8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): August 7, 2006

HIGHWOODS PROPERTIES, INC.

(Exact name of registrant specified in its charter)

Maryland	1-13100	56-1871668
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

HIGHWOODS REALTY LIMITED PARTNERSHIP

(Exact name of registrant specified in its charter)

North Carolina	000-21731	56-1869557
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3100 Smoketree Court, Suite 600

Raleigh, North Carolina 27604

(Address of principal executive offices, zip code)

Registrants’ telephone number, including area code: (919) 872-4924

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrants under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On August 7, 2006, we issued a press release announcing operational information for the quarter ended June 30, 2006. This press release is attached as Exhibit 99.1. In addition, we posted on our web site supplemental information regarding our operations for the quarter ended June 30, 2006, a copy of which is attached as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits

No.	Description
99.1	Press release dated August 7, 2006
99.2	Supplemental operating information for the quarter ended June 30, 2006

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each of the registrants has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

HIGHWOODS PROPERTIES, INC.
By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Vice President and Chief Financial Officer

HIGHWOODS REALTY LIMITED PARTNERSHIP
By:	Highwoods Properties, Inc., its general partner

By:	/s/ Terry L. Stevens
	Terry L. Stevens
	Vice President and Chief Financial Officer

Dated: August 7, 2006

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE Ref: 06-26

Contact:	Tabitha Zane
	Vice President, Investor Relations
	919-431-1529

Highwoods Properties Reports

Second Quarter 2006 Operational Results

1.9 million square feet leased

Occupancy increases to 88.1%

Raleigh, NC – August 7, 2006 – Highwoods Properties, Inc. (NYSE: HIW), the largest owner and operator of suburban office properties in the Southeast, today reported operational results for the quarter ended June 30, 2006.

Total occupancy in the Company’s wholly-owned portfolio at June 30, 2006 was 88.1%, a 400 basis point increase from June 30, 2005 and a 40 basis point increase from the first quarter of 2006. Occupancy in the Company’s office portfolio, which contributes 82% of annual revenue, increased 360 basis points year over year and was unchanged from the previous quarter.

Ed Fritsch, President and Chief Executive Officer of Highwoods Properties, stated “We had a solid second quarter with almost two million square feet of second generation office and industrial space leased. Our development pipeline currently stands at a robust $361 million and includes 18 projects in 11 markets. Since April 1, 2006, we have added five wholly-owned Class “A” office projects that are 60% pre-leased.”

Second Quarter 2006 Operating Highlights

• Second generation leasing activity in Highwoods’ portfolio was over 1.9 million square feet, including 950,460 square feet of office space, 974,807 square feet of industrial space and 13,573 square feet of retail space.

• Straight-line (GAAP) rental rates for signed office leases increased 1.8% from straight line rental rates under the previous leases, ahead of the Company’s 2006 expectations. Cash rents for office leases signed in the first quarter declined 5.5%, in line with the Company’s expectations and a modest improvement from the first quarter of 2006 when cash rents for newly signed office leases declined 6.3%

• Office tenant improvements and leasing commissions as a percentage of term base rent (netting out free rent) were 12.8% compared to the five-quarter average of 12.0%. On a dollar per square foot basis, tenant improvements and leasing commissions were $11.17, in line with our 2006 expectations.

• On May 3^rd, the Company announced that it had obtained a new, $350 million three-year unsecured revolving credit facility, which replaced its previous $250 million unsecured revolving credit facility and a $100 million bank term loan.

Highwoods Properties

2006 Development Activity

The Company’s development pipeline is now $361 million. Since January 1, 2006, the Company has announced and/or commenced eight new wholly-owned developments in seven markets representing $197.5 million of value creating projects. These new projects are detailed in the table below:

Market	RSF	Total Investment		Pre-Leased
Tampa (O)	324,000	$	62,400,000	35	%
Nashville (O)	255,000	$	58,300,000	100	%
Atlanta (O)	91,000	$	21,700,000	100	%
Triad (I)	418,000	$	14,400,000	44	%
Kansas City (O&R)	47,000	$	13,900,000	49	%
Richmond (O)	95,000	$	13,600,000	0	%
Orlando (O)	99,000	$	13,200,000	0	%
Total	1,329,000	$	197,500,000	50	%

Mr. Fritsch noted, “Our development pipeline includes four fully leased build-to-suit office projects, one of which is for the United States government. We continue to focus our efforts on building properties in well-leased, highly desirable submarkets where available inventory is scarce and demand is resilient.”

SEC Update

The Company noted that there has been no change in the status of the formal investigation by the SEC. Management continues to cooperate fully and remains confident and comfortable with the information provided to the SEC.

Funds from Operations Outlook

The Company also reaffirmed its guidance for 2006 FFO of $2.28 to $2.42 per diluted share. This estimate continues to reflect management’s view of current and future market conditions, including assumptions with respect to rental rates, occupancy levels, operating expenses, land sale gains, asset dispositions and acquisitions and development. This estimate excludes any gains or impairments associated with potential operating property dispositions, as well as any unusual or non-recurring credits or charges that may occur during the year. It also excludes a reduction of $1.8 million, or $0.03 per share, related to the redemption of $50 million of 8.0% Series B Preferred Shares on February 23, 2006. Factors that could cause actual results to differ materially from Highwoods’ current expectations are discussed below and are also detailed in the Company’s 2005 Annual Report on Form 10-K.

Non-GAAP Information

We believe that FFO and FFO per share are beneficial to management and investors as important indicators of the performance of an equity REIT. FFO and FFO per share can facilitate comparisons of operating performance between periods and between other REITs because they exclude factors, such as depreciation, amortization and gains and losses from sales of real estate assets, which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates. FFO and FFO per share as disclosed by other REITs may not be comparable to our calculations of FFO and FFO per share. FFO and FFO per share are non-GAAP financial measures and do not represent net income or cash flows from operating, investing or financing activities as defined by GAAP. They should not be considered as alternatives to net income as indicators of our operating performance or to cash flows as measures of liquidity. Furthermore, FFO per share does not depict the amount that accrues directly to the stockholders’ benefit.

FFO is defined by NAREIT as net income or loss, excluding gains or losses from sales of depreciated property, plus operating property depreciation and amortization and adjustments for minority interest and unconsolidated companies on the same basis. As clarified by NAREIT in October 2003, impairment losses on depreciable real estate assets are included in FFO.

2

Highwoods Properties

Supplemental Information

A copy of the Company’s second quarter 2006 Supplemental Information that includes leasing and operational statistics is available in the “Investor Relations/Quarterly Earnings” section of the Company’s Web site at www.highwoods.com. You may also obtain a copy of all Supplemental Information published by the Company by contacting Highwoods Investor Relations at 919-431-1521/ 800-256-2963 or by e-mail to HIW-IR@highwoods.com. If you would like to receive future Supplemental Information packages by e-mail, please contact the Investor Relations department as noted above or by written request to: Investor Relations Department, Highwoods Properties, Inc., 3100 Smoketree Court, Suite 600, Raleigh, NC 27604.

Conference Call

On Tuesday, August 8, 2006 at 11:00 a.m. Eastern time, Highwoods will host a teleconference call to discuss the matters outlined in this press release. For US/Canada callers, dial (888) 202-5268 and international callers dial (706) 643-7509. A live listen-only Web cast can be accessed through the Company’s Web site at www.highwoods.com under the “Investor Relations” section.

Telephone and Web cast replays and a Pod cast will be available two hours after the completion of the call. The replays will be available for one week beginning at 2:00 p.m. Eastern time. Dial-in numbers for the replay are (800) 642-1687 US/Canada, (706) 645-9291 international. The conference ID is 3168158.

About the Company

Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. At June 30, 2006, the Company owned or had an interest in 418 in-service office, industrial and retail properties encompassing approximately 35.1 million square feet. Highwoods also owns 830 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our Web site at www.highwoods.com.

Certain matters discussed in this press release, such as expected leasing and financing activities and financial and operating performance and the cost and timing of expected development projects and asset dispositions, are forward-looking statements within the meaning of the federal securities laws. These statements are distinguished by use of the words “will”, “expect”, “intends” and words of similar meaning. Although Highwoods believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, it can give no assurance that its expectations will be achieved.

Factors that could cause actual results to differ materially from Highwoods’ current expectations include, among others, the following: the financial condition of our customers could deteriorate; unwaived defaults, if any, under our debt instruments could result in an acceleration of some of our outstanding debt; speculative development by others could result in excessive supply of office properties relative to customer demand; we may not be able to lease or re-lease space quickly or on as favorable terms as old leases; unexpected difficulties in obtaining additional capital to satisfy our future cash needs or unexpected increases in interest rates would increase our debt service costs; and others detailed in the Company’s 2005 Annual Report on Form 10-K and subsequent SEC reports.

3

EX-99.2

Supplemental Information

June 30, 2006

Supplemental Information

Table of Contents

June 30, 2006

Schedule	Page
Corporate Information	i and ii
Capitalization	1
Long-Term Debt Summary	2
Long-Term Debt Detail	3
Portfolio Summary	4, 5 and 6
Occupancy Trends	7
Leasing Statistics	8, 9 and 10
Leasing Statistics by Market	11
Rental Rate Comparisons by Market	12
Lease Expirations	13 and 14
Office Lease Expirations by Market by Quarter	15
Industrial Lease Expirations by Market by Quarter	16
Office Lease Expirations by Market by Year	17
Industrial Lease Expirations by Market by Year	18
Customer Diversification	19
Acquisition Activity	20
Disposition Activity	21
Development Activity	22
Development Land	23
Joint Ventures Long-Term Debt Detail	24
Joint Ventures Portfolio Summary	25
Joint Ventures Lease Expirations	26
Joint Ventures Development	27

The information within refers to all Highwoods Properties’ wholly-owned entities, except pages 24 to 27, unless noted otherwise.

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

Corporate Information

Board of Directors

Research Coverage

Thomas W. Adler Gene H. Anderson Kay N. Callison Edward J. Fritsch Lawrence S. Kaplan Sherry Kellett L. Glenn Orr Jr. O. Temple Sloan Jr., Chairman F. William Vandiver, Jr. Corporate Officers Edward J. Fritsch President, Chief Executive Officer and Director Michael E. Harris Executive Vice President and Chief Operating Officer Terry L. Stevens Vice President, Chief Financial Officer S. Hugh Esleeck Treasurer Julie M. Kelly Vice President, Compliance and Internal Audit Carman J. Liuzzo Vice President, Investments Kevin E. Penn Chief Information Officer and Vice President, Strategy Mack D. Pridgen III Vice President, General Counsel and Secretary Tabitha N. Zane Vice President, Investor Relations and Corporate Communications

Credit Suisse - North America John Stewart - 212-538-3183 Deutsche Banc Securities Lou Taylor - 212-469-4912 Green Street Advisors Jim Sullivan - 949-640-8780 Morgan Stanley Dean Witter David Cohen - 212-761-8564 Smith Barney Citigroup Jonathan Litt - 212-816-0231 Stifel Nicolaus John Guinee - 410-454-5520 Wachovia Securities Chris Haley - 443-263-6773

i

Corporate Information

Divisional Officers	Corporate Headquarters
Atlanta/Piedmont Triad Gene H. Anderson - Regional Manager Atlanta, GA Gene H. Anderson, Senior Vice President Piedmont Triad, NC Mark W. Shumaker, Vice President Orlando/Tampa Michael F. Beale - Regional Manager Orlando, FL Michael F. Beale, Senior Vice President Tampa, FL Dan Woodward, Vice President Raleigh Raleigh, NC Thomas “Skip” Hill, Vice President Richmond Richmond, VA Paul W. Kreckman, Vice President Memphis/Nashville/Columbia/Greenville W. Brian Reames - Regional Manager Nashville, TN W. Brian Reames, Senior Vice President Columbia, SC and Greenville, SC W. Brian Reames, Senior Vice President Memphis, TN Steven L. Guinn, Vice President	Highwoods Properties, Inc. 3100 Smoketree Court, Suite 600 Raleigh, NC 27604 919-872-4924 Stock Exchange NYSE         Trading Symbol: HIW Investor Relations Contact Tabitha Zane Vice President, Investor Relations and Corporate Communications Phone: 919-431-1529 Fax: 919-876-6929 E-mail: tabitha.zane@highwoods.com Information Request To request a standard Investor Relations package, Annual Report or to be added to our e-mail or fax list, please contact the Corporate Communications/IR Specialist at: Phone: 919-431-1521 Email: HIW-IR@highwoods.com The Company Highwoods Properties, Inc., a member of the S&P MidCap 400 Index, is a fully integrated, self-administered real estate investment trust (“REIT”) that provides leasing, management, development, construction and other customer-related services for its properties and for third parties. As of June 30, 2006, the Company owned or had an interest in 418 in-service office, industrial and retail properties encompassing approximately 35.1 million square feet. Highwoods also owns 830 acres of development land. Highwoods is based in Raleigh, North Carolina, and its properties and development land are located in Florida, Georgia, Iowa, Kansas, Maryland, Missouri, North Carolina, South Carolina, Tennessee and Virginia. For more information about Highwoods Properties, please visit our Web site at www.highwoods.com.
Kansas City
Kansas City, MO Barrett Brady, Senior Vice President

ii

Capitalization

Dollars, shares, and units in thousands

	06/30/06		03/31/06		12/31/05		09/30/05		06/30/05
Long-Term Debt (see pages 2 & 3):	$	1,466,839	$	1,450,253	$	1,471,615	$	1,441,081	$	1,559,352
Eastshore Debt 1/		—		—		—		—		19,800
Total debt per the balance sheet		1,466,839		1,450,253		1,471,615		1,441,081		1,579,152
Finance Obligations:	$	34,410	$	33,833	$	33,706	$	34,746	$	43,168
Preferred Stock (at redemption value):
Series A 8 5/8% Perpetual Preferred Stock	$	104,945	$	104,945	$	104,945	$	104,945	$	104,945
Series B 8% Perpetual Preferred Stock		42,500		92,500		142,500		142,500		172,500
Series D 8% Perpetual Preferred Stock		—		—		—		—		100,000
Total preferred stock	$	147,445	$	197,445	$	247,445	$	247,445	$	377,445
Shares and Units Outstanding:
Common stock outstanding		54,131		54,142		54,029		54,030		54,037
Minority interest partnership units		5,234		5,401		5,450		5,493		5,668
Total shares and units outstanding		59,365		59,543		59,479		59,523		59,705
Stock price at period end	$	36.18	$	33.73	$	28.45	$	29.51	$	29.76
Market value of common equity	$	2,147,826	$	2,008,385	$	1,692,178	$	1,756,524	$	1,776,821
Total market capitalization with debt and obligations	$	3,796,520	$	3,689,916	$	3,444,944	$	3,479,796	$	3,756,786

1/ This debt is the 100% obligation of an entity that Highwoods has no ownership interest in but which had been consolidated according to GAAP. The value of this debt is not included in “total market capitalization with debt and obligations.” These properties are no longer consolidated as of 9/30/05.

See pages 24 to 27 for information regarding Highwoods’ Joint Ventures

Highwoods Properties, Inc. Page 1

Long-Term Debt Summary

Dollars in thousands

	06/30/06			03/31/06			12/31/05			09/30/05			06/30/05
Balances Outstanding:
Secured:
Conventional fixed rate 1/	$	695,832		$	699,951		$	667,137		$	676,855		$	709,948
Variable rate debt 2/		13,007			12,302			53,978			46,226			84,404
Secured total	$	708,839		$	712,253		$	721,115		$	723,081		$	794,352
Unsecured:
Fixed rate bonds and notes	$	460,000		$	460,000		$	460,000		$	460,000		$	460,000
Variable rate debt		—			100,000			100,000			100,000			120,000
Credit facility		298,000			178,000			190,500			158,000			185,000
Unsecured total	$	758,000		$	738,000		$	750,500		$	718,000		$	765,000
Total	$	1,466,839		$	1,450,253		$	1,471,615		$	1,441,081		$	1,559,352
Average Interest Rates:
Secured:
Conventional fixed rate		6.9	%		6.9	%		7.0	%		7.0	%		7.1	%
Variable rate debt		5.8	%		5.4	%		5.5	%		5.0	%		4.9	%
Secured total		6.9	%		6.9	%		6.9	%		6.9	%		6.8	%
Unsecured:
Fixed rate bonds		7.4	%		7.4	%		7.4	%		7.4	%		7.4	%
Variable rate debt		—			5.8	%		5.4	%		5.4	%		4.7	%
Credit facility		6.0	%		5.8	%		5.4	%		4.9	%		4.3	%
Unsecured total		6.8	%		6.8	%		6.6	%		6.5	%		6.2	%
Average		6.9	%		6.8	%		6.7	%		6.7	%		6.5	%

Maturity Schedule:

	Future Maturities of Debt				Total Debt 3/		Average Interest Rate
Year	Secured Debt 3/		Unsecured Debt
2006	$	—	$	110,000	$	110,000	7.0	%
2007		80,627		—		80,627	7.8	%
2008		—		100,000		100,000	7.1	%
2009 4/		153,030		348,000		501,030	6.7	%
2010		133,765		—		133,765	7.8	%
2011		—		—		—	—
2012		22,800		—		22,800	6.1	%
2013		275,089		—		275,089	5.9	%
2014		38,463		—		38,463	5.8	%
2015		—		—		—	—
Thereafter		5,065		200,000		205,065	7.5	%
Total maturities	$	708,839	$	758,000	$	1,466,839	6.9	%

Weighted average maturity = 4.3 years

1/ Includes a $22.8 million loan related to a consolidated 20% owned joint venture (Harborview) and $38.5 million in loans at June 30, 2006 related to a consolidated 50% joint venture (Markel)

2/ Includes a $9.7 million construction loan at June 30, 2006 related to a consolidated 50% owned joint venture (Vinings).

3/ All periods exclude annual principal amortization.

4/ The $348.0 million of unsecured debt maturities includes $298.0 million related to the credit facility which matures in 2009.

Highwoods Properties, Inc. Page 2

Long-Term Debt Detail

Dollars in thousands

Secured Loans
Lender
	Rate		Maturity Date	Loan Balance 06/30/06		Undepreciated Book Value of Assets Secured
Monumental Life Ins. Co.	7.8	%	Nov-09	$	147,065	$	198,172
Northwestern Mutual	6.0	%	Mar-13		138,857		168,929
Northwestern Mutual	7.8	%	Nov-10		133,765		282,365
Massachusetts Mutual Life Ins. Co. 1/	5.7	%	Dec-13		124,374		185,704
Northwestern Mutual	8.2	%	Feb-07		62,426		134,832
Metropolitan Life Ins. Co. 2/	6.1	%	Oct-12		22,800		38,712
Principal Life Insurance Company 3/	5.8	%	Jan-14		11,791		14,880
Principal Life Insurance Company 3/	5.8	%	Jan-14		11,791		18,781
Massachusetts Mutual Life Ins. Co. 1/	6.5	%	Dec-13		10,936		15,638
Central Carolina Bank 4/ 5/	5.3	%	Jan-08		9,660		11,262
Principal Life Insurance Company 3/	5.7	%	Jan-14		9,300		14,564
Principal Life Insurance Company 3/	5.9	%	Jan-14		5,581		7,514
PFL Life Ins. Co. 6/	8.1	%	Jun-07		5,194		23,417
Ohio National	8.0	%	Nov-17		5,065		11,206
Lutheran Brotherhood	6.8	%	Apr-09		3,863		7,927
PFL Life Ins. Co. 6/ 7/	7.5	%	Jun-07		3,347		—
Security Life of Denver	8.9	%	Aug-09		2,101		9,362
American United Life	9.0	%	Jun-13		923		3,322
	6.9	%		$	708,839	$	1,146,587
Unsecured Bonds
Bonds	7.0	%	Dec-06	$	110,000
Bonds	7.1	%	Feb-08		100,000
Bonds	8.1	%	Jan-09		50,000
Bonds	7.5	%	Apr-18		200,000
	7.4	%		$	460,000
Unsecured Loans
Credit facility 5/	6.0	%	Jul-06	$	298,000
Total Debt	6.9	%		$	1,466,839

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

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

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

4/ Loan relates to a consolidated 50% owned joint venture (Vinings).

5/ Floating rate loan based on one month libor.

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

7/ Floating rate loan based on ninety day libor.

Highwoods Properties, Inc. Page 3

Portfolio Summary - Wholly-Owned Properties Only 1/

(Rentable Square Feet)

	06/30/06		03/31/06		12/31/05		09/30/05		06/30/05
Office Industrial & Retail
In-Service:
Office 2/	19,704,000		19,691,000		21,412,000		21,432,000		23,849,000
Industrial	6,706,000		6,706,000		6,977,000		6,977,000		6,623,000
Retail 3/	1,408,000		1,408,000		1,416,000		1,417,000		1,417,000
Total	27,818,000		27,805,000		29,805,000		29,826,000		31,889,000
Development Completed - Not Stabilized:
Office 2/	153,000		—		—		—		—
Industrial	—		—		—		—		353,000
Retail	—		9,600		9,600		9,600		9,600
Total	153,000		9,600		9,600		9,600		362,600
Development - In Process:
Office 2/	1,268,000		1,026,000		533,000		780,000		710,000
Industrial	418,000		418,000		—		—		—
Retail	23,000		23,000		—		—		—
Total	1,709,000		1,467,000		533,000		780,000		710,000
Total:
Office 2/	21,125,000		20,717,000		21,945,000		22,212,000		24,559,000
Industrial	7,124,000		7,124,000		6,977,000		6,977,000		6,976,000
Retail 3/	1,431,000		1,440,600		1,425,600		1,426,600		1,426,600
Total	29,680,000		29,281,600		30,347,600		30,615,600		32,961,600
Same Property
Office 2/	19,328,000		19,328,000		19,328,000		19,328,000		19,328,000
Industrial	6,352,000		6,352,000		6,352,000		6,352,000		6,352,000
Retail	1,408,000		1,408,000		1,408,000		1,408,000		1,408,000
Total	27,088,000		27,088,000		27,088,000		27,088,000		27,088,000
Percent Leased/Pre-Leased:
In-Service:
Office	87.1	%	87.1	%	87.5	%	85.0	%	83.5	%
Industrial	89.5	%	88.0	%	92.4	%	86.2	%	83.8	%
Retail	95.3	%	95.7	%	97.5	%	96.4	%	96.0	%
Total	88.1	%	87.7	%	89.1	%	85.8	%	84.1	%
Development Completed - Not Stabilized:
Office	17.0	%	—		—		—		—
Industrial	—		—		—		—		100.0	%
Retail	—		88.0	%	87.0	%	87.0	%	87.0	%
Total	17.0	%	88.0	%	87.0	%	87.0	%	99.7	%
Development - In Process:
Office	53.7	%	57.1	%	37.2	%	57.1	%	60.8	%
Industrial	44.0	%	43.8	%	—		—		—
Retail	100.0	%	100.0	%	—		—		—
Total	51.9	%	54.0	%	37.2	%	57.1	%	60.8	%
Same Property
Office	86.9	%	86.8	%	88.3	%	86.6	%	86.1	%
Industrial	89.0	%	87.3	%	92.8	%	86.9	%	84.4	%
Retail	95.3	%	95.7	%	98.1	%	97.0	%	96.6	%
Total	87.8	%	87.4	%	89.8	%	87.2	%	86.3	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

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

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

Highwoods Properties, Inc. Page 4

Portfolio Summary

(Continued)

As of June 30, 2006

Summary by Location, Wholly-Owned Properties Only 1/:
Market	Rentable Square Feet		Occupancy		Percentage of Annualized Revenue 2/
					Office		Industrial		Retail		Total
Raleigh /3	4,101,000		83.0	%	14.7	%	0.2	%	—		14.9	%
Atlanta	5,584,000		91.8	%	10.6	%	4.0	%	—		14.6	%
Kansas City	2,306,000	4/	89.9	%	4.5	%	—		9.9	%	14.4	%
Nashville	2,874,000		90.8	%	13.3	%	—		—		13.3	%
Tampa	2,524,000		93.6	%	12.6	%	—		—		12.6	%
Piedmont Triad /5	5,598,000		88.6	%	7.5	%	3.8	%	—		11.3	%
Richmond	1,954,000		88.0	%	8.0	%	—		—		8.0	%
Memphis	1,197,000		89.7	%	5.4	%	—		—		5.4	%
Greenville	1,110,000		68.8	%	3.2	%	0.1	%	—		3.3	%
Orlando	218,000		100.0	%	1.2	%	—		—		1.2	%
Columbia	252,000		49.8	%	0.5	%	—		—		0.5	%
Other	100,000		76.2	%	0.5	%	—		—		0.5	%
Total	27,818,000		88.1	%	82.0	%	8.1	%	9.9	%	100.0	%

Summary by Location, Including Joint Venture Properties:

Market	Rentable Square Feet		Occupancy		Percentage of Annualized Revenue 2/ 6/
					Office		Industrial		Retail		Multi-Family		Total
Atlanta	6,419,000		92.3	%	10.9	%	3.5	%	—		—		14.4	%
Kansas City	3,030,000	4/	87.9	%	5.0	%	—		8.7	%	—		13.7	%
Raleigh	4,556,000		84.7	%	13.4	%	0.1	%	—		—		13.5	%
Nashville	2,874,000		90.8	%	11.7	%	—		—		—		11.7	%
Tampa	2,729,000		94.1	%	11.3	%	—		—		—		11.3	%
Piedmont Triad	5,962,000		89.3	%	7.0	%	3.3	%	—		—		10.3	%
Richmond	2,367,000		90.1	%	7.7	%	—		—		—		7.7	%
Memphis	1,197,000		89.7	%	4.8	%	—		—		—		4.8	%
Orlando	1,903,000		94.0	%	4.3	%	—		—		—		4.3	%
Des Moines	2,315,000		92.5	%	3.3	%	0.5	%	0.1	%	0.4	%	4.3	%
Greenville	1,110,000		68.8	%	2.9	%	0.1	%	—		—		3.0	%
Other	210,000		88.6	%	0.5	%	—		—		—		0.5	%
Columbia	252,000		49.8	%	0.4	%	—		—		—		0.4	%
Charlotte	148,000		100.0	%	0.1	%	—		—		—		0.1	%
Total	35,072,000		89.3	%	83.3	%	7.5	%	8.8	%	0.4	%	100.0	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

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

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

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

6/ Includes Highwoods’ share of Joint Venture Annualized Rental Revenue, see page 25

Highwoods Properties, Inc. Page 5

Portfolio Summary - Wholly-Owned Properties Only 1/

(Continued)

As of June 30, 2006

	Office Properties					Industrial
Market	Rentable Square Feet	Occupancy		Percentage of Office Annualized Revenue 2/		Rentable Square Feet	Occupancy		Percentage of Industrial Annualized Revenue 2/
Raleigh	4,000,000	83.5	%	18.0	%	101,000	63.0	%	1.9	%
Nashville	2,874,000	90.8	%	16.1	%	—	—		—
Tampa	2,524,000	93.6	%	15.3	%	—	—		—
Atlanta	2,529,000	86.9	%	13.0	%	3,055,000	95.9	%	50.0	%
Richmond	1,954,000	88.0	%	9.8	%	—	—		—
Piedmont Triad	2,155,000	92.0	%	9.1	%	3,443,000	86.6	%	47.1	%
Memphis	1,197,000	89.7	%	6.6	%	—	—		—
Kansas City	894,000	81.4	%	5.4	%	4,000	100.0	%	0.1	%
Greenville	1,007,000	73.2	%	4.0	%	103,000	25.4	%	0.9	%
Orlando	218,000	100.0	%	1.5	%	—	—		—
Columbia	252,000	49.8	%	0.6	%	—	—		—
Other	100,000	76.2	%	0.6	%	—	—		—
	19,704,000	87.1	%	100.0	%	6,706,000	89.5	%	100.0	%

	Retail
Market	Rentable Square Feet	Occupancy		Percentage of Retail Annualized Revenue 2/
Kansas City 3/	1,408,000	95.3	%	100.0	%
	1,408,000	95.3	%	100.0	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

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

Highwoods Properties, Inc. Page 6

Occupancy Trends - Office, Industrial and Retail Properties 1/

Market	Measurement	06/30/06		03/31/06		12/31/05		09/30/05		06/30/05
Atlanta	Rentable Square Feet	5,584,000		5,584,000		6,806,000		6,818,000		6,465,000
	Occupancy	91.8	%	91.1	%	87.4	%	83.3	%	81.9	%
	Current Properties 2/	91.1	%	90.3	%	90.1	%	88.0	%	86.7	%
Charlotte	Rentable Square Feet	—		—		—		—		1,492,000
	Occupancy	—		—		—		—		66.9	%
	Current Properties 2/	—		—		—		—		—
Columbia	Rentable Square Feet	252,000		252,000		426,000		426,000		426,000
	Occupancy	49.8	%	41.4	%	58.9	%	62.0	%	61.6	%
	Current Properties 2/	49.8	%	41.4	%	38.2	%	42.0	%	40.8	%
Greenville	Rentable Square Feet	1,110,000		1,106,000		1,105,000		1,105,000		1,105,000
	Occupancy	68.8	%	73.4	%	73.0	%	71.2	%	75.5	%
	Current Properties 2/	68.8	%	73.1	%	72.7	%	70.9	%	75.2	%
Kansas City 3/	Rentable Square Feet	2,306,000		2,306,000		2,314,000		2,315,000		2,315,000
	Occupancy	89.9	%	90.4	%	92.2	%	91.7	%	91.4	%
	Current Properties 2/	89.9	%	90.4	%	92.5	%	92.1	%	91.7	%
Memphis	Rentable Square Feet	1,197,000		1,197,000		1,197,000		1,216,000		1,216,000
	Occupancy	89.7	%	90.0	%	88.8	%	83.8	%	82.3	%
	Current Properties 2/	89.7	%	89.9	%	88.8	%	83.8	%	82.3	%
Nashville	Rentable Square Feet	2,874,000		2,874,000		2,874,000		2,874,000		2,873,000
	Occupancy	90.8	%	90.6	%	94.0	%	95.6	%	95.1	%
	Current Properties 2/	90.8	%	90.6	%	94.0	%	95.6	%	95.0	%
Orlando	Rentable Square Feet	218,000		218,000		218,000		218,000		218,000
	Occupancy	100.0	%	99.5	%	100.0	%	100.0	%	96.8	%
	Current Properties 2/	100.0	%	99.5	%	100.0	%	100.0	%	96.9	%
Piedmont Triad	Rentable Square Feet	5,598,000		5,589,000		5,589,000		5,589,000		5,593,000
	Occupancy	88.6	%	86.7	%	93.1	%	89.1	%	88.3	%
	Current Properties 2/	88.6	%	86.7	%	93.1	%	89.1	%	88.4	%
Raleigh	Rentable Square Feet	4,101,000		4,102,000		4,232,000		4,358,000		4,432,000
	Occupancy	83.0	%	82.7	%	87.5	%	85.5	%	83.8	%
	Current Properties 2/	83.0	%	82.7	%	87.7	%	86.6	%	85.1	%
Richmond	Rentable Square Feet	1,954,000		1,954,000		1,955,000		1,955,000		1,841,000
	Occupancy	88.0	%	91.3	%	94.4	%	93.1	%	93.2	%
	Current Properties 2/	87.2	%	90.7	%	94.1	%	92.7	%	93.2	%
Tampa	Rentable Square Feet	2,524,000		2,523,000		2,989,000		2,851,000		3,813,000
	Occupancy	93.6	%	91.9	%	87.6	%	76.7	%	77.2	%
	Current Properties 2/	93.3	%	91.4	%	88.9	%	77.5	%	73.7	%
Total 4/	Rentable Square Feet	27,718,000		27,705,000		29,705,000		29,725,000		31,789,000
	Occupancy	88.1	%	87.7	%	89.1	%	85.8	%	84.1	%
	Current Properties 2/	87.8	%	87.4	%	89.9	%	87.3	%	86.3	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

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

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

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

Highwoods Properties, Inc. Page 7

Leasing Statistics

Office Portfolio 1/

	Three Months Ended
	6/30/06 2/			3/31/06 3/			12/31/05 4/			9/30/05 5/			6/30/05 6/			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		141			188			171			180			223			181
Rentable square footage leased		950,460			944,222			1,169,148			1,069,468			1,155,513			1,057,762
Square footage of Renewal Deals		486,998			528,275			890,582			826,512			785,827			703,639
Renewed square footage (% of total)		51.2	%		55.9	%		76.2	%		77.3	%		68.0	%		66.5	%
New Leases square footage (% of total)		48.8	%		44.1	%		23.8	%		22.7	%		32.0	%		33.5	%
Weighted average per rentable square foot over the lease term:
Base rent	$	17.29		$	18.06		$	17.37		$	17.71		$	17.31		$	17.55
Tenant improvements		(1.71	)		(1.52	)		(1.67	)		(1.10	)		(1.45	)		(1.49	)
Leasing commissions 7/		(0.48	)		(0.62	)		(0.66	)		(0.57	)		(0.60	)		(0.59	)
Rent concessions		(0.22	)		(0.31	)		(0.27	)		(0.27	)		(0.31	)		(0.28	)
Effective rent		14.88			15.61			14.77			15.77			14.95			15.19
Expense stop		(5.53	)		(5.57	)		(4.79	)		(4.85	)		(5.33	)		(5.21	)
Equivalent effective net rent	$	9.35		$	10.04		$	9.98		$	10.92		$	9.62		$	9.98
Weighted average term in years		4.5			4.3			5.0			3.8			4.1			4.3
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	8,416,490		$	7,270,758		$	10,506,779		$	5,996,413		$	8,869,553		$	8,211,999
Rentable square feet		950,460			944,222			1,169,148			1,069,468			1,155,513			1,057,762
Per rentable square foot	$	8.86		$	7.70		$	8.99		$	5.61		$	7.68		$	7.76
Leasing Commissions:
Total dollars committed under signed leases 7/	$	2,198,017		$	2,363,857		$	3,551,312		$	2,398,139		$	2,629,936		$	2,628,252
Rentable square feet		950,460			944,222			1,169,148			1,069,468			1,155,513			1,057,762
Per rentable square foot	$	2.31		$	2.50		$	3.04		$	2.24		$	2.28		$	2.48
Total:
Total dollars committed under signed leases	$	10,614,507		$	9,634,615		$	14,058,091		$	8,394,552		$	11,499,489		$	10,840,251
Rentable square feet		950,460			944,222			1,169,148			1,069,468			1,155,513			1,057,762
Per rentable square foot	$	11.17		$	10.20		$	12.02		$	7.85		$	9.95		$	10.25

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Includes 74K square feet of leases that start in 2008 or later

3/ Includes 82K square feet of leases that start in 2008 or later

4/ Includes 171K square feet of leases that start in 2008 or later

5/ Includes 115K square feet of leases that start in 2008 or later

6/ Includes 68K square feet of leases that start in 2008 or later

7/ Excludes a full allocation of internal leasing costs

Highwoods Properties, Inc. Page 8

Leasing Statistics

Industrial Portfolio

	Three Months Ended
	6/30/06 1/			3/31/06 2/			12/31/05 3/			9/30/05 4/			6/30/05 5/			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		36			22			29			32			30			30
Rentable square footage leased		974,807			300,496			532,917			498,819			359,342			533,276
Square footage of Renewal Deals		543,537			165,621			274,174			349,405			224,203			311,388
Renewed square footage (% of total)		55.8	%		55.1	%		51.4	%		70.0	%		62.4	%		58.4	%
New Leases square footage (% of total)		44.2	%		44.9	%		48.6	%		30.0	%		37.6	%		41.6	%
Weighted average per rentable square foot over the lease term:
Base rent	$	3.44		$	4.46		$	4.14		$	4.19		$	5.16		$	4.28
Tenant improvements		(0.17	)		(0.79	)		(0.32	)		(0.45	)		(0.51	)		(0.45	)
Leasing commissions 6/		(0.07	)		(0.15	)		(0.14	)		(0.06	)		(0.12	)		(0.11	)
Rent concessions		(0.01	)		(0.13	)		(0.09	)		(0.02	)		(0.16	)		(0.08	)
Effective rent		3.19			3.39			3.59			3.66			4.37			3.64
Expense stop		(0.10	)		(0.17	)		(0.15	)		(0.38	)		(0.31	)		(0.22	)
Equivalent effective net rent	$	3.09		$	3.22		$	3.44		$	3.28		$	4.06		$	3.42
Weighted average term in years		2.9			3.5			3.9			4.1			3.7			3.6
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	895,575		$	1,032,151		$	796,212		$	1,256,241		$	917,527		$	979,541
Rentable square feet		974,807			300,496			532,917			498,819			359,342			533,276
Per rentable square foot	$	0.92		$	3.43		$	1.49		$	2.52		$	2.55		$	1.84
Leasing Commissions:
Total dollars committed under signed leases 6/	$	144,376		$	191,615		$	355,767		$	185,669		$	172,719		$	210,029
Rentable square feet		974,807			300,496			532,917			498,819			359,342			533,276
Per rentable square foot	$	0.15		$	0.64		$	0.67		$	0.37		$	0.48		$	0.39
Total:
Total dollars committed under signed leases	$	1,039,951		$	1,223,766		$	1,151,979		$	1,441,910		$	1,090,246		$	1,189,570
Rentable square feet		974,807			300,496			532,917			498,819			359,342			533,276
Per rentable square foot	$	1.07		$	4.07		$	2.16		$	2.89		$	3.03		$	2.23

1/ Includes 14K square feet of leases that start in 2008 or later

2/ Includes 10K square feet of leases that start in 2008 or later

3/ Includes 12K square feet of leases that start in 2008 or later

4/ Includes 113K square feet of leases that start in 2008 or later

5/ Includes 4K square feet of leases that start in 2008 or later

6/ Excludes a full allocation of internal leasing costs

Highwoods Properties, Inc. Page 9

Leasing Statistics

Retail Portfolio

	Three Months Ended
	06/30/06			3/31/06			12/31/05			9/30/05			6/30/05 1/			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		5			12			9			7			10			9
Rentable square footage leased		13,573			49,479			19,320			10,721			39,723			26,563
Square footage of Renewal Deals		3,919			36,129			2,729			6,502			36,118			17,079
Renewed square footage (% of total)		28.9	%		73.0	%		14.1	%		60.6	%		90.9	%		64.3	%
New Leases square footage (% of total)		71.1	%		27.0	%		85.9	%		39.4	%		9.1	%		35.7	%
Weighted average per rentable square foot over the lease term:
Base rent	$	30.32		$	19.22		$	23.03		$	17.61		$	21.49		$	22.33
Tenant improvements		(4.28	)		(0.41	)		(1.33	)		(1.21	)		(1.64	)		(1.77	)
Leasing commissions 2/		(1.04	)		(0.28	)		(0.60	)		(1.11	)		(0.40	)		(0.69	)
Rent concessions		0.00			(0.06	)		(0.35	)		(0.08	)		0.00			(0.10	)
Effective rent		25.00			18.47			20.75			15.21			19.45			19.77
Expense stop		0.00			0.00			0.00			0.00			0.00			0.00
Equivalent effective net rent	$	25.00		$	18.47		$	20.75		$	15.21		$	19.45		$	19.77
Weighted average term in years		10.8			11.1			6.1			4.3			8.7			8.2
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	838,555		$	186,372		$	251,252		$	62,187		$	695,152		$	406,704
Rentable square feet		13,573			49,479			19,320			10,721			39,723			26,563
Per rentable square foot	$	61.78		$	3.77		$	13.00		$	5.80		$	17.50		$	15.31
Leasing Commissions:
Total dollars committed under signed leases 2/	$	63,681		$	42,804		$	13,721		$	12,026		$	43,041		$	35,055
Rentable square feet		13,573			49,479			19,320			10,721			39,723			26,563
Per rentable square foot	$	4.69		$	0.87		$	0.71		$	1.12		$	1.08		$	1.32
Total:
Total dollars committed under signed leases	$	902,236		$	229,176		$	264,973		$	74,213		$	738,193		$	441,758
Rentable square feet		13,573			49,479			19,320			10,721			39,723			26,563
Per rentable square foot	$	66.47		$	4.63		$	13.71		$	6.92		$	18.58		$	16.63

1/ Includes 16K square feet of leases that start in 2008 or later

2/ Excludes a full allocation of internal leasing costs

Highwoods Properties, Inc. Page 10

Leasing Statistics by Market

For the Three Months ended June 30, 2006

Office Portfolio 1/
Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/
Piedmont Triad	204,563	4.5	$	11.64	$	1.71	$	1.62
Atlanta	160,038	3.5		18.16		6.82		1.45
Greenville	135,473	5.2		17.19		23.57		5.32
Raleigh	105,750	5.3		16.66		8.69		1.69
Nashville	99,807	4.0		19.66		5.46		2.37
Memphis	78,818	4.2		21.06		13.98		0.76
Richmond	73,798	5.6		19.80		7.98		2.86
Tampa	72,901	4.1		18.63		6.94		1.61
Kansas City	17,732	3.5		20.75		6.12		3.29
Other	1,580	5.0		22.63		8.47		7.92
	950,460	4.5	$	17.07	$	8.86	$	2.31
Industrial Portfolio
Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 2/
Piedmont Triad	872,662	2.9	$	3.11	$	0.85	$	0.06
Atlanta	81,103	2.8		5.77		1.14		0.78
Raleigh	16,248	2.9		7.70		1.90		1.29
Greenville	4,794	3.3		7.62		6.00		0.99
	974,807	2.9	$	3.43	$	0.92	$	0.15
Retail Portfolio
Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF
Kansas City	13,573	10.8	$	30.32	$	61.78	$	4.69
	13,573	10.8	$	30.32	$	61.78	$	4.69

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

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

Highwoods Properties, Inc. Page 11

Rental Rate Comparisons by Market

For the Three Months ended June 30, 2006

Office Portfolio 1/
Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Piedmont Triad	204,563	$	11.64	$	11.76	-1.0	%
Atlanta	160,038		18.16		18.08	0.4	%
Greenville	135,473		17.19		16.82	2.2	%
Raleigh	105,750		16.66		16.89	-1.3	%
Nashville	99,807		19.66		19.07	3.1	%
Memphis	78,818		21.06		19.74	6.7	%
Richmond	73,798		19.80		19.02	4.1	%
Tampa	72,901		18.63		18.18	2.5	%
Kansas City	17,732		20.75		19.96	3.9	%
Other	1,580		22.63		21.25	6.5	%
GAAP Rent Growth	950,460	$	17.07	$	16.77	1.8	%
Cash Rent Growth	950,460	$	16.83	$	17.82	-5.5	%
Industrial Portfolio
Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Piedmont Triad	872,662	$	3.11	$	3.32	-6.3	%
Atlanta	81,103		5.77		5.44	6.0	%
Raleigh	16,248		7.70		8.59	-10.3	%
Greenville	4,794		7.62		10.12	-24.7	%
GAAP Rent Growth	974,807	$	3.43	$	3.61	-5.1	%
Cash Rent Growth	974,807	$	3.35	$	3.66	-8.5	%
Retail Portfolio
Market	Rentable Square Feet Leased	Current Rent		Previous Rent		Percentage Change Rent
Kansas City	13,573	$	30.32	$	22.01	37.8	%
GAAP Rent Growth	13,573	$	30.32	$	22.01	37.8	%
Cash Rent Growth	13,573	$	28.55	$	21.47	32.9	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

Highwoods Properties, Inc. Page 12

Lease Expirations

June 30, 2006

Dollars in thousands

Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Revenue 1/		Average Rental Rate		Percent of Annualized Revenue 1/
Office: 2/
2006 /3	1,085,764	6.3	%	$	17,428	$	16.05	5.6	%
2007	1,783,334	10.4	%		32,362		18.15	10.4	%
2008	2,535,661	14.8	%		44,837		17.68	14.4	%
2009	2,595,675	15.1	%		48,507		18.69	15.5	%
2010	2,275,909	13.3	%		45,538		20.01	14.6	%
2011	2,315,561	13.5	%		42,455		18.33	13.6	%
2012	1,256,999	7.3	%		24,759		19.70	7.9	%
2013	631,911	3.7	%		10,836		17.15	3.5	%
2014	433,175	2.5	%		9,213		21.27	3.0	%
2015	635,493	3.7	%		12,694		19.98	4.1	%
2016 and thereafter	1,621,660	9.4	%		23,228		14.32	7.4	%
	17,171,142	100.0	%	$	311,857	$	18.16	100.0	%
Industrial:
2006 /4	598,027	10.0	%	$	2,574	$	4.30	8.4	%
2007	1,070,433	17.8	%		6,136		5.73	20.0	%
2008	1,274,570	21.3	%		5,891		4.62	19.2	%
2009	744,945	12.4	%		4,453		5.98	14.5	%
2010	518,113	8.6	%		2,672		5.16	8.7	%
2011	497,642	8.3	%		2,175		4.37	7.1	%
2012	230,189	3.8	%		1,193		5.18	3.9	%
2013	210,689	3.5	%		1,098		5.21	3.6	%
2014	210,439	3.5	%		1,126		5.35	3.7	%
2015	137,882	2.3	%		695		5.04	2.3	%
2016 and thereafter	511,330	8.5	%		2,636		5.16	8.6	%
	6,004,259	100.0	%	$	30,649	$	5.10	100.0	%

1/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

2/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

3/ Includes 169,000 square feet of leases that are on a month to month basis or 0.7% of total annualized revenue

4/ Includes 84,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

Note: 2006 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.

Highwoods Properties, Inc. Page 13

Lease Expirations

June 30, 2006

(Continued)

Dollars in thousands

Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Revenue 1/		Average Rental Rate		Percent of Annualized Revenue 1/
Retail:
2006 2/	46,697	3.5	%	$	1,252	$	26.81	3.3	%
2007	75,664	5.6	%		2,271		30.01	6.0	%
2008	130,910	9.8	%		3,744		28.60	9.9	%
2009	180,311	13.4	%		4,664		25.87	12.4	%
2010	99,390	7.4	%		3,416		34.37	9.1	%
2011	61,112	4.6	%		1,714		28.05	4.5	%
2012	143,771	10.7	%		4,252		29.57	11.3	%
2013	107,006	8.0	%		2,613		24.42	6.9	%
2014	79,410	5.9	%		1,465		18.45	3.9	%
2015	132,384	9.9	%		4,258		32.16	11.3	%
2016 and thereafter	285,608	21.2	%		8,032		28.12	21.4	%
	1,342,263	100.0	%	$	37,681	$	28.07	100.0	%
Total:
2006 3/4/	1,730,488	7.1	%	$	21,254	$	12.28	5.6	%
2007	2,929,431	11.9	%		40,769		13.92	10.7	%
2008	3,941,141	16.0	%		54,472		13.82	14.3	%
2009	3,520,931	14.4	%		57,624		16.37	15.3	%
2010	2,893,412	11.8	%		51,626		17.84	13.6	%
2011	2,874,315	11.7	%		46,344		16.12	12.2	%
2012	1,630,959	6.7	%		30,204		18.52	7.9	%
2013	949,606	3.9	%		14,547		15.32	3.8	%
2014	723,024	2.9	%		11,804		16.33	3.1	%
2015	905,759	3.7	%		17,647		19.48	4.6	%
2016 and thereafter	2,418,598	9.9	%		33,896		14.01	8.9	%
	24,517,664	100.0	%	$	380,187	$	15.51	100.0	%

1/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

2/ Includes 14,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

3/ Includes 267,000 square feet of leases that are on a month to month basis or 0.9% of total annualized revenue

4/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

Note: 2006 and beyond expirations that have been renewed are reflected above based on the renewal expiration date.

Highwoods Properties, Inc. Page 14

Office Lease Expirations by Market by Quarter 1/

Dollars in thousands

			Three Months Ended
			9/30/06 2/			12/31/06			03/31/07			06/30/07			Total
Atlanta	RSF			102,122			19,441			44,917			5,954			172,434
	% of Total Office RSF			0.6	%		0.1	%		0.3	%		0.0	%		1.0	%
	Annualized Revenue	3/	$	1,389		$	372		$	739		$	113		$	2,613
	% of Total Office Annl Rev			0.4	%		0.1	%		0.2	%		0.0	%		0.8	%
Columbia	RSF			831			2,831			0			0			3,662
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	3/	$	13		$	42		$	—		$	—		$	55
	% of Total Office Annl Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Greenville	RSF			72,468			28,545			1,708			4,849			107,570
	% of Total Office RSF			0.4	%		0.2	%		0.0	%		0.0	%		0.6	%
	Annualized Revenue	3/	$	1,425		$	535		$	32		$	87		$	2,079
	% of Total Office Annl Rev			0.5	%		0.2	%		0.0	%		0.0	%		0.7	%
Kansas City	RSF			36,411			40,701			30,080			38,839			146,031
	% of Total Office RSF			0.2	%		0.2	%		0.2	%		0.2	%		0.9	%
	Annualized Revenue	3/	$	793		$	869		$	629		$	854		$	3,145
	% of Total Office Annl Rev			0.3	%		0.3	%		0.2	%		0.3	%		1.0	%
Memphis	RSF			20,879			15,266			61,224			26,430			123,799
	% of Total Office RSF			0.1	%		0.1	%		0.4	%		0.2	%		0.7	%
	Annualized Revenue	3/	$	352		$	338		$	1,130		$	517		$	2,337
	% of Total Office Annl Rev			0.1	%		0.1	%		0.4	%		0.2	%		0.7	%
Nashville	RSF			57,505			160,188			33,720			138,173			389,586
	% of Total Office RSF			0.3	%		0.9	%		0.2	%		0.8	%		2.3	%
	Annualized Revenue	3/	$	1,205		$	3,314		$	694		$	2,387		$	7,600
	% of Total Office Annl Rev			0.4	%		1.1	%		0.2	%		0.8	%		2.4	%
Orlando	RSF			0			6,465			2,389			11,607			20,461
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.1	%		0.1	%
	Annualized Revenue	3/	$	—		$	183		$	62		$	203		$	448
	% of Total Office Annl Rev			0.0	%		0.1	%		0.0	%		0.1	%		0.1	%
Piedmont Triad	RSF			227,218			30,152			224,302			42,901			524,573
	% of Total Office RSF			1.3	%		0.2	%		1.3	%		0.2	%		3.1	%
	Annualized Revenue	3/	$	2,312		$	473		$	2,892		$	720		$	6,397
	% of Total Office Annl Rev			0.7	%		0.2	%		0.9	%		0.2	%		2.1	%
Raleigh	RSF			162,955			13,018			141,286			50,501			367,760
	% of Total Office RSF			0.9	%		0.1	%		0.8	%		0.3	%		2.1	%
	Annualized Revenue	3/	$	2,052		$	112		$	2,831		$	910		$	5,905
	% of Total Office Annl Rev			0.7	%		0.0	%		0.9	%		0.3	%		1.9	%
Richmond	RSF			33,817			36,938			43,924			52,748			167,427
	% of Total Office RSF			0.2	%		0.2	%		0.3	%		0.3	%		1.0	%
	Annualized Revenue	3/	$	684		$	586		$	892		$	891		$	3,053
	% of Total Office Annl Rev			0.2	%		0.2	%		0.3	%		0.3	%		1.0	%
Tampa	RSF			3,321			13,597			23,922			20,489			61,329
	% of Total Office RSF			0.0	%		0.1	%		0.1	%		0.1	%		0.4	%
	Annualized Revenue	3/	$	89		$	286		$	528		$	472		$	1,375
	% of Total Office Annl Rev			0.0	%		0.1	%		0.2	%		0.2	%		0.4	%
Other	RSF			1,095			0			0			12,707			13,802
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.1	%		0.1	%
	Annualized Revenue	3/	$	5		$	—		$	—		$	334		$	339
	% of Total Office Annl Rev			0.0	%		0.0	%		0.0	%		0.1	%		0.1	%
Total	RSF			718,622			367,142			607,472			405,198			2,098,434
	% of Total Office RSF			4.1	%		2.1	%		3.5	%		2.4	%		12.2	%
	Annualized Revenue	3/	$	10,319		$	7,110		$	10,429		$	7,488		$	35,346
	% of Total Office Annl Rev			3.3	%		2.3	%		3.3	%		2.4	%		11.3	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Includes 169,000 square feet of leases that are on a month to month basis or 0.7% of total annualized revenue

3/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page 15

Industrial Lease Expirations by Market by Quarter

Dollars in thousands

			Three Months Ended
			9/30/06 1/			12/31/06			03/31/07			06/30/07			Total
Atlanta	RSF			112,496			69,763			275,828			36,576			494,663
	% of Total Industrial RSF			1.9	%		1.2	%		4.6	%		0.6	%		8.2	%
	Annualized Revenue	2/	$	395		$	489		$	1,542		$	210		$	2,636
	% of Total Industrial Annl Rev			1.3	%		1.6	%		5.0	%		0.7	%		8.7	%
Greenville	RSF			0			0			0			16,081			16,081
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.3	%		0.3	%
	Annualized Revenue	2/	$	—		$	—		$	—		$	212		$	212
	% of Total Industrial Annl Rev			0.0	%		0.0	%		0.0	%		0.7	%		0.7	%
Kansas City	RSF			2,018			0			0			0			2,018
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	2/	$	17		$	—		$	—		$	—		$	17
	% of Total Industrial Annl Rev			0.1	%		0.0	%		0.0	%		0.0	%		0.1	%
Piedmont Triad	RSF			168,386			240,252			188,048			214,706			811,392
	% of Total Industrial RSF			2.8	%		4.0	%		3.1	%		3.6	%		13.5	%
	Annualized Revenue	2/	$	754		$	866		$	1,016		$	951		$	3,587
	% of Total Industrial Annl Rev			2.5	%		2.8	%		3.3	%		3.1	%		11.7	%
Raleigh	RSF			5,112			0			3,550			0			8,662
	% of Total Industrial RSF			0.1	%		0.0	%		0.1	%		0.0	%		0.1	%
	Annualized Revenue	2/	$	53		$	—		$	36		$	—		$	89
	% of Total Industrial Annl Rev			0.2	%		0.0	%		0.1	%		0.0	%		0.3	%
Total	RSF			288,012			310,015			467,426			267,363			1,332,816
	% of Total Industrial RSF			4.8	%		5.2	%		7.8	%		4.5	%		22.2	%
	Annualized Revenue	2/	$	1,219		$	1,355		$	2,594		$	1,373		$	6,541
	% of Total Industrial Annl Rev			4.0	%		4.4	%		8.5	%		4.5	%		21.4	%

1/ Includes 84,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

2/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page 16

Office Lease Expirations by Market by Year 1/

Dollars in thousands

			2006 2/			2007			2008			2009			Thereafter
Atlanta	RSF			121,563			227,987			446,367			336,826			1,065,164
	% of Total Office RSF			0.7	%		1.3	%		2.6	%		2.0	%		6.2	%
	Annualized Revenue	3/	$	1,761		$	4,020		$	7,184		$	5,706		$	21,731
	% of Total Office Annl Rev			0.6	%		1.3	%		2.3	%		1.8	%		7.0	%
Columbia	RSF			3,662			3,258			69,987			8,409			40,054
	% of Total Office RSF			0.0	%		0.0	%		0.4	%		0.0	%		0.2	%
	Annualized Revenue	3/	$	54		$	56		$	1,047		$	128		$	549
	% of Total Office Annl Rev			0.0	%		0.0	%		0.3	%		0.0	%		0.2	%
Greenville	RSF			101,013			11,758			99,410			49,133			475,962
	% of Total Office RSF			0.6	%		0.1	%		0.6	%		0.3	%		2.8	%
	Annualized Revenue	3/	$	1,960		$	227		$	1,831		$	721		$	7,613
	% of Total Office Annl Rev			0.6	%		0.1	%		0.6	%		0.2	%		2.4	%
Kansas City	RSF			77,112			98,091			76,660			96,387			378,771
	% of Total Office RSF			0.4	%		0.6	%		0.4	%		0.6	%		2.2	%
	Annualized Revenue	3/	$	1,661		$	2,061		$	1,586		$	1,974		$	9,640
	% of Total Office Annl Rev			0.5	%		0.7	%		0.5	%		0.6	%		3.1	%
Memphis	RSF			36,145			118,522			157,018			217,729			545,061
	% of Total Office RSF			0.2	%		0.7	%		0.9	%		1.3	%		3.2	%
	Annualized Revenue	3/	$	690		$	2,213		$	2,940		$	4,002		$	10,731
	% of Total Office Annl Rev			0.2	%		0.7	%		0.9	%		1.3	%		3.4	%
Nashville	RSF			217,693			265,025			205,615			650,797			1,270,955
	% of Total Office RSF			1.3	%		1.5	%		1.2	%		3.8	%		7.4	%
	Annualized Revenue	3/	$	4,520		$	4,931		$	4,078		$	12,361		$	24,534
	% of Total Office Annl Rev			1.4	%		1.6	%		1.3	%		4.0	%		7.9	%
Orlando	RSF			6,465			21,694			6,133			6,788			176,852
	% of Total Office RSF			0.0	%		0.1	%		0.0	%		0.0	%		1.0	%
	Annualized Revenue	3/	$	183		$	448		$	153		$	157		$	3,672
	% of Total Office Annl Rev			0.1	%		0.1	%		0.0	%		0.1	%		1.2	%
Piedmont Triad	RSF			257,370			357,210			400,114			118,149			848,490
	% of Total Office RSF			1.5	%		2.1	%		2.3	%		0.7	%		4.9	%
	Annualized Revenue	3/	$	2,785		$	4,840		$	6,331		$	1,820		$	12,564
	% of Total Office Annl Rev			0.9	%		1.6	%		2.0	%		0.6	%		4.0	%
Raleigh	RSF			175,973			393,305			530,792			472,757			1,768,229
	% of Total Office RSF			1.0	%		2.3	%		3.1	%		2.8	%		10.3	%
	Annualized Revenue	3/	$	2,163		$	7,730		$	9,017		$	8,950		$	28,455
	% of Total Office Annl Rev			0.7	%		2.5	%		2.9	%		2.9	%		9.1	%
Richmond	RSF			70,755			155,772			278,984			189,025			1,024,627
	% of Total Office RSF			0.4	%		0.9	%		1.6	%		1.1	%		6.0	%
	Annualized Revenue	3/	$	1,270		$	2,893		$	5,315		$	3,509		$	17,501
	% of Total Office Annl Rev			0.4	%		0.9	%		1.7	%		1.1	%		5.6	%
Tampa	RSF			16,918			116,875			245,132			443,509			1,541,073
	% of Total Office RSF			0.1	%		0.7	%		1.4	%		2.6	%		9.0	%
	Annualized Revenue	3/	$	375		$	2,586		$	4,835		$	9,067		$	30,970
	% of Total Office Annl Rev			0.1	%		0.8	%		1.6	%		2.9	%		9.9	%
Other	RSF			1,095			13,837			19,449			6,166			35,470
	% of Total Office RSF			0.0	%		0.1	%		0.1	%		0.0	%		0.2	%
	Annualized Revenue	3/	$	5		$	357		$	521		$	114		$	765
	% of Total Office Annl Rev			0.0	%		0.1	%		0.2	%		0.0	%		0.2	%
Total	RSF			1,085,764			1,783,334			2,535,661			2,595,675			9,170,708
	% of Total Office RSF			6.3	%		10.4	%		14.8	%		15.1	%		53.4	%
	Annualized Revenue	3/	$	17,427		$	32,362		$	44,838		$	48,509		$	168,725
	% of Total Office Annl Rev			5.6	%		10.4	%		14.4	%		15.6	%		54.1	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Includes 169,000 square feet of leases that are on a month to month basis or 0.7% of total annualized revenue

3/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page 17

Industrial Lease Expirations by Market by Year

Dollars in thousands

			2006 1/			2007			2008			2009			Thereafter
Atlanta	RSF			182,259			401,043			540,510			297,155			1,509,563
	% of Total Industrial RSF			3.0	%		6.7	%		9.0	%		4.9	%		25.1	%
	Annualized Revenue	2/	$	884		$	2,147		$	2,747		$	1,811		$	7,738
	% of Total Industrial Annl Rev 2.9%			7.0	%		9.0	%		5.9	%		25.2	%
Greenville	RSF			0			16,081			5,350			4,794			0
	% of Total Industrial RSF			0.0	%		0.3	%		0.1	%		0.1	%		0.0	%
	Annualized Revenue	2/	$	—		$	212		$	61		$	—		$	—
	% of Total Industrial Annl Rev 0.0%			0.7	%		0.2	%		0.0	%		0.0	%
Kansas City	RSF			2,018			0			0			1,756			0
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	2/	$	17		$	—		$	—		$	20		$	—
	% of Total Industrial Annl Rev 0.1%			0.0	%		0.0	%		0.1	%		0.0	%
Piedmont Triad	RSF			408,638			649,759			713,522			413,314			794,785
	% of Total Industrial RSF			6.8	%		10.8	%		11.9	%		6.9	%		13.2	%
	Annualized Revenue	2/	$	1,620		$	3,740		$	2,936		$	2,391		$	3,754
	% of Total Industrial Annl Rev 5.3%			12.2	%		9.6	%		7.8	%		12.2	%
Raleigh	RSF			5,112			3,550			15,188			27,926			11,936
	% of Total Industrial RSF			0.1	%		0.1	%		0.3	%		0.5	%		0.2	%
	Annualized Revenue	2/	$	53		$	36		$	147		$	231		$	103
	% of Total Industrial Annl Rev 0.2%			0.1	%		0.5	%		0.8	%		0.3	%
Total	RSF			598,027			1,070,433			1,274,570			744,945			2,316,284
	% of Total Industrial RSF			10.0	%		17.8	%		21.2	%		12.4	%		38.6	%
	Annualized Revenue	2/	$	2,574		$	6,135		$	5,891		$	4,453		$	11,595
	% of Total Industrial Annl Rev 8.4%			20.0	%		19.2	%		14.5	%		37.8	%

1/ Includes 84,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

2/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page 18

Customer Diversification 1/

June 30, 2006

Dollars in thousands

Top 20 Customers
Customer	RSF	Annualized Revenue 2/		Percent of Annualized Revenue 2/	Average Remaining Lease Term in Years
Federal Government	1,454,977	$	26,029	6.85%	8.6
AT&T	537,529		10,424	2.74%	2.6
Price Waterhouse Coopers	332,931		8,408	2.21%	3.8
State Of Georgia	356,175		6,839	1.80%	3.5
T-Mobile USA	205,855		5,221	1.37%	7.5
US Airways	293,007		4,281	1.13%	1.2
Volvo	278,940		3,826	1.01%	3.1
Lockton Companies	145,651		3,736	0.98%	8.7
Northern Telecom	246,000		3,651	0.96%	1.7
SCI Services, Inc.	162,784		3,455	0.91%	11.1
Metropolitan Life Insurance	174,944		3,398	0.89%	7.6
BB&T	197,893		2,889	0.76%	6.0
Jacobs Engineering Group	164,417		2,446	0.64%	9.7
Vanderbilt University	119,746		2,308	0.61%	9.3
Lifepoint Corporate Services	120,112		2,299	0.60%	5.1
Icon Clinical Research	101,249		2,185	0.57%	6.2
Wachovia	98,531		2,157	0.57%	3.7
The Martin Agency	118,518		2,038	0.54%	10.8
Infineon Technologies	110,572		2,001	0.53%	6.6
Cingular Wireless	118,607		1,928	0.51%	2.3
	5,338,438	$	99,519	26.18%	6.1

By Industry

Category	Percent of Annualized Revenue 2/
Professional, Scientific, and Technical Services	20.9	%
Insurance	9.7	%
Government/Public Administration	9.5	%
Finance/Banking	8.6	%
Retail Trade	7.7	%
Telecommunication	7.5	%
Manufacturing	7.1	%
Health Care and Social Assistance	5.9	%
Wholesale Trade	5.6	%
Real Estate Rental and Leasing	3.8	%
Transportation and Warehousing	3.2	%
Accommodation and Food Services	2.8	%
Administrative and Support Services	2.5	%
Other Services (except Public Administration)	2.5	%
Information	1.6	%
Educational Services	1.1	%
	100.0	%

1/ Excludes properties recorded on our Balance Sheet that (1) were sold but accounted for as Financings or Profit Sharing arrangements under FAS 66 or (2) related to joint ventures properties that are consolidated under GAAP

2/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page 19

Acquisition Activity

Dollars in thousands

Name	Market	Type	Date Acquired	Square Footage	Total Cost
First quarter 2006:
None
Second quarter 2006:
None

Highwoods Properties, Inc. Page 20

Disposition Activity

Dollars in thousands

Name	Market	Type 1/	Date Sold	Square Footage	Occupancy		Gross Sales Price
First quarter 2006:
Office properties	Atlanta/Columbia/Tampa	O	01/09/06	1,596,000	74.9	%
Industrial properties	Atlanta	I	01/09/06	271,000	72.8	%
				1,867,000	74.6	%	$	141,000
Concourse	Raleigh	O	03/30/06	132,000	77.2	%		12,900
First quarter totals				1,999,000	74.8	%	$	153,900
Second quarter 2006:
None
2006 totals				1,999,000	74.8	%	$	153,900

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

Highwoods Properties, Inc. Page 21

Development Activity

Dollars in thousands

Property	Market	Type 1/	Rentable Square Feet	Anticipated Total Investment		Investment @ 06/30/06		Pre- Leasing		Estimated Completion Date	Estimated Stabilization Date
In - Process
Office:
Dept. of Homeland Security	Atlanta	O	91,000	$	21,700	$	2,244	100	%	3Q 07	3Q 07
Cordoba /2	Kansas City	O	24,000		3,546		1,150	0	%	4Q 06	1Q 08
ThyssenKrupp	Memphis	O	78,000		8,800		4,187	100	%	1Q 07	1Q 07
Healthways	Nashville	O	255,000		58,300		5,983	100	%	2Q 08	2Q 08
Berkshire	Orlando	O	99,000		13,197		2,643	0	%	1Q 07	2Q 08
3330 Healy Rd /2	Piedmont Triad	O	40,000		3,600		3,044	0	%	4Q 06	2Q 07
Glenlake Four	Raleigh	O	158,000		27,150		16,392	50	%	3Q 06	1Q 08
Stony Point IV	Richmond	O	104,000		13,125		5,964	60	%	4Q 06	4Q 07
North Shore Commons B	Richmond	O	95,000		13,586		2,767	0	%	2Q 07	1Q 08
Highwoods Preserve VII	Tampa	O	115,000		21,245		3,463	100	%	1Q 07	4Q 08
Highwoods Bay Center I	Tampa	O	209,000		41,174		5,490	0	%	3Q 07	4Q 08
Total or Weighted Average			1,268,000	$	225,423	$	53,327	54	%
Industrial:
Enterprise II	Piedmont Triad	I	418,000	$	14,400	$	6,604	44	%	3Q 06	4Q 08
Total or Weighted Average			418,000	$	14,400	$	6,604	44	%
Retail:
Cordoba /2	Kansas City	R	23,000	$	10,328	$	5,476	100	%	4Q 06	4Q 06
Total or Weighted Average			23,000	$	10,328	$	5,476	100	%
In-Process Total or Weighted Average			1,709,000	$	250,151	$	65,407	52	%
Completed Not Stabilized 3/
Office:
Cool Springs III	Nashville	O	153,000	$	21,640	$	13,216	17	%	2Q 06	4Q 07
Total or Weighted Average			153,000	$	21,640	$	13,216	17	%
Grand Total or Weighted Average			1,862,000	$	271,791	$	78,623	49	%

Placed In Service
Property	Market	Type 1/	In-Service Date	Rentable Square Feet	Investment @ 06/30/06		Occ %		Leasing %
Griffith Rd./Boutique Shops	Piedmont Triad	R	6/1/2006	9,600	$	2,493	100	%	100	%
Total or Weighted Average				9,600	$	2,493	100	%	100	%

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

2/ Redevelopment property

3/ Completed Not Stabilized properties are recorded in the Consolidated Balance Sheet in the Land and Building accounts, not Development-in-process.

Highwoods Properties, Inc. Page 22

Development Land

June 30, 2006

Dollars in thousands

Market	Usable Acres	Total Estimated Market Value
Research Triangle	260	$	55,597
Atlanta	227		43,186
Triad	78		17,179
Richmond	43		10,380
Baltimore	39		11,041
Kansas City 1/	44		23,540
Charlotte	41		10,000
Nashville	25		7,386
Tampa	26		11,254
Orlando	14		12,350
Memphis	21		5,100
Greenville	12		1,800
Total 2/	830	$	208,813

1/ Includes 27 acres of residential land

2/ Developable square footage on core land holdings, which constitute 423 of the total 830 acres, is approximately 4.3 million of office space and 1.4 million of industrial space.

Highwoods Properties, Inc. Page 23

Joint Ventures Long-Term Debt Detail 1/

Dollars in thousands

Joint Venture	Own %		Lender	Interest Rate		Maturity Date	Loan Balance 06/30/06
Dallas County Partners I, LP	50.0	%	American Express	7.0	%	Sep-09		3,403
Dallas County Partners I, LP	50.0	%	American Express	6.9	%	Jun-09		7,195
Dallas County Partners I, LP	50.0	%	John Hancock Life Insurance Co.	7.6	%	Mar-08		2,788
Dallas County Partners I, LP	50.0	%	Orix	7.1	%	Oct-08		2,936
Dallas County Partners I, LP	50.0	%	State Farm	7.9	%	Sep-06		2,893
Dallas County Partners I, LP	50.0	%	State Farm	7.5	%	May-07		4,196
Dallas County Partners I, LP	50.0	%	Bank of America	5.7	%	Oct-07		3,875
Dallas County Partners I, LP	50.0	%	State Farm	7.5	%	Dec-07		4,842
Dallas County Partners I, LP	50.0	%	Thrivent	8.5	%	Aug-10		1,642
Dallas County Partners I, LP	50.0	%	Regions	6.3	%	Jun-14		3,586
Dallas County Partners I, LP	50.0	%	Sun Life	7.2	%	Jan-06		1,093
Dallas County Partners I, LP	50.0	%	Bankers Trust	8.0	%	Jul-11		1,203
				7.1	%			39,652
Dallas County Partners II, LP	50.0	%	Principal Life Insurance Company	10.2	%	Jun-13		19,106
Fountain Three	50.0	%	John Hancock Life Insurance Co.	7.8	%	Jan-08		5,815
Fountain Three	50.0	%	American Express	6.9	%	Jun-09		3,846
Fountain Three	50.0	%	Thrivent	8.0	%	Oct-10		3,643
Fountain Three	50.0	%	Thrivent	7.3	%	Apr-09		3,456
Fountain Three	50.0	%	Wells Fargo	8.2	%	May-08		1,277
Fountain Three	50.0	%	Lehman Brothers	8.0	%	Jul-09		3,564
Fountain Three	50.0	%	Thrivent	7.0	%	Sep-12		5,433
				7.5	%			27,034
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds	1.0	%	Nov-15		23,000
RRHWoods, LLC	50.0	%	Bank of America	6.8	%	Sep-12		26,988
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds	1.0	%	Sep-15		6,000
RRHWoods, LLC	50.0	%	Industrial Revenue Bonds	1.1	%	Nov-15		5,500
RRHWoods, LLC	50.0	%	Bank of America	5.7	%	Oct-07		3,927
RRHWoods, LLC	50.0	%	Massachusetts Mutual Life Ins. Co.	5.9	%	Mar-16		7,600
RRHWoods, LLC	50.0	%	Regions	6.3	%	Jun-14		3,586
				4.0	%			76,601
Plaza Colonnade, LLC	50.0	%	Met Life	5.7	%	Jan-17		49,735
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	5.4	%	Mar-10		1,818
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	6.0	%	Mar-16		4,394
Plaza Colonnade, LLC	50.0	%	Tax Incremental Financing	5.9	%	Mar-24		12,283
				5.8	%			68,230
4600 Madison Associates, LLC	12.5	%	State Farm	6.9	%	Apr-18		14,847
Board of Trade Investment Company	49.0	%	KC Board of Trade Clearing Corp.	7.8	%	Sep-07		261
Highwoods DLF 98/29, LP	22.8	%	USG Annuity & Life Company	6.8	%	Apr-11		64,516
Highwoods DLF 97/26 DLF 99/32, LP	42.9	%	Massachusetts Mutual Life Ins. Co.	7.7	%	May-12		57,136
Concourse Center Associates, LLC	50.0	%	Lincoln National Life Insurance Co.	7.0	%	Jul-10		9,231
Highwoods KC Orlando, LLC	40.0	%	Met Life	5.2	%	Jul-14		143,000
Highwoods KC Glenridge Office	40.0	%	Wachovia	3.2	%	Jun-14		25,173
				5.9	%			314,164
				6.0	%		$	544,787
Highwoods’ Share of the above							$	228,407

1/ Excludes loans related to certain “consolidated” joint ventures

Highwoods Properties, Inc. Page 24

Joint Ventures Portfolio Summary

As of June 30, 2006

Summary by Location:
	Rentable Square Feet 1/	Occupancy 2/		Percentage of Annualized Revenue - Highwoods’ Share Only 3/
Market				Office		Industrial		Retail		Multi-Family		Total
Des Moines	2,315,000	92.5	%	27.4	%	4.1	%	1.0	%	3.2	%	35.7	%
Orlando	1,685,000	93.3	%	26.9	%	—		—		—		26.9	%
Atlanta	835,000	95.2	%	12.8	%	—		—		—		12.8	%
Kansas City	724,000	81.6	%	8.6	%	—		—		—		8.6	%
Richmond	413,000	100.0	%	5.1	%	—		—		—		5.1	%
Piedmont Triad	364,000	100.0	%	3.9	%	—		—		—		3.9	%
Raleigh	455,000	99.6	%	3.7	%	—		—		—		3.7	%
Tampa	205,000	100.0	%	2.0	%	—		—		—		2.0	%
Charlotte	148,000	100.0	%	0.8	%	—		—		—		0.8	%
Other	110,000	100.0	%	0.5	%	—		—		—		0.5	%
Total 4/	7,254,000	93.6	%	91.7	%	4.1	%	1.0	%	3.2	%	100.0	%

1/ Excludes Des Moines’ apartment units

2/ Excludes Des Moines’ apartment occupancy percentage of 95.5%

3/ Annualized Rental Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

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

Highwoods Properties, Inc. Page 25

Joint Ventures Lease Expirations

June 30, 2006

Dollars in thousands

Year	Rentable Square Feet Expiring	Percent of Rentable Square Feet		Annualized Revenue 1/		Average Rental Rate		Percent of Annualized Revenue 1/
Total
2006	351,145	5.1	%	$	6,461	$	18.40	5.0	%
2007	419,163	6.1	%		8,494		20.26	6.6	%
2008	1,378,956	20.0	%		23,103		16.75	18.0	%
2009	933,638	13.5	%		18,747		20.08	14.7	%
2010	733,652	10.6	%		12,845		17.51	10.0	%
2011	812,894	11.8	%		13,771		16.94	10.7	%
2012	397,885	5.8	%		8,450		21.24	6.6	%
2013	757,431	11.0	%		14,939		19.72	11.6	%
2014	390,606	5.7	%		8,659		22.17	6.7	%
2015	546,434	7.9	%		8,833		16.16	6.9	%
2016 and thereafter	172,213	2.5	%		4,151		24.10	3.2	%
	6,894,017	100.0	%	$	128,453	$	18.63	100.0	%

1/ Annualized Revenue is June, 2006 rental revenue (base rent plus operating expense pass through revenue) multiplied by 12.

Highwoods Properties, Inc. Page 26

Joint Ventures Development

Dollars in thousands

Property	% Ownership		Market	Rentable Square Feet	Anticipated Total Investment		Investment @ 06/30/06		Pre- Leasing		Estimated Completion Date	Estimated Stabilization Date
Sonoma	50	%	Des Moines	75,000	$	9,364	$	9,072	68	%	2Q 05	4Q 06
The Vinings at University Center 1/ 2/	50	%	Charlotte	156 Units		11,300		11,141	89	%	1Q 06	3Q 06
Brickstone	50	%	Des Moines	31,000		5,149		634	35	%	4Q 06	4Q 07
Weston Lakeside 2/	50	%	Raleigh	332 Units		33,181		14,834	0	%	1Q 07	1Q 08
Total or Weighted Average 3/				106,000	$	58,994	$	35,681	58	%
Highwoods’ Share of the above					$	29,497	$	17,840

1/ The Vinings at University Center is currently a fifty percent owned joint venture consolidated under the provisions of FIN 46.

2/ Estimated Completion Date is the date the last unit is expected to be delivered

3/ Pre-leasing percentage does not include multi-family

Highwoods Properties, Inc. Page 27