On this page of StockholderLetter.com we present the 3/29/2024 shareholder letter from HIGHWOODS PROPERTIES, INC. — ticker symbol HIW. Reading current and past HIW letters to shareholders can bring important insights into the investment thesis.

 •  3/29/2024 Letter Continued (Full PDF)
 •  3/31/2023 HIW Stockholder Letter
 •  3/28/2025 HIW Stockholder Letter
 •  3/27/2026 HIW Stockholder Letter
 •  More "REITs" Category Stockholder Letters
 •  HIW Benford's Law Stock Score = 60

HIW 3/29/2024 Shareholder/Stockholder Letter Transcript:

HIGHWOODS PROPERTIES, INC.
TABLE OF CONTENTS
Item No.
Page
PART I
BUSINESS
RISK FACTORS
UNRESOLVED STAFF COMMENTS
CYBERSECURITY
PROPERTIES
1.
1A.
1B.
1C.
2.
3. LEGAL PROCEEDINGS
4. MINE SAFETY DISCLOSURES
X. INFORMATION ABOUT OUR EXECUTIVE OFFICERS
PART II
5. MARKET FOR REGISTRANT   S COMMON EQUITY, RELATED STOCKHOLDER MATTERS
AND ISSUER PURCHASES OF EQUITY SECURITIES
7. MANAGEMENT   S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
9A. CONTROLS AND PROCEDURES
9B. OTHER INFORMATION
9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
10.
11.
12.
13.
14.
PART III
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
EXECUTIVE COMPENSATION
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
PRINCIPAL ACCOUNTANT FEES AND SERVICES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
3
5
10
21
21
22
25
25
26
27
29
45
45
45
46
49
49
50
50
50
50
50
51

EXPLANATORY NOTE
We refer to Highwoods Properties, Inc. as the    Company,    Highwoods Realty Limited Partnership as the    Operating
Partnership,    the Company   s common stock as    Common Stock    or    Common Shares,    the Company   s preferred stock as
   Preferred Stock    or    Preferred Shares,    the Operating Partnership   s common partnership interests as    Common Units    and the
Operating Partnership   s preferred partnership interests as    Preferred Units.    References to    we    and    our    mean the Company
and the Operating Partnership, collectively, unless the context indicates otherwise.
The Company conducts its activities through the Operating Partnership and is its sole general partner. The partnership
agreement provides that the Operating Partnership will assume and pay when due, or reimburse the Company for payment of,
all costs and expenses relating to the ownership and operations of, or for the benefit of, the Operating Partnership. The
partnership agreement further provides that all expenses of the Company are deemed to be incurred for the benefit of the
Operating Partnership.
Certain information contained herein is presented as of January 26, 2024, the latest practicable date for financial
information prior to the filing of this Annual Report.
Except as otherwise noted, all property-level operational information presented herein, including the information set forth
in    Part I, Item 2. Properties,    includes in-service wholly owned properties and in-service properties owned by consolidated
joint ventures (at 100%). Development projects are not considered in-service properties until such projects are completed and
stabilized. Stabilization occurs at the beginning of the first quarter after the earlier of: (1) the projected stabilization date; or (2)
the date on which a project's occupancy generally exceeds 93%.
4

Table of Contents
PART I
ITEM 1. BUSINESS
General
Highwoods Properties, Inc., headquartered in Raleigh, is a publicly-traded real estate investment trust (   REIT   ). The
Company is a fully integrated office REIT that owns, develops, acquires, leases and manages properties primarily in the best
business districts (BBDs) of Atlanta, Charlotte, Dallas, Nashville, Orlando, Raleigh, Richmond and Tampa. Our Common
Stock is traded on the New York Stock Exchange (   NYSE   ) under the symbol    HIW.   
As of December 31, 2023, the Company owned all of the Preferred Units and 105.3 million, or 98.0%, of the Common
Units in the Operating Partnership. Limited partners owned the remaining 2.2 million Common Units. Generally, the Operating
Partnership is obligated to redeem each Common Unit at the request of the unitholder for cash equal to the value of one share of
Common Stock based on the average of the market price for the 10 trading days immediately preceding the notice date of such
redemption, provided that the Company, at its option, may elect to acquire any such Common Units presented for redemption
for cash or one share of Common Stock. The Common Units owned by the Company are not redeemable.
The Company was incorporated in Maryland in 1994. The Operating Partnership was formed in North Carolina in 1994.
Our executive offices are located at 150 Fayetteville Street, Suite 1400, Raleigh, NC 27601, and our telephone number is
(919) 872-4924.
Our primary business is the operation, acquisition and development of office properties. There are no material intersegment transactions. See Note 14 to our Consolidated Financial Statements for a summary of the rental and other revenues, net
operating income and assets for each reportable segment.
Our website is www.highwoods.com. 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.
During 2023, 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.
Our Strategy
We are in the work-placemaking business. We believe that by creating environments and experiences where the best and
brightest can achieve together what they cannot apart, we can deliver greater value to our customers, their teammates and, in
turn, our stakeholders. Our simple strategy is to own and operate high-quality workplaces in the BBDs within our footprint,
maintain a strong balance sheet to be opportunistic throughout economic cycles, employ a talented and dedicated team and
communicate transparently with all stakeholders. We focus on owning and managing buildings in the most dynamic and vibrant
BBDs. BBDs are highly-energized and amenitized workplace locations that enhance our customers    ability to attract and retain
talent. They are both urban and suburban. Providing the most talent-supportive workplace options in these environments is core
to our work-placemaking strategy.
Our investment strategy is to generate attractive and sustainable returns over the long term for our stockholders by
developing, acquiring and owning a portfolio of high-quality, differentiated office buildings in the BBDs of our core markets. A
core component of this strategy is to continuously strengthen the financial and operational performance, resiliency and longterm growth prospects of our existing in-service portfolio and recycle out of those properties that no longer meet our criteria.
Since the beginning of 2019, we have acquired (on a wholly-owned or joint venture basis) 4.0 million square feet of trophy
office assets for a total gross investment of $1.9 billion, placed in service 2.1 million square feet of highly pre-leased new office
development for a total gross investment of $762.0 million and sold 7.5 million square feet of non-core assets for $1.2 billion.
As of December 31, 2023, our wholly-owned and joint venture development pipeline consisted of in-process and recently
completed but not yet stabilized developments with a total anticipated gross investment of $928.6 million. During this
timeframe, we have completed our exit from Greensboro and Memphis, announced our plan to exit Pittsburgh and entered
Charlotte and Dallas, two higher-growth markets.
5

Table of Contents
Geographic Diversification. Our core portfolio consists primarily of office properties in Atlanta, Charlotte, Dallas,
Nashville, Orlando, Raleigh, Richmond and Tampa. We do not believe that our operations are significantly dependent upon any
particular geographic market.
Conservative and Flexible Balance Sheet. We are committed to maintaining a conservative and flexible balance sheet
with access to ample liquidity, multiple sources of debt and equity capital and sufficient availability under our revolving credit
facility to fund our short and long-term liquidity requirements. Our balance sheet also allows us to proactively assure our
existing and prospective customers that we are able to fund tenant improvements and maintain our properties in good condition
while retaining the flexibility to capitalize on favorable development and acquisition opportunities as they arise.
Competition
Our properties compete for customers with similar properties located in our markets primarily on the basis of location, rent,
services provided and the design, quality and condition of the facilities. We also compete with other domestic and foreign
REITs, financial institutions, pension funds, partnerships, individual investors and others when attempting to acquire, develop
and operate properties.
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. To support and advance the environmental component of our longterm resiliency initiatives, we have formed a management-level corporate resiliency team that is overseen by the investment
committee of the Company   s Board of Directors. The corporate resiliency team, comprised of a diverse group of disciplines
including executive leadership, is charged with refining our long-term resiliency strategy, driving performance improvements
across our portfolio and establishing and tracking progress towards goals. More information regarding our sustainability
strategy and progress towards reaching our target goals is available in our annual corporate resiliency report that can be found
under the    Service Not Space/Resiliency    section of our website. Information on our website is not considered part of this
Annual Report.
Government Regulation
We are subject to laws, rules and regulations of the United States and the states and local municipalities in which we
operate, including laws and regulations relating to environmental protection and human health and safety. Compliance with
these laws, rules and regulations has not had, and is not expected to have, a material effect on our capital expenditures, results
of operations and competitive position as compared to prior periods. For more information about environmental laws and
regulations, see    Item 1A. Risk Factors - Risks Related to our Operations - Costs of complying with governmental laws and
regulations may adversely affect our results of operations.   
Human Capital Resources
We focus our real estate activities in markets where we have extensive local knowledge and own a significant amount of
assets. 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
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3/29/2024 Letter Continued (Full PDF)

 

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