Highwoods Properties (HIW) 8-K Highwoods Properties Reports First Quarter Financial Results

EXHIBIT 99.2

Supplemental Operating and Financial Information

March 31, 2004

Supplemental Information

Table of Contents

March 31, 2004

Schedule	Page
Summary and Corporate Information	i, ii and iii
Consolidated Statements of Income	1
Statement of Funds from Operations	2
Notes to FFO Table, Net Cash Flow and Capital Expenditures	3
Consolidated Balance Sheets	4
Estimated Net Asset Value	5
Combined Financial Information	6
Components of Discontinued Operations	7
Capitalization	8
Long-Term Debt Summary	9
Long-Term Debt Detail	10
Portfolio Summary	11, 12 and 13
Occupancy Trends	14
Leasing Statistics	15, 16 and 17
Leasing Statistics by Market	18
Rental Rate Comparisons by Market	19
Lease Expirations	20 and 21
Office Lease Expirations by Market by Quarter	22
Industrial Lease Expirations by Market by Quarter	23
Office Lease Expirations by Market by Year	24
Industrial Lease Expirations by Market by Year	25
Customer Diversification	26
Same Property Performance	27
Acquisition Activity	28
Disposition Activity and Assets Contributed to Joint Ventures	29
Development Activity	30
Development Land	31
Unconsolidated Joint Ventures Assets, Debt and Liabilities	32
Unconsolidated Joint Ventures Income (Three Months)	33
Unconsolidated Joint Ventures Long-Term Debt Detail	34
Portfolio Summary Unconsolidated Joint Ventures	35
Unconsolidated Joint Ventures Lease Expirations	36
Unconsolidated Joint Ventures Development	37

The information within refers to all Highwoods Properties’ consolidated entities, except pages 32 to 37 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.

Highwoods Properties, Inc. 3/31/04

Summary

Dollars in thousands, except per share amounts

	Three Months Ended
	03/31/04			03/31/03			Change F/(U)
Operations
Revenue from continuing operations	$	108,622		$	103,924		$	4,698
Rental property expense from continuing operations		39,165			35,940			(3,225	)
Net operating income from continuing operations	$	69,457		$	67,984		$	1,473
Revenue from discontinued operations	$	1,222		$	9,008		$	(7,786	)
Rental property expense from discontinued operations		451			2,310			1,859
Net operating income from discontinued operations	$	771		$	6,698		$	(5,927	)
Interest and other income	$	3,346		$	2,859		$	487
Equity in earnings of unconsolidated affiliates		1,402			1,761			(359	)
General and administrative (includes $4,638 retirement compensation expense in 2004)		12,167			5,344			(6,092	)
G&A as a % of revenue and other income		10.6	%		4.5	%		-5.5	%
EBITDA calculation
Net income	$	5,834		$	11,172		$	(4,633	)
Addback depreciation and amortization		34,345			33,294			1,051
Addback interest expense		26,912			28,729			(1,817	)
EBITDA	$	67,141		$	73,195		$	(5,399	)
Interest expense from continuing operations	$	26,912		$	28,300		$	1,388
Interest expense from discontinued operations		—			429			429
EBITDA/Interest expense		2.49			2.55			(0.03	)
EBITDA/Interest expense + preferred dividends		1.94			2.01			(0.05	)
Net income	$	5,884		$	11,172		$	(4,633	)
Funds from operations		27,640			35,191			(6,895	)
Cash available for distribution		18,431			29,125			(10,694	)
Per share - diluted:
Net (loss)/income	$	(0.03	)	$	0.06		$	(0.08	)
Funds from operations		0.51			0.66			(0.14	)
Dividends paid		0.425			0.585			(0.16	)
Dividends paid as % of funds from operations		83.3	%		88.6	%		6.9	%
Dividends paid as % of cash available for distribution		138.9	%		121.2	%		-17.7	%
	03/31/04			03/31/03			Change
Capitalization
Total assets	$	3,508,523		$	3,403,032		$	105,491
Market capitalization:
Total debt		1,767,239			1,580,301			186,938
Market value of equity		1,944,200			1,610,631			333,569
Total market capitalization	$	3,711,439		$	3,190,932		$	520,507
Total Debt/Total Assets		50.4	%		46.4	%		-4.0	%
	03/31/04			03/31/03			Change F/(U)
Portfolio
Total In-Service Square Footage		36,111,000			37,157,000			(1,046,000	)
Occupancy		81.4	%		83.2	%		-1.8	%
Same Property NOI (GAAP basis)	$	67,078		$	69,336		$	(2,257	)

Highwoods Properties, Inc. i 3/31/04

Corporate Information

Board of Directors	Research Coverage
Thomas W. Adler	Banc of America Securities
Gene H. Anderson	Daniel Oppenheim - 212-847-5733
Kay N. Callison
Edward J. Fritsch	Davenport & Company, LLC
Ronald P. Gibson	Rob Norfleet - 804-780-2170
William E. Graham Jr.
Lawrence S. Kaplan	Deutsche Banc Securities
L. Glenn Orr Jr.	Lou Taylor - 212-469-4912
O. Temple Sloan Jr., Chairman
Willard H. Smith Jr.	Green Street Advisors
John L. Turner	Jim Sullivan - 949-640-8780
F. William Vandiver, Jr.
	KeyBanc Capital Markets
Senior Management Team	Frank Greywitt - 216-443-4795
Ronald P. Gibson	Legg Mason
Chief Executive Officer and Director	David Fick - 410-454-5018
Edward J. Fritsch	Morgan Stanley Dean Witter
President, Chief Operating Officer	Gregory Whyte - 212-761-6331
and Director
	Prudential Equity Group
Gene H. Anderson	Jim Sullivan - 212-778-2515
Senior Vice President and Director
	Smith Barney Citigroup
Michael F. Beale	Jonathan Litt - 212-816-0231
Senior Vice President
	UBS Warburg
Michael E. Harris	Keith Mills - 212-713-3098
Senior Vice President
	Wachovia Securities
Carman J. Liuzzo	Chris Haley - 443-263-6773
Vice President, Investments and
Strategic Analysis
Mack D. Pridgen III
Vice President, General Counsel and
Secretary
Terry L. Stevens
Vice President, Chief Financial Officer
and Treasurer

Highwoods Properties, Inc. ii 3/31/04

Corporate Information

Divisional Offices	Corporate Headquarters
Atlanta/Piedmont Triad	Highwoods Properties, Inc.
Gene H. Anderson - Regional Manager	3100 Smoketree Court, Suite 600
	Raleigh, NC 27604
Atlanta, GA	919-872-4924
Gene H. Anderson, Senior Vice President
	Stock Exchange
Piedmont Triad, NC
Mark W. Shumaker, Vice President	NYSE                Trading Symbol: HIW
Orlando/Tampa	Investor Relations Contact
Michael F. Beale - Regional Manager
	Tabitha Zane
Orlando, FL	Sr. Director, Investor Relations
Michael F. Beale, Senior Vice President	Phone: 919-431-1529
	Fax: 919-876-6929
Tampa, FL	E-mail: tabitha.zane@highwoods.com
Stephen A. Meyers, Vice President
	Information Request
Research Triangle/Richmond
	To request a standard Investor Relations package, Annual
Research Triangle, NC	Report or to be added to our e-mail or fax list, please contact the
Robert G. Cutlip, Vice President	Investor Relations Coordinator at:
	Phone: 919-875-6717 or 800-256-2963
Richmond, VA	Email: HIW-IR@highwoods.com
Paul W. Kreckman, Vice President
	The Company
Kansas City/Charlotte/Memphis/	Highwoods Properties, Inc., a member of the S&P MidCap 400
Nashville	Index, is a fully integrated, self-administered real estate
Michael E. Harris - Regional Manager	investment trust ("REIT") that provides leasing, management,
	development, construction and other customer-related services
Kansas City, MO	for its properties and for third parties. As of March 31, 2004,
Barrett Brady, Senior Vice President	the Company owned or had an interest in 529 in-service office,
	industrial and retail properties encompassing approximately
Charlotte, NC	41.7 million square feet. Highwoods also owns approximately
Thomas F. Cochran, Senior Vice President	1,255 acres of development land. Highwoods is based in
	Raleigh, North Carolina, and its properties and development
Memphis, TN	land are located in Florida, Georgia, Iowa, Kansas, Maryland,
Michael E. Harris, Senior Vice President	Missouri, North Carolina, South Carolina, Tennessee and
	Virginia. For more information about Highwoods Properties,
Nashville, TN	please visit our web site at www.highwoods.com.
W. Brian Reames, Vice President

Highwoods Properties, Inc. iii 3/31/04

Consolidated Statements of Income

Dollars in thousands, except per share amounts

		Three Months Ended
		03/31/04			12/31/03			09/30/03			06/30/03			03/31/03
Rental revenue		$	108,622		$	107,857		$	106,490		$	103,610		$	103,924
Operating expenses:
Rental property			39,165			38,368			37,114			36,158			35,940
Depreciation and amortization			34,316			34,089			31,438			31,983			32,030
General and administrative (includes $3,907 retirement compensation expense in 2004)			12,167			6,671			6,276			6,524			5,344
Total operating expenses			85,648			79,128			74,828			74,665			73,314
Interest expense:
Contractual			26,057			27,575			28,122			27,822			27,674
Amortization of deferred financing costs			855			876			819			757			626
			26,912			28,451			28,941			28,579			28,300
Other income:
Interest and other income			3,346			3,343			2,506			3,208			2,859
Equity in earnings/(loss) of unconsolidated affiliates			1,402			1,848			1,626			(485	)		1,761
			4,748			5,191			4,132			2,723			4,620
Income before gain/(loss) on disposition of land and depreciable assets, minority interest and discontinued operations			810			5,469			6,853			3,089			6,930
Gain on disposition of land			1,138			397			1,067			1,412			863
(Loss)/gain on disposition and impairment of depreciable assets, net			(55	)		—			(203	)		220			20
Income before minority interest and discontinued operations			1,893			5,866			7,717			4,721			7,813
Minority interest			(231	)		(615	)		(821	)		(552	)		(938	)
Income from continuing operations			1,662			5,251			6,896			4,169			6,875
Discontinued operations:
Income from discontinued operations, net of minority int			667			2,575			3,297			4,606			4,467
Gain/(loss) on sale of discontinued operations, net of minority int			3,555			5,104			11,280			1,345			(170	)
			4,222			7,679			14,577			5,951			4,297
Net income			5,884			12,930			21,473			10,120			11,172
Dividends on preferred stock			(7,713	)		(7,713	)		(7,713	)		(7,713	)		(7,713	)
Net (loss)/income attributable to common stockholders	��	$	(1,829	)	$	5,217		$	13,760		$	2,407		$	3,459
Net (loss)/income per common share - diluted:
Loss from continuing operations		$	(0.11	)	$	(0.05	)	$	(0.01	)	$	(0.06	)	$	(0.02	)
Income from discontinued operations		$	0.08		$	0.15		$	0.27		$	0.11		$	0.08
Net (loss)/income		$	(0.03	)	$	0.10		$	0.26		$	0.05		$	0.06
Weighted average common shares outstanding - diluted			53,542			53,651			53,261			53,315			53,475
Rental property expenses / rental revenue			36.1	%		35.6	%		34.9	%		34.9	%		34.6	%

Highwoods Properties, Inc. Page 1 3/31/04

Statement of Funds from Operations

Dollars in thousands, except per share amounts

	Three Months Ended
	03/31/04			12/31/03			09/30/03			06/30/03			03/31/03
Funds from operations:
Net income	$	5,884		$	12,930		$	21,473		$	10,120		$	11,172
Dividends to preferred shareholders		(7,713	)		(7,713	)		(7,713	)		(7,713	)		(7,713	)
Net (loss)/income attributable to common stockholders		(1,829	)		5,217			13,760			2,407			3,459
Add/(Deduct):
Depreciation and amortization of real estate assets 1/		33,542			33,279			30,456			31,149			31,210
(Loss)/gain on disposition of depreciable real estate assets 2/		55			—			203			(220	)		(20	)
Minority interest in income from operations		231			615			821			552			938
Unconsolidated affiliates:
Depreciation and amortization of real estate assets 1/		2,278			2,086			2,235			2,489			2,415
Discontinued operations:
Depreciation and amortization of real estate assets 1/		29			64			477			798			1,264
Gain on sale, net of minority interest 2/		(3,555	)		(5,104	)		(11,280	)		(1,345	)		(118	)
Minority interest in income from discontinued operations		77			306			408			580			575
Funds from operations before amounts allocable to minority interest		30,828			36,463			37,080			36,410			39,723
Minority interest in funds from operations		(3,188	)		(3,865	)		(4,083	)		(4,074	)		(4,532	)
Funds from operations applicable to common shares	$	27,640		$	32,598		$	32,997		$	32,336		$	35,191
Cash available for distribution:
Funds from operations before amounts allocable to minority interest	$	30,828		$	36,463		$	37,080		$	36,410		$	39,723
Add/(Deduct):
Rental income from straight-line rents		(2,586	)		(688	)		(1,136	)		(1,680	)		(1,685	)
Amortization of intangible lease assets		252			305			212			—			—
Depreciation of non-real estate assets 1/		774			810			982			834			820
Impairment charges		—			—			—			2,413			288
Amortization of deferred financing costs		855			876			819			757			626
Retirement compensation accrual - non-cash portion 3/		2,325			—			—			—			—
Non-incremental revenue generating capital expenditures paid:
Building improvements		(1,768	)		(2,384	)		(4,500	)		(2,734	)		(2,791	)
2nd generation tenant improvements		(7,209	)		(9,802	)		(6,588	)		(6,932	)		(4,488	)
2nd generation lease commissions		(5,040	)		(5,793	)		(4,551	)		(3,546	)		(3,368	)
		(14,017	)		(17,979	)		(15,639	)		(13,212	)		(10,647	)
Cash available for distribution	$	18,431		$	19,787		$	22,318		$	25,522		$	29,125
Funds from operations per share - diluted
Net (loss)/income attributable to common shares	$	(0.03	)	$	0.10		$	0.26		$	0.05		$	0.06
Add/(Deduct):
Depreciation and amortization of real estate assets 1/		0.62			0.62			0.57			0.58			0.58
(Loss)/gain on disposition of depreciable real estate assets 2/		—			—			—			—			—
Minority interest in income from operations		—			0.01			0.02			0.01			0.02
Unconsolidated affiliates:
Depreciation and amortization of real estate assets 1/		0.04			0.04			0.04			0.04			0.05
Discontinued operations:
Depreciation and amortization of real estate assets 1/		—			—			0.01			0.02			0.02
Gain on sale, net of minority interest		(0.06	)		(0.10	)		(0.21	)		(0.02	)		—
Minority interest in income from discontinued operations		—			0.01			0.01			—			0.01
Funds from operations before amounts allocable to minority interest		0.57			0.68			0.70			0.68			0.74
Minority interest in funds from operations		(0.06	)		(0.07	)		(0.08	)		(0.08	)		(0.08	)
Funds from operations attributable to common shares	$	0.51		$	0.61		$	0.62		$	0.60		$	0.66
Weighted average shares outstanding - diluted 4/		54,066			53,651			53,261			53,315			53,475
Weighted average shares/units outstanding - diluted		60,238			59,990			59,830			60,028			60,360
Dividend payout data:
Dividends paid per common share/common unit - diluted:	$	0.425		$	0.425		$	0.425		$	0.425		$	0.585
Funds from operations		83.3	%		69.7	%		68.5	%		70.8	%		88.6	%
Cash available for distribution		138.9	%		128.9	%		113.9	%		100.0	%		121.2	%

Highwoods Properties, Inc. Page 2 3/31/04

Notes to FFO Table, Net Cash Flow and Capital Expenditures

Dollars in thousands, except per share amounts

1/ In connection with the SEC’s adoption of Regulation G, which governs the presentation of non-GAAP financial measures in documents filed with the SEC, the Company revised its definition of FFO in 2003 relating to the add-back of non-real estate depreciation and amortization. The Company's revised definition is in accordance with the definition provided by NAREIT. The change reduced FFO before amounts allocable to minority interest as previously reported by $820,000, or $0.01 per share for the first quarter of 2003. For the second through fourth quarters of 2003, the change was $834,000 or $0.02 per share, $982,000, or $0.02 per share and $810,000 or $0.01 per share, respectively.

2/ In October 2003, NAREIT issued a Financial Reporting Alert that changed its current implementation guidance for FFO regarding impairment charges. Accordingly, impairment charges related to depreciable assets have now been included in FFO for the periods presented. The following is a reconciliation of gain/(loss) on disposition of depreciable assets included in the FFO calculation and gain/(loss) on disposition of depreciable assets included in the Company's Consolidated Statements of Income for all periods presented:

	Three Months Ended
	03/31/04			12/31/03		09/30/03			06/30/03		03/31/03
Continuing Operations:
(Loss)/gain on disposition of depreciable assets per FFO calculation	$	(55	)	$	—	$	(203	)	$	220	$	20
Impairment charges		—			—		—			—		—
(Loss)/gain on disposition and impairment of depreciable assets, net per Consolidated Statements of Income	$	(55	)	$	—	$	(203	)	$	220	$	20
Discontinued Operations:
Gain/(loss) on disposition of depreciable assets per FFO calculation	$	3,555		$	5,104	$	11,280		$	1,345	$	118
Impairment charges		—			—		—			—		(288	)
Gain/(loss) on disposition and impairment of depreciable assets, net per Consolidated Statements of Income	$	3,555		$	5,104	$	11,280		$	1,345	$	(170	)

In addition to the impairment losses detailed above, FFO for the three months ended June 30, 2003 also excludes a $2.4 million impairment loss included in the Company's equity in earnings of unconsolidated affiliates related to the acquisition of certain assets of the MG-HIW, LLC joint venture by the Company.

As a result of the changes to the FFO calculation as outlined in footnotes 1/ and 2/, FFO has been reduced by the following in dollars and per share amounts:

FFO in dollars before amounts allocable to minority interest from the Operating Partnership	$	—	$	(810	)	$	(982	)	$	(3,247	)	$	(1,108	)
FFO per common share	$	—	$	(0.01	)	$	(0.02	)	$	(0.06	)	$	(0.02	)

3/ As previously announced, Mr. Ron Gibson, Chief Executive Officer and one of the Company’s founders, is retiring from the Company effective June 30, 2004. In connection with Mr. Gibson’s retirement and as previously disclosed by the Company, the Company’s Board of Directors approved a compensation package for Mr. Gibson effective with his retirement. As part of this package, Mr. Gibson will receive a lump-sum retirement payment of $2.2 million, his unvested previously granted stock options and restricted stock awards will fully vest on June 30, 2004 and he will continue under the Company’s insurance programs for several years. His options will also be modified to remain outstanding for their stated terms. Under GAAP, these arrangements with Mr. Gibson result in a total charge of $6.3 million, or $0.11 per share, $4.6 million of which was recorded in the first quarter with the balance of $1.7 million to be recorded in the second quarter of 2004.

4/ Options on 524,000 shares of common stock were not included in the calculation of net loss per share on the Consolidated Statements of Income, as their effects were antidilutive. However, they are included in the calculation of funds from operations applicable to common shares per share diluted as they were not antidilutive.

Net cash provided by/(used in):
Operating activities	$	38,194		$	28,360		$	54,887		$	35,067		$	38,806
Investing activities		(78,841	)		64,535			14,599			6,565			(20,188	)
Financing activities		39,084			(87,414	)		(69,428	)		(47,811	)		(10,431	)
Net (decrease)/increase in cash and cash equivalents	$	(1,563	)	$	5,481		$	58		$	(6,179	)	$	8,187

	Three Months Ended
	03/31/04		03/31/03
Supplemental Capital Expenditure Disclosure
Development cost:
Shell construction and predevelopment costs	$	2,562	$	2,745
1st generation tenant improvements		990		1,953
1st generation lease commissions		38		960
Nonrecurring property renovation cost		1,839		968
Acquisitions		73,987		8,829
Furniture, Fixtures and Equipment		132		184
	$	79,548	$	15,639
Non-incremental revenue generating capital expenditures paid:		14,017		10,647
Total per the Statement of Cash Flows	$	93,565	$	26,286

Highwoods Properties, Inc. Page 3 3/31/04

Consolidated Balance Sheets

Dollars in thousands

	03/31/04			12/31/03			09/30/03			06/30/03			03/31/03
Assets:
Real estate assets, at cost:
Land and improvements	$	443,611		$	397,150		$	399,808		$	383,932		$	395,121
Buildings and tenant improvements		3,093,094			2,912,489			2,905,351			2,790,093			2,862,809
Development in process		9,071			6,899			11,159			9,514			7,721
Land held for development		199,228			196,620			179,887			174,719			171,841
Furniture, fixtures and equipment		21,950			21,818			21,605			21,223			21,150
		3,766,954			3,534,976			3,517,810			3,379,481			3,458,642
Less-accumulated depreciation		(566,489	)		(542,328	)		(517,376	)		(500,767	)		(488,218	)
Net real estate assets		3,200,465			2,992,648			3,000,434			2,878,714			2,970,424
Property held for sale		38,467			55,453			141,728			213,993			151,901
Cash and cash equivalents		17,001			18,564			13,083			13,025			19,204
Restricted cash		8,044			6,320			6,810			3,163			2,943
Accounts receivable, net		10,737			17,827			12,570			13,902			12,723
Notes receivable		24,309			24,623			18,920			27,617			32,077
Accrued straight-line rents receivable		54,732			51,189			51,592			51,703			50,462
Investment in unconsolidated affiliates		68,553			74,665			73,372			76,499			78,229
Other assets:
Deferred leasing costs		114,687			110,488			105,585			100,492			99,730
Deferred financing costs		46,396			46,198			44,506			42,544			42,548
Prepaid expenses and other		14,287			13,799			16,341			16,882			16,388
		175,370			170,485			166,432			159,918			158,666
Less- accumulated amortization		(89,155	)		(84,965	)		(81,419	)		(76,501	)		(73,597	)
Other assets, net		86,215			85,520			85,013			83,417			85,069
Total Assets	$	3,508,523		$	3,326,809		$	3,403,522		$	3,362,033		$	3,403,032
Liabilities and Stockholders’ Equity:
Mortgages and notes payable	$	1,767,239		$	1,558,758		$	1,612,483		$	1,579,265		$	1,580,301
Accounts payable, accrued expenses and other liabilities		108,199			111,772			118,192			102,949			108,808
Total Liabilities		1,875,438			1,670,530			1,730,675			1,682,214			1,689,109
Minority interest		161,884			165,250			174,058			177,104			183,297
Stockholders’ Equity:
Preferred stock		377,445			377,445			377,445			377,445			377,445
Common stock		536			535			531			531			535
Additional paid-in capital		1,400,315			1,393,103			1,384,129			1,383,568			1,392,118
Distributions in excess of net earnings		(296,538	)		(271,971	)		(254,546	)		(245,751	)		(225,430	)
Accumulated other comprehensive loss		(3,525	)		(3,650	)		(4,002	)		(7,831	)		(8,767	)
Deferred compensation		(7,032	)		(4,433	)		(4,768	)		(5,247	)		(5,275	)
Total Stockholders’ Equity		1,471,201			1,491,029			1,498,789			1,502,715			1,530,626
Total Liabilities and Stockholders' Equity	$	3,508,523		$	3,326,809		$	3,403,522		$	3,362,033		$	3,403,032
Ratios
Total Debt/Total Assets		50.4	%		46.9	%		47.4	%		47.0	%		46.4	%

Highwoods Properties, Inc. Page 4 3/31/04

Estimated Net Asset Value

March 31, 2004

Dollars in thousands, except per share amounts

The information on this Page is provided to assist in the calculation of Net Asset Value using a range of Capitalization rates and In-Place Net Operating Income among other Factors. It is not intended to be an asset by asset valuation.

Office		8.75	%		9.00	%		9.25	%
Retail		7.75	%		8.00	%		8.25	%
Industrial/Other		8.75	%		9.00	%		9.25	%
Weighted average		8.64	%		8.89	%		9.14	%
Wholly Owned Properties Net Operating Income 1Q04 (1)
Office 2/ 3/ 4/	$	53,255		$	53,255		$	53,255
Retail		6,347			6,347			6,347
Industrial/Other		6,441			6,441			6,441
Total Net Operating Income	$	66,043		$	66,043		$	66,043
Wholly Owned Properties Net Operating Income Annualized
Office	$	213,180		$	213,180		$	213,180
Retail		25,388			25,388			25,388
Industrial/Other		25,764			25,764			25,764
Total Net Operating Income	$	264,332		$	264,332		$	264,332
Wholly Owned Properties Capitalized Value
Office	$	2,436,343		$	2,368,667		$	2,304,649
Retail		327,587			317,350			307,733
Industrial/Other		294,446			286,267			278,530
	$	3,058,376		$	2,972,283		$	2,890,912
Highwoods' Share of Joint Ventures
Net Operating Income YTD	$	6,168		$	6,168		$	6,168
Net Operating Income Annualized	$	22,454		$	22,454		$	22,454
Capitalization Rates		8.75	%		9.00	%		9.25	%
Capitalized Value	$	256,617		$	249,489		$	242,746
Value of Highwoods Preserve at $80 per square foot 5/	$	65,280		$	65,280		$	65,280
Total In-Service Property Value	$	3,380,273		$	3,287,052		$	3,198,938
Value of Other income
Annualized Development, Leasing and Management Fees	$	6,180		$	6,180		$	6,180
Capitalization Rate		20	%		20	%		20	%
Value of Other income	$	30,900		$	30,900		$	30,900
Add Other assets:
Development Pipeline Investment	$	20,389		$	20,389		$	20,389
Property Held for Sale, at Net Sales Price		51,019			51,019			51,019
Orlando CBD 6/		212,000			212,000			212,000
Land held for development at Book Value		199,228			199,228			199,228
Cash and cash equivalents		17,001			17,001			17,001
Restricted cash		8,044			8,044			8,044
Accounts receivable, net		10,736			10,736			10,736
Notes receivable		24,309			24,309			24,309
Other assets total	$	542,726		$	542,726		$	542,726
Gross Value of Assets	$	3,953,899		$	3,860,678		$	3,772,564
Deductions:
Total Liabilities	$	1,872,999		$	1,872,999		$	1,872,999
Preferred stock		377,445			377,445			377,445
Highwoods' Share of Joint Ventures Liabilities		168,976			168,976			168,976
Estimated Net Asset Value	$	1,534,479		$	1,441,258		$	1,353,144
Total diluted common shares and operating units		60,301			60,301			60,301
Estimated Net Asset Value Per Share	$	25.45		$	23.90		$	22.44

1/ Excludes straight-line rent of $2.6 million and the intra period impact of the net operating income related to acquisitions and dispositions

2/ Added back the $548,000 operating loss at Highwoods Preserve

3/ Deducted $76,000 for the operating income on the completed but not stabilized development projects

4/ Deducted Orlando CBD NOI

5/ Highwoods Preserve is an 816,000 square foot office campus in Tampa that Worldcom vacated 12/31/02.

6/ Value of Orlando CBD properties based on pending membership interest sale

Highwoods Properties, Inc. Page 5 12/31/03

Estimated Net Asset Value

March 31, 2004

Dollars in thousands, except per share amounts

The information on this Page is provided to assist in the calculation of Net Asset Value using a range of Capitalization rates and In-Place Net Operating Income among other Factors. It is not intended to be an asset by asset valuation.

Office		9.00	%		9.25	%		9.50	%
Retail		7.75	%		8.00	%		8.25	%
Industrial/Other		8.75	%		9.00	%		9.25	%
Weighted average		8.85	%		9.10	%		9.35	%
Wholly Owned Properties Net Operating Income YTD (1)
Office 2/ 3/ 4/	$	54,556		$	54,556		$	54,556
Retail		6,347			6,347			6,347
Industrial/Other		6,441			6,441			6,441
Total Net Operating Income	$	67,344		$	67,344		$	67,344
Wholly Owned Properties Net Operating Income Annualized
Office	$	228,796		$	228,796		$	228,796
Retail		25,388			25,388			25,388
Industrial/Other		25,764			25,764			25,764
Total Net Operating Income	$	279,948		$	279,948		$	279,948
Wholly Owned Properties Capitalized Value
Office	$	2,542,178		$	2,473,470		$	2,408,379
Retail		327,587			317,350			307,733
Industrial/Other		294,446			286,267			278,530
	$	3,164,211		$	3,077,087		$	2,994,642
Highwoods’ Share of Joint Ventures
Net Operating Income YTD	$	6,168		$	6,168		$	6,168
Net Operating Income Annualized	$	22,454		$	22,454		$	22,454
Capitalization Rates		9.00	%		9.25	%		9.50	%
Capitalized Value	$	249,489		$	242,746		$	236,358
Value of Highwoods Preserve at $80 per square foot 5/	$	65,280		$	65,280		$	65,280
Total In-Service Property Value	$	3,478,979		$	3,385,113		$	3,296,280
Value of Other income
Annualized Development, Leasing and Management Fees	$	6,180		$	6,180		$	6,180
Capitalization Rate		20	%		20	%		20	%
Value of Other income	$	30,900		$	30,900		$	30,900
Add Other assets:
Development Pipeline Investment	$	20,389		$	20,389		$	20,389
Property Held for Sale, at Net Sales Price		51,019			51,019			51,019
Orlando CBD 6/		212,000			212,000			212,000
Land held for development at Book Value		199,228			199,228			199,228
Cash and cash equivalents		17,001			17,001			17,001
Restricted cash		8,044			8,044			8,044
Accounts receivable, net		10,736			10,736			10,736
Notes receivable		24,309			24,309			24,309
Other assets total	$	330,726		$	330,726		$	330,726
Gross Value of Assets	$	3,840,605		$	3,746,739		$	3,657,906
Deductions:
Total Liabilities	$	1,872,999		$	1,872,999		$	1,872,999
Preferred stock		377,445			377,445			377,445
Highwoods’ Share of Joint Ventures Liabilities		168,976			168,976			168,976
Estimated Net Asset Value	$	1,429,000		$	1,335,134		$	1,246,301
Total diluted common shares and operating units		60,301			60,301			60,301
Estimated Net Asset Value Per Share	$	23.57		$	22.01		$	20.54

1/ Excludes straight-line rent of $2.6 million and the intra period impact of the net operating income related to acquisitions and dispositions

2/ Added back the $548,000 operating loss at Highwoods Preserve

3/ Deducted $76,000 for the operating income on the completed but not stabilized development projects

4/ Deducted Orlando CBD No 1

5/ Highwoods Preserve is an 816,000 square foot office campus in Tampa that Worldcom vacated 12/31/02.

6/ Value of Orlando CBD properties based on pending membership sale

Highwoods Properties, Inc. Page 5 3/31/04

Combined Financial Information

Highwoods Properties and Unconsolidated Joint Ventures

Dollars in thousands

	Highwoods Properties Inc.			Highwoods’ Share of Joint Ventures		Total
				(see pages 32 -33)
Statement of Operations:
For the three months ended March 31, 2004
Revenue:
Rental property revenue	$	108,622		$	10,806	$	119,428
Expenses:
Rental property expense		39,165			4,638		43,803
Depreciation and amortization		34,316			2,278		36,594
General and administrative (includes $4,638 non-recurring compensation expense in 2004)		12,167			—		12,167
Interest expense:
Contractual		26,057			2,660		28,717
Amortization of deferred financing costs		855			—		855
		26,912			2,660		29,572
Other income		4,748			—		4,748
Income from continuing operations before gains/(losses)	$	810		$	1,230	$	2,040
Net income	$	5,884			1,402	$	7,286
Deduct equity in earnings of unconsolidated affiliates		(1,402	)		—		(1,402	)
Addback depreciation and amortization		34,345			2,278		36,623
Addback interest expense		26,912			2,660		29,572
EBITDA	$	65,739		$	6,340	$	72,079
EBITDA /Interest Expense							2.44
As of March 31, 2004
Balance Sheet Information:
Total Assets 1/	$	3,439,970		$	244,157	$	3,684,127
Debt		1,767,239			161,161		1,928,400
Total Liabilities		1,875,438			168,976		2,044,414
Total Debt/Total Assets							52.3	%

1/ Excludes investment in unconsolidated affiliates

Highwoods Properties, Inc. Page 6 3/31/03

Components of Discontinued Operations

Dollars in thousands, except per share amounts

	Three Months Ended
	03/31/04			12/31/03			09/30/03			06/30/03			03/31/03
Rental revenue	$	1,222		$	3,939		$	5,717		$	8,532		$	9,008
Operating expenses:
Rental property		451			1,005			1,417			2,148			2,310
Depreciation and amortization		29			64			477			798			1,264
Interest expense		—			—			143			428			429
Total operating expenses		480			1,069			2,037			3,374			4,003
Interest and other income		2			11			25			28			37
		2			11			25			28			37
Income before gain/(loss) on disposition of depreciable assets and minority interest		744			2,881			3,705			5,186			5,042
Minority interest		(77	)		(306	)		(408	)		(580	)		(575	)
Income from discontinued operations, net of minority interest		667			2,575			3,297			4,606			4,467
Gain/(loss) on disposition of discontinued operations		3,965			5,711			12,676			1,515			(192	)
Minority Interest		(410	)		(607	)		(1,396	)		(170	)		22
Gain on disposition of discontinued operations, net of minority interest		3,555			5,104			11,280			1,345			(170	)
Total discontinued operations	$	4,222		$	7,679		$	14,577		$	5,951		$	4,297

Highwoods Properties, Inc. Page 7 3/31/04

Capitalization

Dollars, shares, and units in thousands

	03/31/04		12/31/03		09/30/03		06/30/03		03/31/03
Long-Term Debt (see page 9 & 10)	$	1,767,239	$	1,558,758	$	1,612,483	$	1,579,265	$	1,580,301
Preferred Stock:
Series A 8 5/8% Perpetual Preferred Stock	$	104,945	$	104,945	$	104,945	$	104,945	$	104,945
Series B 8% Perpetual Preferred Stock		172,500		172,500		172,500		172,500		172,500
Series D 8% Perpetual Preferred Stock		100,000		100,000		100,000		100,000		100,000
Total preferred stock	$	377,445	$	377,445	$	377,445	$	377,445	$	377,445
Shares and Units Outstanding:
Common stock outstanding		53,631		53,474		53,103		53,072		53,484
Minority interest partnership units		6,146		6,203		6,505		6,625		6,848
Total shares and units outstanding		59,777		59,677		59,608		59,697		60,332
Stock price at period end	$	26.21	$	25.40	$	23.86	$	22.30	$	20.44
Market value of equity	$	1,944,200	$	1,893,241	$	1,799,692	$	1,708,688	$	1,610,631
Total market capitalization with debt	$	3,711,439	$	3,451,999	$	3,412,175	$	3,287,953	$	3,190,932

See pages 32 to 37 for information regarding Highwoods’ Joint Ventures

Highwoods Properties, Inc. Page 8 3/31/04

Long-Term Debt Summary

Dollars in thousands

	03/31/04			12/31/03			09/30/03			06/30/03			03/31/03
Balances Outstanding:
Secured:
Conventional fixed rate	$	751,894		$	755,049		$	631,203		$	653,092		$	656,060
Variable rate debt		204,845			68,709			68,780			4,173			4,241
Secured total	$	956,739		$	823,758		$	699,983		$	657,265		$	660,301
Unsecured:
Fixed rate bonds and notes	$	560,000		$	560,000		$	806,500		$	806,500		$	806,500
Variable rate debt		120,000			120,000			20,000			20,000			20,000
Credit facility		130,500			55,000			86,000			95,500			93,500
Unsecured total	$	810,500		$	735,000		$	912,500		$	922,000		$	920,000
Total	$	1,767,239		$	1,558,758		$	1,612,483		$	1,579,265		$	1,580,301
Average Interest Rates:
Secured:
Conventional fixed rate		7.2	%		7.2	%		7.5	%		7.6	%		7.6	%
Variable rate debt		3.1	%		3.1	%		3.2	%		3.6	%		3.7	%
Secured total		6.3	%		6.9	%		7.1	%		7.5	%		7.5	%
Unsecured:
Fixed rate bonds		7.3	%		7.3	%		7.4	%		7.4	%		7.4	%
Variable rate debt		2.4	%		2.5	%		2.1	%		2.5	%		2.6	%
Credit facility		2.1	%		2.2	%		2.3	%		2.1	%		2.3	%
Unsecured total		5.8	%		6.2	%		6.8	%		6.7	%		6.9	%
Average		6.1	%		6.5	%		6.9	%		7.1	%		7.1	%
Capitalized Interest:	$	115		$	204		$	276		$	349		$	366

Maturity Schedule:

	Future Maturities of Debt					Total Debt 1/		Average Interest Rate
Year	Secured Debt 1/		Unsecured Debt
Remainder of 2004	$	—	$	—		$	—	—
2005		69,164		120,000			189,164	4.6	%
2006		207,305		240,500	2/		447,805	3.9	%
2007		78,903		—			78,903	7.9	%
2008		—		100,000			100,000	7.1	%
2009		184,005		50,000			234,005	7.9	%
2010		139,871		—			139,871	7.8	%
2011		—		100,000			100,000	7.2	%
2012		—		—			—	—
2013		271,867		—			271,867	5.9	%
Thereafter		5,624		200,000			205,624	7.5	%
Total maturities	$	956,739	$	810,500		$	1,767,239	6.1	%

Weighted average maturity = 5.5 years

1/ Excludes annual principal amortization

2/ Included in the $240.5 million of unsecured debt maturities is $130.5 million related to the credit facility which matures in 2006.

Highwoods Properties, Inc. Page 9 3/31/04

Long-Term Debt Detail

Dollars in thousands

Secured Loans In Excess of $10 Million

Lender	Blended Rate		Maturity Date	Loan Balance 03/31/04		Undepreciated Book Value of Assets Secured
Monumental Life Insurance Company	7.8	%	Nov-09	$	175,879	$	249,172
Northwestern Mutual Life	6.0	%	Feb-13		143,251		183,663
Northwestern Mutual Life	7.8	%	Nov-10		139,871		269,283
Mass Mutual	5.7	%	Dec-13		127,500		184,652
Northwestern Mutual Life	8.2	%	Jan-07		66,484		136,167
GECC	3.1	%	Jan-06		200,884		295,345
Principal Life Insurance Company	8.6	%	Apr-05		42,103		102,681
Principal Life Insurance Company	8.2	%	Jul-05		27,060		68,678
	6.3	%		$	923,032	$	1,489,641
All Other Secured Loans (12)	7.4	%		$	33,707	$	82,962
Total Secured Loans	6.3	%		$	956,739	$	1,572,603
Unsecured Bonds
Bonds	7.0	%	Dec-06	$	110,000
Bonds	7.1	%	Feb-08		100,000
Bonds	8.1	%	Jan-09		50,000
Xpos 1/	7.2	%	Jun-11		100,000
Bonds	7.5	%	Apr-18		200,000
	7.4	%		$	560,000

1/ Remarket date is 6/15/2004

Highwoods Properties, Inc. Page 10 3/31/04

Portfolio Summary

(Rentable Square Feet)

	03/31/04		12/31/03		09/30/03		06/30/03		03/31/03
Office Industrial & Retail
In-Service:
Office 1/	26,608,000		25,303,000		25,710,000		25,052,000		25,387,000
Industrial	8,092,000		8,092,000		9,934,000		10,243,000		10,243,000
Retail 2/	1,411,000		1,527,000		1,527,000		1,527,000		1,527,000
Total	36,111,000		34,922,000		37,171,000		36,822,000		37,157,000
Development Completed - Not Stabilized:
Office 1/	140,000		140,000		140,000		140,000		100,000
Industrial	—		—		60,000		60,000		60,000
Retail	—		—		—		—		—
Total	140,000		140,000		200,000		200,000		160,000
Development - In Process:
Office 1/	112,000		112,000		—		—		40,000
Industrial	350,000		350,000		350,000		—		—
Retail	—		—		—		—		—
Total	462,000		462,000		350,000		—		40,000
Total:
Office 1/	26,860,000		25,555,000		25,850,000		25,192,000		25,527,000
Industrial	8,442,000		8,442,000		10,344,000		10,303,000		10,303,000
Retail 2/	1,411,000		1,527,000		1,527,000		1,527,000		1,527,000
Total	36,713,000		35,524,000		37,721,000		37,022,000		37,357,000
Same Property
Office 1/	23,500,000		23,500,000		23,500,000		23,500,000		23,500,000
Industrial	8,032,000		8,032,000		8,032,000		8,032,000		8,032,000
Retail	1,411,000		1,411,000		1,411,000		1,411,000		1,411,000
Total	32,943,000		32,943,000		32,943,000		32,943,000		32,943,000
Percent Leased/Pre-Leased:
In-Service:
Office	79.2	%	79.2	%	79.4	%	80.5	%	80.9	%
Industrial	86.5	%	85.7	%	88.0	%	88.7	%	86.8	%
Retail	94.0	%	96.3	%	96.3	%	96.8	%	96.5	%
Total	81.4	%	81.5	%	82.4	%	83.4	%	83.2	%
Development Completed - Not Stabilized:
Office	36.0	%	36.0	%	30.0	%	30.0	%	42.0	%
Industrial	—		—		50.0	%	50.0	%	50.0	%
Retail	—		—		—		—		—
Total	36.0	%	36.0	%	36.0	%	36.0	%	45.0	%
Development - In Process:
Office	100.0	%	100.0	%	—		—		0.0	%
Industrial	100.0	%	100.0	%	100.0	%	—		—
Retail	—		—		—		—		—
Total	100.0	%	100.0	%	100.0	%	—		0.0	%
Same Property
Office	79.6	%	79.9	%	79.7	%	80.6	%	81.0	%
Industrial	86.7	%	86.0	%	85.5	%	86.8	%	84.5	%
Retail	94.0	%	96.7	%	96.6	%	97.2	%	96.7	%
Total	82.0	%	82.1	%	81.8	%	82.8	%	82.5	%

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

2/ Excludes basement space in the Country Club Plaza property of 418,000 square feet.

Highwoods Properties, Inc. Page 11 3/31/04

Portfolio Summary

(Continued)

As of March 31, 2004

Summary by Location:

	Rentable Square Feet		Occupancy		Percentage of Annualized Revenue 1/
Market					Office		Industrial		Retail		Total
Raleigh 2/	4,664,000		80.9	%	15.1	%	0.2	%	—		15.3	%
Atlanta	6,919,000		78.8	%	11.0	%	3.0	%	—		14.0	%
Tampa	4,443,000		63.7	%	12.3	%	—		—		12.3	%
Kansas City	2,309,000	3/	91.2	%	3.9	%	—		7.4	%	11.3	%
Nashville	2,870,000		89.8	%	10.7	%	—		—		10.7	%
Piedmont Triad 4/	6,684,000		90.5	%	5.7	%	3.8	%	—		9.5	%
Richmond	1,851,000		90.9	%	6.8	%	—		—		6.8	%
Orlando	1,656,000		75.9	%	6.3	%	—		—		6.3	%
Charlotte	1,655,000		80.5	%	4.3	%	0.3	%	—		4.6	%
Memphis	1,216,000		81.3	%	4.5	%	—		—		4.5	%
Greenville	1,318,000		78.8	%	3.3	%	0.1	%	—		3.4	%
Columbia	426,000		58.7	%	1.0	%	—		—		1.0	%
Other	100,000		64.1	%	0.3	%	—		—		0.3	%
Total	36,111,000		81.4	% 5/	85.2	%	7.4	%	7.4	%	100.0	%

Summary by Location, Including Unconsolidated Joint Venture Properties:

	Rentable Square Feet	Occupancy		Percentage of Annualized Revenue 1/5/
Market				Office		Industrial		Retail		Multi- Family		Total
Raleigh 2/	5,119,000	82.5	%	14.8	%	0.2	%	—		—		15.0	%
Atlanta	7,754,000	79.8	%	11.8	%	2.9	%	—		—		14.7	%
Tampa	4,648,000	64.9	%	12.0	%	—		—		—		12.0	%
Kansas City	2,736,000	90.8	%	4.1	%	0.0	%	7.0	%	—		11.1	%
Nashville	2,870,000	89.8	%	10.2	%	—		—		—		10.2	%
Piedmont Triad 4/	7,048,000	91.0	%	5.8	%	3.6	%	—		—		9.4	%
Richmond	2,263,000	92.5	%	7.1	%	—		—		—		7.1	%
Orlando	2,069,000	80.4	%	6.5	%	—		—		—		6.5	%
Charlotte	1,803,000	82.2	%	4.2	%	0.2	%	—		—		4.4	%
Memphis	1,216,000	81.3	%	4.2	%	—		—		—		4.2	%
Greenville	1,318,000	78.8	%	3.2	%	0.1	%	—		—		3.3	%
Des Moines	2,245,000	87.3	%	0.1	%	0.3	%	0.1	%	0.4	%	0.9	%
Columbia	426,000	58.6	%	0.9	%	—		—		—		0.9	%
Other	210,000	82.9	%	0.3	%	—		—		—		0.3	%
Total	41,725,000	82.8	%	85.2	%	7.3	%	7.1	%	0.4	%	100.0	%

1/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

2/ Raleigh = Raleigh, Durham metropolitan area

3/ Excludes basement space in the Country Club Plaza property of 418,000 square feet

4/ Piedmont Triad Market = Greensboro, Winston-Salem metropolitan area

5/ Includes Highwoods’ share of Joint Venture Annualized Rental Revenue, see page 35

Highwoods Properties, Inc. Page 12 3/31/04

Portfolio Summary

(Continued)

As of March 31, 2004

	Office Properties					Industrial
Market	Rentable Square Feet	Occupancy		Percentage of Office Annualized Revenue 1/		Rentable Square Feet	Occupancy		Percentage of Industrial Annualized Revenue 1/
Raleigh	4,563,000	81.0	%	17.7	%	101,000	80	%	2.3	%
Tampa	4,443,000	63.7	%	14.4	%	—	—		—
Atlanta	3,568,000	80.0	%	12.9	%	3,351,000	78	%	40.9	%
Nashville	2,870,000	89.8	%	12.6	%	—	—		—
Richmond	1,851,000	90.9	%	8.0	%	—	—		—
Orlando	1,656,000	75.9	%	7.4	%	—	—		—
Piedmont Triad	2,314,000	82.4	%	6.6	%	4,370,000	95	%	51.4	%
Memphis	1,216,000	81.3	%	5.2	%	—	—		—
Charlotte	1,492,000	81.5	%	5.1	%	163,000	72	%	3.5	%
Kansas City	894,000	86.7	%	4.6	%	4,000	100	%	0.1	%
Greenville	1,215,000	81.1	%	3.9	%	103,000	52	%	1.8	%
Columbia	426,000	58.7	%	1.2	%	—	—		—
Other	100,000	64.1	%	0.4	%	—	—		—
	26,608,000	79.2	%	100.0	%	8,092,000	86.5	%	100.0	%
	Retail
Market	Rentable Square Feet	Occupancy		Percentage of Retail Annualized Revenue 1/
Kansas City 2/	1,411,000	94.0	%	100.0	%
	1,411,000	94.0	%	100.0	%

1/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

2/ Excludes basement space in the Country Club Plaza property of 418,000 square feet.

Highwoods Properties, Inc. Page 13 3/31/04

Occupancy Trends - Office, Industrial and Retail Properties

Market	Measurement	3/31/2004		12/31/2003		09/30/03		06/30/03		03/31/03
Atlanta	Rentable Square Feet	6,919,000		6,919,000		6,860,000		6,729,000		6,729,000
	Occupancy	78.8	%	78.4	%	80.7	%	82.5	%	82.0	%
	Current Properties 1/	78.8	%	78.4	%	80.3	%	82.1	%	81.4	%
Charlotte	Rentable Square Feet	1,655,000		1,655,000		1,727,000		1,729,000		1,729,000
	Occupancy	80.5	%	79.6	%	79.5	%	79.8	%	79.1	%
	Current Properties 1/	80.5	%	79.6	%	78.5	%	78.9	%	78.2	%
Columbia	Rentable Square Feet	426,000		426,000		426,000		426,000		426,000
	Occupancy	58.6	%	57.9	%	57.2	%	60.2	%	60.2	%
	Current Properties 1/	58.6	%	57.9	%	57.2	%	60.2	%	60.2	%
Greenville	Rentable Square Feet	1,319,000		1,318,000		1,318,000		1,511,000		1,511,000
	Occupancy	78.8	%	80.2	%	81.5	%	84.0	%	85.8	%
	Current Properties 1/	78.8	%	80.2	%	81.5	%	81.7	%	83.8	%
Kansas City 2/	Rentable Square Feet	2,309,000		2,433,000		2,512,000		2,511,000		2,511,000
	Occupancy	91.2	%	92.7	%	92.1	%	93.1	%	93.3	%
	Current Properties 1/	91.2	%	92.8	%	92.6	%	93.7	%	93.8	%
Memphis	Rentable Square Feet	1,216,000		1,216,000		1,216,000		1,216,000		1,216,000
	Occupancy	81.3	%	81.0	%	79.8	%	80.5	%	81.5	%
	Current Properties 1/	81.3	%	81.0	%	79.8	%	80.5	%	81.5	%
Nashville	Rentable Square Feet	2,870,000		2,869,000		2,865,000		2,865,000		2,864,000
	Occupancy	89.8	%	91.5	%	88.7	%	87.0	%	86.0	%
	Current Properties 1/	89.8	%	91.4	%	88.7	%	87.0	%	85.9	%
Orlando	Rentable Square Feet	1,656,000		299,000		299,000		340,000		340,000
	Occupancy	75.8	%	44.9	%	46.9	%	48.8	%	48.8	%
	Current Properties 1/	75.8	%	74.9	%	74.5	%	74.1	%	71.4	%
Piedmont Triad	Rentable Square Feet	6,685,000		6,688,000		8,208,000		8,368,000		8,371,000
	Occupancy	90.5	%	90.0	%	90.6	%	90.0	%	89.4	%
	Current Properties 1/	90.5	%	90.1	%	89.0	%	89.0	%	88.3	%
Raleigh	Rentable Square Feet	4,664,000		4,706,000		4,706,000		4,032,000		4,188,000
	Occupancy	80.9	%	80.8	%	79.7	%	81.2	%	80.3	%
	Current Properties 1/	80.9	%	80.7	%	79.6	%	80.4	%	79.6	%
Richmond	Rentable Square Feet	1,851,000		1,852,000		2,526,000		2,825,000		2,829,000
	Occupancy	90.9	%	91.5	%	92.8	%	93.9	%	94.6	%
	Current Properties 1/	90.9	%	91.6	%	90.4	%	91.4	%	92.4	%
Tampa	Rentable Square Feet	4,443,000		4,441,000		4,408,000		4,170,000		4,262,000
	Occupancy	63.7	%	63.4	%	64.2	%	66.4	%	66.5	%
	Current Properties 1/	63.7	%	63.4	%	64.2	%	66.9	%	66.6	%
Total 3/	Rentable Square Feet	36,013,000		34,822,000		37,071,000		36,722,000		36,976,000
	Occupancy	81.4	%	81.5	%	82.4	%	83.4	%	83.2	%
	Current Properties 1/	81.4	%	81.4	%	81.2	%	82.0	%	81.5	%

1/ Only properties that were owned and in-service on March 31, 2004 are included for each quarter shown.

2/ Excludes basement space in the Country Club Plaza property of 418,000 square feet.

3/ Excludes 100,000 square foot building located in South Florida.

Highwoods Properties, Inc. Page 14 3/31/04

Leasing Statistics

Office Portfolio

	Three Months Ended
	3/31/2004 1/			12/31/03			09/30/03			06/30/03			03/31/03			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		209			179			225			216			166			199
Rentable square footage leased		1,191,746			962,636			1,074,270			1,097,633			1,081,692			1,081,595
Square footage of Renewal Deals		673,551			614,969			629,353			891,772			822,005			726,330
Renewed square footage (% of total)		56.5	%		63.9	%		58.6	%		81.2	%		76.0	%		67.2	%
New Leases square footage (% of total)		43.5	%		36.1	%		41.4	%		18.8	%		24.0	%		32.8	%
Average per rentable square foot over the lease term:
Base rent	$	17.43		$	16.12		$	17.34		$	16.93		$	16.08		$	16.78
Tenant improvements		(1.57	)		(1.09	)		(1.54	)		(1.33	)		(0.85	)		(1.28	)
Leasing commissions 2/		(0.58	)		(0.64	)		(0.55	)		(0.59	)		(0.54	)		(0.58	)
Rent concessions		(0.63	)		(0.35	)		(0.24	)		(0.16	)		(0.14	)		(0.30	)
Effective rent		14.65			14.04			15.01			14.85			14.55			14.62
Expense stop		(5.70	)		(5.35	)		(5.45	)		(4.69	)		(4.76	)		(5.19	)
Equivalent effective net rent	$	8.95		$	8.69		$	9.56		$	10.16		$	9.79		$	9.43
Average term in years		4.8			4.1			5.5			3.8			3.5			4.3
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	10,063,665		$	5,355,637		$	9,120,612		$	7,125,673		$	4,474,184		$	7,227,954
Rentable square feet		1,191,746			962,636			1,074,270			1,097,633			1,081,692			1,081,595
Per rentable square foot	$	8.44		$	5.56		$	8.49		$	6.49		$	4.14		$	6.68
Leasing Commissions:
Total dollars committed under signed leases	$	2,747,400		$	2,102,659		$	2,175,162		$	1,803,423		$	1,658,231		$	2,097,375
Rentable square feet		1,191,746			962,636			1,074,270			1,097,633			1,081,692			1,081,595
Per rentable square foot	$	2.31		$	2.18		$	2.02		$	1.64		$	1.53		$	1.94
Total:
Total dollars committed under signed leases	$	12,811,064		$	7,458,296		$	11,295,774		$	8,929,097		$	6,132,415		$	9,325,329
Rentable square feet		1,191,746			962,636			1,074,270			1,097,633			1,081,692			1,081,595
Per rentable square foot	$	10.75		$	7.75		$	10.51		$	8.13		$	5.67		$	8.62

1/ Includes 72K square feet of leases that start in 2006 or later

2/ Excludes a full allocation of internal marketing cost

Highwoods Properties, Inc. Page 15 3/31/04

Leasing Statistics

Industrial Portfolio

	Three Months Ended
	03/31/04			12/31/03			09/30/03			06/30/03			03/31/03			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		32			36			22			41			35			33
Rentable square footage leased		630,829			1,131,281			638,376			540,891			857,482			759,772
Square footage of Renewal Deals		448,003			968,879			555,933			403,716			639,683			603,243
Renewed square footage (% of total)		71.0	%		85.6	%		87.1	%		74.6	%		74.6	%		79.4	%
New Leases square footage (% of total)		29.0	%		14.4	%		12.9	%		25.4	%		25.4	%		20.6	%
Average per rentable square foot over the lease term:
Base rent	$	3.67		$	3.79		$	3.52		$	4.46		$	3.70		$	3.83
Tenant improvements		(0.17	)		(0.08	)		(0.20	)		(0.28	)		(0.32	)		(0.21	)
Leasing commissions 1/		(0.14	)		(0.08	)		(0.08	)		(0.12	)		(0.11	)		(0.11	)
Rent concessions		(0.05	)		(0.05	)		(0.06	)		(0.07	)		(0.01	)		(0.05	)
Effective rent		3.31			3.58			3.18			3.99			3.26			3.46
Expense stop		(0.18	)		(0.20	)		(0.09	)		(0.49	)		(0.25	)		(0.24	)
Equivalent effective net rent	$	3.13		$	3.38		$	3.09		$	3.50		$	3.01		$	3.22
Average term in years		2.6			3.2			4.5			3.5			2.6			3.3
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	640,867		$	517,025		$	675,982		$	701,259		$	791,737		$	665,374
Rentable square feet		630,829			1,131,281			638,376			540,891			857,482			759,772
Per rentable square foot	$	1.02		$	0.46		$	1.06		$	1.30		$	0.92		$	0.88
Leasing Commissions:
Total dollars committed under signed leases	$	280,486		$	338,143		$	242,605		$	298,582		$	178,385		$	267,640
Rentable square feet		630,829			1,131,281			638,376			540,891			857,482			759,772
Per rentable square foot	$	0.44		$	0.30		$	0.38		$	0.55		$	0.21		$	0.35
Total:
Total dollars committed under signed leases	$	921,354		$	855,168		$	918,587		$	999,841		$	970,122		$	933,014
Rentable square feet		630,829			1,131,281			638,376			540,891			857,482			759,772
Per rentable square foot	$	1.46		$	0.76		$	1.44		$	1.85		$	1.13		$	1.23

1/ Excludes a full allocation of internal marketing cost

Highwoods Properties, Inc. Page 16 3/31/04

Leasing Statistics

Retail Portfolio

	Three Months Ended
	03/31/04			12/31/03			09/30/03			06/30/03			03/31/03			Average
Net Effective Rents Related to Re-Leased Space:
Number of lease transactions (signed leases)		10			9			6			9			10			9
Rentable square footage leased		37,303			75,947			12,920			25,772			22,774			34,943
Square footage of Renewal Deals		27,219			53,541			—			8,631			7,814			19,441
Renewed square footage (% of total)		73.0	%		1			0.0	%		33.5	%		34.3	%		55.6	%
New Leases square footage (% of total)		27.0	%		29.5	%		100.0	%		66.5	%		65.7	%		44.4	%
Average per rentable square foot over the lease term:
Base rent	$	30.87		$	12.30		$	17.25		$	26.51		$	23.03		$	21.99
Tenant improvements		(1.58	)		(0.31	)		(2.51	)		(0.86	)		(1.54	)		(1.36	)
Leasing commissions 2/		(0.31	)		(0.14	)		(1.28	)		(0.70	)		(1.09	)		(0.70	)
Rent concessions		(0.06	)		0.00			0.00			0.00			0.00			(0.01	)
Effective rent		28.92			11.85			13.46			24.95			20.40			19.92
Expense stop		0.00			0.00			0.00			0.00			0.00			0.00
Equivalent effective net rent	$	28.92		$	11.85		$	13.46		$	24.95		$	20.40		$	19.92
Average term in years		6.1			6.8			4.8			9.9			6.9			6.9
Capital Expenditures Related to Re-leased Space:
Tenant Improvements:
Total dollars committed under signed leases	$	866,975		$	239,110		$	158,000		$	195,055		$	513,000		$	394,428
Rentable square feet		37,303			75,947			12,920			25,772			22,774			34,943
Per rentable square foot	$	23.24		$	3.15		$	12.23		$	7.57		$	22.53		$	11.29
Leasing Commissions:
Total dollars committed under signed leases	$	28,206		$	17,212		$	36,392		$	100,464		$	109,066		$	58,268
Rentable square feet		37,303			75,947			12,920			25,772			22,774			34,943
Per rentable square foot	$	0.76		$	0.23		$	2.82		$	3.90		$	4.79		$	1.67
Total:
Total dollars committed under signed leases	$	895,181		$	256,322		$	194,392		$	295,519		$	622,066		$	452,696
Rentable square feet		37,303			75,947			12,920			25,772			22,774			34,943
Per rentable square foot	$	24.00		$	3.38		$	15.05		$	11.47		$	27.31		$	12.96

1/ Includes 16K square feet of leases that start in 2006 or later

2/ Excludes a full allocation of internal marketing cost

Highwoods Properties, Inc. Page 17 3/31/04

Leasing Statistics by Market

For the Three Months ended March 31, 2004

Office Portfolio

Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 1/
Nashville	221,970	5.4	$	17.73	$	7.19	$	1.70
Richmond	166,635	4.7		15.69		9.87		1.68
Tampa	161,831	4.0		17.25		8.14		1.86
Research Triangle	156,548	3.4		14.49		7.19		1.62
Piedmont Triad	94,038	5.5		16.68		6.08		1.64
Greenville	71,102	6.5		16.06		9.79		5.61
Orlando	63,225	5.9		19.96		16.66		3.85
Charlotte	62,677	3.5		14.19		8.42		0.95
Memphis	61,231	7.0		19.80		13.10		2.94
Atlanta	60,581	3.6		14.98		1.77		0.54
Kansas City	54,479	4.4		19.38		9.23		3.80
Columbia	17,429	3.8		16.09		6.89		2.66
	1,191,746	4.8	$	16.80	$	8.44	$	2.13

Industrial Portfolio

Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF 1/
Piedmont Triad	457,791	1.9	$	3.08	$	0.57	$	0.21
Atlanta	157,671	4.5		4.48		2.24		0.89
Charlotte	11,593	2.2		8.08		2.16		0.13
Kansas City	3,774	2.9		9.30		0.00		1.47
	630,829	2.6	$	3.62	$	1.02	$	0.38

Retail Portfolio

Market	Rentable Square Feet Leased	Average Term	GAAP Rental Rate		TI’s Per SF		Lease Commissions Per SF
Kansas City	37,303	6.1	$	30.81	$	23.24	$	0.76
	37,303	6.1	$	30.81	$	23.24	$	0.76

1/ Total lease commisions per square foot excludes all internal charges from Leasing Departments, which are not allocated to individual leases.

Highwoods Properties, Inc. Page 18 3/31/04

Rental Rate Comparisons by Market

For the Three Months ended March 31, 2004

Office Portfolio

Market	Rentable Square Feet Leased	GAAP Rent		Previous GAAP Rent		Percentage Change GAAP Rent
Nashville	221,970	$	17.73	$	18.36	3.5	%
Richmond	166,635		15.69		14.58	7.9	%
Tampa	161,831		17.25		16.74	3.1	%
Research Triangle	156,548		14.49		17.34	-16.5	%
Piedmont Triad	94,038		16.68		14.79	12.8	%
Greenville	71,102		16.06		16.91	-5.0	%
Orlando	63,225		19.96		21.59	-7.6	%
Charlotte	62,677		14.19		14.89	-4.7	%
Memphis	61,231		19.80		19.16	3.4	%
Atlanta	60,581		14.98		16.31	-8.30	%
Kansas City	54,479		19.38		18.91	2.5	%
Columbia	17,429		16.09		17.21	-7.1	%
	1,191,746	$	16.80	$	17.08	-1.7	%

Industrial Portfolio

Market	Rentable Square Feet Leased	GAAP Rent		Previous GAAP Rent		Percentage Change GAAP Rent
Piedmont Triad	457,791	$	3.08	$	3.30	-6.6	%
Atlanta	157,671		4.48		4.80	-6.7	%
Charlotte	11,593		8.08		7.80	3.5	%
Kansas City	3,774		9.30		8.42	10.4	%
	630,829	$	3.62	$	3.85	-5.9	%

Retail Portfolio

Market	Rentable Square Feet Leased	GAAP Rent		Previous GAAP Rent		Percentage Change GAAP Rent
Kansas City	75,947	$	30.81	$	23.39	31.7	%
	75,947	$	30.81	$	23.39	31.7	%

Highwoods Properties, Inc. Page 19 3/31/04

Lease Expirations

March 31, 2004

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:
Remainder of 2004 2/	2,285,403	10.8	%	$	40,914	$	17.90	11.0	%
2005	3,163,455	15.0	%		59,617		18.85	16.1	%
2006	3,357,476	15.9	%		61,949		18.45	16.7	%
2007	2,012,419	9.5	%		34,461		17.12	9.3	%
2008	3,420,432	16.2	%		56,279		16.45	15.2	%
2009	2,132,241	10.1	%		33,655		15.78	9.1	%
2010	1,429,393	6.8	%		27,324		19.12	7.4	%
2011	1,193,605	5.7	%		22,563		18.90	6.1	%
2012	644,211	3.0	%		11,941		18.54	3.2	%
2013	528,071	2.5	%		8,398		15.90	2.3	%
2014 and thereafter	956,877	4.5	%		13,322		13.92	3.6	%
	21,123,583	100.0	%	$	370,423	$	17.54	100.0	%
Industrial:
Remainder of 2004 3/	1,397,215	20.0	%	$	6,597	$	4.72	20.4	%
2005	1,369,018	19.6	%		6,333		4.63	19.6	%
2006	926,832	13.2	%		4,681		5.05	14.5	%
2007	1,732,892	24.7	%		7,230		4.17	22.5	%
2008	384,012	5.5	%		1,913		4.98	5.9	%
2009	449,714	6.4	%		2,508		5.58	7.8	%
2010	104,570	1.5	%		500		4.78	1.5	%
2011	138,342	2.0	%		356		2.57	1.1	%
2012	44,447	0.6	%		261		5.87	0.8	%
2013	102,384	1.5	%		612		5.98	1.9	%
2014 and thereafter	348,450	5.0	%		1,302		3.74	4.0	%
	6,997,876	100.0	%	$	32,293	$	4.61	100.0	%

1/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

2/ Includes 207,000 square feet of leases that are on a month to month basis or 0.9% of total annualized revenue

3/ Includes 90,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

Note: 2004 and beyond expirations that have been renewed are reflected above based on the renewal’s expiration date.

Highwoods Properties, Inc. Page 20 3/31/04

Lease Expirations

March 31, 2004

(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:
Remainder of 2004 2/	60,800	4.6	%	$	1,100	$	18.09	3.4	%
2005	113,864	8.6	%		2,492		21.89	7.7	%
2006	89,916	6.8	%		2,109		23.46	6.5	%
2007	82,495	6.2	%		1,941		23.53	6.0	%
2008	139,062	10.5	%		3,660		26.32	11.4	%
2009	164,360	12.4	%		3,903		23.75	12.2	%
2010	64,968	4.9	%		1,911		29.41	5.9	%
2011	53,833	4.1	%		1,671		31.04	5.2	%
2012	112,661	8.5	%		2,848		25.28	8.8	%
2013	129,053	9.7	%		3,262		25.28	10.1	%
2014 and thereafter	316,107	23.7	%		7,307		23.12	22.8	%
	1,327,119	100.0	%	$	32,204	$	24.27	100.0	%
Total:
Remainder of 2004 3/	3,743,418	12.7	%		48,611		12.99	11.2	%
2005	4,646,337	15.8	%		68,442		14.73	15.7	%
2006	4,374,224	14.9	%		68,739		15.71	15.9	%
2007	3,827,806	13.0	%		43,632		11.40	10.0	%
2008	3,943,506	13.4	%		61,852		15.68	14.2	%
2009	2,746,315	9.3	%		40,066		14.59	9.2	%
2010	1,598,931	5.4	%		29,735		18.60	6.8	%
2011	1,385,780	4.7	%		24,590		17.74	5.7	%
2012	801,319	2.7	%		15,050		18.78	3.5	%
2013	759,508	2.6	%		12,272		16.16	2.8	%
2014 and thereafter	1,621,434	5.5	%		21,931		13.53	5.0	%
	29,448,578	100.0	%	$	434,920	$	14.77	100.0	%

1/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

2/ Includes 26,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

3/ Includes 323,000 square feet of leases that are on a month to month basis or 1.1% of total annualized revenue

Note: 2004 and beyond expirations that have been renewed are reflected above based on the renewal’s expiration date.

Highwoods Properties, Inc. Page 21 3/31/04

Office Lease Expirations by Market by Quarter

Dollars in thousands

			Three Months Ended
			6/30/2004 1/			09/30/04			12/31/04			03/31/05			Total
Atlanta	RSF			133,784			228,463			40,476			136,298			539,021
	% of Total Office RSF			0.6	%		1.1	%		0.2	%		0.6	%		2.6	%
	Annualized Revenue	2/	$	2,300		$	3,526		$	606		$	2,027		$	8,459
	% of Total Office Annl Rev			0.6	%		1.0	%		0.2	%		0.5	%		2.3	%
Charlotte	RSF			127,257			64,096			33,564			82,971			307,888
	% of Total Office RSF			0.6	%		0.3	%		0.2	%		0.4	%		1.5	%
	Annualized Revenue	2/	$	2,324		$	1,020		$	587		$	1,452		$	5,383
	% of Total Office Annl Rev			0.6	%		0.3	%		0.2	%		0.4	%		1.5	%
Columbia	RSF			5,879			14,446			0			0			20,325
	% of Total Office RSF			0.0	%		0.1	%		0.0	%		0.0	%		0.1	%
	Annualized Revenue	2/	$	109		$	249		$	—		$	—		$	358
	% of Total Office Annl Rev			0.0	%		0.1	%		0.0	%		0.0	%		0.1	%
Greenville	RSF			7,605			6,071			1,439			12,281			27,396
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.1	%		0.1	%
	Annualized Revenue	2/	$	138		$	104		$	25		$	275		$	542
	% of Total Office Annl Rev			0.0	%		0.0	%		0.0	%		0.1	%		0.1	%
Kansas City	RSF			28,725			26,857			17,448			51,411			124,441
	% of Total Office RSF			0.1	%		0.1	%		0.1	%		0.2	%		0.6	%
	Annualized Revenue	2/	$	548		$	492		$	336		$	1,148		$	2,524
	% of Total Office Annl Rev			0.1	%		0.1	%		0.1	%		0.3	%		0.7	%
Memphis	RSF			10,560			56,591			28,778			50,714			146,643
	% of Total Office RSF			0.0	%		0.3	%		0.1	%		0.2	%		0.7	%
	Annualized Revenue	2/	$	180		$	1,095		$	565		$	1,023		$	2,863
	% of Total Office Annl Rev			0.0	%		0.3	%		0.2	%		0.3	%		0.8	%
Nashville	RSF			58,856			48,110			50,481			83,823			241,270
	% of Total Office RSF			0.3	%		0.2	%		0.2	%		0.4	%		1.1	%
	Annualized Revenue	2/	$	1,340		$	952		$	1,003		$	1,670		$	4,965
	% of Total Office Annl Rev			0.4	%		0.3	%		0.3	%		0.5	%		1.3	%
Orlando	RSF			50,461			31,632			44,020			50,737			176,850
	% of Total Office RSF			0.2	%		0.1	%		0.2	%		0.2	%		0.8	%
	Annualized Revenue	2/	$	1,093		$	603		$	1,110		$	1,291		$	4,097
	% of Total Office Annl Rev			0.3	%		0.2	%		0.3	%		0.3	%		1.1	%
Piedmont Triad	RSF			49,243			35,016			10,565			43,243			138,067
	% of Total Office RSF			0.2	%		0.2	%		0.1	%		0.2	%		0.7	%
	Annualized Revenue	2/	$	656		$	593		$	195		$	809		$	2,253
	% of Total Office Annl Rev			0.2	%		0.2	%		0.1	%		0.2	%		0.6	%
Research Triangle	RSF			175,705			124,863			134,602			82,040			517,210
	% of Total Office RSF			0.8	%		0.6	%		0.6	%		0.4	%		2.4	%
	Annualized Revenue	2/	$	3,342		$	2,418		$	2,688		$	1,615		$	10,063
	% of Total Office Annl Rev			0.9	%		0.7	%		0.7	%		0.4	%		2.7	%
Richmond	RSF			117,812			31,705			23,454			27,897			200,868
	% of Total Office RSF			0.6	%		0.2	%		0.1	%		0.1	%		1.0	%
	Annualized Revenue	2/	$	2,013		$	541		$	415		$	508		$	3,477
	% of Total Office Annl Rev			0.5	%		0.1	%		0.1	%		0.1	%		0.9	%
Tampa	RSF			166,798			136,325			162,621			48,579			514,323
	% of Total Office RSF			0.8	%		0.6	%		0.8	%		0.2	%		2.4	%
	Annualized Revenue	2/	$	2,746		$	3,085		$	1,916		$	1,090		$	8,837
	% of Total Office Annl Rev			0.7	%		0.8	%		0.5	%		0.3	%		2.4	%
Other	RSF			1,095			0			0			0			1,095
	% of Total Office RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	2/	$	5		$	—		$	—		$	—		$	5
	% of Total Office Annl Rev			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
Total	RSF			933,780			804,175			547,448			669,994			2,955,397
	% of Total Office RSF			4.4	%		3.8	%		2.6	%		3.2	%		13.9	%
	Annualized Revenue	2/	$	16,794		$	14,678		$	9,446		$	12,908		$	53,826
	% of Total Office Annl Rev			4.5	%		4.0	%		2.6	%		3.5	%		14.5	%

1/ Includes 207,000 square feet of leases that are on a month to month basis or 0.9% of total annualized revenue

2/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

Highwoods Properties, Inc. Page 22 3/31/04

Industrial Lease Expirations by Market by Quarter

Dollars in thousands

			Three Months Ended
			6/30/2004 1/			09/30/04			12/31/04			03/31/05			Total
Atlanta	RSF			166,225			193,235			82,424			105,639			547,523
	% of Total Industrial RSF			2.4	%		2.8	%		1.2	%		1.5	%		7.8	%
	Annualized Revenue	2/	$	805		$	929		$	414		$	473		$	2,621
	% of Total Industrial Annl Rev			2.5	%		2.9	%		1.3	%		1.5	%		8.2	%
Charlotte	RSF			21,655			4,881			6,727			6,235			39,498
	% of Total Industrial RSF			0.3	%		0.1	%		0.1	%		0.1	%		0.6	%
	Annualized Revenue	2/	$	245		$	58		$	62		$	64		$	429
	% of Total Industrial Annl Rev			0.8	%		0.2	%		0.2	%		0.2	%		1.3	%
Greenville	RSF			5,800			26,859			0			0			32,659
	% of Total Industrial RSF			0.1	%		0.4	%		0.0	%		0.0	%		0.5	%
	Annualized Revenue	2/	$	70		$	286		$	—		$	—		$	356
	% of Total Industrial Annl Rev			0.2	%		0.9	%		0.0	%		0.0	%		1.1	%
Kansas City	RSF			0			0			0			2,018			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			0.0	%		0.0	%		0.0	%		0.1	%		0.1	%
Piedmont Triad	RSF			88,238			448,201			336,684			656,170			1,529,293
	% of Total Industrial RSF			1.3	%		6.4	%		4.8	%		9.4	%		21.9	%
	Annualized Revenue	2/	$	635		$	1,642		$	1,301		$	2,233		$	5,811
	% of Total Industrial Annl Rev			2.0	%		5.1	%		4.0	%		6.9	%		18.0	%
Research Triangle	RSF			0			6,128			10,158			0			16,286
	% of Total Industrial RSF			0.0	%		0.1	%		0.1	%		0.0	%		0.2	%
	Annualized Revenue	2/	$	—		$	51		$	101		$	—		$	152
	% of Total Industrial Annl Rev			0.0	%		0.2	%		0.3	%		0.0	%		0.5	%
Total	RSF			281,918			679,304			435,993			770,062			2,167,277
	% of Total Industrial RSF			4.0	%		9.7	%		6.2	%		11.0	%		31.0	%
	Annualized Revenue	2/	$	1,755		$	2,966		$	1,878		$	2,787		$	9,386
	% of Total Industrial Annl Rev			5.5	%		9.2	%		5.8	%		8.6	%		29.1	%

1/ Includes 90,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

2/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

Highwoods Properties, Inc. Page 23 3/31/04

Office Lease Expirations by Market by Year

Dollars in thousands

			2004 1/			2005			2006			2007			Thereafter
Atlanta	RSF			402,723			398,010			332,024			175,318			1,546,970
	% of Total Office RSF			1.9	%		1.9	%		1.6	%		0.8	%		7.3	%
	Annualized Revenue	2/	$	6,432		$	6,519		$	4,865		$	2,496		$	27,583
	% of Total Office Annl Rev			1.7	%		1.8	%		1.3	%		0.7	%		7.4	%
Charlotte	RSF			224,917			309,110			179,236			114,288			389,204
	% of Total Office RSF			1.1	%		1.5	%		0.8	%		0.5	%		1.8	%
	Annualized Revenue	2/	$	3,931		$	5,440		$	2,714		$	1,705		$	4,974
	% of Total Office Annl Rev			1.1	%		1.5	%		0.7	%		0.5	%		1.3	%
Columbia	RSF			20,325			45,532			42,389			59,924			81,602
	% of Total Office RSF			0.1	%		0.2	%		0.2	%		0.3	%		0.4	%
	Annualized Revenue	2/	$	357		$	852		$	743		$	1,091		$	1,278
	% of Total Office Annl Rev			0.1	%		0.2	%		0.2	%		0.3	%		0.3	%
Greenville	RSF			15,115			135,712			238,253			103,236			492,800
	% of Total Office RSF			0.1	%		0.6	%		1.1	%		0.5	%		2.3	%
	Annualized Revenue	2/	$	267		$	1,749		$	4,374		$	1,587		$	6,488
	% of Total Office Annl Rev			0.1	%		0.5	%		1.2	%		0.4	%		1.8	%
Kansas City	RSF			73,030			142,994			151,849			86,800			320,381
	% of Total Office RSF			0.3	%		0.7	%		0.7	%		0.4	%		1.5	%
	Annualized Revenue	2/	$	1,376		$	2,972		$	3,366		$	1,731		$	7,551
	% of Total Office Annl Rev			0.4	%		0.8	%		0.9	%		0.5	%		2.0	%
Memphis	RSF			95,929			227,186			119,147			89,423			456,412
	% of Total Office RSF			0.5	%		1.1	%		0.6	%		0.4	%		2.2	%
	Annualized Revenue	2/	$	1,839		$	4,614		$	2,319		$	1,694		$	8,930
	% of Total Office Annl Rev			0.5	%		1.2	%		0.6	%		0.5	%		2.4	%
Nashville	RSF			157,447			361,085			474,179			198,136			1,385,251
	% of Total Office RSF			0.7	%		1.7	%		2.2	%		0.9	%		6.6	%
	Annualized Revenue	2/	$	3,296		$	7,150		$	9,487		$	3,810		$	22,918
	% of Total Office Annl Rev			0.9	%		1.9	%		2.6	%		1.0	%		6.2	%
Orlando	RSF			126,113			152,322			137,862			103,576			736,003
	% of Total Office RSF			0.6	%		0.7	%		0.7	%		0.5	%		3.5	%
	Annualized Revenue	2/	$	2,806		$	3,863		$	3,134		$	2,183		$	15,395
	% of Total Office Annl Rev			0.8	%		1.0	%		0.8	%		0.6	%		4.2	%
Piedmont Triad	RSF			94,824			242,698			160,494			274,768			1,134,730
	% of Total Office RSF			0.4	%		1.1	%		0.8	%		1.3	%		5.4	%
	Annualized Revenue	2/	$	1,444		$	3,910		$	2,765		$	3,361		$	13,127
	% of Total Office Annl Rev			0.4	%		1.1	%		0.7	%		0.9	%		3.5	%
Research Triangle	RSF			435,170			497,046			868,720			338,353			1,605,132
	% of Total Office RSF			2.1	%		2.4	%		4.1	%		1.6	%		7.6	%
	Annualized Revenue	2/	$	8,447		$	9,767		$	15,219		$	6,531		$	25,639
	% of Total Office Annl Rev			2.3	%		2.6	%		4.1	%		1.8	%		6.9	%
Richmond	RSF			172,971			350,426			251,384			262,996			645,985
	% of Total Office RSF			0.8	%		1.7	%		1.2	%		1.2	%		3.1	%
	Annualized Revenue	2/	$	2,968		$	6,251		$	4,906		$	4,283		$	11,128
	% of Total Office Annl Rev			0.8	%		1.7	%		1.3	%		1.2	%		3.0	%
Tampa	RSF			465,744			280,853			392,990			192,894			1,489,622
	% of Total Office RSF			2.2	%		1.3	%		1.9	%		0.9	%		7.1	%
	Annualized Revenue	2/	$	7,747		$	6,089		$	7,853		$	3,666		$	27,925
	% of Total Office Annl Rev			2.1	%		1.6	%		2.1	%		1.0	%		7.5	%
Other	RSF			1,095			20,481			8,949			12,707			20,738
	% of Total Office RSF			0.0	%		0.1	%		0.0	%		0.1	%		0.1	%
	Annualized Revenue	2/	$	5		$	440		$	204		$	322		$	546
	% of Total Office Annl Rev			0.0	%		0.1	%		0.1	%		0.1	%		0.1	%
Total	RSF			2,285,403			3,163,455			3,357,476			2,012,419			10,304,830
	% of Total Office RSF			10.8	%		15.0	%		15.9	%		9.5	%		48.8	%
	Annualized Revenue	2/	$	40,915		$	59,616		$	61,949		$	34,460		$	173,482
	% of Total Office Annl Rev			11.0	%		16.1	%		16.7	%		9.3	%		46.8	%

1/ Includes 207,000 square feet of leases that are on a month to month basis or 0.9% of total annualized revenue

2/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

Highwoods Properties, Inc. Page 24 3/31/04

Industrial Lease Expirations by Market by Year

Dollars in thousands

			2004 1/			2005			2006			2007			Thereafter
Atlanta	RSF			441,884			547,214			331,569			599,849			678,595
	% of Total Industrial RSF			6.3	%		7.8	%		4.7	%		8.6	%		9.7	%
	Annualized Revenue	2/	$	2,146		$	2,852		$	1,978		$	2,766		$	3,482
	% of Total Industrial Annl Rev			6.6	%		8.8	%		6.1	%		8.6	%		10.8	%
Charlotte	RSF			33,263			19,961			41,535			19,181			2,340
	% of Total Industrial RSF			0.5	%		0.3	%		0.6	%		0.3	%		0.0	%
	Annualized Revenue	2/	$	365		$	213		$	363		$	182		$	19
	% of Total Industrial Annl Rev			1.1	%		0.7	%		1.1	%		0.6	%		0.1	%
Greenville	RSF			32,659			0			16,081			0			5,350
	% of Total Industrial RSF			0.5	%		0.0	%		0.2	%		0.0	%		0.1	%
	Annualized Revenue	2/	$	355		$	—		$	184		$	—		$	51
	% of Total Industrial Annl Rev			1.1	%		0.0	%		0.6	%		0.0	%		0.2	%
Kansas City	RSF			0			2,018			0			0			1,756
	% of Total Industrial RSF			0.0	%		0.0	%		0.0	%		0.0	%		0.0	%
	Annualized Revenue	2/	$	—		$	17		$	—		$	—		$	20
	% of Total Industrial Annl Rev			0.0	%		0.1	%		0.0	%		0.0	%		0.1	%
Piedmont Triad	RSF			873,123			764,364			530,872			1,113,862			861,551
	% of Total Industrial RSF			12.5	%		10.9	%		7.6	%		15.9	%		12.3	%
	Annualized Revenue	2/	$	3,578		$	2,945		$	2,094		$	4,281		$	3,657
	% of Total Industrial Annl Rev			11.1	%		9.1	%		6.5	%		13.3	%		11.3	%
Research Triangle	RSF			16,286			35,461			6,775			0			22,327
	% of Total Industrial RSF			0.2	%		0.5	%		0.1	%		0.0	%		0.3	%
	Annualized Revenue	2/	$	152		$	305		$	63		$	—		$	225
	% of Total Industrial Annl Rev			0.5	%		0.9	%		0.2	%		0.0	%		0.7	%
Total	RSF			1,397,215			1,369,018			926,832			1,732,892			1,571,919
	% of Total Industrial RSF			20.0	%		19.6	%		13.2	%		24.8	%		22.5	%
	Annualized Revenue	2/	$	6,596		$	6,332		$	4,682		$	7,229		$	7,454
	% of Total Industrial Annl Rev			20.4	%		19.6	%		14.5	%		22.4	%		23.1	%

1/ Includes 90,000 square feet of leases that are on a month to month basis or 0.1% of total annualized revenue

2/ Annualized Revenue is March, 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

Highwoods Properties, Inc. Page 25 3/31/04

Customer Diversification

March 31, 2004

Dollars in thousands

Top 20 Customers

Customer	RSF	Annualized Revenue 1/		Percent of Annualized Revenue 1/		Average Remaining Lease Term in Years
Federal Government	739,523	$	14,991	3.58	%	6.1
AT&T	573,890		10,922	2.61	%	3.6
Price Waterhouse Coopers	297,795		6,965	1.66	%	6.1
State Of Georgia	359,565		6,858	1.64	%	4.7
Sara Lee	1,195,383		4,636	1.11	%	3.4
IBM	215,460		4,568	1.09	%	2.0
WorldCom and Affiliates 2/	183,014		3,746	0.89	%	2.4
Northern Telecom	246,000		3,651	0.87	%	3.9
Volvo	267,717		3,450	0.82	%	5.3
Lockton Companies	132,718		3,303	0.79	%	10.9
US Airways	295,046		3,243	0.77	%	3.7
ITC Deltacom 3/	158,392		3,226	0.77	%	1.2
BB&T	239,248		3,187	0.76	%	7.0
T-Mobile USA	120,561		3,016	0.72	%	2.3
Bank of America	146,842		2,733	0.65	%	5.2
Ford Motor Company	125,989		2,685	0.64	%	5.9
Ikon	181,361		2,534	0.61	%	3.6
CHS Professional Services	149,021		2,519	0.60	%	2.6
Hartford Insurance	115,548		2,506	0.60	%	2.6
Carlton Fields	95,771		2,412	0.58	%	0.3
	5,838,844	$	91,151	21.76	%	4.5

By Industry

Category	Percent of Annualized Revenue 1/
Professional, Scientific, and Technical Services	23.7	%
Insurance	9.7	%
Finance/Banking	9.0	%
Telecommunication	8.3	%
Manufacturing	8.2	%
Retail Trade	6.7	%
Government/Public Administration	5.3	%
Health Care and Social Assistance	5.1	%
Administrative and Support Services	4.5	%
Wholesale Trade	4.2	%
Transportation and Warehousing	3.5	%
Real Estate Rental and Leasing	3.1	%
Other Services (except Public Administration)	3.0	%
Information	2.4	%
Accommodation and Food Services	2.4	%
Educational Services	0.9	%
	100.0	%

1/ Annualized Revenue is March 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

2/ This quarter reflects the addition of leasing in the Orlando properties previously part of the Miller Group joint venture.

3/ ITC Deltacom (formerly Business Telecom) is located in a property that, as of March 31, 2004, is under contract for sale. The sale is projected for either the second or third quarter of 2004.

Highwoods Properties, Inc. Page 26 3/31/04

Same Property Performance

Dollars in thousands

	Three months ended March 31,						Percentage Change
	2004			2003
Rental revenues	$	101,027		$	102,452		-1.4	%
Straight Line rent		2,159			1,774		21.7	%
Lease termination fees		241			194		24.3	%
Operating expenses		(36,349	)		(35,084	)	-3.6	%
Net operating income	$	67,078		$	69,336		-3.3	%
Average Occupancy		81.7	%		82.5	%	-1.0	%
Rentable Square Feet		32,943,000			32,943,000

Market	2003 to 2004 1st Quarter NOI Change
Atlanta	-11.1	%
Charlotte	-4.4	%
Columbia	-14.5	%
Greenville	-12.3	%
Kansas City	-2.5	%
Memphis	0.2	%
Nashville	1.7	%
Orlando	-5.0	%
Piedmont Triad	-2.1	%
Research Triangle	1.9	%
Richmond	0.8	%
Tampa	-5.4	%
	-3.3	%

Highwoods Properties, Inc. Page 27 3/31/04

Acquisition Activity

Dollars in thousands

Name	Market	Type 1/	Date Acquired	Square Footage	Cost
First quarter 2004:
Signature Plaza	Orlando	O	03/02/04	274,000
Capital Plaza I	Orlando	O	03/02/04	242,000
Capital Plaza II	Orlando	O	03/02/04	303,000
Landmark I	Orlando	O	03/02/04	226,000
Landmark II	Orlando	O	03/02/04	225,000
				1,270,000	$	62,526	2/
Windsor at Metro Center 3/	Orlando	O	03/02/04	88,000	$	6,100	3/
				1,358,000	$	68,626

Joint Venture Acquisitions

	Market	Type 1/	Date Acquired	Square Footage	Cost
First quarter 2004:
Glenridge 100	Atlanta	O	02/26/04	91,500
Glenridge 200	Atlanta	O	02/26/04	93,900
				185,400	$	23,850	4/

1/ The letter “O” represents office.

2/ We purchased our partner’s 80% interest in these MG-H/W Properties.

3/ We purchased our Partner’s 50% interest in this Merowest Property.

4/ We purchased a 40% interest in these two properties.

Highwoods Properties, Inc. Page 28 3/31/04

Disposition Activity

Dollars in thousands

Name	Market	Type 1/	Date Sold	Square Footage	Sales Price
First quarter 2004:
Brookside Shopping Center	Kansas City	R	01/29/04	111,800
63rd & Brookside Building	Kansas City	O	01/29/04	7,800
				119,600	$	15,250
Northpark I	Raleigh	O	03/28/04	42,300		4,500
				161,900	$	19,750

Assets Contributed to Joint Ventures

	Market	Type 1/	Date Contributed	Square Footage	Sales Price
First quarter 2004:
None

1/ The letters "O" and "R" represent Office and Retail, respectively.

Highwoods Properties, Inc. Page 29 3/31/04

Development Activity

Dollars in thousands

Property	Market	Type 1/	Rentable Square Feet	Anticipated Total Investment		Investment @ 03/31/04		Pre-   Leasing		Estimated Completion Date	Estimated Stabilization Date
In-Process
NARA	Atlanta	I	350,000	$	20,387	$	4,140	100	%	3Q04	4Q05
FBI	Tampa	O	112,000		26,634		2,639	100	%	4Q05	4Q05
			462,000	$	47,021	$	6,779	100	%
Completed Not Stabilized 2/
Catawba	Research Triangle	O	40,000	$	4,030	$	2,908	0	%	2Q03	4Q04
801 Raleigh Corporate Center	Research Triangle	O	100,000		12,016		10,702	51	%	4Q02	4Q04
Total or Weighted Average			140,000	$	16,046	$	13,610	36	%

Developed for Sale

	Market	Type 1/	Rentable Square Feet	Anticipated Total Investment		Investment @ 03/31/04		Pre-   Sales		Estimated Completion Date
Grove Park Condominiums	Richmond	O	65,000	$	6,163	$	4,376	67	%	2Q04

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

2/ These properties contributed $76,000 in Net Operating Income (Property Revenue - Property Expense) in Q1 2004.

Highwoods Properties, Inc. Page 30 3/31/04

Development Land

March, 2004

Dollars in thousands

		Developable Square Footage			Total Estimated Market Value
Market	Acres	Office	Retail	Industrial
On Balance Sheet:
Research Triangle	381	2,924,000	60,000	162,000	$	65,600
Atlanta	258	270,000	1,100,000	1,040,000		35,300
Piedmont Triad	148	787,000	37,000	1,190,000		17,400
Kansas City 1/	89	725,000	216,000	—		19,700
Charlotte	79	1,151,000	—	—		12,600
Baltimore	72	1,102,000	—	—		20,000
Richmond	50	688,000	—	—		9,500
Orlando	49	862,000	—	—		14,800
Nashville	48	830,000	—	—		12,900
Tampa	35	522,000	—	15,000		12,500
Memphis	22	288,000	—	—		4,200
Greenville	12	150,000	—	—		1,800
Jacksonville	10	80,000	—	—		1,100
Columbia	2	20,000	—	—		300
	1,255	10,399,000	1,413,000	2,407,000	$	227,700
Deferred or optioned:
Atlanta	25	—	500,000	—
Research Triangle	22	470,399	—	—
Richmond	11	91,000	—	—
Charlotte	—	—	—	—
Memphis	—	—	—	—
Nashville	—	—	—	—
Piedmont Triad	—	—	—	—
	58	561,399	500,000	—
Total	1,313	10,960,399	1,913,000	2,407,000

1/ Includes 27 acres of residential land

Highwoods Properties, Inc. Page 31 3/31/04

Unconsolidated Joint Ventures Assets, Debt and Liabilities

March 31, 2004

Dollars in thousands

				Venture’s Books
Joint Venture	Type 1/	Own %		Total Assets		Debt		Total Liabilities
Board of Trade Investment Co.	O	49.0	%	$	7,975	$	704	$	888
Dallas County Partners I, LP	O/ I	50.0	%		41,529		37,763		39,789
Dallas County Partners II, LP	O	50.0	%		17,942		22,166		23,492
Dallas County Partners III, LP	O	50.0	%		70		—		20
Fountain Three	O/ I / R	50.0	%		34,302		29,653		31,928
RRHWoods , LLC	O/ M	50.0	%		81,029		66,312		70,002
Kessinger/Hunter, LLC	—	26.5	%		8,390		—		404
4600 Madison Associates, LP	O	12.5	%		21,607		16,548		17,039
Highwoods DLF 98/29, LP	O	22.8	%		138,971		66,989		68,788
Highwoods DLF 97/26 DLF 99/32, LP	O	42.9	%		114,265		58,854		61,576
Highwoods-Markel Associates, LLC	O	50.0	%		51,679		39,901		40,552
MG-HIW, LLC	O	20.0	%		—		—		—
MG-HIW Metrowest I, LLC	O	50.0	%		—		—		—
MG-HIW Metrowest II, LLC	O	50.0	%		—		—		—
Concourse Center Associates, LLC	O	50.0	%		14,361		9,652		9,789
Plaza Colonnade, LLC	O/R	50.0	%		31,459		21,631		22,811
SF-HIW Harborview Plaza, LP	O	20.0	%		40,232		22,800		23,538
Highwoods KC Glenridge Office, LP	O	40.0	%		25,077		—		443
Highwoods KC Glenridge Land, LP	O	40.0	%		768		250		250
Total				$	629,656	$	393,223	$	411,309
				Highwoods’ Share of Joint Venture
Joint Venture	Type 1/	Own %		Total Assets		Debt		Total Liabilities
Board of Trade Investment Co.	O	49.0	%	$	3,908	$	345	$	435
Dallas County Partners I, LP	O/ I	50.0	%		20,765		18,882		19,895
Dallas County Partners II, LP	O	50.0	%		8,971		11,083		11,746
Dallas County Partners III, LP	O	50.0	%		35		—		10
Fountain Three	O/ I / R	50.0	%		17,151		14,827		15,964
RRHWoods , LLC	O/ M	50.0	%		40,515		33,156		35,001
Kessinger/Hunter, LLC	—	26.5	%		2,223		—		107
4600 Madison Associates, LP	O	12.5	%		2,701		2,069		2,130
Highwoods DLF 98/29, LP	O	22.8	%		31,699		15,280		15,691
Highwoods DLF 97/26 DLF 99/32, LP	O	42.9	%		49,054		25,266		26,435
Highwoods-Markel Associates, LLC	O	50.0	%		25,840		19,951		20,276
MG-HIW, LLC	O	20.0	%		—		—		—
MG-HIW Metrowest I, LLC	O	50.0	%		—		—		—
MG-HIW Metrowest II, LLC	O	50.0	%		—		—		—
Concourse Center Associates, LLC	O	50.0	%		7,181		4,826		4,895
Plaza Colonnade, LLC	O/R	50.0	%		15,730		10,816		11,406
SF-HIW Harborview Plaza, LP	O	20.0	%		8,046		4,560		4,708
Highwoods KC Glenridge Office, LP	O	40.0	%		10,031		—		177
Highwoods KC Glenridge Land, LP	O	40.0	%		307		100		100
Total				$	244,157	$	161,161	$	168,976

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

Highwoods Properties, Inc. Page 32 3/31/04

Unconsolidated Joint Ventures Income

For the three months ended March 31, 2004

Dollars in thousands

			Venture’s Books
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Net Income
Board of Trade Investment Co.	49.0	%	$	633	$	434	$	14	$	112	$	73
Dallas County Partners I, LP	50.0	%		2,504		1,490		680		462		(128	)
Dallas County Partners II, LP	50.0	%		1,595		711		570		186		128
Dallas County Partners III, LP	50.0	%		43		34		—		2		7
Fountain Three	50.0	%		1,834		835		536		379		84
RRHWoods , LLC	50.0	%		3,311		1,874		675		851		(89	)
Kessinger/Hunter, LLC	26.5	%		1,538		1,229		—		174		135
4600 Madison Associates, LP	12.5	%		1,215		562		287		421		(55	)
Highwoods DLF 98/29, LP	22.8	%		4,960		1,346		1,137		880		1,597
Highwoods DLF 97/26 DLF 99/32, LP	42.9	%		3,796		1,005		1,140		1,083		568
Highwoods-Markel Associates, LLC	50.0	%		1,671		385		586		368		332
MG-HIW, LLC	20.0	%		4,749		1,868		836		979		1,066
MG-HIW Metrowest I, LLC	50.0	%		—		5		—		—		(5	)
MG-HIW Metrowest II, LLC	50.0	%		141		88		39		70		(56	)
Concourse Center Associates, LLC	50.0	%		526		141		175		85		125
Plaza Colonnade, LLC	50.0	%		1		—		—		1		—
SF-HIW Harborview Plaza, LP	20.0	%		1,395		468		351		216		360
Highwoods KC Glenrige Office, LP	40.0	%		326		97		—		46		183
Total			$	30,238	$	12,572	$	7,026	$	6,315	$	4,325
			Highwoods’ Share of Joint Venture
Joint Venture	Own %		Revenue		Operating Exp		Interest		Depr/Amort		Net Income
Board of Trade Investment Co.	49.0	%	$	310	$	213	$	7	$	55	$	35
Dallas County Partners I, LP	50.0	%		1,252		745		340		231		(64	)
Dallas County Partners II, LP	50.0	%		798		356		285		93		64
Dallas County Partners III, LP	50.0	%		22		17		—		1		4
Fountain Three	50.0	%		917		418		268		190		41
RRHWoods , LLC	50.0	%		1,656		937		338		426		(45	)
Kessinger/Hunter, LLC	26.5	%		408		326		—		46		36
4600 Madison Associates, LP	12.5	%		152		70		36		53		(7	)
Highwoods DLF 98/29, LP	22.8	%		1,131		307		259		201		364
Highwoods DLF 97/26 DLF 99/32, LP	42.9	%		1,630		431		489		464		246
Highwoods-Markel Associates, LLC	50.0	%		836		193		293		183		167
MG-HIW, LLC	20.0	%		950		374		167		195		214
MG-HIW Metrowest I, LLC	50.0	%		—		3		—		—		(3	)
MG-HIW Metrowest II, LLC	50.0	%		71		44		20		35		(28	)
Concourse Center Associates, LLC	50.0	%		263		71		88		43		61
Plaza Colonnade, LLC	50.0	%		1		—		—		1		—
SF-HIW Harborview Plaza, LP	20.0	%		279		94		70		43		72
Highwoods KC Glenrige Office, LP	40.0	%		130		39		—		18		73
Total 1/			$	10,806	$	4,638	$	2,660	$	2,278	$	1,230

1/ Highwoods’ Share of JV income shown above does not include the amortization of a $172K deferred gain.

Highwoods Properties, Inc. Page 33 3/31/04

Unconsolidated Joint Ventures Long-Term Debt Detail

Dollars in thousands

Joint Venture	Own %		Lender	Interest Rate		Maturity Date	Loan Balance 03/31/04
Dallas County Partners I, LP	50.0	%	various 1/	7.2	%	various 1/	$	37,763
Dallas County Partners II, LP	50.0	%	Principal Life Insurance Company	10.2	%	Jun-13		22,166
Fountain Three	50.0	%	John Hancock Life Insurance Co.	7.8	%	Jan-08		6,169
	50.0	%	various 2/	7.5	%	various 2/		23,484
Total Fountain Three				7.5	%			29,653
RRHWoods , LLC	50.0	%	Industrial Revenue Bonds	1.0	% 3/	Nov-15		23,000
	50.0	%	Bank of America	6.8	%	Sep-12		8,366
	50.0	%	Bank of America	6.8	%	Sep-12		6,382
	50.0	%	Industrial Revenue Bonds	1.0	% 3/	Sep-15		6,000
	50.0	%	various 4/	5.2	% 3/	various 4/		22,564
Total RRHWoods, LLC				3.7	%			66,312
Highwoods DLF 98/29	22.8	%	USG Annuity & Life Company	6.8	%	May-11		66,989
Highwoods DLF 97/26 DLF 99/32	42.9	%	Massachusetts Mutual Life Ins. Co.	7.7	%	May-12		58,854
4600 Madison Associates, LP	12.5	%	State Farm	6.9	%	Apr-18		16,548
Board of Trade Investment Co.	49.0	%	KC Board of Trade Clearing Corp.	7.8	%	Sep-07		704
Concourse Center Assoc., LLC	50.0	%	Lincoln National Life Insurance Co.	7.0	%	Jul-10		9,652
Highwoods-Markel Assoc., LLC	50.0	%	Principal Life Insurance Company	5.9	%	Jan-14		5,786
	50.0	%	Principal Life Insurance Company	5.8	%	Jan-14		12,232
	50.0	%	Principal Life Insurance Company	5.7	%	Jan-14		9,651
	50.0	%	Principal Life Insurance Company	5.8	%	Jan-14		12,232
Total Highwoods-Markel Assoc., LLC				5.8	%			39,901
SF-HIW Harborview Plaza, LP	20.0	%	Met Life	6.1	%	Oct-12		22,800
Plaza Colonnade, LLC	50.0	%	Wells Fargo	3.0	%	Feb-06		21,631
Highwoods KC Glenridge Land, LP	40.0	%	Transwestern	0.0	%	Feb-04		250
Total Secured Loans							$	393,223
Highwoods’ Share of the above							$	161,161

1/ Includes 16 fixed rate loans under $4 million with maturities ranging from January 2006 to July 2011

2/ Includes 6 fixed rate loans under $6 million with maturities ranging from May 2008 to September 2012

3/ The floating rate loans’ interest rates are based on March 31, 2004’s rates.

4/ Includes 5 fixed rate loans under $6 million maturing between October 2007 to September 2012 and a floating rate loan under $6 million that matures in November 2015

Highwoods Properties, Inc. Page 34 3/31/04

Portfolio Summary Unconsolidated Joint Ventures

As of March 31, 2004

Summary by Location:

	Rentable Square Feet 1/			Percentage of Annualized Revenue - Highwoods’ Share Only 3/
Market		Occupancy 2/		Office		Industrial		Retail		Multi-Family		Total
Des Moines	2,245,000	87.3	%	37.6	%	4.3	%	1.4	%	4.9	%	48.2	%
Atlanta	835,000	87.7	%	17.1	%	—		—		—		17.1	%
Richmond	412,000	99.4	%	8.1	%	—		—		—		8.1	%
Orlando	413,000	98.7	%	6.8	%	—		—		—		6.8	%
Piedmont Triad	364,000	100.0	%	5.3	%	—		—		—		5.3	%
Kansas City	427,000	88.7	%	5.0	%	—		—		—		5.0	%
Research Triangle	455,000	98.7	%	4.9	%	—		—		—		4.9	%
Tampa	205,000	92.1	%	2.8	%	—		—		—		2.8	%
Charlotte	148,000	100.0	%	1.1	%	—		—		—		1.1	%
Other	110,000	100.0	%	0.7	%	—		—		—		0.7	%
Total	5,614,000	91.7	%	89.4	%	4.3	%	1.4	%	4.9	%	100.0	%

1/ Excludes Des Moines’ apartment units

2/ Excludes Des Moines’ apartment occupancy percentage of 85%

3/ Annualized Rental Revenue is March 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

Highwoods Properties, Inc. Page 35 3/31/04

Unconsolidated Joint Ventures Lease Expirations

March 31, 2004

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
Remainder of 2004	447,785	8.6	%	$	8,227	$	18.37	9.0	%
2005	504,138	9.7	%		7,557		14.99	8.3	%
2006	706,595	13.6	%		11,386		16.11	12.4	%
2007	222,928	4.3	%		4,460		20.01	4.9	%
2008	884,143	17.0	%		13,168		14.89	14.3	%
2009	510,842	9.8	%		10,272		20.11	11.3	%
2010	201,780	3.9	%		3,616		17.92	4.0	%
2011	307,842	5.9	%		6,639		21.57	7.3	%
2012	294,818	5.7	%		6,489		22.01	7.1	%
2013	600,463	11.5	%		11,454		19.08	12.6	%
2014 and thereafter	518,290	10.0	%		7,994		15.42	8.8	%
	5,199,624	100.0	%	$	91,262	$	17.55	100.0	%

1/ Annualized Revenue is March 2004 rental revenue (base rent plus operating expense pass throughs) multiplied by 12.

Highwoods Properties, Inc. Page 36 3/31/04

Unconsolidated Joint Ventures Development

Dollars in thousands

Property	% Ownership		Market	Rentable Square Feet	Anticipated Total Investment		Investment @ 03/31/04		Pre - Leasing		Estimated Completion Date	Estimated Stabilization Date
Plaza Colonade, LLC 1/	50	%	Kansas City	285,000	$	69,700	$	31,459	76	%	Q304	Q305
Summit	50	%	Des Moines	36,000		3,559		1,693	69	%	Q304	Q305
Pinehurst	50	%	Des Moines	36,000		3,559		1,367	41	%	Q304	Q305
Highwoods’ Share of the above				357,000	$	38,409	$	17,260	72	%

1/ Includes $14.1 million in investment cost that will be funded by tax increment financing

Highwoods Properties, Inc. Page 37 3/31/04