gains.
Department of Government Efficiency (“DOGE”) and the U.S. General Services Administration (“GSA”) are reaching out to all tenant agencies with non-firm term leases to see if there are opportunities to reduce space usage. We currently have 30 leases with 23 different agencies of the Federal government across five different markets, which encompass an aggregate of 737,000 square feet.
We currently have 31 leases with 24 different agencies of the Federal government across five different markets, which encompass an aggregate of 749,000 square feet. See “Item 2.
Removed
Most countries, including the United States, reacted to the pandemic by restricting many business and travel activities, mandating the partial or complete closures of certain businesses and schools and taking other actions to mitigate the spread of the virus, most of which had a disruptive effect on economic activity, including the use of and demand for office space.
Added
Adverse economic conditions in our markets that negatively impact the demand for office space, such as high unemployment, may result in lower occupancy and rental rates for our portfolio, which would adversely affect our results of operations . Our operating results heavily depend on successfully leasing and operating the office space in our portfolio.
Removed
Our operating results heavily depend on successfully leasing and operating the office space in our portfolio. Economic growth and office employment levels in our core markets are important factors, among others, in predicting our future operating results.
Added
In addition, the timing of changes in occupancy levels tends to lag the timing of changes in overall economic activity and employment levels. Occupancy in our office portfolio decreased from 87.1% as of December 31, 2024 to 85.3% as of December 31, 2025.
Removed
Any expenditures, fines or damages we must pay would adversely affect our results of operations. 11 Table of Contents Discovery of previously undetected environmentally hazardous conditions may adversely affect our financial condition and results of operations .
Added
Third parties may seek recovery from real property owners or operators for 11 Table of Contents personal injury or property damage associated with exposure to released hazardous substances.
Removed
Unwaived defaults under our debt agreements could materially and adversely affect our financial condition and results of operations. 15 Table of Contents Further, we obtain credit ratings from Moody’s Investors Service and Standard and Poor’s Rating Services based on their evaluation of our creditworthiness.
Added
We face risks associated with security breaches through cyber attacks, cyber intrusions, ransomware or otherwise, as well as other significant disruptions of our information technology (“IT”) networks and related systems.
Added
If we do not meet our mortgage financing obligations, any properties securing such indebtedness could be foreclosed on. We depend on our revolving credit facility for working capital purposes and for the short-term funding of our development and acquisition activity and, in certain instances, the repayment of other debt upon maturity.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of this program, we also take reasonable steps to ensure any employee who may come into possession of confidential financial or health information has received appropriate cybersecurity awareness training and, if applicable, payment card industry (PCI) training.
Biggest changeAs part of this program, we also take reasonable steps to ensure any employee who may 20 Table of Contents come into possession of confidential financial or health information has received appropriate cybersecurity awareness training and, if applicable, payment card industry (PCI) training.
We partner with a 20 Table of Contents third party service provider to assist us on a real-time basis with detecting advanced threats, streamline and collaborate on investigations and recommend actions to further strengthen our systems and, if and when necessary, respond to incidents.
We partner with a third party service provider to assist us on a real-time basis with detecting advanced threats, streamline and collaborate on investigations and recommend actions to further strengthen our systems and, if and when necessary, respond to incidents.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMorgan Chase & Co. 183,864 6,508 0.81 3.4 State of Georgia 302,443 6,144 0.77 1.6 Deloitte 132,328 6,027 0.75 5.9 Lifepoint Corporate Services 202,991 5,814 0.73 4.2 Delta Community Credit Union 128,589 5,531 0.69 7.8 CapFinancial Group 120,847 5,495 0.69 8.6 Regus 169,833 5,368 0.67 5.6 Fisher Asset Management 179,184 5,255 0.66 5.3 The Cigna Group 180,728 5,187 0.65 3.0 Global Payments 168,051 5,055 0.63 8.2 Total 6,136,446 $ 220,917 27.64 % 7.3 __________ (1) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2024 multiplied by 12. 23 Table of Contents Lease Expirations The following table sets forth scheduled lease expirations for existing leases in our portfolio as of December 31, 2024: Lease Expiring (1) Number of Leases Expiring Rentable Square Feet Subject to Expiring Leases Percentage of Leased Square Footage Represented by Expiring Leases Annualized GAAP Rental Revenue Under Expiring Leases (2) Average Annual GAAP Rental Rate Per Square Foot for Expirations Percent of Annualized GAAP Rental Revenue Represented by Expiring Leases (2) (in thousands) 2025 (3) 523 2,699,719 11.4 % $ 80,251 $ 29.73 10.0 % 2026 348 2,218,130 9.4 72,868 32.85 9.1 2027 349 2,668,478 11.3 85,833 32.17 10.7 2028 258 2,411,216 10.2 80,393 33.34 10.1 2029 228 1,864,565 7.9 58,353 31.30 7.3 2030 217 2,951,965 12.4 90,918 30.80 11.4 2031 107 2,537,503 10.7 83,703 32.99 10.5 2032 74 1,089,158 4.6 44,056 40.45 5.5 2033 62 1,219,071 5.1 44,773 36.73 5.6 2034 49 1,502,307 6.3 61,645 41.03 7.7 Thereafter 106 2,531,399 10.7 96,339 38.06 12.1 2,321 23,693,511 100.0 % $ 799,132 $ 33.73 100.0 % __________ (1) Expirations that have been renewed are reflected above based on the renewal expiration date.
Biggest changeMorgan Chase & Co. 183,864 6,464 0.81 2.4 CapFinancial Group 135,631 6,360 0.80 10.6 Albemarle Corporation 139,242 6,215 0.78 10.2 Deloitte 132,328 5,993 0.75 4.9 Lifepoint Corporate Services 202,991 5,978 0.75 3.2 Robinson Bradshaw & Hinson PA 101,502 5,712 0.72 14.4 Regus 169,833 5,564 0.70 4.6 Delta Community Credit Union 128,589 5,522 0.69 6.8 Global Payments 168,051 5,240 0.66 7.2 PNC Bank 146,394 4,707 0.59 2.9 Martin Marietta 125,432 4,509 0.57 10.3 Total 5,827,811 $ 225,681 28.34 % 7.3 __________ (1) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2025 multiplied by 12. 23 Table of Contents Lease Expirations The following table sets forth scheduled lease expirations for existing leases in our portfolio as of December 31, 2025: Lease Expiring (1) Number of Leases Expiring Rentable Square Feet Subject to Expiring Leases Percentage of Leased Square Footage Represented by Expiring Leases Annualized GAAP Rental Revenue Under Expiring Leases (2) Average Annual GAAP Rental Rate Per Square Foot for Expirations Percent of Annualized GAAP Rental Revenue Represented by Expiring Leases (2) (in thousands) 2026 (3) 409 2,047,446 8.9 % $ 65,224 $ 31.86 8.2 % 2027 360 2,570,746 11.2 83,418 32.45 10.5 2028 299 2,423,458 10.6 80,438 33.19 10.1 2029 254 1,959,416 8.6 60,575 30.91 7.6 2030 258 2,798,559 12.2 88,245 31.53 11.1 2031 219 2,826,293 12.3 92,568 32.75 11.6 2032 111 1,455,151 6.4 58,592 40.27 7.4 2033 151 1,415,709 6.2 51,253 36.20 6.4 2034 57 1,455,125 6.4 65,301 44.88 8.2 2035 65 826,252 3.6 26,527 32.11 3.3 Thereafter 138 3,113,558 13.6 124,591 40.02 15.6 2,321 22,891,713 100.0 % $ 796,732 $ 34.80 100.0 % __________ (1) Expirations that have been renewed are reflected above based on the renewal expiration date.
Expirations include leases related to completed not stabilized development properties but exclude leases related to developments in-process. (2) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2024 multiplied by 12.
Expirations include leases related to completed not stabilized development properties but exclude leases related to developments in-process. (2) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December 2025 multiplied by 12.
We also own additional development land on which we or third parties can develop approximately 2.8 million square feet of mixed-use real estate projects, including retail and multi-family.
We also own additional development land on which we or third parties can develop approximately 2.4 million square feet of mixed-use real estate projects, including retail and multi-family.
The following table sets forth operating information about our portfolio: Average Occupancy Annualized GAAP Rent Per Square Foot (1) Annualized Cash Rent Per Square Foot (2) 2020 90.7 % $ 29.23 $ 28.21 2021 90.0 % $ 30.75 $ 29.63 2022 90.8 % $ 31.89 $ 30.51 2023 89.2 % $ 32.79 $ 32.18 2024 88.0 % $ 33.73 $ 33.18 __________ (1) Annualized GAAP Rent Per Square Foot is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage.
The following table sets forth operating information about our portfolio: Average Occupancy Annualized GAAP Rent Per Square Foot (1) Annualized Cash Rent Per Square Foot (2) 2021 90.0 % $ 30.75 $ 29.63 2022 90.8 % $ 31.89 $ 30.51 2023 89.2 % $ 32.79 $ 32.18 2024 88.0 % $ 33.73 $ 33.18 2025 85.5 % $ 34.80 $ 33.71 __________ (1) Annualized GAAP Rent Per Square Foot is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage.
In addition, we own 50.0% interests in 2827 Peachtree (Atlanta), Granite Park Six (Dallas), 23Springs (Dallas) and Midtown East (Tampa), four unconsolidated joint ventures that are currently developing projects that have not yet been placed in service.
In addition, as of December 31, 2025, we owned 50.0% interests in Granite Park Six (Dallas), 23Springs (Dallas) and Midtown East (Tampa), three unconsolidated joint ventures that are currently developing projects that have not yet been placed in service.
Joint Venture Investments The following table sets forth information about our in-service joint venture investments by geographic location as of December 31, 2024: Rentable Square Feet Weighted Average Ownership Interest (1) Occupancy Market Dallas 542,000 50.0 % 99.4 % Kansas City (2) 292,000 50.0 89.4 Richmond 354,000 50.0 100.0 Tampa (3) 152,000 80.0 100.0 Total 1,340,000 53.4 % 97.5 % __________ (1) Weighted Average Ownership Interest is calculated using Rentable Square Feet.
Joint Venture Investments The following table sets forth information about our in-service joint venture investments by geographic location as of December 31, 2025: Rentable Square Feet Weighted Average Ownership Interest (1) Occupancy Market Atlanta 136,000 50.0 % 88.2 % Dallas 542,000 50.0 94.8 Kansas City (2) 292,000 50.0 88.9 Tampa (3) 152,000 80.0 100.0 Total 1,122,000 54.1 % 93.2 % __________ (1) Weighted Average Ownership Interest is calculated using Rentable Square Feet.
PROPERTIES Properties The following table sets forth information about our portfolio by geographic location as of December 31, 2024: Market Rentable Square Feet Occupancy Percentage of Annualized GAAP Rental Revenue (1) Nashville 5,098,000 89.0 % 20.3 % Raleigh 5,592,000 88.6 20.2 Atlanta 4,935,000 83.7 16.5 Tampa 3,196,000 87.8 12.3 Charlotte 1,991,000 96.3 10.3 Orlando 1,789,000 88.3 6.5 Richmond 1,845,000 85.4 4.6 Other 2,754,000 79.5 9.3 Total 27,200,000 87.1 % 100.0 % __________ (1) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) from our office properties for the month of December 2024 multiplied by 12.
PROPERTIES Properties The following table sets forth information about our portfolio by geographic location as of December 31, 2025: Market Rentable Square Feet Occupancy Percentage of Annualized GAAP Rental Revenue (1) Raleigh 5,827,000 89.3 % 21.6 % Nashville 5,105,000 81.8 18.7 Atlanta 4,622,000 86.4 16.9 Charlotte 2,402,000 87.1 12.8 Tampa 2,523,000 88.8 10.3 Orlando 1,789,000 87.6 6.2 Richmond 1,740,000 84.9 4.8 Other 2,822,000 75.7 8.7 Total 26,830,000 85.3 % 100.0 % __________ (1) Annualized GAAP Rental Revenue is GAAP rental revenue (base rent plus cost recovery income, including straight-line rent) from our office properties for the month of December 2025 multiplied by 12.
(2) Annualized Cash Rent Per Square Foot is cash rental revenue (base rent plus cost recovery income, excluding straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage. 22 Table of Contents Customers The following table sets forth information concerning the 20 largest customers in our portfolio as of December 31, 2024: Customer Rentable Square Feet Annualized GAAP Rental Revenue (1) Percent of Total Annualized GAAP Rental Revenue (1) Weighted Average Remaining Lease Term in Years (in thousands) Bank of America 648,440 $ 30,168 3.78 % 9.2 Asurion 543,794 28,042 3.51 11.8 Metropolitan Life Insurance 667,228 21,228 2.66 6.2 Federal Government 736,663 21,120 2.64 4.0 Bridgestone Americas 506,128 19,684 2.46 12.7 PPG Industries 370,927 11,284 1.41 6.5 Vanderbilt University 294,389 9,672 1.21 4.9 Mars Petcare 223,700 9,194 1.15 6.4 Albemarle Corporation 162,368 7,154 0.90 9.1 Bass, Berry & Sims 213,951 6,987 0.87 0.1 J.P.
(2) Annualized Cash Rent Per Square Foot is cash rental revenue (base rent plus cost recovery income, excluding straight-line rent) for the month of December of the respective year multiplied by 12, divided by total occupied rentable square footage. 22 Table of Contents Customers The following table sets forth information concerning the 20 largest customers in our portfolio as of December 31, 2025: Customer Rentable Square Feet Annualized GAAP Rental Revenue (1) Percent of Total Annualized GAAP Rental Revenue (1) Weighted Average Remaining Lease Term in Years (in thousands) Bank of America 620,790 $ 34,316 4.31 % 8.6 Asurion 543,794 27,620 3.47 10.8 Federal Government 748,955 21,600 2.71 3.6 Metropolitan Life Insurance 667,228 20,631 2.59 5.2 Bridgestone Americas 506,128 19,089 2.40 11.7 PPG Industries 370,927 11,058 1.39 5.5 Advance Auto Parts 218,043 9,944 1.25 6.8 Mars Petcare 223,700 9,817 1.23 5.4 Vanderbilt University 294,389 9,342 1.17 3.8 J.P.
(2) Will be recorded in development-in-process on our Consolidated Balance Sheets once we begin construction on the project. 24 Table of Contents Land Held for Development As of December 31, 2024, we estimate that we can develop approximately 4.6 million rentable square feet of office space on the wholly-owned development land that we consider core assets for our future development needs.
(3) Includes 46,000 rentable square feet of leases that are on a month-to-month basis, which represent 0.2% of total annualized GAAP rental revenue. 24 Table of Contents Land Held for Development As of December 31, 2025, we estimate that we can develop approximately 4.2 million rentable square feet of office space on the wholly-owned development land that we consider core assets for our future development needs.
The following table sets forth the net changes in rentable square footage of our portfolio: Year Ended December 31, 2024 2023 2022 (in thousands) Acquisitions — — 367 Developments Placed In-Service 18 — 263 Remeasurements/Other (1) 575 5 (11) Dispositions (605) (383) (437) Net Change in Rentable Square Footage (12) (378) 182 __________ (1) Increase in square footage during 2024 is due to the inclusion of in-service properties owned by consolidated and unconsolidated joint ventures (at our share).
The following table sets forth the net changes in rentable square footage of our portfolio: Year Ended December 31, 2025 2024 2023 (in thousands) Acquisitions 757 — — Developments Placed In-Service 68 18 — Remeasurements/Other (1) (353) 575 5 Dispositions (842) (605) (383) Net Change in Rentable Square Footage (370) (12) (378) __________ (1) The decrease in square footage during 2025 was primarily due to two non-core assets encompassing 0.4 million rentable square feet that were taken out of service during 2025, which resulted from a change in our assumptions about the use of such assets.
Removed
(3) Includes 47,000 rentable square feet of leases that are on a month-to-month basis, which represent 0.2% of total annualized GAAP rental revenue.
Added
The increase in square footage during 2024 was due to the inclusion of in-service properties owned by consolidated and unconsolidated joint ventures (at our share). See Explanatory Note.
Removed
In-Process Development The following table summarizes our in-process office development activity as of December 31, 2024: Property Market Own % Consolidated (Y/N) Rentable Square Feet Anticipated Total Investment (1) Investment as of December 31, 2024 Pre Leased % Estimated Completion Estimated Stabilization ($ in thousands) 23Springs Dallas 50.0 % N 642,000 $ 460,000 $ 299,422 61.6 % 1Q 25 1Q 28 Midtown East Tampa 50.0 % N 143,000 83,000 53,510 34.5 1Q 25 2Q 26 GlenLake Two Retail (2) Raleigh 100.0 % Y 8,600 8,100 1,241 100.0 1Q 26 1Q 26 793,600 $ 551,100 $ 354,173 57.1 % __________ (1) Includes estimated lease up costs for tenant improvements and lease commissions until the property has reached stabilization.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeMaiorana became executive vice president of finance in July 2019 and assumed the roles of treasurer in January 2021 and chief financial officer in January 2022. Prior to that, Mr. Maiorana was our senior vice president of finance and investor relations since May 2016. Prior to joining Highwoods, Mr. Maiorana spent 11 years in equity research at Wells Fargo Securities.
Biggest changePrior to that, Mr. Maiorana was our senior vice president of finance and investor relations since May 2016. Prior to joining Highwoods, Mr. Maiorana spent 11 years in equity research at Wells Fargo Securities. Prior to that, Mr. Maiorana worked four years at Ernst & Young LLP. Jeffrey D. Miller 55 Executive Vice President, General Counsel and Secretary.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 Table of Contents ITEM X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The Company is the sole general partner of the Operating Partnership. The following table sets forth information with respect to the Company’s executive officers: Name Age Position and Background Theodore J. Klinck 59 Director, President and Chief Executive Officer. Mr.
ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 25 Table of Contents ITEM X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS The Company is the sole general partner of the Operating Partnership. The following table sets forth information with respect to the Company’s executive officers: Name Age Position and Background Theodore J. Klinck 60 Director, President and Chief Executive Officer. Mr.
Brian M. Leary 50 Executive Vice President and Chief Operating Officer. Mr. Leary became chief operating officer in July 2019. Previously, Mr. Leary served as president of the commercial and mixed-use business unit of Crescent Communities since 2014. Prior to joining Crescent, Mr.
Brian M. Leary 51 Executive Vice President and Chief Operating Officer. Mr. Leary became chief operating officer in July 2019. Previously, Mr. Leary served as president of the commercial and mixed-use business unit of Crescent Communities since 2014. Prior to joining Crescent, Mr.
Leary held senior management positions with Jacoby Development, Inc., Atlanta Beltline, Inc., AIG Global Real Estate, Atlantic Station, LLC and Central Atlanta Progress. Brendan C. Maiorana 49 Executive Vice President and Chief Financial Officer. Mr.
Leary held senior management positions with Jacoby Development, Inc., Atlanta Beltline, Inc., AIG Global Real Estate and Atlantic Station, LLC. Brendan C. Maiorana 50 Executive Vice President and Chief Financial Officer. Mr. Maiorana became executive vice president of finance in July 2019 and assumed the roles of treasurer in January 2021 and chief financial officer in January 2022.
Miller is admitted to practice in North Carolina. Mr. Miller served as lead independent director of Hatteras Financial Corp., a publicly-traded mortgage REIT (NYSE:HTS), prior to its merger with Annaly Capital Management, Inc. (NYSE:NLY) in July 2016. Mr.
Miller served as lead independent director of Hatteras Financial Corp., a publicly-traded mortgage REIT (NYSE:HTS), prior to its merger with Annaly Capital Management, Inc. (NYSE:NLY) in July 2016. Mr. Miller is a trustee of Ravenscroft School and a member of the Wake Forest School of Law Board of Visitors. 26 Table of Contents PART II
Prior to that, Mr. Maiorana worked four years at Ernst & Young LLP. Jeffrey D. Miller 54 Executive Vice President, General Counsel and Secretary. Prior to joining us in March 2007, Mr. Miller was a partner with DLA Piper US, LLP, where he practiced since 2005. Previously, Mr. Miller had been a partner with Alston & Bird LLP. Mr.
Prior to joining us in March 2007, Mr. Miller was a partner with DLA Piper US, LLP, where he practiced since 2005. Previously, Mr. Miller had been a partner with Alston & Bird LLP. Mr. Miller is admitted to practice in North Carolina. Mr.
Removed
Miller is a trustee of Ravenscroft School and a member of the Wake Forest School of Law Board of Visitors. 26 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFor the Period from December 31, 2019 to December 31, Index 2020 2021 2022 2023 2024 Highwoods Properties, Inc. 85.24 100.26 66.60 59.85 85.65 S&P 500 Index 118.40 152.39 124.79 157.59 197.02 FTSE NAREIT Equity Office Index 81.56 99.51 62.07 63.34 76.95 The performance graph above is being furnished as part of this Annual Report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish the Company’s stockholders with such information and, therefore, is not deemed to be filed, or incorporated by reference in any filing, by the Company or the Operating Partnership under the Securities Act of 1933 or the Securities Exchange Act of 1934. 27 Table of Contents The Company has a Dividend Reinvestment and Stock Purchase Plan (“DRIP”) under which holders of Common Stock may elect to automatically reinvest their dividends in additional shares of Common Stock and make optional cash payments for additional shares of Common Stock.
Biggest changeFor the Period from December 31, 2020 to December 31, Index 2021 2022 2023 2024 2025 Highwoods Properties, Inc. 117.63 78.13 70.21 100.48 90.83 S&P 500 Index 128.71 105.40 133.10 166.40 196.16 FTSE NAREIT Equity Office Index 122.00 76.10 77.65 94.35 81.15 The performance graph above is being furnished as part of this Annual Report solely in accordance with the requirement under Rule 14a-3(b)(9) to furnish the Company’s stockholders with such information and, therefore, is not deemed to be filed, or incorporated by reference in any filing, by the Company or the Operating Partnership under the Securities Act of 1933 or the Securities Exchange Act of 1934. 27 Table of Contents The Company has an Employee Stock Purchase Plan (“ESPP”) pursuant to which employees may contribute up to 25% of their cash compensation for the purchase of Common Stock.
The total return performance graph assumes an investment of $100 in our Common Stock and the two indices on December 31, 2019, and further assumes the reinvestment of all dividends. The FTSE NAREIT Equity Office Index consists of the REITs in the FTSE NAREIT All Equity REITs Index that principally operate in the office sector .
The total return performance graph assumes an investment of $100 in our Common Stock and the two indices on December 31, 2020, and further assumes the reinvestment of all dividends. The FTSE NAREIT Equity Office Index consists of the REITs in the FTSE NAREIT All Equity REITs Index that principally operate in the office sector .
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is traded on the NYSE under the symbol “HIW.” On December 31, 2024, the Company had 571 common stockholders of record. There is no public trading market for the Common Units.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Common Stock is traded on the NYSE under the symbol “HIW.” On December 31, 2025, the Company had 546 common stockholders of record. There is no public trading market for the Common Units.
Information about the Company’s equity compensation plans and other related stockholder matters is incorporated herein by reference to the Company’s Proxy Statement to be filed in connection with its annual meeting of stockholders to be held on May 13, 2025. 28 Table of Contents
Information about the Company’s equity compensation plans and other related stockholder matters is incorporated herein by reference to the Company’s Proxy Statement to be filed in connection with its annual meeting of stockholders to be held on May 12, 2026. 28 Table of Contents
On December 31, 2024, the Operating Partnership had 100 holders of record of Common Units (other than the Company). As of December 31, 2024, there were 107.6 million shares of Common Stock outstanding and 2.2 million Common Units outstanding not owned by the Company.
On December 31, 2025, the Operating Partnership had 99 holders of record of Common Units (other than the Company). As of December 31, 2025, there were 109.9 million shares of Common Stock outstanding and 2.0 million Common Units outstanding not owned by the Company.
Removed
The Company satisfies its DRIP obligations by instructing the DRIP administrator to purchase Common Stock in the open market. The Company has an Employee Stock Purchase Plan (“ESPP”) pursuant to which employees may contribute up to 25% of their cash compensation for the purchase of Common Stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

88 edited+27 added−20 removed64 unchanged
Biggest changeDuring the second quarter of 2024, we sold seven buildings in Raleigh for a sales price of $62.5 million and recorded a gain on disposition of property of $35.0 million. 36 Table of Contents During the first quarter of 2024, we sold two buildings in Raleigh for an aggregate sales price of $16.9 million and recorded aggregate gains on disposition of property of $7.2 million. - Impairments During the fourth quarter of 2024, we recorded an impairment charge of $24.6 million to lower the carrying amount of EQT Plaza to its estimated fair value. - Joint Venture Investments We have a 50% interest in the McKinney & Olive joint venture.
Biggest changeDuring the first quarter of 2025, we sold three buildings in Tampa and land in Pittsburgh for an aggregate sales price of $146.3 million and recorded aggregate net gains on disposition of property of $82.2 million. - Impairments During the third quarter of 2025, we recorded an impairment charge of $8.8 million to lower the carrying amount of two non-core, out-of-service assets at Century Center in Atlanta to their estimated fair values. - Joint Venture Investments On January 12, 2026, we contributed $16.2 million of preferred equity to the Granite Park Six joint venture, in which we own a 50.0% interest, which used such funds to pay off at maturity the $16.2 million outstanding balance of an up to $115.0 million construction loan.
Rental property expenses are expenses associated with our ownership and operation of rental properties and include expenses that vary somewhat proportionately to occupancy and usage levels, such as janitorial services and utilities, and expenses that do not vary based on occupancy, such as property taxes and insurance.
Rental property expenses are expenses associated with our ownership and operation of rental properties and include expenses that vary somewhat proportionately to occupancy and usage levels, such as janitorial services and utilities, and expenses that do not vary based on occupancy and usage levels, such as property taxes and insurance.
General and administrative expenses consist primarily of management and employee salaries and benefits, corporate overhead and short and long-term incentive compensation.
General and administrative expenses primarily consist of management and employee salaries and benefits, corporate overhead and short and long-term incentive compensation.
We generally believe existing cash and rental and other revenues will continue to be sufficient to fund short-term liquidity needs such as funding operating and general and administrative expenses, paying interest expense, maintaining our existing quarterly dividend and funding existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions.
We generally believe existing cash and rental and other revenues will continue to be sufficient to fund our short-term liquidity needs such as funding operating and general and administrative expenses, paying interest expense, maintaining our existing quarterly dividend and funding existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions.
Our long-term liquidity uses generally consist of the retirement or refinancing of debt upon maturity, funding of building improvements, new building developments (including our proportionate share of joint venture developments) and land infrastructure projects and funding acquisitions of buildings and development land.
Our long-term liquidity uses generally consist of the retirement or refinancing of debt upon maturity, funding of building improvements, new building developments (including our proportionate share of joint venture developments) and land infrastructure projects and funding acquisitions of buildings and development land (including our proportionate share of joint venture acquisitions).
We expect to meet our long-term liquidity needs through a combination of: • cash flows from operating activities; • issuance of debt securities by the Operating Partnership; • issuance of secured debt; • bank term loans; • borrowings under our revolving credit facility; • issuance of equity securities by the Company or the Operating Partnership; and • the disposition of non-core assets.
We expect to meet our long-term liquidity needs through a combination of: • cash flows from operating activities; • issuance of debt securities by the Operating Partnership; • secured debt; • bank term loans; • borrowings under our revolving credit facility; • issuance of equity securities by the Company or the Operating Partnership; and • the disposition of non-core assets.
Current and Future Cash Needs We anticipate that our available cash and cash equivalents, cash flows from operating activities and other available financing sources, including the issuance of debt securities by the Operating Partnership, the issuance of secured debt, bank term loans, borrowings under our revolving credit facility, the issuance of equity securities by the Company or the Operating Partnership and the disposition of non-core assets, will be adequate to meet our short-term liquidity requirements.
Current and Future Cash Needs We anticipate that our available cash and cash equivalents, cash flows from operating activities and other available financing sources, including the issuance of debt securities by the Operating Partnership, secured debt, bank term loans, borrowings under our revolving credit facility, the issuance of equity securities by the Company or the Operating Partnership and the disposition of non-core assets, will be adequate to meet our short-term liquidity requirements.
Sales of the shares, if any, may be made by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of such firms (which may include block trades).
Sales of the shares, if any, may be made by means of ordinary brokers’ transactions on the NYSE or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices or as otherwise agreed with any of such firms (which may include block trades).
We have a currently effective automatic shelf registration statement on Form S-3 with the SEC pursuant to which, at any time and from time to time, in one or more offerings on an as-needed basis, the Company may sell an indefinite amount of common stock, preferred stock and depositary shares and the Operating Partnership may sell an indefinite amount of debt securities, subject to our ability to effect offerings on satisfactory terms based on prevailing market conditions.
We typically have a currently effective automatic shelf registration statement on Form S-3 with the SEC pursuant to which, at any time and from time to time, in one or more offerings on an as-needed basis, the Company may sell an indefinite amount of common stock, preferred stock and depositary shares and the Operating Partnership may sell an indefinite amount of debt securities, subject to our ability to effect offerings on satisfactory terms based on prevailing market conditions.
Net income and net income per share as defined by GAAP are the most relevant measures in determining the Company’s operating performance because these FFO measures include adjustments that investors may deem subjective, such as adding back expenses such as depreciation, amortization and impairments.
Net income and net income per share as defined by GAAP are the most relevant measures in determining the Company’s operating performance because these FFO measures include adjustments that investors may deem subjective, including adding back expenses such as depreciation, amortization and impairments.
In addition to the effect of same property NOI, whether or not NOI increases typically depends upon whether the NOI from our acquired properties and recently completed development projects exceeds the lost NOI from property dispositions.
In addition to the effect of consolidated same property NOI, whether or not NOI increases typically depends upon whether the NOI from our acquired properties and recently completed development projects exceeds the lost NOI from property dispositions.
(2) Consists primarily of commitments under signed leases and contracts for operating properties (excluding tenant-funded tenant improvements), contracts for development/redevelopment projects and unfunded joint venture equity contributions agreed to at formation. Tenant improvements that can be used at the option of the customer at any time during the remaining lease term have been reflected in 2025.
(2) Consists primarily of commitments under signed leases and contracts for operating properties (excluding tenant-funded tenant improvements), contracts for development/redevelopment projects and unfunded joint venture equity contributions agreed to at formation. Tenant improvements that can be used at the option of the customer at any time during the remaining lease term have been reflected in 2026.
Additionally, the analysis includes considerable judgement in our estimates of hold periods, projected cash flows and discount and capitalization rates. Significant increases or decreases in any of these inputs, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed.
Additionally, the analysis includes considerable judgment in our estimates of hold periods, projected cash flows and discount and capitalization rates. Significant increases or decreases in any of these inputs, particularly with regards to cash flow projections and discount and capitalization rates, would result in a significantly lower or higher fair value measurement of the real estate assets being assessed.
Such statements include, in particular, statements about our plans, strategies and prospects under this section and under the heading “Item 1. Business.” You can identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words.
Such statements include statements about our plans, strategies and prospects under this section and under the heading “Item 1. Business.” You can identify forward-looking statements by our use of forward-looking terminology such as “may,” “will,” “expect,” “anticipate,” “estimate,” “continue” or other similar words.
Credit Losses on Lease Related Receivables Credit losses on lease related receivables, which include accounts receivable and accrued straight-line rents receivable, are recorded as a reduction to rental and other revenues when the amount recorded is determined, in management’s judgement, to not be probable of collection.
Credit Losses on Lease Related Receivables Credit losses on lease related receivables, which include accounts receivable and accrued straight-line rents receivable, are recorded as a reduction to rental and other revenues when the amount recorded is determined, in management’s judgment, to not be probable of collection.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” in our 2023 Annual Report on Form 10-K. 34 Table of Contents Liquidity and Capital Resources Statements of Cash Flows We report and analyze our cash flows based on operating activities, investing activities and financing activities.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Results of Operations” in our 2024 Annual Report on Form 10-K. 34 Table of Contents Liquidity and Capital Resources Statements of Cash Flows We report and analyze our cash flows based on operating activities, investing activities and financing activities.
While our methodology for purchase price allocation did not change during the year ended December 31, 2024, the real estate market is fluid and our assumptions are based on information currently available in the market at the time of acquisition.
While our methodology for purchase price allocation did not change during the year ended December 31, 2025, the real estate market is fluid and our assumptions are based on information currently available in the market at the time of acquisition.
Because 41 Table of Contents these FFO calculations exclude such factors as depreciation, amortization and impairments of real estate assets and gains or losses from sales of operating real estate assets, which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful life estimates, they facilitate comparisons of operating performance between periods and between other REITs.
Because these FFO calculations exclude such factors as depreciation, amortization and impairments of real estate assets and gains or losses from sales of operating real estate assets, which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful life estimates, they facilitate comparisons of operating performance between periods and between other REITs.
We use considerable judgement in our estimates of cash flow projections, discount, capitalization and interest rates, fair market lease rates, carrying costs during hypothetical expected lease-up periods and costs to execute similar leases.
We use considerable judgment in our estimates of cash flow projections, discount, capitalization and interest rates, fair market lease rates, carrying costs during hypothetical expected lease-up periods and costs to execute similar leases.
Actual results could differ from our estimates. The policies used in the preparation of our Consolidated Financial Statements are described in Note 1 to our Consolidated Financial Statements. However, certain of our significant accounting policies contain an increased level of assumptions used or 40 Table of Contents estimates made in determining their impact in our Consolidated Financial Statements.
Actual results could differ from our estimates. The policies used in the preparation of our Consolidated Financial Statements are described in Note 1 to our Consolidated Financial Statements. However, certain of our significant accounting policies contain an increased level of assumptions used or estimates made in determining their impact in our Consolidated Financial Statements.
As of December 31, 2024, our same property portfolio consisted of 152 wholly owned and joint venture in-service properties encompassing 27.2 million rentable square feet that were owned during the entirety of the periods presented (from January 1, 2023 to December 31, 2024).
As of December 31, 2024, our same property portfolio consisted of 152 wholly owned in-service properties encompassing 27.2 million rentable square feet that were owned during the entirety of the periods presented (from January 1, 2023 to December 31, 2024).
We generally believe existing cash and rental and other revenues will continue to be sufficient to fund operating and general and administrative expenses, interest expense, our existing quarterly dividend and existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions. We had $22.4 million of cash and cash equivalents as of December 31, 2024.
We generally believe existing cash and rental and other revenues will continue to be sufficient to fund operating and general and administrative expenses, interest expense, our existing quarterly dividend and existing portfolio capital expenditures, including building improvement costs, tenant improvement costs and lease commissions. We had $27.4 million of cash and cash equivalents as of December 31, 2025.
Management’s evaluation of collectability requires the exercise of considerable judgement in assessing the current credit quality of our customers using payment history and other available information about the financial condition of the customers. During the year ended December 31, 2024, we have not experienced significant credit losses based on management’s evaluation of collectability of our lease receivables.
Management’s evaluation of collectability requires the exercise of considerable judgment in assessing the current credit quality of our customers using payment history and other available information about the financial condition of the customers. During the year ended December 31, 2025, we have not experienced significant credit losses based on management’s evaluation of collectability of our lease receivables.
We have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with the Company's Board of Directors. As of December 31, 2024, only Bank of America (3.8%) and Asurion (3.5%) accounted for more than 3% of our annualized GAAP revenues. See “Item 2.
We have an internal guideline whereby customers that account for more than 3% of our revenues are periodically reviewed with the Company's Board of Directors. As of December 31, 2025, only Bank of America (4.3%) and Asurion (3.5%) accounted for more than 3% of our annualized GAAP revenues. See “Item 2.
We generally use our revolving credit facility for daily working capital purposes, which means that during any given period, in order to minimize interest expense, we may record significant repayments and borrowings under our revolving credit facility.
We generally use our revolving credit 31 Table of Contents facility for daily working capital purposes, which means that during any given period, in order to minimize interest expense, we may record significant repayments and borrowings under our revolving credit facility.
We expect average occupancy in our office portfolio to range from 85.0% to 86.5% for 2025. Whether or not our rental revenue tracks average occupancy proportionally depends upon whether GAAP rents under signed new and renewal leases are higher or lower than the GAAP rents under expiring leases.
We expect average occupancy in our office portfolio to range from 85.0% to 87.0% for 2026. Whether or not our rental revenue tracks average occupancy proportionally depends upon whether GAAP rents under signed new and renewal leases are higher or lower than the GAAP rents under expiring leases.
For a discussion regarding dividends and distributions, see “Liquidity and Capital Resources - Dividends and Distributions.” 31 Table of Contents Liquidity and Capital Resources We continue to maintain a conservative and flexible balance sheet and believe we have ample liquidity to fund our operations and growth prospects.
For a discussion regarding dividends and distributions, see “Liquidity and Capital Resources - Dividends and Distributions.” Liquidity and Capital Resources We continue to maintain a conservative and flexible balance sheet and believe we have ample liquidity to fund our operations and growth prospects.
Additionally, given the length of construction cycles, development 32 Table of Contents projects are not placed in service until several years after commencement in some cases.
Additionally, given the length of construction cycles, development projects are not placed in service until several years after commencement in some cases.
During the remainder of 2025, we expect to sell up to an additional $150 million of properties no longer considered to be core assets due to location, age, quality and/or overall strategic fit.
During the remainder of 2026, we expect to sell up to an additional $250 million of properties no longer considered to be core assets due to location, age, quality and/or overall strategic fit.
The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term.” Occupancy in our office portfolio decreased from 88.9% as of December 31, 2023 to 87.1% as of December 31, 2024.
The continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements could materially and negatively impact the future demand for office space over the long-term.” Occupancy in our office portfolio decreased from 87.1% as of December 31, 2024 to 85.3% as of December 31, 2025.
Management has reviewed and determined the appropriateness of our critical accounting policies and estimates with the audit committee of the Company’s Board of Directors.
Management has reviewed and 40 Table of Contents determined the appropriateness of our critical accounting policies and estimates with the audit committee of the Company’s Board of Directors.
Other Income Other income was $7.9 million higher in 2024 as compared to 2023 primarily due to a refund of $5.8 million in the aggregate of Tennessee franchise taxes paid for the 2020 through 2023 tax years. During the second quarter of 2024, the State of Tennessee modified the methodology for calculating franchise taxes.
Other Income Other income was $2.8 million lower in 2025 as compared to 2024 primarily due to a 2024 refund of $5.8 million in the aggregate of Tennessee franchise taxes paid for the 2020 through 2023 tax years. During the second quarter of 2024, the State of Tennessee modified the methodology for calculating franchise taxes.
On January 29, 2025, the Company declared a cash dividend of $0.50 per share of Common Stock, which is payable on March 11, 2025 to stockholders of record as of February 18, 2025. The Company declared and paid a cash dividend of $0.50 per share of Common Stock in each quarter of 2024.
On January 29, 2026, the Company declared a cash dividend of $0.50 per share of Common Stock, which is payable on March 10, 2026 to stockholders of record as of February 17, 2026. The Company declared and paid a cash dividend of $0.50 per share of Common Stock in each quarter of 2025.
The interest payments due on mortgages and notes payable are based on the stated rates for the fixed rate debt and on the rates in effect as of December 31, 2024 for the variable rate debt. The weighted average interest rate on our fixed and variable rate debt was 4.31% and 5.33%, respectively, as of December 31, 2024.
The interest payments due on mortgages and notes payable are based on the stated rates for the fixed rate debt and on the rates in effect as of December 31, 2025 for the variable rate debt. The weighted average interest rate on our fixed and variable rate debt was 4.43% and 4.63%, respectively, as of December 31, 2025.
As of January 31, 2025, we had approximately $34 million of existing cash and $119.0 million drawn on our $750 million revolving credit facility, which is scheduled to mature in January 2028 (but can be extended for two additional six-month periods at our option).
As of January 30, 2026, we had approximately $46 million of existing cash and $170.0 million drawn on our $750 million revolving credit facility, which is scheduled to mature in January 2028 (but which can be extended for two additional six-month periods at our option).
As of December 31, 2024, our leverage ratio, as measured by the ratio of our mortgages and notes payable and outstanding preferred stock to the undepreciated book value of our assets, was 42.1%, and there were 109.8 million diluted shares of Common Stock outstanding. Rental and other revenues are our principal source of funds to meet our short-term liquidity requirements.
As of December 31, 2025, our leverage ratio, as measured by the ratio of our mortgages and notes payable and outstanding preferred stock to the undepreciated book value of our assets, was 43.7%, and there were 111.9 million diluted shares of Common Stock outstanding. Rental and other revenues are our principal source of funds to meet our short-term liquidity requirements.
Same property rental and other revenues were higher primarily due to higher average GAAP rents per rentable square foot, higher cost recoveries and higher parking income, partially offset by a decrease in average occupancy.
Same property rental and other revenues were lower primarily due to a decrease in average occupancy and lower cost recoveries, partially offset by higher average GAAP rents per rentable square foot, higher termination fees and lower credit losses.
As of December 31, 2024, the Operating Partnership had the following unsecured notes outstanding ($ in thousands): Face Amount Carrying Amount Stated Interest Rate Effective Interest Rate (1) Notes due March 2027 $ 300,000 $ 299,134 3.875 % 4.038 % Notes due March 2028 $ 350,000 $ 348,690 4.125 % 4.271 % Notes due April 2029 $ 350,000 $ 349,583 4.200 % 4.234 % Notes due February 2030 $ 400,000 $ 399,498 3.050 % 3.079 % Notes due February 2031 $ 400,000 $ 399,048 2.600 % 2.645 % Notes due February 2034 $ 350,000 $ 345,862 7.650 % 7.836 % __________ (1) The effective rate included in the table above excludes the amortized impact of unrealized losses or gains associated with the termination of related forward-starting swaps, if any, and underwriting fees and other expenses.
As of December 31, 2025, the Operating Partnership had the following unsecured notes outstanding ($ in thousands): Face Amount Carrying Amount Stated Interest Rate Effective Interest Rate (1) Notes due March 2027 $ 300,000 $ 299,533 3.875 % 4.038 % Notes due March 2028 $ 350,000 $ 349,104 4.125 % 4.271 % Notes due April 2029 $ 350,000 $ 349,681 4.200 % 4.234 % Notes due February 2030 $ 400,000 $ 399,596 3.050 % 3.079 % Notes due February 2031 $ 400,000 $ 399,205 2.600 % 2.645 % Notes due January 2033 $ 350,000 $ 348,308 5.350 % 5.431 % Notes due February 2034 $ 350,000 $ 346,318 7.650 % 7.836 % __________ (1) The effective rate included in the table above excludes the amortized impact of unrealized losses or gains associated with the termination of related forward-starting swaps, if any, and underwriting fees and other expenses.
We have historically generated a positive amount of cash from operating activities. From period to period, cash flow from operations depends primarily upon changes in our net income, as discussed more fully below under “Results of Operations,” changes in receivables and payables and net additions or decreases in our overall portfolio.
From period to period, cash flow from operations primarily depends upon changes in our net income, as discussed more fully below under “Results of Operations,” changes in receivables and payables and net additions or decreases in our overall portfolio.
These decreases were partially offset by accelerated depreciation and amortization of tenant improvements and deferred leasing costs associated with the cancellation of a lease with a backfill customer for 110,000 square feet in the former Tivity building in Nashville that was originally scheduled to commence in the third quarter of 2024 and recently completed development projects in Raleigh and Charlotte.
The accelerated depreciation and amortization in 2024 was associated with the cancellation of a lease with a backfill customer for 110,000 square feet in the former Tivity building in Nashville that was originally scheduled to commence in the third quarter of 2024. These decreases were partially offset by 2025 property acquisitions in Charlotte and Raleigh.
The Company believes that it is important to present FFO on an as-converted basis since all of the Common Units not owned by the Company are redeemable on a one-for-one basis for shares of its Common Stock. 42 Table of Contents The following table sets forth the Company’s FFO, FFO available for common stockholders and FFO available for common stockholders per share (in thousands, except per share amounts): Year Ended December 31, 2024 2023 2022 Funds from operations: Net income $ 104,254 $ 151,330 $ 163,958 Net (income)/loss attributable to noncontrolling interests in consolidated affiliates 34 549 (1,230) Depreciation and amortization of real estate assets 296,277 296,705 284,723 Impairments of depreciable properties 24,600 — 35,000 (Gains) on disposition of depreciable properties (46,467) (33,288) (47,807) (Gain) on deconsolidation of affiliate — (11,778) — Unconsolidated affiliates: Depreciation and amortization of real estate assets 15,001 12,223 1,160 Funds from operations 393,699 415,741 435,804 Dividends on Preferred Stock (2,485) (2,485) (2,486) Funds from operations available for common stockholders $ 391,214 $ 413,256 $ 433,318 Funds from operations available for common stockholders per share $ 3.61 $ 3.83 $ 4.03 Weighted average shares outstanding (1) 108,319 107,785 107,567 __________ (1) Includes assumed conversion of all potentially dilutive Common Stock equivalents.
The Company believes that it is important to present FFO on an as-converted basis since all of the Common Units not owned by the Company are redeemable on a one-for-one basis for shares of its Common Stock. 42 Table of Contents The following table sets forth the Company’s FFO, FFO available for common stockholders and FFO available for common stockholders per share (in thousands, except per share amounts): Year Ended December 31, 2025 2024 2023 Funds from operations: Net income $ 162,650 $ 104,254 $ 151,330 Net loss attributable to noncontrolling interests in consolidated affiliates 74 34 549 Depreciation and amortization of real estate assets 292,152 296,277 296,705 Impairments of depreciable properties 8,800 24,600 — (Gains) on disposition of depreciable properties (100,626) (46,467) (33,288) (Gain) on deconsolidation of affiliate — — (11,778) Loss on disposition of investment in unconsolidated affiliate 4,700 — — Unconsolidated affiliates: Depreciation and amortization of real estate assets 19,587 15,001 12,223 Funds from operations 387,337 393,699 415,741 Dividends on Preferred Stock (2,359) (2,485) (2,485) Funds from operations available for common stockholders $ 384,978 $ 391,214 $ 413,256 Funds from operations available for common stockholders per share $ 3.48 $ 3.61 $ 3.83 Weighted average shares outstanding (1) 110,570 108,319 107,785 __________ (1) Includes assumed conversion of all potentially dilutive Common Stock equivalents.
NOI was $11.5 million, or 2.0%, lower in 2024 as compared to 2023 primarily due to lost NOI from property dispositions and lower consolidated same property NOI, partially offset by NOI from recently completed development projects in Raleigh and Charlotte.
NOI was $9.0 million, or 1.6%, lower in 2025 as compared to 2024 primarily due to lost NOI from property dispositions and lower consolidated same property NOI, partially offset by NOI from 2025 property acquisitions in Raleigh and Charlotte and recently completed development projects in Raleigh and Charlotte.
Our $750.0 million unsecured revolving credit facility was modified during the first quarter of 2024 and is now scheduled to mature in January 2028 (but can be extended for two additional six-month periods at our option assuming no defaults have occurred).
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).
Earnings Per Common Share - Diluted Diluted earnings per common share was $0.45 lower in 2024 as compared to 2023 due to a decrease in net income for the reasons discussed above. Comparison of 2023 to 2022 For a comparison of 2023 to 2022, see “Item 7.
Earnings Per Common Share - Diluted Diluted earnings per common share was $0.51 higher in 2025 as compared to 2024 due to an increase in net income for the reasons discussed above. Comparison of 2024 to 2023 For a comparison of 2024 to 2023, see “Item 7.
Annual combined GAAP rents for new and renewal leases signed in the fourth quarter were $33.32 per rentable square foot, 12.2% higher compared to previous leases in the same office spaces. 30 Table of Contents We strive to maintain a diverse, stable and creditworthy customer base.
Annual combined GAAP rents for new and renewal leases signed in the fourth quarter were $35.02 per rentable square foot, 15.4% higher compared to previous leases in the same office spaces. We strive to maintain a diverse, stable and creditworthy customer base.
As of December 31, 2023, our same property portfolio consisted of 154 wholly owned in-service properties encompassing 26.6 million rentable square feet that were owned during the entirety of the periods presented (from January 1, 2022 to December 31, 2023).
As of December 31, 2025, our same property portfolio consisted of 143 wholly owned and joint venture in-service properties encompassing 26.0 million rentable square feet that were owned during the entirety of the periods presented (from January 1, 2024 to December 31, 2025).
There was $104.0 million and $119.0 million outstanding under our revolving credit facility as of December 31, 2024 and 37 Table of Contents January 31, 2025, respectively. As of both December 31, 2024 and January 31, 2025, we had $0.1 million of outstanding letters of credit, which reduce the availability on our revolving credit facility.
There was $25.0 million and $170.0 million outstanding under our revolving credit facility as of December 31, 2025 and January 30, 2026, respectively. As of both December 31, 2025 and January 30, 2026, we had $0.1 million of outstanding letters of credit, which reduce the availability on our revolving credit facility.
The unused capacity of our revolving credit facility as of December 31, 2024 and January 31, 2025, respectively, was $645.9 million and $630.9 million.
The unused capacity of our revolving credit facility as of December 31, 2025 and January 30, 2026, respectively, was $724.9 million and $579.9 million.
We expect interest expense to be lower in 2025 as compared to 2024 due to lower average interest rates and lower average debt balances, partially offset by lower capitalized interest.
We expect interest expense to be higher in 2026 as compared to 2025 due to higher average debt balances and lower capitalized interest.
We expect rental and other revenues to be lower in 2025 as compared to 2024 due to lower anticipated average occupancy and lost revenue from property dispositions, partially offset by recently completed development projects in Raleigh and Charlotte.
We expect rental and other revenues to be higher in 2026 as compared to 2025 due to higher revenue from 2025 property acquisitions in Charlotte and Raleigh, 2026 property acquisitions in Raleigh and Dallas, recently completed development projects in Raleigh and an anticipated increase in consolidated same property revenue, partially offset by lost revenue from property dispositions.
Under the terms of the equity distribution agreements, the Company may offer and sell up to $300.0 million in aggregate gross sales price of shares of Common Stock from time to time through such firms, acting as agents of the Company or as principals.
Morgan Securities LLC, TD Securities (USA) LLC and Truist Securities, Inc. pursuant to which the Company may offer and sell up to $300.0 million in aggregate gross sales price of shares of Common Stock from time to time through such firms, acting as agents of the Company or as principals.
These changes were partially offset by lower investments in building improvements and development in process. We expect uses of cash for investing activities in 2025 to be primarily driven by whether or not we acquire and commence development of additional office buildings in the BBDs of our markets.
We expect uses of cash for investing activities in 2026 to be primarily driven by whether or not we acquire and commence development of additional office buildings in the BBDs of our markets. We expect these uses of cash for investing activities will be fully or partially offset by proceeds from property dispositions in 2026.
We expect general and administrative expenses to be lower in 2025 as compared to 2024 due to lower predevelopment cost write-offs, partially offset by higher salaries and benefits. Interest Expense Interest expense was $10.5 million, or 7.7%, higher in 2024 as compared to 2023 primarily due to higher average interest rates and higher average debt balances.
We expect general and administrative expenses to be higher in 2026 as compared to 2025 due to higher salaries and benefits. 33 Table of Contents Interest Expense Interest expense was $5.2 million, or 3.6%, higher in 2025 as compared to 2024 primarily due to higher average debt balances and lower capitalized interest, partially offset by lower average interest rates.
See also “Executive Summary - Liquidity and Capital Resources.” Our mortgages and notes payable as of December 31, 2024 consisted of $712.2 million of secured indebtedness with a weighted average interest rate of 4.43% and $2,595.8 million of unsecured indebtedness with a weighted average interest rate of 4.45%.
See also “Executive Summary - Liquidity and Capital Resources.” 35 Table of Contents Our mortgages and notes payable as of December 31, 2025 consisted of $703.4 million of secured indebtedness with a weighted average interest rate of 4.44% and $2,866.7 million of unsecured indebtedness with a weighted average interest rate of 4.46%.
Quantitative and Qualitative Disclosures About Market Risk.” Covenant Compliance We are currently in compliance with financial covenants and other requirements with respect to our consolidated debt.
For information regarding our interest hedging activities and other market risks associated with our debt financing activities, see “Item 7A. Quantitative and Qualitative Disclosures About Market Risk.” Covenant Compliance We are currently in compliance with financial covenants and other requirements with respect to our consolidated debt.
The secured indebtedness was collateralized by real estate assets with an undepreciated book value of $1,245.0 million. As of December 31, 2024, $454.0 million of our debt does not bear interest at fixed rates or is not protected by interest rate hedge contracts. Investment Activity - Acquisitions In the normal course of business, we regularly evaluate potential acquisitions.
The secured indebtedness was collateralized by real estate assets with an undepreciated book value of $1,263.4 million. As of December 31, 2025, $375.0 million of our debt bears interest at floating rates. Investment Activity - Acquisitions In the normal course of business, we regularly evaluate potential acquisitions.
We expect net cash related to operating activities to be lower in 2025 as compared to 2024 due to lower anticipated occupancy and property dispositions, partially offset by net cash from recently completed development projects in Raleigh and Charlotte.
We expect net cash related to operating activities to be higher in 2026 as compared to 2025 due to 2025 property acquisitions in Charlotte and Raleigh, 2026 property acquisitions in Raleigh and Dallas and higher occupancy, partially offset by property dispositions.
The following table sets forth information regarding second generation office leases signed during the fourth quarter of 2024 (we define second generation office leases as leases with new customers and renewals of existing customers in both consolidated and unconsolidated office space that has been previously occupied and leases with respect to vacant space in acquired buildings): New Renewal All Office Leased space (in rentable square feet) 348,797 919,011 1,267,808 Average term (in years - rentable square foot weighted) 7.4 6.2 6.6 Base rents (per rentable square foot) (1) $ 35.75 $ 34.64 $ 34.94 Rent concessions (per rentable square foot) (1) (2.01) (1.47) (1.62) GAAP rents (per rentable square foot) (1) $ 33.74 $ 33.17 $ 33.32 Tenant improvements (per rentable square foot) (1) $ 5.13 $ 3.78 $ 4.15 Leasing commissions (per rentable square foot) (1) $ 1.32 $ 1.00 $ 1.09 __________ (1) Weighted average per rentable square foot on an annual basis over the lease term.
The following table sets forth information regarding second generation office leases signed during the fourth quarter of 2025 (we define second generation office leases as leases with new customers and renewals of existing customers in both consolidated and unconsolidated office space that has been previously occupied and leases with respect to vacant space in acquired buildings): New Renewal All Office Leased space (in rentable square feet) 217,174 295,755 512,929 Average term (in years - rentable square foot weighted) 7.0 4.1 5.3 Base rents (per rentable square foot) (1) $ 37.16 $ 36.62 $ 36.85 Rent concessions (per rentable square foot) (1) (2.34) (1.46) (1.83) GAAP rents (per rentable square foot) (1) $ 34.82 $ 35.16 $ 35.02 Tenant improvements (per rentable square foot) (1) $ 5.86 $ 2.28 $ 3.80 Leasing commissions (per rentable square foot) (1) $ 1.48 $ 1.03 $ 1.22 30 Table of Contents __________ (1) Weighted average per rentable square foot on an annual basis over the lease term.
Investment Activity As noted above, a key tenet of our strategic plan is to continuously upgrade the quality of our office portfolio through acquisitions, dispositions and development. We generally seek to acquire and develop office buildings that improve the average quality of our overall portfolio and deliver consistent and sustainable value for our stockholders over the long-term.
We generally seek to acquire and develop office buildings that improve the average quality of our overall portfolio and deliver consistent and sustainable value for our stockholders over the long-term.
Results of Operations Comparison of 2024 to 2023 Rental and Other Revenues Rental and other revenues were $8.1 million, or 1.0%, lower in 2024 as compared to 2023 primarily due to lost revenue from property dispositions in Raleigh, which decreased rental and other revenues by $14.4 million.
Results of Operations Comparison of 2025 to 2024 Rental and Other Revenues Rental and other revenues were $19.8 million, or 2.4%, lower in 2025 as compared to 2024 primarily due to lost revenue from property dispositions, lower consolidated same property revenues and lost revenues from properties taken out of service, which decreased rental and other revenues by $18.8 million, $13.9 million and $6.2 million, respectively.
During the fourth quarter of 2024, we sold a building in Raleigh for a sales price of $21.4 million and recorded a gain on disposition of property of $4.2 million.
During the third quarter of 2025, we sold a building in Richmond for a sales price of $16.0 million and recorded a gain on disposition of property of $5.7 million.
The following table sets forth the changes in the Company’s cash flows (in thousands): Year Ended December 31, 2024 2023 2022 2024-2023 Change 2023-2022 Change Net Cash Provided By Operating Activities $ 403,584 $ 386,962 $ 421,779 $ 16,622 $ (34,817) Net Cash Used In Investing Activities (302,435) (169,686) (614,799) (132,749) 445,113 Net Cash Provided By/(Used In) Financing Activities (99,041) (205,426) 187,927 106,385 (393,353) Total Cash Flows $ 2,108 $ 11,850 $ (5,093) $ (9,742) $ 16,943 Comparison of 2024 to 2023 The change in net cash provided by operating activities in 2024 as compared to 2023 was primarily due to net cash from the operations of consolidated same properties, recently completed development projects in Raleigh and Charlotte and changes in operating assets and liabilities, partially offset by property dispositions and higher interest expense.
The following table sets forth the changes in the Company’s cash flows (in thousands): Year Ended December 31, 2025 2024 2023 2025-2024 Change 2024-2023 Change Net Cash Provided By Operating Activities $ 359,207 $ 403,584 $ 386,962 $ (44,377) $ 16,622 Net Cash Used In Investing Activities (440,664) (302,435) (169,686) (138,229) (132,749) Net Cash Provided By/(Used In) Financing Activities 90,829 (99,041) (205,426) 189,870 106,385 Total Cash Flows $ 9,372 $ 2,108 $ 11,850 $ 7,264 $ (9,742) Comparison of 2025 to 2024 The change in net cash provided by operating activities in 2025 as compared to 2024 was primarily due to changes in operating liabilities, lower occupancy and property dispositions, partially offset by net cash from property acquisitions in Charlotte and Raleigh.
During the second quarter of 2024, we modified the revolving credit facility to provide that the interest rate may be adjusted upward or downward by 2.5 basis points depending upon whether or not we achieve certain pre-determined sustainability goals with respect to the ongoing reduction of greenhouse gas emissions.
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 $7.7 million of debt issuance costs during the first quarter of 2024, which will be amortized along with certain existing unamortized debt issuance costs over the remaining term of our new revolving credit facility and recorded $0.2 million of loss on debt extinguishment.
We incurred $2.0 million of debt 37 Table of Contents 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.
We have no debt scheduled to mature prior to 2026. We generally believe we will be able to satisfy future obligations with existing cash, borrowings under our revolving credit facility, new bank term loans, issuance of other unsecured debt, mortgage debt and/or proceeds from the sale of additional non-core assets.
We generally believe we will be able to satisfy future obligations with existing cash, borrowings under our revolving credit facility, new bank term loans, issuance of other unsecured debt, mortgage debt and/or proceeds from the sale of additional non-core assets. 32 Table of Contents Investment Activity As noted above, a key tenet of our strategic plan is to continuously upgrade the quality of our office portfolio through acquisitions, dispositions and development.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in our 2023 Annual Report on Form 10-K. 35 Table of Contents Capitalization The following table sets forth the Company’s capitalization (in thousands, except per share amounts): December 31, 2024 2023 Mortgages and notes payable, net, at recorded book value $ 3,293,559 $ 3,213,206 Preferred Stock, at liquidation value $ 28,811 $ 28,811 Common Stock outstanding 107,624 105,710 Common Units outstanding (not owned by the Company) 2,151 2,157 Per share stock price at year end $ 30.58 $ 22.96 Market value of Common Stock and Common Units $ 3,356,920 $ 2,476,626 Total capitalization $ 6,679,290 $ 5,718,643 As of December 31, 2024, our mortgages and notes payable and outstanding preferred stock represented 49.7% of our total capitalization and 42.1% of the undepreciated book value of our assets.
Capitalization The following table sets forth the Company’s capitalization (in thousands, except per share amounts): December 31, 2025 2024 Mortgages and notes payable, net, at recorded book value $ 3,554,178 $ 3,293,559 Preferred Stock, at liquidation value $ 26,691 $ 28,811 Common Stock outstanding 109,905 107,624 Common Units outstanding (not owned by the Company) 2,044 2,151 Per share stock price at year end $ 25.82 $ 30.58 Market value of Common Stock and Common Units $ 2,890,523 $ 3,356,920 Total capitalization $ 6,471,392 $ 6,679,290 As of December 31, 2025, our mortgages and notes payable and outstanding preferred stock represented 55.3% of our total capitalization and 43.7% of the undepreciated book value of our assets.
We are in the work-placemaking business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates and, in turn, our shareholders. By creating and 29 Table of Contents operating commute-worthy places, we support the growth and success of our customers and contribute to the vitality of our communities.
Our mission is to create environments and experiences that inspire our teammates and our customers to achieve more together. We are in the work-placemaking business and believe that by creating exceptional environments and experiences, we can deliver greater value to our customers, their teammates and, in turn, our shareholders.
Assuming the net effect of our acquisition, disposition and development activity in 2025 results in an increase to our assets, we would expect outstanding debt and/or Common Stock balances to increase. Comparison of 2023 to 2022 For a comparison of 2023 to 2022, see “Item 7.
The change in net cash used in financing activities in 2025 as compared to 2024 was primarily due to higher net debt borrowings in 2025. Assuming the net effect of our acquisition, disposition and development activity in 2026 results in an increase to our assets, we would expect outstanding debt and/or Common Stock balances to increase.
Risk Factors – Risks Related to our Investment Activity – Recent and future acquisitions and development properties may fail to perform in accordance with our expectations and may require renovation and development costs exceeding our estimates.” During the fourth quarter of 2024, we acquired fee simple title to the land underneath our Century Center assets in Atlanta for a purchase price, including capitalized acquisition costs, of $50.8 million.
Risk Factors – Risks Related to our Investment Activity – Recent and future acquisitions and development properties may fail to perform in accordance with our expectations and may require renovation and development costs exceeding our estimates.” During the fourth quarter of 2025, we acquired 6HUNDRED, a 411,000 square foot office building in Uptown Charlotte.
Consolidated same property NOI was $4.3 million, or 0.8%, lower in 2024 as compared to 2023 due to an increase of $8.3 million in same property expenses offset by an increase of $4.0 million in same property revenues. We expect same property NOI to be lower in 2025 as compared to 2024 primarily due to lower anticipated average occupancy.
Consolidated same property NOI was $9.4 million, or 1.8%, lower in 2025 as compared to 2024 due to a decrease of $13.9 million in same property revenues, partially offset by a decrease of $4.6 million in same property expenses.
We expect these uses of cash for investing activities will be partially offset by proceeds from property dispositions in 2025. The change in net cash used in financing activities in 2024 as compared to 2023 was primarily due to higher net debt borrowings and proceeds from issuance of common stock in 2024.
The change in net cash used in investing activities in 2025 as compared to 2024 was primarily due to 2025 property acquisitions in Charlotte and Raleigh, partially offset by higher net proceeds from dispositions and lower investments in unconsolidated affiliates.
The change in our same property portfolio was due to the addition of six joint venture properties encompassing 0.7 million rentable square feet, one property acquired during 2022 encompassing 0.4 million rentable square feet and one newly developed property placed in service during 2022 encompassing 0.1 million rentable square feet, offset by the removal of 10 properties that were sold during 2024 encompassing 0.6 million rentable square feet. 43 Table of Contents The following table sets forth the Company’s NOI, same property NOI and same property cash NOI (in thousands): Year Ended December 31, 2024 2023 Net income $ 104,254 $ 151,330 Equity in earnings of unconsolidated affiliates (4,158) (1,107) Gain on deconsolidation of affiliate — (11,778) Gains on disposition of property (46,817) (47,773) Other income (12,337) (4,435) Interest expense 147,198 136,710 General and administrative expenses 41,903 42,857 Impairments of real estate assets 24,600 — Depreciation and amortization 299,046 299,411 Net operating income 553,689 565,215 Our share of unconsolidated joint venture same property net operating income 18,686 18,436 Partner's share of consolidated joint venture same property net operating income (1,110) (1,009) Non same property and other net operating (income)/loss (3,242) (10,536) Same property net operating income $ 568,023 $ 572,106 Same property net operating income $ 568,023 $ 572,106 Lease termination fees, straight-line rent and other non-cash adjustments (13,961) (25,782) Same property cash net operating income $ 554,062 $ 546,324 44 Table of Contents
The change in our same property portfolio was due to the removal of seven properties encompassing 0.8 million rentable square feet that were sold during 2025 and two properties encompassing 0.4 million rentable square feet that were taken out of service during 2025 due to a change in our assumptions about the use of such assets. 43 Table of Contents The following table sets forth the Company’s NOI, same property NOI and same property cash NOI (in thousands): Year Ended December 31, 2025 2024 Net income $ 162,650 $ 104,254 Equity in earnings of unconsolidated affiliates (2,369) (4,158) Loss on disposition of investment in unconsolidated affiliate 4,700 — Gains on disposition of property (107,149) (46,817) Other income (9,587) (12,337) Interest expense 152,433 147,198 General and administrative expenses 40,307 41,903 Impairments of real estate assets 8,800 24,600 Depreciation and amortization 294,954 299,046 Net operating income 544,739 553,689 Our share of unconsolidated joint venture same property net operating income 18,512 18,686 Partner's share of consolidated joint venture same property net operating income (1,108) (1,110) Non same property and other net operating income (18,341) (17,928) Same property net operating income $ 543,802 $ 553,337 Same property net operating income $ 543,802 $ 553,337 Lease termination fees, straight-line rent and other non-cash adjustments (17,532) (14,390) Same property cash net operating income $ 526,270 $ 538,947 44 Table of Contents
Any such refinancing could also impose tighter financial ratios and other covenants that restrict our ability to take actions that could otherwise be in our best interest, such as funding new development activity, making opportunistic acquisitions, repurchasing our securities or paying distributions. 38 Table of Contents Contractual Obligations The following table sets forth a summary regarding our known material contractual obligations on a cash basis, including required interest payments for those items that are interest bearing, as of December 31, 2024 (in thousands): Amounts due during the years ending December 31, Total 2025 2026 2027 2028 2029 Thereafter Mortgages and Notes Payable: Principal payments (1) $ 3,305,089 $ 7,268 $ 207,035 $ 458,755 $ 802,765 $ 517,210 $ 1,312,056 Interest payments 718,889 147,295 139,851 120,915 90,155 63,604 157,069 Purchase Obligations: Lease and contractual commitments and contingent consideration (2) 232,597 180,832 45,448 3,660 325 1,513 819 Other Commitments: Advances to unconsolidated affiliates (3) 35,514 28,762 6,659 93 — — — Operating and Finance Lease Obligations: Ground leases 81,894 2,071 2,121 2,172 2,226 2,067 71,237 Total $ 4,373,983 $ 366,228 $ 401,114 $ 585,595 $ 895,471 $ 584,394 $ 1,541,181 __________ (1) Excludes amortization of premiums, discounts, debt issuance costs and/or purchase accounting adjustments.
Any such refinancing could also impose tighter financial ratios and other covenants that restrict our ability to take actions that could otherwise be in our best interest, such as funding new development activity, making opportunistic acquisitions, repurchasing our securities or paying distributions. 38 Table of Contents Contractual Obligations The following table sets forth a summary regarding our known material contractual obligations on a cash basis, including required interest payments for those items that are interest bearing, as of December 31, 2025 (in thousands): Amounts due during the years ending December 31, Total 2026 2027 2028 2029 2030 Thereafter Mortgages and Notes Payable: Principal payments (1) $ 3,568,821 $ 7,035 $ 458,755 $ 723,765 $ 717,210 $ 404,914 $ 1,257,142 Interest payments 717,234 158,868 144,164 117,747 82,431 64,027 149,997 Purchase Obligations: Lease and contractual commitments (2) 234,507 210,288 17,055 4,599 2,198 31 336 Other Commitments: Advances to unconsolidated affiliates (3) 15,181 15,181 — — — — — Operating and Finance Lease Obligations: Ground leases 79,823 2,121 2,172 2,226 7,067 2,125 64,112 Total $ 4,615,566 $ 393,493 $ 622,146 $ 848,337 $ 808,906 $ 471,097 $ 1,471,587 __________ (1) Excludes amortization of premiums, discounts, debt issuance costs and/or purchase accounting adjustments.
Operating Expenses Rental property and other expenses were $3.4 million, or 1.3%, higher in 2024 as compared to 2023 primarily due to $8.3 million of higher consolidated same property operating expenses, partially offset by a $4.6 million decrease in operating expenses from property dispositions in Raleigh.
Operating Expenses Rental property and other expenses were $10.8 million, or 4.0%, lower in 2025 as compared to 2024 primarily due to property dispositions, lower consolidated same property expenses and lower expenses from properties taken out of service, which decreased operating expenses by $7.9 million, $4.6 million and $2.0 million, respectively.
Same property operating expenses were higher primarily due to higher contract services, property insurance, repairs and maintenance and utilities, partially offset by lower taxes. We expect operating expenses to be lower in 2025 as compared to 2024 primarily due to property dispositions.
Same property operating expenses were lower primarily due to lower property taxes, partially offset by higher utilities and contract services. These decreases were partially offset by a $4.4 million increase in expenses from 2025 property acquisitions in Charlotte and Raleigh.
During the fourth quarter of 2024, the Company issued 1.6 million shares of Common Stock under its equity distribution agreements at an average gross sales price of $32.71 per share and received net proceeds, after sales commissions, of $51.3 million.
During the fourth quarter of 2025, the Company issued 0.3 million shares of Common Stock at an average gross sales price of $32.06 per share and received net proceeds, after sales commissions, of $10.7 million. We paid an aggregate of $0.2 million in sales commissions to Jefferies LLC and J.P. Morgan Securities LLC during the fourth quarter of 2025.
Non-GAAP Information The Company believes that FFO, FFO available for common stockholders and FFO available for common stockholders per share are beneficial to management and investors and are important indicators of the performance of any equity REIT.
If management’s assumptions regarding the collectability of lease related receivables prove incorrect, we could experience credit losses in excess of what was recognized in rental and other revenues. 41 Table of Contents Non-GAAP Information The Company believes that FFO, FFO available for common stockholders and FFO available for common stockholders per share are metrics that are beneficial to management and investors and are important indicators of the performance of any equity REIT.
Depreciation and amortization expense was $0.4 million, or 0.1%, lower in 2024 as compared to 2023 primarily due to property dispositions in Raleigh and fully amortized acquisition-related intangible assets.
Depreciation and amortization was $4.1 million, or 1.4%, lower in 2025 as compared to 2024 primarily due to accelerated depreciation and amortization of tenant improvements and deferred leasing costs in 2024, as well as property dispositions.
As a result, the unused capacity of our revolving credit facility as of December 31, 2024 and January 31, 2025 was $645.9 million and $630.9 million, respectively. We regularly evaluate the financial condition of the financial institutions that participate in our credit facilities and as counterparties under any interest rate swap agreements using publicly available information.
We regularly evaluate the financial condition of the financial institutions that participate in our credit facilities and as counterparties under any interest rate swap agreements using publicly available information. Based on this review, we currently expect these financial institutions to perform their obligations under our existing facilities and any swap agreements.
We expect NOI to be lower in 2025 as compared to 2024 due to lost NOI from property dispositions and an anticipated decrease in same property NOI, partially offset by recently completed development projects. Cash Flows In calculating net cash related to operating activities, depreciation and amortization, which are non-cash expenses, are added back to net income.
We expect NOI to be higher in 2026 as compared to 2025 due to NOI from the 2025 property acquisitions in Raleigh and Charlotte, 2026 property acquisitions in Dallas and Raleigh, recently completed development projects in Raleigh and an anticipated increase in consolidated same property NOI, partially offset by lost NOI from property dispositions.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed4 unchanged
Biggest changeAs of December 31, 2024, we had $454.0 million of variable rate debt outstanding not protected by interest rate hedge contracts, an $84.0 million increase as compared to December 31, 2023.
Biggest changeAs of December 31, 2025, we had $375.0 million of variable rate debt outstanding not protected by interest rate hedge contracts, a $79.0 million decrease as compared to December 31, 2024.
If the weighted average interest rate on this variable rate debt had been 100 basis points higher or lower, the annual interest expense as of December 31, 2024 would increase or decrease by $4.5 million.
If the weighted average interest rate on this variable rate debt had been 100 basis points higher or lower, the annual interest expense as of December 31, 2025 would increase or decrease by $3.8 million.
If interest rates had been 100 basis points higher, the aggregate fair market value of our fixed rate debt would have been $117.3 million lower. If interest rates had been 100 basis points lower, the aggregate fair market value of our fixed rate debt would have been $124.7 million higher.
If interest rates had been 100 basis points higher, the aggregate fair market value of our fixed rate debt would have been $121.5 million lower. If interest rates had been 100 basis points lower, the aggregate fair market value of our fixed rate debt would have been $128.6 million higher.
As of December 31, 2024, we had $2,854.0 million principal amount of fixed rate debt outstanding, a $6.9 million decrease as compared to December 31, 2023. The estimated aggregate fair market value of this debt was $2,659.4 million.
As of December 31, 2025, we had $3,195.2 million principal amount of fixed rate debt outstanding, a $341.2 million increase as compared to December 31, 2024. The estimated aggregate fair market value of this debt was $3,113.5 million.

Other HIW 10-K year-over-year comparisons